<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 10, 1997
REGISTRATION NO. 33-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
REGISTRATION STATEMENT
ON
FORM S-3
UNDER THE SECURITIES ACT OF 1933
---------------
EMC CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 3577 04-2680009
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
171 SOUTH STREET
HOPKINTON, MASSACHUSETTS 01748
(ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
PAUL T. DACIER, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
EMC CORPORATION
171 SOUTH STREET
HOPKINTON, MA 01748
(508) 435-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
---------------
COPIES TO:
DAVID B. WALEK, ESQ.
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110
(617) 951-7388
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
AMOUNT OFFERING MAXIMUM
TITLE OF EACH CLASS TO TO BE PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
3 1/4% Convertible
Subordinated Notes
Due 2002.............. $517,500,000 100%(1) $517,500,000(1) $156,819
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Common Stock, $.01 par
value per share....... 11,421,319(2) -- -- None(3)
</TABLE>
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(1) Estimated solely for purposes of calculating the registration fee.
(2) Plus such additional indeterminate number of shares as may become issuable
upon conversion of the Notes being registered hereunder as a result of
adjustments to the conversion price.
(3) Pursuant to Rule 457(i) there is no filing fee with respect to the shares
of common stock issuable upon conversion of the Notes because no
additional consideration will be received in connection with the exercise
of the conversion privilege.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 10, 1997
PROSPECTUS
$517,500,000
EMC CORPORATION
3 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2002
INTEREST PAYABLE MARCH 15 AND SEPTEMBER 15
11,421,319 SHARES OF COMMON STOCK
-----------
This Prospectus relates to $517,500,000 aggregate principal amount of 3 1/4%
Convertible Subordinated Notes due 2002 (the "Notes") of EMC Corporation, a
Massachusetts corporation (together with its subsidiaries, "EMC" or the
"Company"), and 11,421,319 shares of common stock, par value $.01 per share of
the Company (the "Common Stock"), which are initially issuable upon conversion
of the Notes plus such additional indeterminate number of shares of Common
Stock as may become issuable upon conversion of the Notes as a result of
adjustments to the conversion price (the "Shares"). The Notes and the Shares
that are being registered hereby are to be offered for the account of the
holders thereof (the "Selling Securityholders"). The Notes were issued and sold
in March 1997 in transactions exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), to persons
reasonably believed by Smith Barney Inc., Alex. Brown & Sons Incorporated and
Morgan Stanley & Co. Incorporated (the "Initial Purchasers") to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act) or
institutional "accredited investors" (as defined in Rule 510(a)(1), (2), (3) or
(7) under the Securities Act or outside the United States to certain persons in
offshore transactions in reliance on Regulation S under the Securities Act. See
"Plan of Distribution."
The Notes are convertible into Common Stock at any time after May 10, 1997
and at or before maturity, unless previously redeemed, at a conversion price of
$45.31 per share, subject to adjustment in certain events. The Common Stock is
traded on the New York Stock Exchange under the symbol EMC. On April 9, 1997,
the last reported sale price of the Common Stock on the New York Stock Exchange
Composite Tape was $39.50 per share.
The Notes do not provide for a sinking fund. The Notes are redeemable, at the
option of the Company, in whole or in part, at any time on or after March 15,
2000 at the redemption prices set forth in this Prospectus, together with
accrued interest. The Notes are redeemable at the option of the holder upon a
Change of Control (as defined herein) at 100% of the principal amount thereof,
plus accrued interest. See "Description of Notes."
The Notes are unsecured obligations of the Company and are subordinated to
all present and future Senior Indebtedness (as defined herein) of the Company
and will be effectively subordinated to all indebtedness and other liabilities
of subsidiaries of the Company. The Indenture will not restrict the incurrence
of any other indebtedness or liabilities by the Company or its subsidiaries.
See "Description of Notes--Subordination."
For a description of certain tax consequences to holders of the Notes see
"Certain United States Federal Tax Consequences."
The Notes and the Shares are being registered to permit public secondary
trading of the Notes and, upon conversion, the underlying Common Stock, by the
holders thereof from time to time after the date of this Prospectus. The
Company has agreed, among other things, to bear all expenses (other than
underwriting discounts and selling commissions) in connection with the
registration and sale of the Notes and the underlying Common Stock covered by
this Prospectus.
Upon their original issuance, the Notes became eligible for trading in the
Private Offerings, Resales and Trading through Automated Linkages ("PORTAL")
Market. However, the Notes sold pursuant to this Prospectus will no longer be
eligible for trading on the PORTAL Market. No assurance can be given that an
active market for the Notes will develop or as to the liquidity or
sustainability of any such market. See "Risk Factors--Absence of Existing
Active Public Market."
The Company will not receive any of the proceeds from the sale of the Notes
or the Shares by the Selling Securityholders. The Notes and the Shares may be
offered in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices. In addition, the Shares may be
offered from time to time through ordinary brokerage transactions on the New
York Stock Exchange. See "Plan of Distribution." The Selling Securityholders
may be deemed to be "Underwriters" as defined in the Securities Act of 1933, as
amended (the "Securities Act"). If any broker-dealers are used by the Selling
Securityholders, any commissions paid to broker-dealers and, if broker-dealers
purchase any Notes or Shares as principals, any profits received by such
broker-dealers on the resale of the Notes or Shares, may be deemed to be
underwriting discounts or commissions under the Securities Act. In addition,
any profits realized by the Selling Securityholders may be deemed to be
underwriting commissions.
-----------
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
THE DATE OF THIS PROSPECTUS IS , 1997
<PAGE>
Some of the information set forth or incorporated by reference in this
Prospectus constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. All such forward-looking
statements are necessarily only estimates of future results, and there can be
no assurance that actual results will not materially differ from expectations.
Factors which could cause actual results to differ from expectations include,
among others, a shortage of key components or products which meet EMC's
delivery or quality requirements, the Company's "hockey stick" pattern of
quarterly sales, competitive pricing pressures in the computer storage market,
reliance on indirect channels of distribution, competition in the computer
data storage industry, the Company's ability to successfully integrate
acquisitions and the Company's ability to manage growth. Specific reference is
made to the risks and uncertainties described under "Risk Factors."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements, information statements and other
information with the Commission. Such reports, proxy and information
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Seven World Trade Center, Suite 1300, New
York, New York 10048; and 500 West Madison Avenue, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained from the public
reference section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates, or from the Commission's Internet Web site at
http://www.sec.gov. In addition, such materials also may be inspected and
copied at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996 (File No. 1-9853) and its Current Report on Form 8-K dated March 13,
1997 are incorporated herein by reference.
In addition, all reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the termination of the offering made hereby, shall be deemed to be
incorporated by reference herein. Any statement included in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any or all of the documents which have been incorporated by reference in
this Prospectus, other than exhibits to such documents unless such exhibits
are specifically incorporated by reference into the documents so incorporated.
Requests for such copies should be directed to: Investor Relations Department,
EMC Corporation, 171 South Street, Hopkinton, Massachusetts 01748 (telephone
number (508) 435-1000).
2
<PAGE>
THE COMPANY
EMC designs, manufactures, markets and supports a wide range of storage-
related hardware, software and service products for the multi-billion dollar
market for mainframe, open systems and network attached storage systems. Since
the introduction of its first Symmetrix Integrated Cached Disk Array in 1991,
EMC has rapidly become a leading supplier of intelligent enterprise storage
and retrieval technology for both mainframe and open systems environments.
These products are sold as storage solutions for customers utilizing a variety
of the world's most popular computer system platforms. EMC's products provide
solutions for a wide range of customer storage requirements, from the highest
performance mission critical applications to extremely high capacity business
support applications.
The Company was organized as a Massachusetts corporation in 1979. The
Company's corporate headquarters is located at 171 South Street, Hopkinton,
Massachusetts 01748, and the telephone number is (508) 435-1000.
RISK FACTORS
This Prospectus and the documents incorporated herein contain certain
forward-looking statements within the meaning of the Federal Securities Laws.
Actual results could differ materially from those projected in the forward-
looking statements as a result of certain risk factors, including those set
forth below and elsewhere in this Prospectus and the documents incorporated by
reference herein. In addition to other information contained or incorporated
by reference in this Prospectus, prospective investors should consider
carefully the factors listed below in evaluating an investment in the Notes or
the Shares offered hereby.
UNEVEN PATTERN OF QUARTERLY RESULTS
There has been a historic and recurring "hockey stick" pattern of the
Company's quarterly sales, by which a disproportionate percentage of a
quarter's total sales occur in the last month and weeks and days of each
quarter, making prediction of revenues, earnings and working capital for each
financial period especially difficult and uncertain and increasing the risk of
unanticipated variations in quarterly results and financial condition.
This pattern of sales is itself believed to be the result of many factors
including the significant size of EMC's average product price in relation to
its customers' budgets, resulting in long lead times for customers' budgetary
approval, which tends to be given late in a quarter; the tendency of customers
to wait until late in a quarter to commit to purchase in the hope of obtaining
more favorable pricing from one or more competitors seeking their business;
and, at times, seasonal influences, as well as the fourth quarter influence of
customers' spending their remaining capital budget authorization prior to new
budget constraints in the next year's first quarter.
The "hockey stick" pattern of the Company's sales also makes it extremely
difficult to predict near-term demand and adjust manufacturing capacity
accordingly. Substantial variance of orders from the predicted demand may
limit the Company's ability to assemble, test and ship orders received in the
last weeks and days of each quarter, which could adversely affect quarterly
revenues and earnings.
In addition, revenues in any quarter are substantially dependent on orders
booked and shipped in that quarter and the Company's backlog at any particular
time is not necessarily indicative of future sales levels. This is because the
Company manufactures its products on the basis of its forecast of near-term
demand and maintains inventory in advance of receipt of firm orders from
customers; orders are generally shipped by the Company shortly after receipt
of the order; and customers may reschedule orders with little or no penalty.
These are additional factors making the prediction of revenues extremely
difficult. Further, any unexpected decline in revenues without a corresponding
and timely slowdown in expenses could have a material adverse effect on the
Company's business, results of operations or financial condition.
3
<PAGE>
COMPETITION
There is strong competition in the computer data storage industry. EMC
competes with many companies in the mainframe and open systems markets,
certain of which have substantially greater financial and technological
resources, larger distribution capabilities, earlier access to customers and
greater overall customer loyalty than EMC. In the mainframe market, EMC
competes primarily with International Business Machines Corporation ("IBM").
In the open systems market, the Company's primary competition is provided by
systems vendors, including IBM, Digital Equipment Corporation and Sun
Microsystems Corporation. In the Company's opinion, the major competitive
advantage of the open systems vendors is their overall market presence and
ability to provide integrated Central Processing Unit, storage and software
packages. EMC's business may be adversely affected by the announcement or
introduction of new products by its competitors, price reductions of its
competitors' equipment or services and the implementation of certain marketing
strategies by its competitors. As a significant number of EMC's products are
designed to be fully compatible with IBM computers and IBM operating systems,
EMC's business could also be adversely affected by modifications in the design
or configuration of IBM computer systems.
PRICING
Competitive pricing pressures exist in the computer storage market, and have
had and may in the future have an adverse effect on the Company's revenues and
earnings. There also has been and may continue to be a willingness on the part
of certain large competitors to reduce prices in order to preserve or gain
market share, which cannot be foreseen by the Company. The Company believes
that pricing pressures are likely to continue as competitors develop more
competitive product offerings.
To date, the Company has been able to manage its component and product
design costs. However, there can be no assurance that the Company will be able
to continue to achieve reductions in component and product design costs. The
relative and varying rates of product price and component cost declines could
have an adverse effect on the Company's earnings.
DEPENDENCE ON SUPPLIERS
The Company purchases certain components and products from suppliers who EMC
believes are currently the only suppliers of those components or products that
meet EMC's requirements. Among the most important components that EMC uses are
disk drives and high density memory components ("DRAMs"). Disk drives are a
key component of the Company's products and the Company currently purchases
substantially all of its disk drives from a single supplier. EMC purchases
DRAMs from a small number of qualified suppliers. A failure by any supplier of
disk drives, high density DRAMs or other components to meet EMC's delivery or
quality requirements for an extended period of time could have a material
adverse effect on EMC. The Company is currently transitioning its product line
from use of 5.250 9 gigabyte ("GB") disk drives to new 3.50 9 GB and 5.250 23
GB disk drive technologies. This transition may intensify the above risks.
From time to time, because of high industry demand and/or the inability of
certain vendors to consistently meet on a timely basis the Company's component
quality standards, the Company has experienced delays in deliveries of disk
drives and high density DRAMs needed to satisfy orders for its Integrated
Cached Disk Array ("ICDA") products. The Company is currently working with
such vendors to proactively maintain and/or improve component quality
standards and also continues to seek alternative sources of supply. If such
shortages and/or performance problems were to intensify, the Company could
lose some time-sensitive customer orders which could adversely affect
quarterly revenues and earnings. The adverse effect of a supplier's failure to
meet EMC's requirements may be intensified by the "hockey stick" pattern of
the Company's sales and the necessity of meeting critical manufacturing
schedules.
NEW PRODUCTS
Technology and user needs change rapidly in the computer data storage
industry, which requires ongoing technological development and introduction of
new products. Sales of the Symmetrix series of products
4
<PAGE>
constitute the principal source of revenues for EMC and such sales are expected
to continue to be the principal source of its revenues in the near future. EMC
expects competition in the sale of ICDA products to increase, and there can be
no assurance that the Symmetrix series of products will continue to achieve
market acceptance. Significant delays in the development of ICDA technology for
future products or product enhancements would be to the advantage of EMC's
competitors. Furthermore, the continued development of ICDA technology and its
incorporation into EMC's future generations of products cannot be assured even
with significant additional investments.
Further risks inherent in new product introductions include the uncertainty
of price-performance relative to products of competitors, including
competitors' responses to the introductions, and the desire by customers to
evaluate new, more expensive products for longer periods of time.
CHANGE IN REGULATIONS
The Company's business, results of operations and financial condition could
be adversely affected if laws, regulations or standards relating to the Company
or its products were newly implemented or changed.
MANUFACTURING RISKS
EMC's products operate near the limits of electronic and physical performance
and are designed and manufactured with relatively small tolerances. If flaws in
design, production, assembly or testing occur on the part of EMC or its
suppliers, EMC may experience a rate of failure in its products that results in
substantial repair or replacement costs and potential damage to EMC's
reputation. Continued improvement in manufacturing capabilities and control of
material and manufacturing quality and costs will be critical factors in the
future growth of EMC. EMC frequently revises and updates manufacturing and test
processes to address engineering and component changes to its products and
evaluates the reallocation of manufacturing resources among its facilities.
There can be no assurance that EMC's efforts to monitor, develop and implement
appropriate test and manufacturing processes for its products, especially the
Symmetrix series of products, will be sufficient to permit EMC to avoid a rate
of failure in its products that results in substantial delays in shipment,
significant repair or replacement costs and potential damage to EMC's
reputation, any of which could have a substantial adverse effect on EMC's
operations and ultimately on its financial results.
INDIRECT CHANNELS OF DISTRIBUTION
In 1996, the Company derived a significant percentage of its product revenues
from reseller and original equipment manufacturer ("OEM") channels. A
substantial portion of these reseller and OEM revenues stems from the Company's
reseller agreement with Hewlett-Packard Company ("HP"), which currently expires
in August of 1997. The Company's financial results could be adversely affected
if such contracts were terminated, if the Company's relationship with such
resellers or OEMs were to deteriorate or if the financial condition of its
resellers and OEMs were to weaken. In addition, the Company is currently
experiencing growth in the transition from the mainframe to the open systems
market. In this regard, the Company may have an increased reliance on indirect
channels of distribution. There can be no assurance that the Company will be
successful in maintaining or expanding these indirect channels of distribution.
If the Company is not successful, the Company may lose certain sales
opportunities. Furthermore, the partial reliance on indirect channels of
distribution may materially reduce the visibility to management of potential
orders.
ALLIANCES
Many of the Company's products are marketed in conjunction with the products
of other vendors, and the Company plans to continue its strategy of developing
key alliances. There can be no assurance that the Company will be successful in
its ongoing strategic partnerships or that the Company will be able to find
further suitable business relationships as it develops new products. Any
failure to continue or expand such relationships could have a material adverse
effect on the Company's business, financial condition and results of operation.
5
<PAGE>
There can be no assurance that the Company's distributors and strategic
partners, many of which have significantly greater financial and marketing
resources than the Company, will not develop and market products in competition
with the Company in the future, discontinue their relationships with the
Company, or form competing arrangements with the Company's competitors.
INTERNATIONAL SALES
A substantial portion of the Company's revenues is derived from sales outside
the United States. In addition, a substantial portion of the Company's products
are manufactured outside of the United States. Accordingly, the Company's
future results could be adversely affected by a variety of factors, including
changes in foreign currency exchange rates, changes in a specific country's or
region's political or economic conditions, trade restrictions, import or export
licensing requirements, the overlap of different tax structures or changes in
international tax laws, changes in regulatory requirements, compliance with a
variety of foreign laws and regulations and longer payment cycles in certain
countries.
MANAGEMENT OF GROWTH
The Company has a history of rapid growth. The Company's future operating
results will depend on management's ability to manage growth, continuously hire
and retain significant numbers of qualified employees, forecast revenues and
control expenses. An unexpected decline in the growth rate of revenues without
a corresponding and timely reduction in expense growth could have a material
adverse effect on the Company's business, results of operations or financial
condition.
DEPENDENCE UPON KEY PERSONNEL
The Company's continued growth and success depends to a significant extent on
the continued service of senior management and other key employees and the
hiring of new qualified employees. Competition for highly-skilled personnel is
intense in the high technology industry. There can be no assurance that the
Company will be successful in continuously recruiting new personnel and in
retaining existing personnel. The loss of one or more key employees or the
Company's inability to attract additional qualified employees or retain other
employees could have a material adverse effect on the Company's business,
results of operations or financial condition.
ENFORCEMENT OF THE COMPANY'S INTELLECTUAL PROPERTY RIGHTS
No assurance can be given that the Company's patent applications will issue
as patents or that any patents that may issue will provide the Company with
adequate protection for the covered products or technology. Additionally, there
can be no assurance that the Company's confidentiality agreements will
adequately protect its trade secrets, know-how or other proprietary
information. Further, there can be no assurance that the Company's activities
will not infringe on the patents or proprietary rights of others or that the
Company will be able to obtain licenses to any technology that it may require
to conduct its business or that, if obtainable, such technology can be licensed
at a reasonable cost. Although the Company has significantly increased its
patents and patent applications, the rapidly changing technology of the
computer industry makes EMC's future success dependent upon the technical
competence and creative skills of its personnel rather than on existing patent
protection.
RISKS ASSOCIATED WITH FUTURE ACQUISITIONS
As part of its business strategy, the Company may make acquisitions of, or
significant investments in, businesses that offer complementary products,
services and technologies. Any such future acquisitions or investments would be
accompanied by the risks commonly encountered in an acquisition of a business.
Such risks include, among other things, the difficulty of assimilating the
operations and personnel of the acquired business, the inability of management
to maximize the financial and strategic position of the Company through the
successful incorporation of acquired personnel and customers, the maintenance
of uniform standards, controls, procedures and policies and the impairment of
relationships with employees and customers as a result
6
<PAGE>
of any integration of new management personnel. These factors could have a
material adverse effect on the Company's business, results of operations or
financial condition. The Company expects that the consideration paid for
future acquisitions, if any, could be in the form of cash, stock, rights to
purchase stock or a combination thereof. Dilution to existing stockholders and
to earnings per share may result to the extent that shares of stock or other
rights to purchase stock are issued in connection with any such future
acquisitions.
VOLATILITY OF STOCK PRICE
The Company's stock price, like that of other technology companies, is
subject to significant volatility. The announcement of new products, services
or technological innovations by the Company or its competitors, quarterly
variations in the Company's results of operations, changes in revenue or
earnings estimates by the investment community and speculation in the press or
investment community are among the factors affecting the Company's stock
price. In addition, the stock price may be affected by general market
conditions and domestic and international economic factors unrelated to the
Company's performance. Because of these reasons, recent trends should not be
considered reliable indicators of future stock prices or financial results.
ABSENCE OF EXISTING ACTIVE PUBLIC MARKET
Upon their original issuance, the Notes became eligible for trading on the
PORTAL Market. However, the Notes sold pursuant to this Prospectus will no
longer be eligible for trading on the PORTAL Market. There can be no assurance
that an active trading market for the Notes will develop or as to the
liquidity or sustainability of any such market, the ability of the holders to
sell their Notes or the price at which holders of the Notes may be able to
sell their Notes. Future trading prices of the Notes will depend on many
factors, including, among other things, prevailing interest rates, the
Company's operating results, the price of the Company's Common Stock and the
market for similar securities. The Company intends to apply for listing of the
Notes on the New York Stock Exchange.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Notes
or the Shares by the Selling Securityholders. See "Selling Securityholders"
for a list of those persons and entities receiving proceeds from sales of
Notes or Shares.
DIVIDEND POLICY
The Company has never paid cash dividends on its Common Stock. While subject
to periodic review, the current policy of the Board of Directors is to retain
all earnings to provide funds for the continued growth of the Company.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for each of the periods
indicated is as follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
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DECEMBER 31, DECEMBER 30, DECEMBER 31, JANUARY 1, JANUARY 2,
1996 1995 1994 1994 1993
------------ ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
40.8x 33.2x 22.6x 29.6x 9.6x
</TABLE>
For the purposes of these computations, "earnings" consist of pre-tax income
before fixed charges. "Fixed charges" consist of interest on indebtedness,
including capitalized leases, amortization of debt expense and implicit
interest on rental arrangements.
7
<PAGE>
DESCRIPTION OF NOTES
The Notes were issued under an indenture dated as of March 11, 1997 (the
"Indenture") between the Company and State Street Bank and Trust Company, as
trustee (the "Trustee"). The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all of the provisions of the Indenture,
including the definition therein of certain terms. Whenever particular sections
or defined terms of the Indenture are referred to, such sections or defined
terms are incorporated herein by reference. Copies of the Indenture are
available from the Company upon request.
GENERAL
The Notes are unsecured, subordinated obligations of the Company, are limited
to $517,500,000 in aggregate principal amount and will mature on March 15,
2002. The Notes bear interest at the rate per annum shown on the front cover of
this Prospectus from the date of original issuance of Notes pursuant to the
Indenture, or from the most recent Interest Payment Date to which interest has
been paid or provided for, payable semi-annually on March 15 and September 15
of each year, commencing September 15, 1997, to the person in whose name the
Note (or any predecessor Note) is registered at the close of business on the
preceding March 1 or September 1, as the case may be (whether or not a Business
Day). Interest on the Notes will be paid on the basis of a 360-day year of
twelve 30-day months.
Principal of and premium, if any, and interest on the Notes are payable (i)
in respect of Notes held of record by The Depositary Trust Company ("DTC") or
its nominee, in same day funds on or prior to the respective payment dates and
(ii) in respect of Notes held of record by holders other than DTC or its
nominee, in same day funds, at the office of the Trustee in New York, New York,
and the Notes may be surrendered for transfer, exchange or conversion at the
office of the Trustee in New York, New York. In addition, with respect to Notes
held of record by holders other than DTC or its nominee, payment of interest
may be made at the option of the Company by check mailed to the address of the
persons entitled thereto as it appears in the Register for the Notes on the
Regular Record Date for such interest.
The Notes have been issued only in registered form, without coupons and in
denominations of $1,000 or any integral multiple thereof. No service charge
will be made for any transfer or exchange of the Notes, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge and any other expenses (including the fees and expenses of the Trustee)
payable in connection therewith. The Company is not required (i) to issue or
register the transfer or exchange of any Notes during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption and ending at the close of business on the day of such mailing, (ii)
to register the transfer of or exchange of any Note selected for redemption in
whole or in part, except the unredeemed portion of Notes being redeemed in
part, or (iii) to register the transfer or exchange of any Notes surrendered
for conversion or repurchase upon the occurrence of a Change of Control.
All monies paid by the Company to the Trustee or any Paying Agent for the
payment of principal of and premium and interest on any Note which remain
unclaimed for two years after such principal, premium or interest become due
and payable may be repaid to the Company. Thereafter, the holder of such Note
may, as an unsecured general creditor, look only to the Company for payment
thereof.
CONVERSION RIGHTS
The Notes are convertible, in whole or from time to time in part (in
denominations of $1,000 or multiples thereof), into shares of Common Stock of
the Company at any time after May 10, 1997 and at or prior to redemption or
final maturity on March 15, 2002 at the conversion price set forth on the cover
page of this Prospectus (the "Conversion Price"), adjusted as described in the
following paragraphs, except that if a Note or portion thereof is earlier
called for redemption, the conversion right with respect thereto will terminate
at the close of business on the date fixed for redemption and will be lost if
not exercised prior to that time, unless the Company shall default in payment
of the redemption price.
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<PAGE>
Fractional shares of Common Stock will not be delivered upon conversion, but
a cash adjustment will be paid in respect of such fractional interests based on
the Current Market Price (as defined in the Indenture) of the Company's Common
Stock.
The Conversion Price is subject to adjustment upon certain events, including
(i) the issuance of Common Stock as a dividend or distribution on the Common
Stock; (ii) a combination, subdivision or reclassification of Common Stock;
(iii) the issuance to all holders of Common Stock of rights, warrants or
options entitling them to subscribe for or purchase Common Stock (or securities
convertible into Common Stock) at less than the Current Market Price; provided,
however, that in the case of certain rights, warrants or options that are not
exercisable until the occurrence of a specified event or events, the Conversion
Price will not be adjusted until the occurrence of the earliest such specified
event; (iv) the distribution to all holders of Common Stock of capital stock
(other than Common Stock), evidences of indebtedness of the Company, assets
(excluding regular periodic cash dividends paid from surplus), or rights or
warrants to subscribe for or purchase securities of the Company (excluding the
dividends, distributions, rights and warrants mentioned above); (v) a
distribution consisting exclusively of cash (excluding any cash distributions
referred to in (iv) above) to all holders of Common Stock in an aggregate
amount that, together with (A) all other cash distributions (excluding any cash
distributions referred to in (iv) above) made within the 12 months preceding
such distribution and (B) any cash and the fair market value of other
consideration payable in respect of any previous tender offer by the Company or
a Subsidiary (as defined in the Indenture) for the Company's Common Stock
consummated within the 12 months preceding such distribution, exceeds 10% of
the Company's market capitalization (being the Current Market Price times the
number of shares of Common Stock then outstanding) on the date fixed for
determining the stockholders entitled to such distribution; (vi) the completion
of a tender offer made by the Company or any Subsidiary for the Company's
Common Stock involving an aggregate consideration that, together with (X) any
cash and the fair market value of any other consideration paid or payable in
respect of any previous tender offer by the Company or a Subsidiary for the
Company's Common Stock consummated within the 12 months preceding the
consummation of such tender offer and (Y) the aggregate amount of all cash
distributions (excluding any cash distributions referred to in (iv) above) to
all holders of Common Stock within the 12 months preceding the consummation of
such tender offer exceeds 10% of the Company's market capitalization on the
date of consummation of such tender offer; and (vii) issuances of Common Stock
to an Affiliate (as defined in the Indenture) for a net consideration per share
less than the Current Market Price (other than issuances of Common Stock under
certain benefit plans of the Company).
The Company is permitted to make such reductions in the Conversion Price as
it determines to be advisable in order that any stock dividend, subdivision of
shares, distribution of rights to purchase stock or securities or distribution
of securities convertible into or exchangeable for stock made by the Company to
its stockholders will not be taxable to the recipients.
Except as stated above, the Conversion Price will not be adjusted for the
issuance of Common Stock, or any securities convertible into or exchangeable
for Common Stock or carrying the right to purchase any of the foregoing, in
exchange for cash, property or services.
If at any time (a) the Company makes a distribution of property to its
stockholders or purchases Common Stock in a tender offer and such distribution
or purchase would be taxable to such stockholders as a dividend for federal
income tax purposes (e.g., distributions of evidences of indebtedness or assets
of the Company but generally not stock dividends or rights to subscribe for
capital stock) and, pursuant to the antidilution provisions of the Indenture,
the Conversion Price of the Notes is reduced or (b) the Conversion Price is
reduced at the discretion of the Company, such reduction may be deemed to be
the receipt of taxable income by holders of the Notes. Holders of Notes
therefore could have taxable income as a result of an event in which they
receive no cash or property. See "Certain United States Federal Tax
Consequences--Adjustment of Conversion Price."
Subject to any applicable right of the holders to cause the Company to
repurchase their Notes upon a Change of Control (as defined below), in the case
of certain consolidations, mergers or statutory exchanges of securities with
another corporation to which the Company is a party, or the sale or conveyance
of the Company's
9
<PAGE>
assets substantially as an entirety, there will be no adjustment to the
Conversion Price, but each holder will have the right, at the holder's option,
to convert all or any portion of such holder's Notes into the kind and amount
of securities, cash or other property receivable upon the consolidation,
merger, statutory exchange or transfer by a holder of the number of shares of
Common Stock into which such Note might have been converted immediately prior
to such consolidation, merger, statutory exchange or transfer (assuming such
holder failed to exercise any rights of election and received per share the
kind and amount of consideration received per share by a plurality of non-
electing shares). In the case of a cash merger of the Company into another
corporation or any other cash transaction of the type mentioned above, the
effect of these provisions would be that thereafter the Notes would be
convertible at the Conversion Price in effect at such time into the same amount
of cash per share into which the Notes would have been convertible had the
Notes been converted into Common Stock immediately prior to the effective date
of such cash merger or transaction. Depending upon the terms of such cash
merger or transaction, the aggregate amount of cash into which the Notes would
be converted could be more or less than the principal amount of the Notes.
Notes surrendered for conversion after the close of business on a record date
for payment of interest and before the close of business on the next succeeding
interest payment date (unless such Notes are subject to redemption on a
redemption date in that period) must be accompanied by payment of an amount
equal to the interest thereon that is to be paid on such interest payment date.
Subject to the foregoing, no payments or adjustments will be made upon
conversion on account of accrued interest on the Notes or for any dividends or
distributions on any shares of Common Stock delivered upon such conversion. No
adjustment of the Conversion Price will be required to be made in any case
until cumulative adjustments amount to 1% of such price.
The Company will endeavor to comply with all federal and state securities
laws regulating the offer and delivery of shares of Common Stock upon
conversion of Notes and will endeavor to list with or upon the New York Stock
Exchange, or any other national securities exchange upon which its Common Stock
is listed, the shares of Common Stock deliverable upon conversion of the Notes.
SUBORDINATION
The payment of the principal of and premium, if any, and interest on the
Notes, including redemptions at the option of a holder upon the occurrence of a
Change of Control, is subordinated in right of payment, as set forth in the
Indenture, to the prior payment in full of all Senior Indebtedness of the
Company. Senior Indebtedness is defined as (a) the principal of, premium, if
any, and accrued and unpaid interest on (i) indebtedness of the Company for
money borrowed, whether outstanding on the date of execution of the Indenture
or thereafter created, incurred or assumed, (ii) guarantees by the Company of
indebtedness for money borrowed by any other person, or reimbursement
obligations under letters of credit, in either case, whether outstanding on the
date of execution of the Indenture or thereafter created, incurred or assumed,
(iii) indebtedness evidenced by notes (other than the Notes), debentures, bonds
or other instruments of indebtedness for the payment of which the Company is
responsible or liable, by guarantees or otherwise, whether outstanding on the
date of execution of the Indenture or thereafter created, incurred or assumed,
(iv) obligations of the Company under interest rate and currency swaps, caps,
floors, collars or similar agreements or arrangements intended to protect the
Company against fluctuations in interest or currency rates, whether outstanding
on the date of execution of the Indenture or thereafter created, incurred or
assumed, and (v) obligations of the Company under any agreement to lease, or
any lease of, any real or personal property, which obligations, whether
outstanding on the date of execution of the Indenture or thereafter created,
incurred or assumed, are required to be capitalized on the books of the Company
in accordance with generally accepted accounting principles, or guarantees by
the Company of similar obligations of others, and (b) modifications, renewals,
extensions and refundings of any such indebtedness, obligations or guarantees;
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such indebtedness, obligations or
guarantees, or such modification, renewal, extension or refunding thereof, is
not superior in right of payment to the Notes; provided, however, that Senior
Indebtedness will not be deemed to include, and the Notes will rank pari passu
in right of payment with, any obligation of the Company to any of its
subsidiaries.
10
<PAGE>
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
in connection therewith, relative to the Company or to its creditors, as such,
or to its assets or (b) any liquidation, dissolution or other winding-up of the
Company, whether total or partial, whether voluntary or involuntary and whether
involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshaling of assets and liabilities of the Company, the
holders of all Senior Indebtedness will first be entitled to receive payment in
full of all amounts due or to become due thereon or in respect thereof before
the holders of the Notes are entitled to receive any payment on account of the
principal of, or premium, if any, or interest on the Notes (other than payment
(a "Permitted Payment") consisting solely of shares of stock, securities or
indebtedness subordinated at least to the extent of the Notes provided by a
plan of reorganization or adjustment that does not adversely alter the rights
of holders of Senior Indebtedness). Following the occurrence of any of the
events described above, if the Trustee or any holder of the Notes receives any
payment or distribution of assets of the Company of any kind or character
before all Senior Indebtedness is paid in full, then such payment or
distribution (other than a Permitted Payment) will be required to be paid over
or delivered to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
the assets of the Company for application to the payment of all amounts payable
on or in respect of Senior Indebtedness remaining unpaid, to the extent
necessary to pay such amounts in full after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
The Indenture also provides that in the event there shall have occurred and
be continuing (i) any default in the payment when due of principal of, premium,
if any, or interest on any Senior Indebtedness or (ii) any other event of
default with respect to any Senior Indebtedness, then no payment shall be made
by the Company on account of the principal of, premium, if any, or interest on
the Notes or on account of the purchase or redemption or other acquisition of
the Notes (x) in the case of any event of default described in clause (i)
above, unless and until the Senior Indebtedness to which such default relates
is discharged or such event of default shall have been cured or waived or shall
have ceased to exist or the holders of such Senior Indebtedness or their agents
shall have waived the benefits of this provision, and (y) in the case of any
event of default specified in clause (ii) above, from the date the Company or
the Trustee receives written notice of such default (a "Senior Default Notice")
from the holders of at least 25% in principal amount of the kind or category of
Senior Indebtedness to which such default relates or any representative of such
holders until the earlier of (A) 180 days after such date or (B) the date, if
any, on which the Senior Indebtedness to which such default relates is
discharged or such default shall have been cured or waived or shall have ceased
to exist or the holders of such Senior Indebtedness or their agents shall have
waived the benefits of this provision; provided, however, that not more than
one Senior Default Notice is permitted to be given during any period of 360
consecutive days, regardless of the number of defaults with respect to Senior
Indebtedness during such 360-day period. Subject to the payment in full of all
Senior Indebtedness, the holders of the Notes will be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to Senior Indebtedness until the Notes are
paid in full.
Notwithstanding anything in the Indenture to the contrary, neither the
Trustee nor any holder of Notes may exercise any right either may have to
accelerate the maturity of the Notes at any time when payment of any amount
owing on the Notes is prohibited, in whole or in part, as described in the
preceding paragraphs; provided, however, that such right may nevertheless be so
exercised upon the earliest of the acceleration of the maturity of any Senior
Indebtedness, the exercise by any holder of Senior Indebtedness of any remedies
available to such holder upon a default or event of default with respect to
such Senior Indebtedness or the occurrence of an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization.
By reason of the subordination of the Notes, in the event of insolvency,
creditors of the Company who are holders of Senior Indebtedness may recover
more, ratably, than the holders of the Notes. In addition, the right of the
Company, and, therefore, the right of creditors of the Company (including
Noteholders), to participate in any distribution of assets of any subsidiary of
the Company upon its liquidation or reorganization or otherwise is necessarily
subject to the prior claims of creditors of the subsidiary, except to the
extent that claims of the Company itself as a creditor of the subsidiary may be
recognized.
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<PAGE>
The Indenture does not limit the amount of other indebtedness or securities
that may be issued by the Company or any of its subsidiaries.
OPTIONAL REDEMPTION
The Notes may not be redeemed by the Company prior to March 15, 2000.
Thereafter, the Notes may be redeemed at the option of the Company, in whole or
in part, at any time and from time to time, upon not less than 15 nor more than
60 days notice by mail at the applicable redemption prices (expressed in
percentages of principal amount) set forth below.
If redeemed during the twelve-month period beginning March 15,
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2000........................ 101.30%
2001........................ 100.65%
</TABLE>
together with interest accrued and unpaid thereon to the date fixed for
redemption. If all accrued and payable interest on the Notes has not been paid,
the Notes may not be redeemed in part and the Company may not purchase or
acquire any Notes otherwise than pursuant to a purchase or exchange offer made
on the same terms to all holders of the Notes.
If less than all the Notes are to be redeemed, the Trustee will select those
to be redeemed by lot or such other method as the Trustee in its discretion
shall deem appropriate and fair. Notice of redemption will be given to holders
of the Notes to be redeemed by first class mail at their last address appearing
on the Register for the Notes.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company will not consolidate with or merge into any other person or
convey, transfer or lease its properties and assets substantially as an
entirety to any person, and the Company will not permit any person to
consolidate with or merge into the Company unless (a) if applicable, the person
formed by such consolidation or into which the Company is merged or the person
or corporation which acquires the properties and assets of the Company
substantially as an entirety is a corporation, partnership or trust organized
and validly existing under the laws of the United States or any state thereof
or the District of Columbia and expressly assumes payment of the principal of
and premium, if any, and interest on the Notes and performance and observance
of each obligation of the Company under the Indenture, (b) after consummating
such consolidation, merger, transfer or lease, no Event of Default or event
which, after notice or lapse of time or both, would become an Event of Default
will occur and be continuing, (c) such consolidation, merger, conveyance,
transfer or lease does not adversely affect the validity or enforceability of
the Notes and (d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease complies with the provisions of the
Indenture.
PURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL
In the event of a Change of Control, each holder of Notes will have the
right, at the holder's option, subject to the terms and conditions of the
Indenture, to require the Company to purchase all or any part (provided that
the principal amount must be $1,000 or an integral multiple thereof) of the
holder's Notes on the date that is 40 business days after the occurrence of
such Change of Control (the "Purchase Date") for a purchase price equal to 100%
of the principal amount thereof, plus interest accrued and unpaid thereon to
the Purchase Date.
Within 20 business days after the occurrence of the Change of Control, the
Company shall mail to the Trustee and to each holder (and to beneficial owners
as required by law) a notice of the occurrence of the Change of Control,
setting forth, among other things, the terms and conditions of, and the
procedures required for exercise of, the holder's right to require the purchase
of such holder's Notes.
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<PAGE>
To exercise the purchase right, a holder must deliver written notice of such
exercise to the Trustee prior to the close of business on the Purchase Date,
specifying the Notes with respect to which the right of purchase is being
exercised. Such notice of exercise may be withdrawn by the holder by a written
notice of withdrawal delivered to the Trustee at any time prior to the close of
business on the Purchase Date.
Under the Indenture, a "Change of Control" is deemed to have occurred at such
time as (i) any Acquiring Person has become such person or (ii) there shall be
consummated any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation (other than a consolidation or
merger with a wholly owned subsidiary of the Company in which all shares of
Common Stock outstanding immediately prior to the effectiveness thereof are
changed into or exchanged for the same consideration) or pursuant to which the
Common Stock would be converted into cash, securities or other property, in
each case, other than a consolidation or merger in which the holders of Common
Stock immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of common stock of the continuing or surviving
corporation immediately after the consolidation or merger; provided, however,
that a Change of Control shall not be deemed to have occurred if either (a) the
average of the last sale prices of the Common Stock for any five trading days
during the ten trading days immediately preceding the Change of Control is at
least equal to 105% of the Conversion Price in effect immediately preceding the
time of such Change of Control or (b) the consideration, in the transaction
giving rise to such Change of Control, to the holders of Common Stock consists
of cash, securities that are, or immediately upon issuance will be, listed on a
national securities exchange or quoted on the NASDAQ National Market System, or
a combination of cash and such securities, and the aggregate fair market value
of such consideration (which, in the case of such securities, shall be equal to
the average of the last sale prices of such securities during the ten
consecutive trading days commencing with the sixth trading day following
consummation of such transaction) is at least 105% of the Conversion Price in
effect on the date immediately preceding the closing date of such transaction.
"Acquiring Person" means any person or group (as defined in Section 13(d)(3)
of the Exchange Act) who or which, together with all affiliates and associates
(as defined in Rule 12b-2 under the Exchange Act), becomes the beneficial owner
of shares of Common Stock or other voting securities of the Company having more
than 50% of the total number of votes that may be cast for the election of
directors of the Company; provided, however, that an Acquiring Person shall not
include (x) the Company, (y) any Subsidiary of the Company or (z) any current
or future employee benefit plan of the Company or any Subsidiary of the Company
or any entity holding Common Stock of the Company for or pursuant to the terms
of any such plan. Notwithstanding the foregoing, no person shall become an
Acquiring Person as the result of an acquisition of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to more than
50% of the Common Stock of the Company then outstanding; provided, however,
that if a Person shall become the beneficial owner of 50% or more of the Common
Stock of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
beneficial owner of any additional shares of Common Stock of the Company, then
such Person shall be deemed to be an Acquiring Person.
The Company will comply with the provisions of Rule 13e-4, Rule l4e-l and any
other tender offer rules under the Exchange Act which may then be applicable,
and will file Schedule 13E-4 or any other schedule required thereunder in
connection with any offer by the Company to purchase Notes at the option of the
holders upon a Change of Control.
The Change of Control purchase feature of the Notes may in certain
circumstances make more difficult or discourage a takeover of the Company and,
thus, the removal of incumbent management. The Change of Control purchase
feature, however, is not the result of management's knowledge of any specific
effort to accumulate shares of Common Stock or to obtain control of the Company
by means of a merger, tender offer, solicitation or otherwise, or part of a
plan by management to adopt a series of anti-takeover provisions. Instead, the
Change of Control purchase feature is a standard term contained in other
similar debt offerings and the terms of such feature result from negotiations
between the Company and the Initial Purchasers.
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<PAGE>
The right to require the Company to repurchase Notes as a result of a Change
of Control could create an event of default under Senior Indebtedness of the
Company as a result of which any repurchase could, absent a waiver, be blocked
by the subordination provisions of the Notes. The Company's Board of Directors
may not waive a Change of Control. Failure by the Company to repurchase the
Notes when required will result in an Event of Default with respect to the
Notes whether or not such a repurchase is permitted by the subordination
provisions.
If a Change of Control were to occur, there can be no assurance that the
Company would have sufficient funds to pay the Change of Control purchase price
for all Notes tendered by the holders thereof. The Company's ability to make
such payments may be limited by the terms of its then-existing borrowing and
other agreements. No Notes may be purchased if there has occurred and is
continuing an Event of Default described below under "Events of Default" (other
than a default in the payment of the purchase price with respect to such
Notes).
EVENTS OF DEFAULT
An Event of Default with respect to the Notes is defined in the Indenture as
being default for 30 days in payment of any interest installment on the Notes
(even if such payment is prohibited by the subordination provisions of the
Indenture); default in payment of principal of or premium, if any, on the Notes
either in connection with any redemption or otherwise (even if such payment is
prohibited by the subordination provisions of the Indenture); default in the
payment of the purchase price in respect of any Note on the Purchase Date
therefor (even if such payment is prohibited by the subordination provisions of
the Indenture); failure to provide timely notice of a Change of Control as
required by the Indenture; failure to observe or perform for 45 days after
notice thereof any other covenant in the Indenture; default in payment of any
principal of, interest on or premium in respect of any instrument or
instruments evidencing or securing other indebtedness for borrowed money having
an aggregate principal amount of $25,000,000 or more that shall have occurred
and be continuing and that (except in the case of a default in payment of
principal at maturity) shall have been accelerated, which acceleration shall
not have been rescinded or annulled within 30 days after notice is given to the
Company by the Trustee or to the Company and the Trustee by the holders of 25%
or more in aggregate principal amount of the Notes; or certain events of
bankruptcy, insolvency, reorganization, receivership or liquidation involving
the Company or certain of its subsidiaries.
The Company is required to file with the Trustee annually a written statement
as to the fulfillment of its obligations under the Indenture. The Indenture
provides that the Trustee may withhold notice to the holders of the Notes of
any default (except in payment of principal of, premium, if any, or interest on
the Notes) if the Trustee considers it in the interest of the holders of the
Notes to do so. The Indenture provides that, if an Event of Default (other than
an Event of Default resulting from bankruptcy, insolvency or reorganization)
shall have occurred and be continuing, either the Trustee or the holders of 25%
or more in aggregate principal amount of the Notes may declare the principal of
all the Notes and the interest accrued thereon to be due and payable
immediately, but if the Company shall cure all defaults (except the nonpayment
of principal of and premium, if any, and accrued interest on Notes that shall
have become due by acceleration) and certain other conditions are met, such
declaration may be annulled and past defaults may be waived by the holders of a
majority in aggregate principal amount of the Notes. Prior to a declaration of
acceleration, certain Events of Default and past defaults may be waived by the
holders of a majority in aggregate principal amount of the Notes. In the case
of an Event of Default resulting from certain events of bankruptcy, insolvency
or reorganization, all unpaid principal of and accrued interest on the Notes
then outstanding shall be due and payable immediately without any declaration
or other act on the part of the Trustee or the holders of Notes.
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default should occur and be continuing, the Trustee
shall be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Noteholders, unless such
Noteholders have offered to the Trustee reasonable security or indemnity.
Subject to such provision for security or indemnification, the holders of a
majority in aggregate principal amount of the Notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
14
<PAGE>
conferred on the Trustee, provided that the Trustee shall have the right to
decline to follow any such direction if the Trustee shall be advised by
counsel that the action or proceeding so directed may not lawfully be taken or
the Trustee shall determine that the action or proceeding so directed could
involve the Trustee in personal liability or would be unduly prejudicial to
the rights of the holders not joining in such directions or would conflict
with the Indenture.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority of the aggregate
principal amount of the Notes then outstanding, to execute a supplemental
indenture to add provisions to, or change in any manner or eliminate any
provisions of, the Indenture or modify in any manner the rights of the holders
of the Notes, provided that no such supplemental indenture may, among other
things, (1) extend the time for payment of principal of or any premium or
interest on any Note or reduce the principal amount thereof or the interest
thereon or any premium payable upon the redemption thereof or impair the right
of any holder to institute suit for payment of the Notes, or make the
principal thereof or any premium or interest thereon payable in any coin or
currency other than that provided in the Indenture, or modify the
subordination provisions of the Indenture in a manner adverse to the holders
or impair the right to convert the Notes into Common Stock or to require the
Company to repurchase the Notes upon the occurrence of a Change of Control
without the consent of the holder of each outstanding Note so affected, or (2)
reduce the aforesaid percentage of the aggregate principal amount of Notes,
the holders of which must consent to authorize any such supplemental
indenture, without the consent of the holders of all outstanding Notes.
FORM, DENOMINATION AND REGISTRATION
The Notes have been issued in fully registered form, without coupons, in
denominations of $1,000 in principal amount and integral multiples thereof.
Notes currently held by "qualified institutional buyers" as defined in Rule
144A under the Securities Act or by persons who are not U.S. persons who
acquired such Notes in "offshore transactions" in reliance on Regulation S
under the Securities Act ("Non-U.S. Persons") are currently evidenced by
restricted global Notes (the "Restricted Global Notes") which were deposited
with, or on behalf of, DTC and registered in the name of Cede and Co.
("Cede"), as DTC's nominee.
Any purchaser (a "Public Holder") of Notes pursuant to this Prospectus will
receive a beneficial interest in an unrestricted global note (the "Public
Global Note") which will be deposited with, or on behalf of, DTC and
registered in the name of Cede, as DTC's nominee. Except as set forth below,
the record ownership of the Public Global Note may be transferred in whole or
in part, only to another nominee of DTC or to a successor of DTC or its
nominee.
A Public Holder may hold its interest in the Public Global Note directly
through DTC if such Public Holder is a participant in DTC, or indirectly
through organizations which are participants in DTC ("Participant" or
"Participants"). Transfers between Participants are effected in the ordinary
way in accordance with DTC rules and will be settled in same day funds.
Public Holders who are not Participants may beneficially own interests in
the Public Global Note held by DTC only through Participants or certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC,
is the registered owner of the Public Global Note, Cede for all purposes is
considered the sole holder of the Public Global Note.
Payment of interest on and the redemption price (upon redemption at the
option of the Company or at the option of the Holder upon a Change of Control)
of the Public Global Note will be made to Cede, the nominee for DTC, as the
registered owner of the Public Global Note, by wire transfer of immediately
available funds.
15
<PAGE>
Neither the Company, the Trustee nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Public
Global Note or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
With respect to any payment of interest on and the redemption price (upon
redemption at the option of the Company or at the option of the Holder upon a
Change of Control) of the Public Global Note, DTC's practice is to credit
Participants' accounts on the payment date therefor with payments in amounts
proportionate to their respective beneficial interests represented by the
Public Global Note as shown on the records of DTC, unless DTC has reason to
believe that it will not receive payment on such payment date. Payments by
Participants to owners of beneficial interests represented by the Public
Global Note held through such Participants will be the responsibility of such
Participants, as is now the case with securities held for the accounts of
customers registered in "street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest represented by the Public Global Note to pledge
such interest to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interest, may be affected
by the lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
Subject to the provisions of the Indenture, persons purchasing Notes
pursuant to this Prospectus and having beneficial interests in the Public
Global Note may upon request exchange such beneficial interest for Notes
issued in definitive form. In addition, if DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will cause Notes to be issued in
definitive form in exchange for the Public Global Note.
PAYMENTS OF PRINCIPAL AND INTEREST
The Indenture requires that payments in respect of the Notes (including
principal, premium, if any, and interest) held of record by DTC (including
Notes evidenced by the Public Global Note) be made in same day funds. Payments
in respect of the Notes held of record by holders other than DTC may, at the
option of the Company, be made by check and mailed to such holders of record
as shown on the Register for the Notes.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The Company and the Initial Purchasers have entered into a Registration
Rights Agreement dated March 6, 1997 (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement, the Company has filed with the
Commission on April 10, 1997 a registration statement (the "Shelf Registration
Statement") on Form S-3, of which this Prospectus is a part, to cover resales
of Transfer Restricted Securities (as defined below) by the holders thereof
who satisfy certain conditions relating to the provision of information in
connection with the Shelf Registration Statement. Notwithstanding the
foregoing, the Company will be permitted to prohibit offers and sales of
Transfer Restricted Securities pursuant to the Shelf Registration Statement
under certain circumstances and subject to certain conditions (any period
during which offers and sales are prohibited being referred to as a
"Suspension Period"). "Transfer Restricted Securities" means each Note and
each Share until the date on which such Note or Share has been effectively
registered under the Securities Act and disposed of in accordance with the
Shelf Registration Statement, the date on which such Note or Share is
distributed to the public pursuant to Rule 144 under the Securities Act or the
date on which such Note or Share may be sold or transferred pursuant to Rule
144(k) (or any similar provisions then in force).
Holders of the Transfer Restricted Securities not already included under
"Selling Securityholders" below will be required to deliver information to be
used in connection with, and to be named as selling securityholders
16
<PAGE>
in, the Shelf Registration Statement and to provide any comments they may wish
to make on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Transfer Restricted
Securities included in the Shelf Registration Statement. The Transfer
Restricted Securities of any holder who elects not to include such securities
in the Shelf Registration Statement could be deemed to be less liquid than if
such securities were included in the Shelf Registration Statement. In addition,
there can be no assurance that the Company will be able to maintain an
effective and current registration statement as required. The absence of such a
registration statement may limit the holder's ability to sell such Transfer
Restricted Securities or adversely affect the price at which such Transfer
Restricted Securities can be sold.
If the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by an
additional registration statement filed and declared effective) or usable for
the offer and sale of Transfer Restricted Securities for a period of time
(including any Suspension Period) which shall exceed 60 days in the aggregate
in any of the one-year periods ending on the first, second or third
anniversaries of March 11, 1997, or which shall exceed 30 days in any calendar
quarter within any of such one-year periods (each such event referred to above,
a "Registration Default"), the Company will pay liquidated damages to each
holder of Transfer Restricted Securities who has complied with such holder's
obligations under the Registration Rights Agreement. The amount of liquidated
damages payable during any period during which a Registration Default shall
have occurred and be continuing is that amount which is equal to one quarter of
one percent (25 basis points) per annum per $1,000 principal amount or $2.50
per annum per 22.0702 shares of Common Stock (subject to adjustment in the
event of stock splits, stock recombinations, stock dividends and the like)
constituting Transfer Restricted Securities for each 90-day period until the
Shelf Registration Statement again becomes effective or usable, as the case may
be, up to a maximum amount of liquidated damages of $0.25 per week per $1,000
principal amount of Notes or $12.50 per annum per 22.0702 shares of Common
Stock (subject to adjustment as set forth above) constituting Transfer
Restricted Securities. All accrued liquidated damages shall be paid to Record
Holders by wire transfer of immediately available funds or by federal funds
check by the Company on each Damages Payment Date (as defined in the
Registration Rights Agreement). Following the cure of all Registration
Defaults, liquidated damages will cease to accrue with respect to such
Registration Default.
The Company shall cause the Shelf Registration Statement to be effective for
a period of three years from the effective date thereof or such shorter period
that will terminate when each of the Transfer Restricted Securities covered by
the Shelf Registration Statement ceases to be a Transfer Restricted Security.
Notwithstanding the foregoing, the Company shall not be obligated to maintain
the effectiveness of the Shelf Registration Statement if it has obtained an
opinion of counsel that the Transfer Restricted Securities may be freely
offered and sold in the public markets without the continued effectiveness of
the Shelf Registration Statement.
The foregoing summary of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the provisions of the Registration Rights
Agreement. Copies of the Registration Rights Agreement are available from the
Company.
GOVERNING LAW
The Indenture and, except as may otherwise be required by mandatory
provisions of law, the Notes will be governed by and construed in accordance
with the laws of the State of New York, without giving effect to such state's
conflicts of laws principles.
INFORMATION CONCERNING THE TRUSTEE
The Company and its subsidiaries may maintain deposit accounts and conduct
other banking transactions with the Trustee in the ordinary course of business.
17
<PAGE>
ABSENCE OF PUBLIC MARKET; TRANSFER RESTRICTIONS
Upon their original issuance, the Notes became eligible for trading on the
PORTAL Market. However, the Notes sold pursuant to this Prospectus will no
longer be eligible for trading on the PORTAL Market. There can be no assurance
that an active trading market for the Notes will develop or as to the
liquidity or sustainability of any such market, the ability of the holders to
sell their Notes or at what price holders of the Notes will be able to sell
their Notes. Future trading prices of the Notes will depend upon many factors
including, among other things, prevailing interest rates, the Company's
operating results, the price of the Common Stock and the market for similar
securities. The Company intends to apply for listing of the Notes on the New
York Stock Exchange.
DESCRIPTION OF CAPITAL STOCK
Currently, the total number of shares of all classes of capital stock which
the Company is authorized to issue is 525,000,000 shares, consisting of
500,000,000 shares of common stock $.01 par value and 25,000,000 shares of
preferred stock, $.01 par value per share (the "Series Preferred Stock"). The
Company is seeking the approval of its stockholders at its Annual Meeting of
Stockholders to be held on May 7, 1997 to increase the number of shares of
authorized Common Stock from 500,000,000 to 750,000,000 shares.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share held and
have no preemptive or other rights to subscribe for additional shares from the
Company. There are no cumulative voting rights, with the result that holders
of more than 50% of the shares of Common Stock are able to elect 100% of the
Company's directors. All outstanding shares of Common Stock are validly issued
and fully paid and nonassessable. Holders of Common Stock are entitled to such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. See "Dividend Policy." Upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to receive the net assets of the Company, after the Company
shall have satisfied or made provision for its debts and obligations and for
the payment to holders of shares of any class or series (including any then
outstanding shares of Series Preferred Stock) having preferential rights to
receive distributions of the net assets of the Company. See "Preferred Stock."
The transfer agent and registrar for the Common Stock is Boston EquiServe
LLP.
PREFERRED STOCK
The shares of Series Preferred Stock may be issued from time to time in one
or more series without further action by the stockholders of the Company,
except as may be required by applicable law or stock exchange rules. The Board
of Directors of the Company may determine, in whole or in part, the
preferences, voting powers, qualifications and special or relative rights or
privileges, if any, of any such series before the issuance of any shares of
that series; provided, however, that if and to the extent that shares of any
series have voting rights, such rights shall not be in excess of the greater
of (i) one vote per share of such series or (ii) if the shares of such series
are convertible into shares of Common Stock, such number of votes per share as
equals the number of shares of Common Stock into which one share of such
series is at the time of such vote convertible. The Board of Directors shall
determine the number of shares constituting each series of Series Preferred
Stock and each series shall have a distinguishing designation.
It is not possible to state the precise effects of the authorization of the
Series Preferred Stock upon the rights of holders of Common Stock until the
Board of Directors determines the respective preferences, limitations and
relative rights of the holders of one or more series of Series Preferred
Stock. However, such effects might include (a) a reduction of the amount
otherwise available for payment of any dividends on Common Stock, to the
extent dividends are payable on any issued shares of Series Preferred Stock,
and restrictions on dividends on Common Stock if dividends on outstanding
Series Preferred Stock are in arrears; (b) dilution of the voting power of the
Common Stock to the extent that outstanding Series Preferred Stock has voting
rights; and (c) the holders of
18
<PAGE>
Common Stock not being entitled to share in the Company's assets upon
liquidation until satisfaction of any liquidation preference granted to
outstanding Series Preferred Stock.
The Series Preferred Stock might have the effect of discouraging an attempt
by another person or entity, through the acquisition of a substantial number of
shares of the Company's Common Stock, to acquire control of the Company with a
view to imposing a merger, sale of all or any part of the Company's assets or a
similar transaction or otherwise to exercise such control, since the issuance
of new shares of Series Preferred Stock could be used to dilute the stock
ownership or voting rights of such person or entity. Furthermore, shares of
Series Preferred Stock, or warrants or other rights to acquire shares of Series
Preferred Stock or Common Stock could be issued to holders of the Common Stock
under a stockholders' rights plan (or otherwise) on terms designed to enable
stockholders to receive fair and equal treatment in the event of any proposed
acquisition of the Company. The adoption of such a rights plan could make it
more difficult for a third party to acquire, or could discourage a third party
from acquiring, the Company or a large block of the Company's Common Stock.
Management is not aware of any effort by any person to gain control of the
Company. The Board of Directors has, however, periodically reviewed the
advantages and disadvantages of adopting a stockholders' rights plan. Although
the Board of Directors has considered, based upon such review, that it may be
in the best interests of the Company and its stockholders to enact such a plan,
the Board has not decided to enact a stockholders' rights plan as of the date
of this Prospectus.
The Company has no current agreements, commitments or understandings with
respect to the sale or issuance of the shares of Series Preferred Stock.
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a summary of certain United States federal income and estate
tax considerations relating to the purchase, ownership and disposition of the
Notes and the Shares, but does not purport to be a complete analysis of all of
the potential tax considerations relating thereto. This summary is based on
laws, regulations, rulings and decisions now in effect, all of which are
subject to change. This summary deals only with holders that hold Notes and
Shares as capital assets and does not address tax considerations applicable to
investors that may be subject to special tax rules, such as banks, tax-exempt
organizations, insurance companies, dealers in securities or currencies,
persons that will hold the Notes or Shares as part of an integrated investment
(including a "straddle") comprised of Notes or Shares and one or more other
positions, persons that have a "functional currency" other than the U.S. dollar
or holders of Notes that did not acquire the Notes in the initial distribution
thereof at their original issue price.
INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS REGARDING THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX AND
ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES
ARISING UNDER THE LAWS OF ANY STATE, LOCAL, OR FOREIGN TAXING JURISDICTION, OR
UNDER ANY APPLICABLE TAX TREATY.
UNITED STATES HOLDERS
As used herein, the term "United States Holder" means the beneficial owner of
a Note or Shares that is a United States person. A "United States person" is
(1) a citizen or resident of the United States, (2) an entity created or
organized in or under the laws of the United States or any political
subdivision thereof that is classified as a corporation or as a partnership,
(3) an estate the income of which is subject to United States federal income
taxation regardless of its source, or (4) a trust if (i) a U.S. court is able
to exercise primary supervision over the trust's administration and (ii) one or
more U.S. fiduciaries have the authority to control all the trust's substantial
decisions. The term "United States" means the United States of America
(including the States and the District of Columbia).
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<PAGE>
PAYMENT OF INTEREST
Interest on a Note generally will be includible in the income of a United
States Holder as ordinary income at the time such interest is received or
accrued, in accordance with such holder's method of accounting for United
States federal income tax purposes.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a Note, a United States Holder
generally will recognize capital gain or loss equal to the difference between
(i) the amount of cash proceeds and the fair market value of any property
received on the sale, exchange or redemption (except to the extent such amount
is attributable to accrued interest income, which is taxable as ordinary
income) and (ii) such holder's adjusted basis in the Note. A United States
Holder's adjusted basis in a Note generally will equal the cost of the Note to
such holder. Such capital gain or loss will be long-term capital gain or loss
if the holder's holding period in the Note was more than one year at the time
of sale, exchange or redemption.
CONVERSION OF THE NOTES
A United States Holder generally will not recognize any income, gain, or loss
upon conversion of a Note into Shares except with respect to cash received in
lieu of a fractional Share. Such holder's basis in the Common Stock received on
conversion of a Note will be the same as such holder's adjusted basis in the
Note at the time of conversion (reduced by any basis allocable to a fractional
share interest), and the holding period for the Common Stock received on
conversion will generally include the holding period of the Note converted.
Cash received in lieu of a fractional Share upon conversion will be treated
as a payment in exchange for the fractional Share. Accordingly, the receipt of
cash in lieu of a fractional Share generally will result in capital gain or
loss (measured by the difference between the cash received for the fractional
Share and the United States Holder's adjusted basis in the fractional Share).
ADJUSTMENT OF CONVERSION PRICE
If at any time (a) the Company makes a distribution of property to its
stockholders or purchases Common Stock in a tender offer and such distribution
or purchase would be taxable to such stockholders as a dividend for federal
income tax purposes (e.g., distributions of evidences of indebtedness or assets
of the Company but generally not stock dividends or rights to subscribe for
capital stock) and, pursuant to the antidilution provisions of the Indenture,
the Conversion Price of the Notes is reduced or (b) the Conversion Price is
reduced at the discretion of the Company, such reduction may be deemed to be
the receipt of taxable income by holders of the Notes. Holders of Notes
therefore could have taxable income as a result of an event in which they
receive no cash or property. Similarly, a failure to adjust the conversion
price of the Notes to reflect a stock dividend or other event increasing the
proportionate interest of the holders of outstanding Company Common Stock could
in some circumstances give rise to deemed dividend income to United States
Holders of such Common Stock.
DIVIDENDS ON THE SHARES
Dividends paid on the Shares generally will be includible in the income of a
United States Holder as ordinary income to the extent of the Company's current
or accumulated earnings and profits. Subject to certain limitations, a
corporate taxpayer holding Common Stock that receives dividends thereon
generally will be eligible for a dividends-received deduction equal to 70
percent of the dividends received. Under legislation proposed as part of the
Clinton administration's fiscal year 1998 budget proposal, the 70-percent
dividends-received deduction would be reduced to 50 percent for dividends paid
or accrued more than 30 days after the date of enactment of the legislation.
SALE, EXCHANGE OR REDEMPTION OF COMMON STOCK
Upon the sale, exchange or redemption of Shares, a United States Holder
generally will recognize capital gain or loss equal to the difference between
(i) the amount of cash proceeds and the fair market value of any
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<PAGE>
property received on the sale, exchange or redemption and (ii) such holder's
adjusted basis in the Shares. Such capital gain or loss will be long-term
capital gain or loss if the holder's holding period in the Shares was more than
one year at the time of sale, exchange or redemption.
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest on a Note, payments of dividends on
Shares, and payments of the proceeds of the sale of a Note or Shares to certain
non-corporate United States holders, and a 31% backup withholding tax may apply
to such payments if the United States Holder (i) fails to furnish or certify
its correct taxpayer identification number to the payor in the manner required,
(ii) is notified by the Internal Revenue Service (the "IRS") that it has failed
to report payments of interest and dividends properly, or (iii) under certain
circumstances, fails to certify that it has not been notified by the IRS that
it is subject to backup withholding for failure to report interest and dividend
payments. Any amounts withheld under the backup withholding rules from a
payment to a United States Holder will be allowed as a credit against such
holder's United States federal income tax liability and may entitle the holder
to a refund.
NON-UNITED STATES HOLDERS
Subject to the discussion of backup withholding below, payments of interest
on the Notes to, or on behalf of, any beneficial owner of a Note that is not a
United States Holder (a "Non-U.S. Holder") will not be subject to U.S. federal
income or withholding taxes, provided that such interest income is not
effectively connected with a United States trade or business of the Non-U.S.
Holder and provided that (i) such Non-U.S. Holder does not actually or
constructively own 10 percent or more of the total combined voting power of all
classes of stock of the Company, (ii) such Non-U.S. Holder is not a controlled
foreign corporation for U.S. tax purposes that is related to the Company
actually or constructively through stock ownership and (iii) the Non-U.S.
Holder certifies, under penalties of perjury, that it is not a United States
person and provides its name and address in compliance with applicable
requirements.
Except to the extent that an applicable treaty otherwise provides, a Non-U.S.
Holder generally will be taxed in the same manner as a United States Holder
with respect to interest paid on the Notes if the interest income is
effectively connected with a United States trade or business of the Non-U.S.
Holder. Effectively connected interest received by a corporate Non-U.S. Holder
may also, under certain circumstances, be subject to an additional "branch
profits tax" at a 30% rate (or, if applicable, a lower treaty rate). Even
though such effectively connected interest is subject to income tax, and may be
subject to the branch profits tax, it is not subject to withholding tax if the
holder delivers IRS Form 4224 to the payor.
Any capital gain realized on the sale, exchange, redemption or other
disposition of a Note or of Shares (including the receipt of cash in lieu of
fractional shares upon conversion of a Note into Shares) by a Non-U.S. Holder
will not be subject to United States federal income or withholding taxes unless
(1) in the case of an individual, such holder is present in the United States
for 183 days or more in the taxable year of the sale, exchange, redemption, or
other disposition or receipt and certain other conditions are met, (2) the gain
is effectively connected with a United States trade or business of the Non-U.S.
Holder, (3) the holder is subject to tax pursuant to the provisions of the Code
applicable to certain United States expatriates, or (4) the Company is a United
States real property holding corporation. The Company does not believe that it
is or is likely to become a United States real property holding corporation.
Except as described above with respect to the receipt of cash in lieu of
fractional shares by certain Non-U.S. Holders upon conversion of a Note, no
United States federal income or withholding taxes will be imposed upon the
conversion of a Note into Shares.
Dividends paid (or deemed paid, as described under "United States Holders--
Adjustment of Conversion Price") on Shares held by a Non-U.S. Holder (excluding
dividends that are effectively connected with the
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<PAGE>
conduct of a trade or business in the United States by such holder) will be
subject to withholding of United States federal income tax at a 30 percent rate
(or lower rate provided under any applicable tax treaty, assuming the holder of
the Shares satisfies any certification or documentation requirements necessary
to claim the benefits of such treaty). Except to the extent that an applicable
tax treaty otherwise provides, a Non-U.S. Holder will be taxed in the same
manner as a United States Holder on dividends paid (or deemed paid) that are
effectively connected with the conduct of a trade or business in the United
States by the Non-U.S. Holder. If such Non-U.S. Holder is a foreign
corporation, it may also be subject to a United States branch profits tax at a
30% rate or such lower rate as may be specified by an applicable income tax
treaty. Even though such effectively connected dividends are subject to income
tax, and may be subject to the branch profits tax, they will not be subject to
U.S. withholding tax if the holder delivers IRS Form 4224 to the payor.
Payments made on a Note or Shares and proceeds from the sale of a Note or
Shares received by a Non-U.S. Holder will not be subject to a backup
withholding tax of 31% or to information reporting requirements unless, in
general, the holder fails to comply with certain reporting procedures or
otherwise fails to establish an exemption from such tax or reporting
requirements under applicable provisions of the Code.
On April 15, 1996, the Internal Revenue Service released proposed revisions
(the "Proposed Regulations") to the regulations interpreting the withholding
tax, information reporting and backup withholding tax rules described above. In
general, the Proposed Regulations would require certain Non-U.S. Holders to
provide additional information in order to establish an exemption from or
reduce the rate of withholding tax or backup withholding tax, and in particular
would require that foreign partnerships and partners of a foreign partnership
provide certain information and comply with certain certification requirements
not required under existing law. The Proposed Regulations are proposed
generally to be effective for payments made after December 31, 1997. It is not
possible to predict whether, or in what form, the Proposed Regulations
ultimately will be adopted.
A Note will not be subject to United States federal estate tax as a result of
the death of a holder who is not a citizen or resident of the United States at
the time of death, provided that such holder did not at the time of death
actually or constructively own 10 percent or more of the combined voting power
of all classes of stock of the Company and, at the time of such holder's death,
payments of interest on such Note would not have been effectively connected
with the conduct by such holder of a trade or business in the United States.
Shares held by an individual at the time of the individual's death (or
previously transferred subject to certain retained rights or powers) will be
subject to United States federal estate tax unless otherwise provided by an
applicable estate tax treaty.
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SELLING SECURITYHOLDERS
The following table sets forth certain information as of April 4, 1997
(except as otherwise noted) as to the security ownership of the Selling
Securityholders. Except as set forth below, none of the Selling
Securityholders has had a material relationship with the Company or any of its
predecessors or affiliates within the past three years.
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL NUMBER OF SHARES
AMOUNT OF NOTES OF COMMON STOCK
NAME THAT MAY BE SOLD THAT MAY BE SOLD*
- ---- ------------------- -----------------
<S> <C> <C>
American National Banking & Trust Com-
pany of Chicago........................ $ 590,000 13,021
The Bank of New York.................... 53,840,000 1,188,258
Bankers Trust Company................... 28,910,000 638,048
Bear Stearns Securities Corp............ 8,500,000 187,596
Bank of Nova Scotia-Taxable Account..... 120,000 2,648
Bank One Trust Company, N.A./DB II...... 35,000 772
Bank One Trust Company, N.A. ........... 915,000 20,194
Bankers Trust Company/NatWest Securi-
ties, Ltd.............................. 750,000 16,552
Bank of America Personal Trust Proxy
Unit #38432............................ 355,000 7,834
Boatmen's Trust Company................. 2,930,000 64,665
Boston Safe Deposit & Trust Co. ........ 33,430,000 737,806
Brown Brothers Harriman & Co............ 31,555,000 696,424
Chase Manhattan Bank.................... 29,730,000 656,146
Chase Manhattan Bank/Chemical........... 5,360,000 118,296
Chase Manhattan Bank, Trust............. 750,000 16,552
Chase Manhattan Bank Trust Co. of Cali-
fornia................................. 500,000 11,035
CIBC Wood Gundy Securities Inc. Royal
Trust Tower............................ 100,000 2,207
Citicorp. Services, Inc................. 6,445,000 142,242
Comerica Bank........................... 40,000 882
Corestates Bank N.A. ................... 3,260,000 71,948
Credit Suisse First Boston Corporation.. 4,750,000 104,833
Custodial Trust Company................. 9,855,000 217,501
Daiwa Securities America, Inc........... 8,250,000 182,079
Donaldson, Lufkin & Jenrette Securities
Corporation............................ 12,200,000 269,256
Fiduciary Trust Company, International.. 400,000 8,828
Firstar Trust Company................... 90,000 1,986
Fleet Bank of Massachusetts, N.A. ...... 45,000 993
First National Bank of Omaha............ 1,505,000 33,215
First of America-Michigan, N.A. ........ 200,000 4,414
Goldman, Sachs & Co..................... 750,000 16,552
Harris Trust & Savings Bank............. 50,000 1,103
Investors Fiduciary Trust Company/SSB... 3,360,000 74,155
Regional Operations Group Inc........... 50,000 1,103
Investors Bank & Trust/M.FL. Custody.... 275,000 6,069
Julius Baer Securities Inc.............. 300,000 6,621
Glynn (J.A.) & Company.................. 250,000 5,517
Morgan (J.P.) Securities Inc., WF....... 10,000,000 220,701
Key Bank National Association........... 1,150,000 25,380
Lehman Brothers, Inc.................... 6,000,000 132,421
Lehman Brothers International (Europe)--
Prime Broker (LBI)..................... 27,700,000 611,344
M & I Marshall & Ilsley Bank............ 60,000 1,324
Mercantile, Safe Deposit and Trust Com-
pany................................... 2,150,000 47,450
Merrill Lynch, Pierce, Fenner & Smith,
Inc. .................................. 3,500,000 77,245
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL NUMBER OF SHARES
AMOUNT OF NOTES OF COMMON STOCK
NAME THAT MAY BE SOLD THAT MAY BE SOLD*
- ---- ------------------- -----------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Safekeeping............................ $ 6,500,000 143,456
Merrill Lynch--Debt Securities.......... 22,495,000 496,468
Morgan (J.P.) Securities Inc............ 9,500,000 209,666
Morgan Stanley & Co. Incorporated....... 1,700,000 37,519
Morgan Stanley Trust Company............ 2,000,000 44,140
National City Bank...................... 190,000 4,193
NatWest Securities Corporation #2....... 750,000 16,552
NBA Bank--Indiana....................... 45,000 993
Nomura International Trust Company In-
corporated............................. 1,300,000 28,691
Norwest Bank Minnesota National Associa-
tion................................... 950,000 20,966
Northern Trust Company.................. 7,275,000 160,560
Old Kent Bank........................... 880,000 19,421
Paine Webber, Inc....................... 2,015,000 44,471
PNC National Association................ 6,445,000 142,242
Prudential Securities Incorporated...... 5,660,000 124,917
RBC Dominion Securities Corporation..... 15,500,000 342,087
Robertson, Stephens & Company, L.P...... 50,000 1,103
Salomon Brothers Inc.................... 1,250,000 27,587
Smith Barney Inc........................ 6,320,000 139,474(1)
SBC Warburg Inc......................... 7,860,000 173,471
Societe General Securities Corporation.. 3,700,000 81,659
SSB-Custodian Global Proxy Unit, A5NW... 96,215,000 2,123,482
Star Bank, National Association, Cincin-
nati................................... 50,000 1,103
Sumitomo Trust & Banking Co. (U.S.A.)... 300,000 6,621
SunTrust Bank........................... 190,000 4,193
Swiss American Securities, Inc. ........ 100,000 2,207
UBS Securities Inc...................... 9,750,000 215,184
UMB Bank, N.A........................... 460,000 10,152
The Bank of California.................. 345,000 7,614
Wachovia Bank North Carolina............ 295,000 6,510
Yasuda Bank & Trust Company (USA)....... 3,000,000 66,210
First Bank, N.A......................... 805,000 17,766
Chase Manhattan Bank/Chemical........... 2,600,000 57,382
------------ ----------
$517,500,000 11,421,276**
============ ==========
</TABLE>
- --------
(1) Differs from the quotient obtained by dividing the aggregate principal
amount by 45.31 due to the fact that the aggregate principal amount
represents holdings of multiple definitive notes as well as an ownership
position under a global note.
* Assumes a conversion price of $45.31 per share and a cash payment in lieu
of any fractional share interest.
** Total differs from the amount to be registered due to the rounding down of
fractional shares.
24
<PAGE>
The preceding table has been prepared based upon information furnished to
the Company by DTC, State Street Bank and Trust Company, Trustee under the
Indenture, and by or on behalf of the Selling Securityholders. From time to
time, additional information concerning ownership of the Notes and Shares
offered hereby may rest with certain holders of the Notes and Shares who are
not named in the preceding table, with whom the Company believes it has no
affiliation and from whom the Company has received no response to its request
for such information.
In view of the fact that Selling Securityholders may offer all or a portion
of the Notes or Shares held by them pursuant to the offering contemplated by
this Prospectus, and because this offering is not being underwritten on a firm
commitment basis, no estimate can be given as to the principal amount of Notes
or the number of Shares that will be held by the Selling Securityholders after
completion of the offering made hereby. In addition, the Selling
Securityholders may have sold, transferred or otherwise disposed of all or a
portion of their Notes and/or Shares, since the date on which they provided
the information set forth above, in transactions exempt from the registration
requirements of the Securities Act.
Information concerning the Selling Securityholders may change from time to
time and any such changed information may be set forth in supplements to this
Prospectus if and when necessary. In addition, the per share conversion price,
and therefore the number of Shares issuable upon conversion of the Notes, is
subject to adjustment under certain circumstances. Accordingly, the aggregate
principal amount of Notes and the number of Shares issuable upon conversion of
the Notes offered hereby may increase or decrease.
PLAN OF DISTRIBUTION
The Notes and the Shares are being registered to permit public secondary
trading of such securities by the holders thereof from time to time after the
date of this Prospectus. The Company has agreed, among other things, to bear
all expenses (other than underwriting discounts and selling commissions) in
connection with the registration and sale of the Notes and the Shares covered
by this Prospectus.
The Company will not receive any of the proceeds from the offering of Notes
or the Shares by the Selling Securityholders. The Company has been advised by
the Selling Securityholders that the Selling Securityholders may sell all or a
portion of the Notes and Shares beneficially owned by them and offered hereby
from time to time on any exchange on which the securities are listed on terms
to be determined at the times of such sales. The Selling Securityholders may
also make private sales directly or through a broker or brokers.
Alternatively, any of the Selling Securityholders may from time to time offer
the Notes or the Shares beneficially owned by them through underwriters,
dealers or agents, who may receive compensation in the form of underwriting
discounts, commissions or concessions from the Selling Securityholders and the
purchasers of the Notes or Shares for whom they may act as agent. The
aggregate proceeds to the Selling Securityholders from the sale of the Notes
or Shares offered by them hereby will be the purchase price of such Notes or
Shares less discounts and commissions, if any.
The Notes and the Shares may be sold from time to time in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices
will be determined by the holders of such securities or by agreement between
such holders and underwriters or dealers who may receive fees or commissions
in connection therewith.
The outstanding Common Stock is listed for trading on the New York Stock
Exchange, and the Shares have been approved for listing on the New York Stock
Exchange. The Company intends to apply for listing of the Notes on the New
York Stock Exchange. However, no assurance can be given that an active trading
market for the Notes will develop or as to the liquidity or sustainability of
any such market. See "Risk Factors--Absence of Existing Active Public Market."
25
<PAGE>
The Selling Securityholders and any broker and any broker-dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the Notes or the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, in which event any commissions
received by such broker-dealers, agents or underwriters and any profit on the
resale of the Notes or the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under
Rule 144 or Rule 144A rather than pursuant to this Prospectus. There is no
assurance that any Selling Securityholder will sell any or all of the Notes or
Shares described herein, and any Selling Securityholder may transfer, devise
or gift such securities by other means not described herein.
The Notes were issued and sold in March 1997 in transactions exempt from the
registration requirements of the Securities Act to persons reasonably believed
by the Initial Purchasers to be "qualified institutional buyers" (as defined
in Rule 144A under the Securities Act) or institutional "accredited investors"
(as defined in Rule 510(a)(1), (2), (3) or (7) under the Securities Act or
outside the United States to certain persons in offshore transactions in
reliance on Regulation S under the Securities Act. Pursuant to the
Registration Rights Agreement, the Company has agreed to indemnify each
Initial Purchaser and each Selling Securityholder, and each Selling
Securityholder has agreed to indemnify the Company, each Initial Purchaser and
each other Selling Stockholder against certain liabilities arising under the
Securities Act.
The Company will use its best efforts to cause the registration statement to
which this Prospectus relates to become effective on or prior to July 9, 1997
and to use its reasonable best efforts to keep the registration statement
effective for a period of three years from the effective date thereof, or
until the Shelf Registration is no longer required for transfer of the Notes
or the Shares. The Company may prohibit offers and sales of Notes and Shares
pursuant to the registration statement to which this Prospectus relates at any
time if (A)(i) it is in possession of material non-public information, (ii)
the Board of Directors of the Company or the Executive Committee thereof
determines (based on advice of counsel) that such prohibition is necessary in
order to avoid a requirement to disclose such material non-public information
and (iii) the Board of Directors of the Company or the Executive Committee
thereof determines in good faith that disclosure of such material non-public
information would not be in the best interests of the Company and its
shareholders or (B) the Company has made a public announcement relating to an
acquisition or business combination transaction including the Company and/or
one or more of its subsidiaries (i) that is material to the Company and its
subsidiaries taken as a whole and (ii) the Board of Directors of the Company
or the Executive Committee thereof determines in good faith that offers and
sales of Notes and Shares pursuant to the registration statement to which this
Prospectus relates prior to the consummation of such transaction (or such
earlier date as the Board of Directors or the Executive Committee thereof
shall determine) is not in the best interests of the Company and its
shareholders. Expenses of preparing and filing the registration statement to
which this Prospectus relates and all post-effective amendments thereto will
be borne by the Company.
LEGAL MATTERS
Certain legal matters with respect to the legality of the issuance of the
Notes and Shares offered hereby will be passed upon for the Company by Ropes &
Gray, Boston, Massachusetts. David B. Walek, Esq., Clerk of the Company, is a
partner of Ropes & Gray. Certain partners of Ropes & Gray are the beneficial
owners of an aggregate of approximately 48,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company as of December 30, 1995
and December 31, 1996 and for each of the three years in the period ended
December 31, 1996 appearing in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 and incorporated by reference in this
Prospectus have been incorporated herein in reliance on the report of Coopers
& Lybrand L.L.P., independent accountants, given on the authority of that firm
as experts in accounting and auditing.
26
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLI-
CATION THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COM-
PANY SINCE THAT DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Information by Reference.......................... 2
The Company................................................................ 3
Risk Factors............................................................... 3
Use of Proceeds............................................................ 7
Dividend Policy............................................................ 7
Ratio of Earnings to Fixed Charges......................................... 7
Description of Notes....................................................... 8
Description of Capital Stock............................................... 18
Certain United States Federal Tax Consequences............................. 19
Selling Securityholders.................................................... 23
Plan of Distribution....................................................... 25
Legal Matters.............................................................. 26
Experts.................................................................... 26
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$517,500,000
EMC/2/
EMC CORPORATION
3 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2002
----------------
PROSPECTUS
, 1997
----------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with the
issuance of the securities being registered. All of the amounts shown are
estimates except the SEC registration fee. Such expenses will be borne by the
Company.
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
SEC registration fee............................................ $156,819
Printing and engraving expenses................................. 75,000
Legal fees and expenses......................................... 55,000
Trustee's Fees and Expenses..................................... 15,000
Accounting fees and Expenses.................................... 40,000
Miscellaneous................................................... 15,000
--------
Total......................................................... $356,819
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 9 of the By-laws of the Registrant, the Registrant shall, to
the extent legally permissible, indemnify each of its directors and officers
(including persons who serve at its request as directors, officers, or
trustees of another organization or in any capacity with respect to any
employee benefit plan) against all liabilities and expenses, including amounts
paid in satisfaction of judgments, in compromise or as fines and penalties,
and counsel fees, reasonably incurred by him in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, in which he may be involved or with which he may be threatened,
while in office or thereafter, by reason of his being or having been such a
director or officer, except with respect to any matter as to which he shall
have been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his action was in the best interests of the Registrant
(any person serving another organization in one or more of the indicated
capacities at the request of the Registrant who shall have acted in good faith
in the reasonable belief that his action was in the best interests of such
other organization to be deemed as having acted in such manner with respect to
the Registrant) or, to the extent that such matter relates to service with
respect to any employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan; provided, however
that as to any matter disposed of by a compromise payment by such director or
officer, pursuant to a consent decree or otherwise, no indemnification either
for said payment or for any other expenses shall be provided unless such
compromise shall be approved as in the best interests of the Registrant, after
notice that it involves such indemnification (a) by a disinterested majority
of the directors then in office; or (b) by a majority of the disinterested
directors then in office, provided that there has been obtained an opinion in
writing of independent legal counsel to the effect that such director or
officer appears to have acted in good faith in the reasonable belief that his
action was in the best interests of the Registrant; or (c) by the holders of a
majority of the outstanding stock at the time entitled to vote for directors,
voting as a single class, exclusive of any stock owned by any interested
director or officer. Expenses, including counsel fees, reasonably incurred by
any director or officer in connection with the defense or disposition of any
such action, suit or other proceeding may be paid from time to time by the
Registrant in advance of the final disposition thereof upon receipt of an
undertaking by such director or officer to repay the amounts so paid to the
Registrant if it is ultimately determined that indemnification for such
expenses is not authorized under such Section 9. The right of indemnification
provided by such Section 9 is not to be exclusive of or affect any rights to
which any director or officer may be entitled. As used in such Section 9, the
terms "director" and "officer" include their respective heirs, executors and
administrators, and an "interested" director or officer is one against whom in
such capacity the proceedings in question or another proceeding on the same or
similar grounds is then pending. Nothing contained in such Section 9 shall
affect any rights to indemnification to which corporate personnel other than
directors and officers may be entitled by contract or otherwise under law.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
3.1 Articles of Organization, as amended. Incorporated by reference from
Registration Statement on Form S-1 of the Registrant filed February 28,
1986, as amended (File No. 33-3636), from Registration Statement on Form
S-1 of the Registrant, as amended (File No. 33-17218), from the
Registrant's Annual Report on Form 10-K for the fiscal year ended January
2, 1993 (File No. 0-14367), from the Registration Statement on Form S-1
of the Registrant as amended (File No. 33-67224), from the Registrant's
Report on Form 8-K dated November 19, 1993 and from the Registrant's
Report on Form 8-K filed May 26, 1995.
3.2 Bylaws, as amended. Incorporated by reference from the Registrant's
Quarterly Report on Form 10-Q filed August 11, 1995.
4.1 Indenture between the Registrant and the Trustee (including form of Note)
4.2 Registration Rights Agreement dated as of March 11, 1997 between the
Registrant and Smith Barney Inc., Alex. Brown & Sons Incorporated and
Morgan Stanley & Co. Incorporated
5.1 Opinion of Ropes & Gray
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Powers of Attorney (included on signature pages of this Registration
Statement)
25.1 Statement of Eligibility of Trustee (Form T-1)
</TABLE>
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered hereunder, the Registrant will, unless in the opinion of its
counsel the question has already been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Act of 1934) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement;
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3, AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT ON FORM S-3 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED IN THE TOWN OF HOPKINTON, COMMONWEALTH OF MASSACHUSETTS, ON
APRIL 9, 1997.
EMC Corporation
By: /s/ Richard J. Egan
---------------------------------
NAME: RICHARD J. EGAN
TITLE: CHAIRMAN OF THE BOARD AND
DIRECTOR
POWER OF ATTORNEY
We, the undersigned officers and directors of EMC Corporation, hereby
severally constitute Richard J. Egan, Colin G. Patteson, William J. Teuber,
Jr., Paul T. Dacier and David B. Walek, and each of them singly, our true and
lawful attorneys with full power for them, and each of them singly, to sign
for us and in our names in the capacities indicated below, the registration
statement filed herewith and any and all amendments to said registration
statement (including pre-effective and post-effective amendments), and
generally to do all such things in our name and behalf in our capacities as
officers and directors to enable EMC Corporation to comply with the provisions
of the Securities Act of 1933, and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they
may be signed by our said attorneys, or any of them, to said registration
statement and any and all amendments thereto.
Witness our hands and common seal on the dates set forth below.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Richard J. Egan Chairman of the April 9, 1997
- ------------------------------------- Board and Director
RICHARD J. EGAN (Principal
Executive Officer)
/s/ Michael C. Ruettgers President and Chief April 9, 1997
- ------------------------------------- Executive Officer
MICHAEL C. RUETTGERS and Director
/s/ Colin G. Patteson Senior Vice April 9, 1997
- ------------------------------------- President, Chief
COLIN G. PATTESON Administrative
Officer and
Treasurer
(Principal
Financial Officer)
II-3
<PAGE>
SIGNATURE TITLE DATE
/s/ William J. Teuber, Jr. Vice President and April 9, 1997
- ------------------------------------- Chief Financial
WILLIAM J. TEUBER, JR. Officer (Principal
Accounting Officer)
/s/ Michael J. Cronin Director April 9, 1997
- -------------------------------------
MICHAEL J. CRONIN
Director April , 1997
- -------------------------------------
JOHN F. CUNNINGHAM
/s/ John R. Egan Director April 9, 1997
- -------------------------------------
JOHN R. EGAN
/s/ Maureen E. Egan Director April 9, 1997
- -------------------------------------
MAUREEN E. EGAN
/s/ W. Paul Fitzgerald Director April 9, 1997
- -------------------------------------
W. PAUL FITZGERALD
/s/ Joseph F. Oliveri Director April 9, 1997
- -------------------------------------
JOSEPH F. OLIVERI
II-4
<PAGE>
EMC CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY,
as Trustee
-----------------------
INDENTURE
Dated as of March 11, 1997
-----------------------
$517,500,000
3 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2002
<PAGE>
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties..................................................................... 1
Recitals.................................................................... 1
Purpose of Indenture........................................................ 1
Form of Face of Note........................................................ 1
Form of Trustee's Certificate of Authentication............................. 5
Form of Reverse of Note..................................................... 5
Compliance with Legal Requirements.......................................... 9
Form of Conversion Notice................................................... 10
Form of Assignment.......................................................... 11
Form of Notice of Exercise of Right to Require Repurchase................... 12
Form of Schedule of Exchanges of Definitive Securities...................... 13
ARTICLE ONE
Definitions
SECTION 1.01. Definitions.................................................. 14
Acquiring Person.......................................... 14
Affiliate................................................. 14
Board of Directors........................................ 15
Business Day.............................................. 15
Cedel..................................................... 15
Change of Control......................................... 15
Change of Control Repurchase Price........................ 16
Common Stock.............................................. 16
Company................................................... 16
Company Request; Company Order............................ 16
Conversion Price.......................................... 16
Corporate Trust Office of the Trustee..................... 16
Current Market Price...................................... 16
Custodian................................................. 16
Daily Market Price........................................ 16
Defaulted Interest........................................ 17
Definitive Note........................................... 17
Depositary................................................ 17
DTC....................................................... 17
</TABLE>
- ------------------------
* This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
i
<PAGE>
<TABLE>
<S> <C>
Euroclear..................................................17
Event of Default...........................................17
Exchange Act...............................................17
Global Note................................................17
Indenture..................................................17
Initial Purchasers.........................................17
Institutional Accredited Investor..........................17
Interest Payment Date......................................18
Material Subsidiary........................................18
Note or Notes..............................................18
Noteholder.................................................18
Officers' Certificate......................................18
Opinion of Counsel.........................................18
Outstanding................................................18
Person.....................................................19
Predecessor Note...........................................19
Purchase Agreement.........................................19
Redemption Date............................................19
Redemption Price...........................................19
Register; Registrar........................................19
Registration Rights Agreement..............................19
Regular Record Date........................................19
Regulation S...............................................19
Regulation S Global Note...................................19
Repurchase Date............................................19
Resale Restriction Termination Date........................19
Responsible Officer........................................20
Restricted Global Note.....................................20
Rule 144A..................................................20
Securities Act.............................................20
Senior Indebtedness........................................20
Shelf Registration Statement...............................20
Special Record Date........................................21
Stated Maturity............................................21
Subsidiary.................................................21
Time of Determination......................................21
Transfer Restricted Securities.............................21
Trust Indenture Act........................................21
Trustee....................................................21
</TABLE>
ii
<PAGE>
ARTICLE TWO
Issue, Description, Execution, Registration and Exchange of Notes
<TABLE>
<S> <C>
SECTION 2.01. Designation, Amount and Issue of Notes...............................22
SECTION 2.02. Form of Notes........................................................22
SECTION 2.03. Denominations, Dates, Interest Payment and Record Dates..............23
SECTION 2.04. Execution and Authentication of Notes................................24
SECTION 2.05. Exchange and Registration of Transfer of Notes.......................25
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes...........................33
SECTION 2.07. Temporary Notes......................................................34
SECTION 2.08. Cancellation of Notes Paid, etc......................................35
SECTION 2.09. CUSIP Numbers........................................................35
ARTICLE THREE
Redemption of Notes
SECTION 3.01. Redemption of Notes..................................................35
SECTION 3.02. Notice of Redemption; Selection of Notes.............................35
SECTION 3.03. Payment of Notes Called for Redemption; Deposit of Redemption Price..37
ARTICLE FOUR
Conversion of Notes
SECTION 4.01. Conversion Privilege................................................38
SECTION 4.02. Manner of Exercise of Conversion Privilege..........................38
SECTION 4.03. Cash Payments in Lieu of Fractional Shares..........................39
SECTION 4.04. Adjustment of Conversion Price......................................39
SECTION 4.05. Notice to Holders Prior to Certain Corporate Actions................44
SECTION 4.06. Reservation of Shares of Common Stock...............................45
SECTION 4.07. Shares Issued Upon Conversion.......................................45
SECTION 4.08. Covenants as to Common Stock........................................45
SECTION 4.09. Consolidation or Merger or Sale of Assets...........................46
SECTION 4.10. Disclaimer of Responsibility for Certain Matters....................47
</TABLE>
iii
<PAGE>
ARTICLE FIVE
Particular Covenants of the Company
<TABLE>
<S> <C>
SECTION 5.01. Payment of Principal, Premium and Interest................................47
SECTION 5.02. Office for Notices, Payments and Conversions, etc.........................47
SECTION 5.03. Appointments to Fill Vacancies in Trustee's Office........................48
SECTION 5.04. Provision as to Paying Agent..............................................48
SECTION 5.05. Annual Statement..........................................................49
ARTICLE SIX
Noteholder Lists and Reports by the Company and the Trustee
SECTION 6.01. Noteholder Lists..........................................................49
SECTION 6.02. Preservation and Disclosure of Lists......................................49
SECTION 6.03. Reports by the Company....................................................51
SECTION 6.04. Reports by the Trustee....................................................51
SECTION 6.05. Rule 144A Information Requirement.........................................52
ARTICLE SEVEN
Remedies of the Trustee and Noteholders on Event of Default
SECTION 7.01. Events of Default.........................................................52
SECTION 7.02. Payment of Notes on Default; Suit Therefor; Filing of Proofs of Claim.....55
SECTION 7.03. Application of Moneys Collected by Trustee................................56
SECTION 7.04. Proceedings by Noteholders................................................57
SECTION 7.05. Proceedings by Trustee....................................................58
SECTION 7.06. Remedies Cumulative and Continuing........................................58
SECTION 7.07. Direction of Proceeding and Waiver of Defaults by Majority of
Noteholders............................................................58
SECTION 7.08. Notice of Defaults........................................................59
SECTION 7.09. Undertaking to Pay Costs..................................................59
ARTICLE EIGHT
Concerning the Trustee
SECTION 8.01. Duties and Responsibilities of Trustee...................................59
SECTION 8.02. Reliance on Documents, Opinions, etc.....................................60
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
SECTION 8.03. No Responsibility for Recitals, etc...................................61
SECTION 8.04. Trustee, Paying Agent, Conversion Agent or Note Registrar May Own
Notes..............................................................62
SECTION 8.05. Moneys to Be Held in Trust............................................62
SECTION 8.06. Compensation and Expenses of Trustee..................................62
SECTION 8.07. Officers' Certificate as Evidence.....................................62
SECTION 8.08. Conflicting Interest of Trustee.......................................63
SECTION 8.09. Eligibility of Trustee................................................63
SECTION 8.10. Resignation or Removal of Trustee.....................................63
SECTION 8.11. Acceptance by Successor Trustee.......................................64
SECTION 8.12. Succession by Merger, etc.............................................65
SECTION 8.13. Limitation on Rights of Trustee as a Creditor.........................65
ARTICLE NINE
Concerning the Noteholders
SECTION 9.01. Action by Noteholders.................................................69
SECTION 9.02. Proof of Execution by Noteholders.....................................69
SECTION 9.03. Who Are Deemed Absolute Owners........................................69
SECTION 9.04. Company-Owned Notes Disregarded.......................................69
SECTION 9.05. Revocation of Consents; Future Holders Bound..........................70
SECTION 9.06. Record Date for Noteholder Acts.......................................70
ARTICLE TEN
Subordination of Notes
SECTION 10.01. Notes Subordinate to Senior Indebtedness.............................70
SECTION 10.02. Payments to Noteholders..............................................70
SECTION 10.03. Authorization by Noteholders.........................................74
SECTION 10.04. Trustee Not Charged with Knowledge of Prohibition....................74
SECTION 10.05. Rights of Trustee as Holder of Senior Indebtedness...................74
SECTION 10.06. Trustee Not Fiduciary for Holders of Senior Indebtedness.............75
SECTION 10.07. Article Applicable to Paying Agents..................................75
ARTICLE ELEVEN
Supplemental Indentures
SECTION 11.01. Supplemental Indentures Without Consent of Noteholders...............75
SECTION 11.02. Supplemental Indentures with Consent of Noteholders..................76
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
SECTION 11.03. Compliance With Trust Indenture Act; Effect of Supplemental
Indentures.........................................................77
SECTION 11.04. Notation on Notes....................................................77
SECTION 11.05. Evidence of Compliance of Supplemental Indenture to Be Furnished To
Trustee............................................................77
ARTICLE TWELVE
Consolidation, Merger and Sale
SECTION 12.01. Company May Consolidate, etc., on Certain Terms......................77
SECTION 12.02. Successor Corporation to Be Substituted..............................78
SECTION 12.03. Opinion of Counsel to be Given Trustee...............................79
ARTICLE THIRTEEN
Satisfaction and Discharge of Indenture
SECTION 13.01. Discharge of Indenture...............................................79
SECTION 13.02. Deposited Moneys to Be Held in Trust by Trustee......................79
SECTION 13.03. Paying Agent to Repay Moneys Held....................................80
SECTION 13.04. Return of Unclaimed Moneys...........................................80
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers and Directors
SECTION 14.01. Indenture and Notes Solely Corporate Obligations.....................80
ARTICLE FIFTEEN
Redemption at the Option of Noteholders Upon the Occurrence of a
Change of Control
SECTION 15.01. Right of Holders Upon the Occurrence of a Change of Control..........81
SECTION 15.02. Notice of Change of Control..........................................81
SECTION 15.03. Notice of Exercise...................................................82
SECTION 15.04. Effect of Exercise...................................................82
</TABLE>
vi
<PAGE>
ARTICLE SIXTEEN
Miscellaneous Provisions
<TABLE>
<S> <C>
SECTION 16.01. Provisions Binding on Company's Successors......................82
SECTION 16.02. Official Acts by Successor Corporation..........................82
SECTION 16.03. Addresses for Notices, etc......................................83
SECTION 16.04. GOVERNING LAW...................................................83
SECTION 16.05. Officers' Certificates and Opinions of Counsel..................83
SECTION 16.06. Legal Holidays..................................................83
SECTION 16.07. Trust Indenture Act to Control..................................84
SECTION 16.08. Table of Contents, Headings, etc................................84
SECTION 16.09. Execution in Counterparts.......................................84
SECTION 16.10. Manner of Mailing Notice to Noteholders.........................84
SECTION 16.11. No Security Interest Created....................................84
SECTION 16.12. Benefits of Indenture...........................................84
Signatures......................................................................84
Attestation.....................................................................84
</TABLE>
EXHIBIT A FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER OF NOTES
EXHIBIT B FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
vii
<PAGE>
INDENTURE dated as of March 11, 1997 between EMC CORPORATION, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts (hereinafter sometimes called the "Company"), and State Street
Bank and Trust Company, a Massachusetts banking corporation (hereinafter
sometimes called the "Trustee").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 3 1/4% Convertible Subordinated Notes Due 2002
(hereinafter sometimes called the "Notes"), in an aggregate principal amount not
to exceed $517,500,000, 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 of this Indenture; and
WHEREAS, the Notes, the Trustee's certificate of authentication to be
borne by the Notes, a form of conversion notice, a form of assignment, a form of
notice of exercise of right to require repurchase and a form of schedule of
exchanges are to be substantially in the following forms, respectively:
[FORM OF FACE OF NOTE]
[LEGEND FOR GLOBAL NOTE:]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE 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. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR 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.] /1/
- -------------------
/1/ This legend should be included only if the Note is issued in global form.
<PAGE>
[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO IS OR WHO THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A,(D) TO AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT IS AN INSTITUTIONAL INVESTOR AND THAT
PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST COMPANY OR
BOSTON EQUISERVE LLP A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED
HEREBY (WHICH FORM OF LETTER CAN BE OBTAINED FROM STATE STREET BANK AND TRUST
COMPANY OR BOSTON EQUISERVE LLP), (E) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATIONS
UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT SUBJECT TO THE COMPANY'S,
STATE STREET BANK AND TRUST COMPANY'S AND BOSTON EQUISERVE LLP'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES
PROVIDED THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO STATE STREET BANK AND TRUST
COMPANY AND BOSTON EQUISERVE LLP AND SUBJECT TO ANY APPLICABLE STATE
2
<PAGE>
SECURITIES LAWS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN
HOLDER OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.]/2/
No. $
CUSIP No. [268648AC6 Restricted Global Note
U2911PAA3 Regulation S Global Note]
[ISIN No. USU2911PAA31]
EMC CORPORATION
3 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2002
EMC CORPORATION, a Massachusetts corporation (the "Company", which term
includes any successor corporation or corporations under the Indenture
hereinafter referred to), promises to pay to _____________________________, or
registered assigns, the principal sum of _______________ Dollars [or such
greater or lesser amount as indicated on the Schedule of Exchanges of Definitive
Securities on the reverse hereof or on the books and records of the Trustee]/3/
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City and State of New York, on March 15, 2002 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, semiannually on March 15 and September 15 of each year, commencing on
September 15, 1997, on said principal sum at said office or agency, in like coin
or currency, at the rate per annum specified in the title of this Note, from the
next preceding Interest Payment Date to which interest has been paid (or, if no
interest has been paid on the Notes, from March 11, 1997) until payment of said
principal sum has been made or duly provided for and promises to pay any
liquidated damages that may be payable pursuant to Section 4 of the Registration
Rights Agreement on the Interest Payment Dates. The interest so payable on any
Interest Payment Date will, subject to certain exceptions provided in the
Indenture referred to on the reverse hereof, be paid to the person in whose name
this Note is registered at the close of business on the Regular Record Date next
preceding such Interest Payment Date. Any such interest not punctually paid or
provided for will forthwith cease to be payable to the person in whose name this
Note is registered at the close of business on the Regular Record Date and may
either be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which
- -----------------------
/2/ These legends should be included only on a Restricted Global Note and a
Definitive Note.
/3/ This phrase should be included only if the Note is issued in global form.
3
<PAGE>
the Notes may be listed and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. Notice of a Special
Record Date shall be given to Noteholders not less than 15 days prior to such
Special Record Date. Payment of the principal of and premium, if any, and
interest on this Note will be made (i) in respect of Notes held of record by the
Depositary or its nominee in same day funds on or prior to the respective
payment dates and (ii) in respect of Notes held of record by Noteholders other
than the Depositary or its nominee at the office or agency of the Company
maintained for that purpose pursuant to Section 5.02 of the Indenture, in each
case 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;
provided, however, that at the option of the Company, payment of interest in
- -------- -------
respect of Notes held of record by Noteholders other than the Depositary or its
nominee may be made by check mailed to the registered address of such person.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Indebtedness as defined in the Indenture and
provisions giving the holder of this Note the right to convert this Note into
Common Stock of the Company on the terms and subject to the limitations referred
to on the reverse hereof and as more fully specified in the Indenture. Such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be signed
manually or by facsimile by its duly authorized officers.
Dated: EMC CORPORATION
[CORPORATE SEAL] By
---------------------------
[Title]
Attest:
By
----------------------------
[Title]
4
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Notes described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By
--------------------------
Authorized Signatory
[FORM OF REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Company,
designated as set forth on the face hereof (herein called the "Notes"), limited
to the aggregate principal amount of $517,500,000, all issued or to be issued
under and pursuant to an Indenture dated as of March 11, 1997 (herein called the
"Indenture"), duly executed and delivered by the Company to State Street Bank
and Trust Company, as Trustee (herein called the "Trustee"), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Trustee, the Company, the holders of the Notes and
the holders of Senior Indebtedness (as defined in the Indenture). All terms used
in this Note which are not defined herein shall have the meanings assigned to
them in the Indenture.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal hereof and accrued interest hereon may
be declared, and upon such 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 any premium 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 any premium or interest
thereon payable in any coin or currency other than that hereinbefore provided,
or modify the provisions of the Indenture with respect to the subordination of
the Notes in a manner adverse to the Noteholders, or impair the right to convert
the Notes into Common Stock or the right to require the Company to repurchase
the Notes upon the occurrence of a Change of Control (as defined in the
Indenture), subject and pursuant to the terms set forth in the Indenture,
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
5
<PAGE>
holders of all Notes then outstanding. It also is 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 the Notes waive any past default
or Event of Default under the Indenture and its consequences except a default in
the payment of principal of or premium, if any, or interest on the Notes or in
respect of a failure by the Company to convert any Note into Common Stock of the
Company in accordance with the Indenture or in respect of a failure by the
Company to redeem or repurchase Notes when due. 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 that may be issued in exchange or substitution
herefor, irrespective of whether or not any notation thereof is made upon this
Note or such other Notes.
Except with respect to the rights of holders of Senior Indebtedness set
forth in this Note and in the Indenture, 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 premium, if any, 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.
Subject to and upon compliance with the provisions of the Indenture,
the registered holder of this Note has the right, at its option, at any time
after the 60th day following the date of original issuance of the Notes pursuant
to the Indenture and on or before the close of business on March 15, 2002 (or,
in case this Note or any portion hereof shall be called for redemption prior to
such date, then to and including but not after the close of business on the date
fixed for redemption), to convert the principal amount hereof, or any portion of
such principal amount that is $1,000 or an integral multiple thereof, into that
number of fully paid and non-assessable shares of Common Stock (calculated to
the nearest 1/100th of a share) obtained by dividing the principal amount of the
Note or portion thereof to be converted by the conversion price of $45.31 per
share, or the conversion price as adjusted from time to time as provided in the
Indenture, upon surrender of this Note to the Company at the office or agency
maintained for such purpose in the Borough of Manhattan, The City and State of
New York, accompanied by written notice of conversion duly executed and (if the
shares of Common Stock to be issued on conversion are to be issued in any name
other than that of the registered holder of this Note) by instruments of
transfer, in form satisfactory to the Company, duly executed by the registered
holder or its duly authorized attorney and, in case such surrender shall be made
during the period starting after the close of business on the Regular Record
Date preceding any Interest Payment Date through the close of business on such
Interest Payment Date (unless this Note or the portion thereof being converted
has been called for redemption on a date falling during such period), also
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Note then being converted.
Subject to the aforesaid requirement for a payment in the event of conversion
after the close of business on a Regular Record Date preceding an Interest
Payment Date no payment or adjustment shall be made on conversion for interest
accrued hereon or for dividends on Common Stock delivered on conversion. The
right to
6
<PAGE>
convert this Note is subject to the provisions of the Indenture relating to
conversion rights in the case of certain consolidations, mergers, statutory
exchanges, or sales or conveyances of substantially all the Company's assets.
The Company shall not issue fractional shares or scrip representing
fractions of shares upon any such conversion, but shall make an adjustment
therefor in cash on the basis of the then current market value of such
fractional interest as provided in the Indenture.
The indebtedness evidenced by the Notes is, to the extent and in the
manner set forth in the Indenture, expressly subordinated and subject in right
of payment to the prior payment in full of all Senior Indebtedness, whether
outstanding at the date of the execution of the Indenture or thereafter
incurred, and this Note is issued subject to such provisions of the Indenture.
Each holder of this Note, by accepting the same, agrees to and shall be bound by
such provisions and authorizes and directs the Trustee on its behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate such
subordination as provided in the Indenture and appoints the Trustee its
attorney-in-fact for any and all such purposes.
The Notes are issuable only in fully registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000. In the manner and
subject to the limitations provided in the Indenture, but without the payment of
any service charge, Notes may be exchanged for an equal aggregate principal
amount of Notes of other authorized denominations at the office or agency of the
Company maintained for such exchange in the Borough of Manhattan, The City and
State of New York.
The Notes may not be redeemed at the option of the Company prior to
March 15, 2000. Thereafter the Notes may be redeemed at the option of the
Company as a whole, or from time to time in part, prior to maturity, upon not
less than 15 nor more than 60 days' prior notice given as provided in the
Indenture.
Notes may be redeemed during the 12-month period beginning March 15 in
the year indicated at the applicable redemption price ("Redemption Price") set
forth below (expressed in percentages of the principal amount):
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2000 101.30%
2001 100.65%
</TABLE>
in each case together with accrued and unpaid interest to the date fixed for
redemption.
If all accrued interest on the Notes has not been paid, the Notes may
not be redeemed in part and the Company may not purchase or acquire any Note
otherwise than pursuant to a purchase or exchange offer made on the same terms
to all holders of the Notes. If less than all the outstanding Notes are to be
redeemed, the Trustee will select those to be redeemed by lot or a substantially
equivalent method. On or after the redemption date, interest shall cease to
accrue on Notes called for redemption.
7
<PAGE>
Upon the occurrence of any Change of Control (or, in the case of a
Change of Control referred to in clause (b) of the definition thereof, upon
notice to the Company thereof), the holder hereof shall have the right, at the
option of such holder, and subject to the subordination provisions of Article
Ten of the Indenture, to require the Company to purchase all or any portion
hereof (in a principal amount that is an integral multiple of $1,000) on the
date (the "Repurchase Date") that is 40 business days after the occurrence (or
notice to the Company) of any Change of Control, at a price equal to the
principal amount thereof plus interest accrued and unpaid to the Repurchase
Date. Within 20 business days after the occurrence (or notice to the Company) of
any Change of Control, the Company shall mail to the Trustee and the holder
hereof (and cause to be published in a newspaper of general circulation in the
Borough of Manhattan, The City and State of New York) notice setting forth in
reasonable detail the occurrence of such Change of Control, such holder's right
to require such redemption and the Repurchase Date. In order to exercise such
right, such holder shall, no later than the close of business on the Repurchase
Date, surrender this Note at such place of payment in such notice specified,
accompanied by written notice of such exercise, specifying such portion of this
Note such holder elects to have redeemed, as provided in the Indenture.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for such registration in the Borough
of Manhattan, The City and State of New York, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, 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 paying agent, conversion agent and 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, as herein and in the Indenture provided, for conversion
hereof 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 and conversions shall
satisfy and discharge the liability upon this Note to the extent of the sum or
sums so paid or the conversions so made.
No recourse for the payment of the principal of or premium, if any, or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, 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.
8
<PAGE>
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 under the Indenture referred to herein.
9
<PAGE>
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: EMC Corporation
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or portion hereof (which is $1,000 or
an integral multiple thereof) below designated, into shares of Common Stock of
EMC Corporation in accordance with the terms of the Indenture referred to in
this Note, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and 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 this Notice is being delivered on a date after the close of business on the
Regular Record Date preceding any Interest Payment Date and prior to the close
of business on such Interest Payment Date (unless this Note or the portion
thereof being converted has been called for redemption on a date falling during
such period), this Notice is accompanied by payment in New York Clearing House
funds or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of this
Note being converted. 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 pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest and taxes accompanies this
Note.
Dated: -----------------------------
-----------------------------
Signature[s]
Fill in for registration of shares
if to be delivered, and Notes if to
be issued, other than to and in the
name of the registered holder
(Please Print):
- ------------------------------
(Name)
- ------------------------------
(Street Address)
- ------------------------------
(City, State and Zip Code)
Principal amount to be converted (if
less than all):
$__________,000
-----------------------------
Social Security or other Taxpayer
Identification Number
10
<PAGE>
[FORM OF ASSIGNMENT]
For value received ________________________ hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
(Please include social security or other tax identification number of assignee.)
the within Note and hereby irrevocably constitutes and appoints
_________________________ attorney to transfer the said Note on the books of the
Company, with full power of substitution in the premises.
Dated________________
----------------------------
Signature(s)
Signature(s) must be guaranteed
by a participant in a recognized
signature guarantee medallion program.
- ----------------------------------------
Signature Guarantee
11
<PAGE>
[FORM OF NOTICE OF EXERCISE OF RIGHT TO REQUIRE PURCHASE]
If you wish to have this Note purchased by the Company pursuant to
Section 15.01 of the Indenture, check the Box: [_]
If you wish to have a portion of this Note (which is $1,000 or any
integral multiple thereof) purchased by the Company pursuant to Section 15.01 of
the Indenture, state the amount you wish to have purchased:
$__________________
Dated:________________ Your Signature(s):
----------------------
Tax Identification No.:
-----------------
Signature(s) must be guaranteed by a participant in a recognized signature
guarantee medallion program.
- ------------------------------
Signature Guarantee
12
<PAGE>
[FORM OF SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES4]
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global Note authorized signatory
Principal Principal following such or Trustee or
Date of Amount of this Amount of this decrease (or --
Exchange Global Note Global Note increase) Custodian
-------- ----------- ----------- -------- ---------
<S> <C> <C> <C> <C>
1.
2.
3.
4.
5.
</TABLE>
- ------------------------------
4 This Schedule should be included only if the Note is issued in global form.
13
<PAGE>
AND WHEREAS, all acts and things necessary to constitute this Indenture
a valid agreement according to its terms, have been done and performed, and the
execution of this Indenture has 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 the 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, as follows:
ARTICLE ONE
Definitions
-----------
SECTION 1.01. Definitions. The terms defined in this Section 1.01
-----------
(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 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act,
or that 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 execution of this Indenture. All
accounting terms not otherwise defined in this Indenture shall have the meanings
assigned to them in accordance with generally accepted accounting principles.
Acquiring Person: The term "Acquiring Person" shall mean any person
----------------
or group (as defined in Section 13(d)(3) of the Exchange Act) who or which,
together with all affiliates and associates (as defined in Rule 12b-2 under the
Exchange Act), becomes the beneficial owner of shares of Common Stock or other
voting securities of the Company having more than 50% of the total number of
votes that may be cast for the election of directors of the Company; provided,
--------
however, that an Acquiring Person shall not include (i) the Company, (ii) any
- -------
Subsidiary of the Company or (iii) any current or future employee benefit plan
of the Company or any Subsidiary of the Company or any entity holding Common
Stock of the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no person shall become an Acquiring Person as the
result of an acquisition of Common Stock by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to more than 50% of the Common Stock of the
Company then outstanding; provided, however, that if a Person shall become the
-------- -------
beneficial owner of 50% or more of the Common Stock of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the beneficial owner of any additional
shares of Common Stock of the Company, then such Person shall be deemed to be an
Acquiring Person.
Affiliate: The term "Affiliate" shall mean, with respect to any
---------
Person, any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For purposes
of this definition, "control" when used with respect to any specified Person
shall mean the power to direct the management and policies of
14
<PAGE>
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
Board of Directors: The term "Board of Directors" shall mean the Board
------------------
of Directors of the Company or any other committee of such Board that is duly
authorized.
Business Day: The term "business day" shall mean each Monday, Tuesday,
------------
Wednesday, Thursday and Friday that is not a day on which banking institutions
in the Borough of Manhattan, The City and State of New York, or in Boston,
Massachusetts, are obligated or authorized by law to close.
Cedel: The term "Cedel" shall mean Cedel Bank, societe anonyme.
-----
Change of Control: The term "Change of Control" shall mean either or
-----------------
both of the following events:
(a) There shall be consummated any consolidation or merger of the
Company (1) in which the Company is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly-owned
subsidiary of the Company in which all shares of Common Stock outstanding
immediately prior to the effectiveness thereof are changed into or
exchanged for the same consideration) or (2) pursuant to which the Common
Stock is converted into cash, securities or other property, in each case,
other than a consolidation or merger of the Company in which the holders of
Common Stock immediately prior to the consolidation or merger hold,
directly or indirectly, at least a majority of the common stock of the
continuing or surviving corporation immediately after such consolidation or
merger; or
(b) Any Acquiring Person shall have become such Person.
Notwithstanding anything to the contrary set forth in this definition,
a Change of Control shall not be deemed to have occurred (A) under paragraph (b)
above, solely by virtue of the Company, any Subsidiary, any employee stock
ownership plan or any other employee benefit plan of the Company or any
Subsidiary or any Person holding securities of the Company for or pursuant to
the terms of any such employee benefit plan, filing or becoming obligated to
file a report under or in response to Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report) under the Exchange Act disclosing beneficial
ownership by it of shares of securities of the Company, whether in excess of 50%
or otherwise, or (B) under paragraphs (a) and (b) above, if either (1) the
average of the last reported sale prices of the Common Stock on the New York
Stock Exchange Composite Tape for any five trading days during the ten trading
days immediately preceding the Change of Control is at least equal to 105% of
the Conversion Price in effect immediately preceding the time of such Change of
Control or (2) the consideration, in the transaction giving rise to such Change
of Control, to the holders of Common Stock consists of cash, securities that
are, or immediately upon issuance will be, listed on a national securities
exchange or quoted in the NASDAQ National Market System, or a combination of
cash and such securities, and the aggregate fair market value of such
consideration (which, in the case of such securities, shall be equal to the
average of the last sale prices of such securities during the ten consecutive
trading days commencing with the sixth trading day following consummation
15
<PAGE>
of such transaction) is at least 105% of the Conversion Price in effect on the
date immediately preceding the closing date of such transaction.
Change of Control Repurchase Price: The term "Change of Control
----------------------------------
Repurchase Price shall have the meaning specified in Section 15.01.
Common Stock: The term "Common Stock" shall mean the Common Stock, $.01
------------
par value per share, of the Company as the same exists at the date of execution
of this Indenture or as such stock may be constituted from time to time, except
that for the purpose of Section 4.04 the term "Common Stock" shall also mean and
include stock of the Company of any class, whether now or hereafter authorized,
that shall have the right to participate in the distribution of either dividends
or assets of the Company upon liquidation, dissolution or winding up, without
limit as to amount or percentage.
Company: The term "Company" shall mean EMC Corporation, a Massachusetts
-------
corporation, until any successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
Company Request; Company Order: The terms "Company Request" and
------------------------------
"Company Order" shall mean a written request or order signed in the name of the
Company by its Chairman of the Board of Directors, its President, its Chief
Executive Officer or any of its Vice Presidents and by its Treasurer, any of its
Assistant Treasurers, its Clerk or any of its Assistant Clerks, and delivered to
the Trustee.
Conversion Price: The term "Conversion Price" shall mean the initial
----------------
conversion price specified in the form of Note hereinabove set forth, as
adjusted in accordance with the provisions of Article Four.
Corporate Trust Office of the Trustee: The term "corporate trust office
-------------------------------------
of the Trustee", or other similar terms, shall mean the principal corporate
trust office of the Trustee in Boston, Massachusetts, which office at the date
of execution of this Indenture is located at 225 Franklin Street, Boston,
Massachusetts 02110.
Current Market Price: The term "Current Market Price" shall have the
--------------------
meaning specified in Section 4.04(g).
Custodian: The term "Custodian" shall mean the Trustee, as custodian
---------
with respect to the Notes in global form or any successor entity thereto.
Daily Market Price: The term "Daily Market Price" when used with
------------------
reference to the Common Stock shall mean the price of a share of Common Stock on
the relevant date, determined on the basis of the last reported sale price
regular way of the Common Stock as reported on the composite tape, or similar
reporting system, for issues listed on the New York Stock Exchange (or if the
Common Stock is not then listed on that Exchange, for issues listed on such
other national securities exchange upon which the Common Stock is listed as may
be designated by the Board of Directors from time to time for the purposes
hereof) or, if there is no such reported sale on the day in question, on the
basis of the average of the closing bid and asked quotations regular way as so
reported, or, if the Common Stock is not listed on any national securities
exchange, on the basis of the average of the high bid and low asked quotations
regular
16
<PAGE>
way on the day in question in the over-the-counter market as reported by the
National Association of Securities Dealers Automated Quotation System, or if not
so quoted, as reported by National Quotation Bureau, Incorporated, or a similar
organization.
Defaulted Interest: The term "Defaulted Interest" shall have the
------------------
meaning specified in Section 2.03
Definitive Note: The terms "Definitive Note" and "Definitive Notes"
---------------
shall mean a Note or Notes that are in the form of the Note set forth in the
recitals hereto, not containing the language referred to in footnotes 1 and 3 or
the additional schedule referred to in footnote 4.
Depositary: The term "Depositary" shall have the meaning specified in
----------
Section 2.05.
DTC: The term "DTC" shall have the meaning specified in Section 2.05.
---
Euroclear: The term "Euroclear" shall mean Morgan Guaranty Trust
---------
Company of New York, Brussels office, as operator of the Euroclear System.
Event of Default: The term "Event of Default" shall have the meaning
----------------
specified in Section 7.01.
Exchange Act: The term "Exchange Act" shall mean the Securities
------------
Exchange Act of 1934, as amended.
Global Note: The terms "Global Note" and "Global Notes" shall mean a
-----------
Restricted Global Note and/or a Regulation S Global Note, as the context
requires.
Indenture: The term "Indenture" shall mean this instrument as
---------
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
Initial Purchasers: The term "Initial Purchasers" shall mean Smith
------------------
Barney Inc., Alex. Brown & Sons Incorporated and Morgan Stanley & Co.
Incorporated.
Institutional Accredited Investor: The term "Institutional Accredited
---------------------------------
Investor" shall have the meaning specified in Section 2.05(b)(ii)(C).
Interest Payment Date: The term "Interest Payment Date" shall mean each
---------------------
semiannual interest payment date on March 15 and September 15 of each year,
commencing September 15, 1997, in respect of the Notes.
Material Subsidiary: The term "Material Subsidiary" shall have the
-------------------
meaning specified in Section 7.01.
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: The terms "Noteholder", "holder of Notes", or other
----------
similar terms, shall mean the person or persons in whose name or names at the
time a particular Note is registered on the Register.
17
<PAGE>
Officers' Certificate: The term "Officers' Certificate", when used
---------------------
with respect to the Company, shall mean a certificate signed by the Chairman of
the Board of Directors, the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Clerk or an Assistant Clerk of the Company. Each
such certificate shall include the statements provided for in Section 16.05 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, and who shall be satisfactory to the Trustee. Each such opinion
shall include the statements provided for in Section 16.05 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 9.04, mean, as of any
particular time, all Notes authenticated and delivered by the Trustee under this
Indenture, except
(a) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes or portions thereof for the payment or redemption of which
moneys 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, however, that if such Notes or
-------- -------
portions are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in Article Three, 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, or that have been paid, pursuant to
the terms of Section 2.06; and
(d) Notes converted into Common Stock pursuant to Article Four and
Notes not deemed to be Outstanding.
Person: The term "Person" shall mean any individual, corporation,
------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Predecessor Note: The term "Predecessor Note" shall mean, with respect
----------------
to any particular Note, 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 2.06 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Note shall be
deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Note.
Purchase Agreement: The term "Purchase Agreement" shall mean that
------------------
certain Purchase Agreement dated March 6, 1997 between the Company and the
Initial Purchasers.
Redemption Date: The term "Redemption Date" shall have the meaning
---------------
specified in Section 3.02.
18
<PAGE>
Redemption Price: The term "Redemption Price" when used with respect
----------------
to a redemption pursuant to Section 3.01 shall mean the applicable percentage of
the principal amount specified in the form of Note hereinabove set forth.
Register; Registrar: The terms "Register" and "Registrar" shall have
-------------------
the respective meanings specified in Section 2.05.
Registration Rights Agreement: The term "Registration Rights Agreement"
-----------------------------
shall mean that certain Registration Rights Agreement dated as of March 6, 1997
between the Company and the Initial Purchasers.
Regular Record Date: The term "Regular Record Date" shall mean, with
-------------------
respect to any Interest Payment Date, each March 1 or September 1, as the case
may be, (whether or not a business day) immediately preceding such Interest
Payment Date.
Regulation S: The term "Regulation S" shall mean Regulation S under the
------------
Securities Act.
Regulation S Global Note: The term "Regulation S Global Note" shall
------------------------
have the meaning specified in Section 2.02.
Repurchase Date: The term "Repurchase Date" shall have the meaning
---------------
specified in Section 15.01.
Resale Restriction Termination Date: The term "Resale Restriction
-----------------------------------
Termination Date", when used with respect to any Note, shall mean the date which
is three years after the later of (i) the original issue date of such Note and
(ii) the last date on which the Company or any Affiliate of the Company was the
owner of such Note (or any Predecessor Note).
Responsible Officer: The term "responsible officer" or "responsible
-------------------
officers", when used with respect to the Trustee, shall mean one or more of the
following: any trust officer, any assistant trust officer, any vice president or
assistant vice president, any assistant secretary, any assistant treasurer, or
any other officer or assistant officer in the Corporate Trust Department, or
successor group, of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.
Restricted Global Note: The term "Restricted Global Note" shall have
----------------------
the meaning specified in Section 2.02.
Rule 144A: The term "Rule 144A" shall mean Rule 144A under the
---------
Securities Act.
Securities Act: The term "Securities Act" shall mean the Securities
--------------
Act of 1933, as amended.
Senior Indebtedness: The term "Senior Indebtedness" shall mean (a) the
-------------------
principal of, premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company) on (i)
19
<PAGE>
indebtedness of the Company for money borrowed, whether outstanding on the date
of execution of this Indenture or thereafter created, incurred or assumed, (ii)
guarantees by the Company of indebtedness for money borrowed by any other
person, or reimbursement obligations under letters of credit, in either case,
whether outstanding on the date of execution of this Indenture or thereafter
created, incurred or assumed, (iii) indebtedness evidenced by notes (other than
the Notes), debentures, bonds or other instruments of indebtedness for the
payment of which the Company is responsible or liable, by guarantees or
otherwise, whether outstanding on the date of execution of this Indenture or
thereafter created, incurred or assumed, (iv) obligations of the Company under
interest rate and currency swaps, caps, floors, collars or similar agreements or
arrangements intended to protect the Company against fluctuations in interest or
currency rates, whether outstanding on the date of execution of this Indenture
or thereafter created, incurred or assumed, and (v) obligations of the Company
under any agreement to lease, or any lease of, any real or personal property,
which obligations, whether outstanding on the date of execution of this
Indenture or thereafter created, incurred or assumed, are required to be
capitalized on the books of the Company in accordance with generally accepted
accounting principles, or guarantees by the Company of similar obligations of
others, and (b) modifications, renewals, extensions and refundings of any such
indebtedness, obligations or guarantees; unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such indebtedness, obligations or guarantees or such modification, renewal,
extension or refunding thereof are not superior in right of payment to the
Notes; provided, however, that Senior Indebtedness shall not be deemed to
-------- -------
include, and the Notes will rank pari passu in right of payment with any
---- -----
obligation of the Company to any Subsidiary.
Shelf Registration Statement: The term "Shelf Registration Statement"
----------------------------
shall mean the registration statement with respect to the Notes and the Common
Stock the Company is required to file pursuant to the Registration Rights
Agreement.
Special Record Date: The term "Special Record Date", with respect to
-------------------
the payment of any Defaulted Interest, shall mean a date fixed by the Trustee
pursuant to Section 2.03.
Stated Maturity: The term "Stated Maturity", when used with respect to
---------------
any Note or any installment of interest thereon, shall mean the date specified
in such Note, as the fixed date on which the principal of such Note or such
installment of interest is due and payable.
Subsidiary: The term "Subsidiary" shall mean any corporation of which
----------
at least a majority of the outstanding stock having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation,
irrespective of whether at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency, is at the time, directly or indirectly, owned or controlled by
the Company or by one or more Subsidiaries or by the Company and one or more
Subsidiaries.
Time of Determination: The term "Time of Determination" shall mean (1)
---------------------
for purposes of Section 4.04(b) or (c), the time and date of the earlier of (a)
the record date for determining stockholders entitled to receive the rights,
warrants or distributions referred to in Section 4.04(b) and (c), or (b) the
commencement of "ex-dividend" trading on the exchange or market referred to in
the definition of the term "daily market price"; (2) for purposes of Section
20
<PAGE>
4.04(d), the date of issuance of Common Stock to the relevant Affiliate; and (3)
for purposes of Section 4.04(e) the Expiration Time (as defined in Section
4.04(e)).
Transfer Restricted Securities: The term "Transfer Restricted
------------------------------
Securities" shall mean Notes that bear the legend set forth in Section
2.05(k)(i).
Trust Indenture Act: The term "Trust Indenture Act" shall mean the
-------------------
Trust Indenture Act of 1939 as in force at the date of execution of this
Indenture, except as otherwise provided in Article Eleven; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"the term "Trust Indenture Act" shall mean, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
Trustee: The term "Trustee" shall mean State Street Bank and Trust
-------
Company, and, subject to the provisions of Article Eight, any successor trustee
hereunder.
ARTICLE TWO
Issue, Description, Execution, Registration
-------------------------------------------
and Exchange of Notes
---------------------
SECTION 2.01. Designation, Amount and Issue of Notes. The Notes shall
--------------------------------------
be designated as the "3 1/4% Convertible Subordinated Notes Due 2002" of the
Company. Notes not to exceed the aggregate principal amount of $517,500,000 (and
as otherwise provided in Section 2.06), 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
Chairman of the Board, the President or a Vice President, without any further
action by the Company hereunder, subject to Section 2.04.
The Notes shall be subject to the transfer restrictions set forth in
Section 2.05.
SECTION 2.02. Form of Notes. The Notes and the Trustee's certificate
-------------
of authentication to be borne by the Notes shall be substantially in the form as
in this Indenture above recited. Any of the Notes may have imprinted thereon
such legends or 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 stock exchange on which the Notes may be listed,
or to conform to usage.
Unless issued in definitive form, Notes issued and sold in reliance on
Rule 144A shall be issued in the form of one or more global securities (the
"Restricted Global Note"), which Restricted Global Note shall be deposited on
behalf of the holders of the Notes represented thereby with the Trustee, as
custodian for the Depositary, and registered in the name of the nominee of the
Depositary, duly executed by the Company and authenticated as provided for
herein.
Notes offered and sold outside the United States in reliance on
Regulation S shall be issued in the form of one or more global securities (the
"Regulation S Global Note"), which
21
<PAGE>
Regulation S Global Note shall be deposited on behalf of the holders of the
Securities represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of a nominee of the Depositary, duly
executed by the Company and authenticated as provided herein, for credit to the
accounts of the respective depositaries for Euroclear and Cedel (or such other
accounts as they may direct). Prior to or on the 40th day after the later of the
commencement of the offering of the Securities and the Closing Date (the
"Restricted Period"), beneficial interests in the Regulation S Global Note may
only be held through agent members of Euroclear and Cedel. During the Restricted
Period, interests in the Regulation S Global Note may be exchanged for interests
in the Restricted Global Notes or for Definitive Notes only in accordance with
the certification requirements described in Section 2.05.
Each Global Note shall represent such of the outstanding Notes as shall
be specified therein and each 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 reduced or increased, as appropriate, to reflect exchanges and
redemptions, in accordance with the standard practices of the Depositary and the
Trustee. Any endorsement of a Global Note 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 accordance
with instructions given by the holder thereof.
The Definitive Notes shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed or, if the Notes are not listed, the Notes may be produced in any
other manner customarily used to produce similar definitive securities, all as
determined by the officers executing such Notes, as evidenced by their execution
of such Notes.
SECTION 2.03. Denominations, Dates, Interest Payment and Record Dates.
-------------------------------------------------------
The Notes shall be issuable in registered form without coupons in denominations
of $1,000 and any integral multiple of $1,000.
Every Note shall be dated the date of its authentication and the Stated
Maturity of the Notes shall be March 15, 2002. Except as provided in this
Section 2.03, every Note shall bear interest, payable semiannually on March 15
and September 15 of each year, commencing on September 15, 1997, from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for (or, if no interest has been paid on the Notes, from March
11, 1997).
Interest on the Notes shall be calculated on the basis of a 360-day
year of twelve 30-day months.
The person in whose name any Note is registered at the close of
business on any Regular Record Date with respect to any Interest Payment Date
shall be entitled to receive the interest payable on such Interest Payment Date
(unless such Note has been called for redemption and the Redemption Date for
such Note is prior to such Interest Payment Date) notwithstanding the
cancellation of such Note upon any registration of transfer, exchange or
conversion thereof subsequent to the Regular Record Date and prior to such
Interest Payment Date.
22
<PAGE>
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
Regular Record Date by virtue of having been such Noteholder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the 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 proposed to be paid on each Note and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
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 5 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each
Noteholder at its address as it appears in the Register, not less than 15
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) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 2.04. Execution and Authentication of Notes. The Notes shall
-------------------------------------
be signed in the name and on behalf of the Company by its Chairman of the Board
of Directors, its President, its Chief Executive Officer or any of its Vice
Presidents under its corporate seal or a facsimile thereof reproduced thereon
attested by its Treasurer, any of its Assistant Treasurers, its Clerk or any of
its Assistant Clerks. The signature of any of these officers on the Notes may be
manual or facsimile. Only such Notes as shall bear thereon a certificate of
authentication
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substantially in the form hereinbefore recited, manually executed by the
Trustee, shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee 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 (manually or
by facsimile) 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 and shall bind the Company as though the person who signed such
Notes had not ceased to be such officer of the Company, and any Notes may be
signed on behalf of the Company by such persons as, at the actual date of
execution of such Notes, shall be the proper officers of the Company, although
at the date of execution of this Indenture any such person was not such an
officer.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Notes; and the Trustee in accordance with such Company
Order shall either at one time or from time to time pursuant to such
instructions as may be described therein authenticate and deliver such
Securities as in this Indenture provided and not otherwise. Such Company Order
shall specify the amount of Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated, and shall certify that all
conditions precedent to the issuance of such Notes contained in this Indenture
have been complied with. The aggregate principal amount of Notes outstanding at
any time may not exceed the amount set forth above except as provided in Section
2.06.
SECTION 2.05. Exchange and Registration of Transfer of Notes. (a)
----------------------------------------------
Notes may be exchanged for an equal aggregate principal amount of Notes of other
authorized denominations. Notes to be exchanged shall be surrendered at any of
the offices or agencies to be maintained by the Company for such purpose as
provided in Section 5.02 and the Company shall execute and the Company or the
Trustee, as the case may be, shall register or cause to be registered on the
Register, and shall authenticate and deliver in exchange therefor, the Note or
Notes that the Noteholder making the exchange shall be entitled to receive.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 5.02 being herein sometimes
collectively referred to as the "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 "Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided. Such Register shall be in written form or in any other form capable of
being converted into written form within a reasonable time. At all reasonable
times such register shall be open for inspection by the Company.
The Company initially appoints The Depository Trust Company ("DTC") to
act as depositary (the "Depositary") with respect to the Global Notes.
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The Company initially appoints the Trustee to act as Custodian with
respect to the Global Notes.
(b) With respect to the transfer and exchange of Definitive Notes,
when Definitive Notes are presented to the Registrar with the request (x) to
register the transfer of the Definitive Notes or (y) to exchange such Definitive
Notes for an equal principal amount of Definitive Notes of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; provided, however,
-------- -------
that the Definitive Notes presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly
executed by the Noteholder thereof or by its attorney, duly authorized
in writing; and
(ii) shall, in the case of Transfer Restricted Securities
that are Definitive Securities, be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Noteholder for registration
in the name of such Noteholder, without transfer, a
certification from such Noteholder to that effect (in
substantially the form of Exhibit A hereto); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer" (as defined
in Rule 144A) in reliance on Rule 144A under the Securities
Act or pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities
Act or pursuant to an effective registration statement under
the Securities Act, a certification to that effect (in
substantially the form of Exhibit A hereto) and, in the case
of a transfer in accordance with Rule 144 or Regulation S
under the Securities Act, an Opinion of Counsel reasonably
acceptable to the Company and to the Registrar to the effect
that such transfer is in compliance with the Securities Act;
or
(C) if such Transfer Restricted Security is being
transferred to an "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that is
an institutional investor (an "Institutional Accredited
Investor"), a certification to that effect (in substantially
the form of Exhibit A hereto), a signed letter containing
certain representations and agreements relating to the
restrictions on transfer of such Transfer Restricted Security
(in substantially the form of Exhibit B hereto) and an
Opinion of Counsel reasonably acceptable to the Company and
to the Registrar to the effect that such transfer is in
compliance with the Securities Act; or
(D) if such Transfer Restricted Security is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect (in substantially the form of
Exhibit A hereto) and an Opinion of Counsel reasonably
acceptable to the
25
<PAGE>
Company and to the Registrar to the effect that such transfer
is in compliance with the Securities Act.
(c) The following restrictions apply to any transfer of a Definitive
Note for a beneficial interest in a Restricted Global Note. A Definitive
Security may not be exchanged for a beneficial interest in a Restricted Global
Note except until and upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied
by appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted
Security, certification, substantially in the form of Exhibit A hereto,
that such Definitive Note is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A) in accordance with Rule
144A; and
(ii) whether or not such Definitive Note is a Transfer
Restricted Security, written instructions directing the Trustee to
credit, or to direct the Custodian to credit the Restricted Global Note
with an increase in the aggregate principal amount of the Securities
represented by the Restricted Global Note in an amount equal to the
principal amount of the Definitive Notes to be so exchanged.
then the Trustee shall cancel such Definitive Note 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 Securities represented by the Restricted Global Notes to be increased
accordingly. If no Restricted Global Notes are then outstanding, the Company
shall execute and, upon receipt of an authentication order in the form of a
Company Order in accordance with Section 2.04, the Trustee shall authenticate a
new Restricted Global Note in the appropriate principal amount.
(d) The following restrictions apply to any transfer of a Definitive
Note for a beneficial interest in a Regulation S Global Note. A Definitive Note
may not be exchanged for a beneficial interest in a Regulation S Global Note
except until and upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted
Security, certification, substantially in the form of Exhibit A hereto,
that such Definitive Note is being transferred in accordance with
Regulation S and an Opinion of Counsel reasonably acceptable to the
Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer
Restricted Security, written instructions directing the Trustee to
credit, or to direct the Custodian to credit the Regulation S Global
Note with an increase in the aggregate principal amount of the Notes
represented by the Regulation S Global Note in an amount equal to the
principal amount of the Definitive Notes to be so exchanged,
26
<PAGE>
then the Trustee shall cancel such Definitive Note 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 Regulation S Global Note to be increased
accordingly. If no Regulation S Global Notes are then outstanding, the Company
shall execute and, upon receipt of an authentication order in the form of a
Company Order in accordance with Section 2.04, the Trustee shall authenticate a
new Regulation S Global Note in the appropriate principal amount.
(e) The transfer and exchange of Global Notes or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor.
(f) With respect to the transfer of a beneficial interest in a
Restricted Global Note or a Regulation S Global Note for a Definitive Note:
(i) Any person having a beneficial interest in a Restricted
Global Note or a Regulation S Global Note may upon request exchange
such beneficial interest for a Definitive Note. Upon receipt by the
Trustee of written instructions or such other form of instructions as
is customary for the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Restricted Global Note or a
Regulation S Global Note, and, if such Global Note is a Transfer
Restricted Security, receipt by the Trustee of the following additional
information and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred
to the Person designated by the Depositary as being the
beneficial owner, a certification from such Person to that
effect (in substantially the form of Exhibit A hereto); or
(B) if such beneficial interest is being transferred
to a "qualified institutional buyer" as defined in Rule 144A
in accordance with Rule 144A or pursuant to an exemption from
registration in accordance with Rule 144 or Regulation S
under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from the transferor (in
substantially the form of Exhibit A hereto) and, in the case
of a transfer in accordance with Rule 144 or Regulation S
under the Securities Act, an Opinion of Counsel reasonably
acceptable to the Company and to the Registrar to the effect
that such transfer is in compliance with the Securities Act;
or
(C) if such Transfer Restricted Security is being
transferred to an "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that is
an institutional investor (an "Institutional Accredited
Investor"), a certification to that effect (in substantially
the form of Exhibit A hereto), a signed letter containing
certain representations and agreements relating to the
restrictions on transfer of such Transfer Restricted Security
(in substantially the form of Exhibit B hereto) and an
Opinion of Counsel reasonably acceptable to the Company
27
<PAGE>
and to the Registrar to the effect that such transfer is in
compliance with the Securities Act; or
(D) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect from the transferee or transferor (in substantially
the form of Exhibit A hereto) and an Opinion of Counsel from
the transferee or transferor reasonably acceptable to the
Company and to the Registrar to the effect that such transfer
is in compliance with the Securities Act,
then 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 Global Note
to be reduced and, following such reduction, the Company will execute and, upon
receipt of an authentication order in the form of a Company Order in accordance
with Section 2.04, the Trustee will authenticate and deliver to the transferee a
Definitive Note.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Rule 144 A Global Note or a Regulation S Global Note
pursuant to this Section 2.05 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. The Trustee shall deliver such Definitive
Notes to the persons in whose names such Notes are so registered.
(g) With respect to the transfer of a beneficial interest in a
Regulation S Global Note for a beneficial interest in a Restricted Global Note,
any Person having a beneficial interest in a Regulation S Global Note may upon
request exchange such beneficial interest for an interest in a Restricted Global
Note. Upon receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Regulation S Global Note, and by the
Trustee of the following additional information and documents (all of which may
be submitted by facsimile):
(i) instructions given in accordance with the procedures of
Euroclear or Cedel, the Depositary and the Custodian, as the case may
be, from or on behalf of a beneficial owner of an interest in the
Regulation S Global Note directing the Trustee, as transfer agent, to
credit or cause to be credited a beneficial interest in the Restricted
Global Note in an amount equal to the beneficial interest in the
Regulation S Global Note to be exchanged or transferred,
(ii) a written order given in accordance with the procedures
of Euroclear or Cedel, the Depositary and the Custodian, as the case
may be, containing information regarding the account with the
Depositary to be credited with such increase and the name of such
account, and
(iii) if such Restricted Global Note is a Transfer Restricted
Security, a certification from the transferor (in substantially the
form of Exhibit A hereto) to the effect that such beneficial interest
is being transferred to a "qualified institutional buyer" (as defined
in Rule 144A) in accordance with Rule 144A,
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<PAGE>
then the Trustee, as transfer agent, shall promptly deliver appropriate
instructions to the Depositary, its nominee, or the Custodian, as the case may
be, to reduce or reflect on its records a reduction of the Regulation S Global
Note by the aggregate principal amount of the beneficial interest in such
Regulation S Global Note to be exchanged or transferred and the Trustee, as
transfer agent, shall promptly deliver appropriate instructions to the
Depositary, its nominee, or the Custodian, as the case may be, concurrently with
such reduction, to increase or reflect on its records an increase of the
principal amount of the Restricted Global Note by the aggregate principal amount
of the beneficial interest in the Regulation S Global Note to be so exchanged or
transferred, and to credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the 144A Global Note
equal to the reduction in the principal amount of the Regulation S Global Note.
(h) With respect to the transfer of a beneficial interest in a
Restricted Global Note for a beneficial interest in a Regulation S Global Note,
any person having a beneficial interest in a Restricted Global Note may upon
request exchange such beneficial interest for an interest in a Regulation S
Global Note. Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depositary or its nominee on behalf
of any person having a beneficial interest in a Restricted Global Note, and
receipt by the Trustee of the following additional information and documents
(all of which may be submitted by facsimile):
(i) instructions given in accordance with the procedures of
the Depositary and the Custodian, as the case may be, from or on behalf
of a holder of a beneficial interest in the Restricted Global Note,
directing the Trustee, as transfer agent, to credit or cause to be
credited a beneficial interest in the Regulation S Global Note in an
amount equal to the beneficial interest in the Restricted Global Note
to be exchanged or transferred,
(ii) a written order given in accordance with the procedures
of the Depositary and the Custodian, as the case may be, containing
information regarding the Euroclear or Cedel account to be credited
with such increase and the name of such account, and
(iii) if such Restricted Global Note is a Transfer Restricted
Security, a certification from the transferor (in substantially the
form of Exhibit A hereto) to the effect that such beneficial interest
is being transferred in accordance with Regulation S and an Opinion of
Counsel reasonably acceptable to the Company and to the Registrar to
the effect that such transfer is in compliance with the Securities Act,
the Trustee, as transfer agent, shall promptly deliver appropriate instructions
to the Depositary, its nominee, or the Custodian, as the case may be, to reduce
or reflect on its records a reduction of the Restricted Global Note by the
aggregate principal amount of the beneficial interest in such Restricted Global
Note to be so exchanged or transferred from the relevant participant, and the
Trustee, as transfer agent, shall promptly deliver appropriate instructions to
the Depositary, its nominee, or the Custodian, as the case may be, concurrently
with such reduction, to increase or reflect on its records an increase of the
principal amount of such Regulation S Global Note by the aggregate principal
amount of the beneficial interest in such Restricted Global Note to be so
exchanged or transferred, and to credit or cause to be credited to the account
of the person
29
<PAGE>
specified in such instructions (who shall be Euroclear or Cedel or an agent
member of Euroclear or Cedel, or both, as the case may be, acting for and on
behalf of them) a beneficial interest in such Regulation S Global Note equal to
the reduction in the principal amount of such 144A Global Note
(i) Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in subsection (j) of this Section 2.05), a Global
Note 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.
(j) The following relates to the authentication of Definitive
Notes in absence of the Depositary. If at any time: (i) the Depositary for the
Notes notifies the Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Notes and a successor Depositary for the
Global Notes is not appointed by the Company within 90 days after delivery of
such notice; or (ii) the Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Notes under this
Indenture, then the Company will execute, and the Trustee, upon receipt of a
Company Order in accordance with Section 2.04 requesting the authentication and
delivery of Definitive Notes, will authenticate and deliver Definitive Notes, in
an aggregate principal amount equal to the principal amount of the Global Notes
in such names and amounts as instructed by the Depositary, in exchange for such
Global Notes.
(k) (i) Except as permitted by the following paragraph (ii), each
Restricted Global Note and the Definitive Notes (and all Notes issued in
exchange therefor or substitution thereof) shall bear a legend in substantially
the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE
OR OTHER TRANSFER IS (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO IS OR WHO THE HOLDER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A
30
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UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) THAT IS AN INSTITUTIONAL INVESTOR AND THAT
PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST COMPANY
OR BOSTON EQUISERVE LLP A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (WHICH FORM OF LETTER CAN BE OBTAINED
FROM STATE STREET BANK AND TRUST COMPANY OR BOSTON EQUISERVE LLP), (E)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT SUBJECT TO THE
COMPANY'S, STATE STREET BANK AND TRUST COMPANY'S AND BOSTON EQUISERVE
LLP'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (C), (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND IN EACH OF THE FOREGOING CASES PROVIDED THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO STATE STREET BANK AND TRUST COMPANY AND
BOSTON EQUISERVE LLP AND SUBJECT TO ANY APPLICABLE STATE SECURITIES
LAWS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN HOLDER OF
THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144 under the Securities Act or an
effective registration statement under the Securities Act (including
the Shelf Registration Statement):
(A) in the case of any Transfer Restricted Security that
is a Definitive Note, the Registrar shall permit the Noteholder
thereof to exchange such Transfer Restricted Security for a
Definitive Note that does not bear the legend set forth above
and rescind any restriction on the transfer of such Transfer
Restricted Security; provided, however, that with respect to a
-------- -------
transfer made in reliance upon Rule 144 or an effective
registration statement, the Noteholders thereof shall certify
in writing to the Registrar that such request is being made
pursuant to Rule 144 or an effective registration statement
(such Certification to be substantially in the form of Exhibit
A hereto) and, in the case of a transfer made in reliance upon
Rule 144, shall be accompanied by an Opinion of Counsel
reasonably acceptable to the Company and to the Registrar to
the effect that such transfer is in compliance with the
Securities Act; and
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(B) any such Transfer Restricted Security represented by a
Global Note shall not be subject to the provisions set forth in
(i) above (such sales or transfers being subject only to the
provisions of Section 2.05(e) hereof); provided, however, that
-------- -------
with respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global Note for a
Definitive Note that does not bear a legend, which request is
made in reliance upon Rule 144 or an effective registration
statement, the Noteholder thereof shall certify in writing to
the Registrar that such request is being made pursuant to Rule
144 or an effective registration statement (such certification
to be substantially in the form of Exhibit A hereto) and, in
the case of a transfer made in reliance upon Rule 144, shall be
accompanied by an Opinion of Counsel reasonably acceptable to
the Company and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(l) At such time as all beneficial interests in a Global Note have
either been exchanged for Definitive Notes, redeemed, repurchased or cancelled,
such Global Note shall be returned to or retained and cancelled by the Trustee.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced and
the Trustee or the Custodian, at the direction of the Trustee, shall reflect
such reduction on its records in accordance with the standard operating
procedures of the Depositary and the Trustee or the Custodian, as the case may
be.
(m) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Definitive Notes or Global
Notes surrendered upon such registration of transfer or exchange.
To permit registrations of transfer and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Notes and Global
Notes at the Registrar's request.
No service charge shall be made for any exchange or registration
of transfer of Notes, or issue of new Notes in case of partial redemption or
conversion, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
None of the Company, the Trustee nor the Registrar shall be
required to exchange or register a transfer of (a) any Notes for a period
beginning at the opening of business 15 days preceding the day of the mailing of
a notice of redemption of Notes selected for redemption under Section 3.02 and
ending at the close of business on the day of such mailing, (b) any Notes
selected, called or being called for redemption except, in the case of any Note
to be redeemed in part, the portion thereof not to be so redeemed, or (c) any
Notes or portion thereof surrendered for conversion.
All Notes issued upon any transfer or exchange of Notes shall be
valid obligations of the Company evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Notes surrendered upon such exchange
or transfer.
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SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case
------------------------------------------
any Note shall become mutilated or be destroyed, lost or stolen, in the absence
of notice to the Company or the Trustee that such Note has been acquired by a
bona fide purchaser, the Company in its discretion may execute, and upon its
- ---- ----
request the Trustee shall authenticate and deliver, a new Note, bearing a number
not contemporaneously outstanding, in exchange and substitution for the Note so
destroyed, lost or stolen. In every case, the applicant for a substituted Note
shall furnish to the Company and to the Trustee, any paying agent, conversion
agent or the Registrar such security or indemnity as may be required by them to
save each of them harmless, and, in every case of destruction, loss or theft,
the applicant shall also furnish to the Company and to the Trustee evidence to
their satisfaction of the destruction, loss or theft of such Note and of the
ownership thereof.
The Trustee shall authenticate any such substituted Note and
deliver the same upon receipt of a Company Order. Upon the issuance of any
substituted Note, the Company and/or the Trustee 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
that has matured or is about to mature shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Note, permit
the conversion of such Note, if the conversion privilege with respect thereto
has not yet expired, or pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Note) if the conversion
privilege has expired or if the holder thereof has so requested, and if the
applicant for such conversion or payment shall furnish to the Company and to the
Trustee, any paying agent, conversion agent or the Registrar such security or
indemnity as may be required by them to save each of them harmless and, in case
of destruction, loss or theft, evidence satisfactory to the Company and the
Trustee of the destruction, loss or theft of such Note and of the ownership
thereof.
Every substituted Note issued pursuant to the provisions of this
Section 2.06 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 at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. All Notes
shall be held and owned upon the express condition that, to the extent permitted
by law, the foregoing provisions are exclusive with respect to the replacement
or payment 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 of
negotiable instruments or other securities without their surrender.
SECTION 2.07. Temporary Notes. Pending the preparation of
---------------
Definitive Notes, the Company may execute and the Trustee shall authenticate and
deliver temporary Notes (which may be printed, lithographed, typewritten,
mimeographed or otherwise produced). 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 authenticated by the Trustee 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 will deliver to
the Trustee Definitive Notes and thereupon any or all temporary Notes may be
surrendered in exchange therefor, at the corporate trust office of the Trustee
or any
33
<PAGE>
office or agency maintained by the Company pursuant to Section 5.02, and the
Trustee shall register or cause to be registered on the Register, and 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 to the
Noteholders. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes
authenticated and delivered hereunder.
SECTION 2.08. 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 or
conversion agent or the Registrar, be surrendered to the Trustee for
cancellation and promptly cancelled by it, or if surrendered to the Trustee,
shall be promptly cancelled 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, upon request of the Company, deliver either cancelled Notes or a
certificate of destruction thereof to the Company. If the Company shall acquire
any of the Notes, however, 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.
SECTION 2.09. CUSIP Numbers. The Company in issuing the Notes may
-------------
use "CUSIP" numbers (if then generally in use), and the Trustee shall use CUSIP
numbers in notices of redemption or exchange as a convenience to holders of
Notes; provided, however, that any such notice shall state that no
-------- -------
representation is made as to the correctness or accuracy of the CUSIP numbers
either as printed on the Notes or as contained in any notice of redemption or
exchange and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption or exchange shall not be
affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
Redemption of Notes
-------------------
SECTION 3.01. Redemption of Notes. The Notes may not be redeemed
-------------------
at the Company's option prior to March 15, 2000. Thereafter, the Company may, at
its option, redeem all or, from time to time, any part of the Notes, on any date
prior to maturity, in the manner specified in this Article Three and in the
Notes, at the Redemption Prices specified in the form of Note hereinabove set
forth, together with interest accrued and unpaid thereon to the date fixed for
redemption; provided, however, that if all accrued interest on the Notes has not
-------- -------
been paid, the Notes may not be redeemed in part and the Company may not redeem
any Note other than pursuant to a purchase or exchange offer to all holders of
the Notes.
SECTION 3.02. Notice of Redemption; Selection of Notes. In case
----------------------------------------
the Company shall desire to exercise its right to redeem all or any part of the
Notes pursuant to Section 3.01, it shall fix a date for redemption (the
"Redemption Date"), it shall notify the Trustee in writing of such date 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
15 and not more than 60 days prior to the Redemption Date to the holders of the
Notes so to be redeemed as a whole or in part at their last addresses as the
same appear on the Note register. Such mailing shall be by first
34
<PAGE>
class mail. Any notice that is given in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Noteholder
receives the notice. In any case, failure duly to give such notice, or any
defect in such 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 shall specify the principal amount of each Note
to be redeemed, the Redemption Date for such Note, the place of redemption and
the Redemption Price at which such Notes are to be redeemed, and shall state
that payment of the Redemption Price of the Notes or portions thereof to be
redeemed will be made on surrender of the Notes to be redeemed at such place of
redemption, that interest accrued and unpaid on such Notes or the portions
thereof to be redeemed, as the case may be, to the Redemption Date for such
Notes will be paid as specified in such notice, and that from and after such
date interest thereon will cease to accrue. Such notice shall also state the
then current Conversion Price and the date, determined pursuant to Article Four,
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 shall
specify the Notes or portions thereof to be redeemed. In case any Note is to be
redeemed in part only, the notice that relates to such Note shall state the
portion of the principal amount thereof to be redeemed (which shall be $1,000 or
any integral multiple thereof) and shall state that, upon surrender of such
Note, a new Note or Notes in aggregate principal amount equal to the unredeemed
portion thereof will be issued.
Prior to the redemption date specified in the notice of redemption
given as provided in this Section, 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 5.04) an
amount of money sufficient to redeem on the redemption date all the Notes so
called for redemption (other than those theretofore surrendered for conversion
into Common Stock) at the applicable Redemption Price, together with interest
accrued and unpaid to the date fixed for redemption. If any Note called for
redemption is converted pursuant to the provisions of Article Four, any money
deposited with the Trustee or any paying agent or so segregated and held in
trust for the redemption of such Note shall be paid to the Company upon its
request, or, if then held by the Company shall be discharged from such trust.
If fewer than all of the Notes are to be redeemed, the Company
shall give the Trustee at least 45 days' notice (unless a shorter period shall
be acceptable to the Trustee) in advance of the date fixed for redemption as to
the aggregate principal amount of the Notes to be redeemed, and thereupon the
Trustee shall select in its discretion the particular Notes to be redeemed as a
whole or in part by lot or substantially equivalent method and shall thereafter
promptly notify the Company in writing of the Notes (and in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed) so
to be redeemed. Notes shall be redeemed only in denominations of $1,000 or any
integral multiple of $1,000.
If any Note selected for partial redemption is converted in part
before the termination of the conversion right with respect to the portion of
the Note so selected, the converted portion of such Note shall be deemed (so far
as may be) to be the portion selected for redemption.
35
<PAGE>
Upon any redemption of fewer 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 3.03. Payment of Notes Called for Redemption; Deposit of
--------------------------------------------------
Redemption Price. If notice of redemption shall have been given as provided
- ----------------
above, such Notes or portions of Notes called for redemption shall, unless
theretofore converted into Common Stock as provided in Article Four, become due
and payable on the date and at the place stated in such notice at the applicable
Redemption Price, together with interest accrued and unpaid to the date fixed
for redemption. On and after such date fixed for redemption, provided that the
Company shall have deposited prior to such date fixed for redemption the amount
sufficient to pay the Redemption Price together with interest accrued and unpaid
to the date fixed for redemption in accordance with Section 3.02, interest on
the Notes or portions thereof so called for redemption shall cease to accrue and
such Notes shall cease after the date fixed for redemption to be convertible
into Common Stock and, except as provided in Sections 8.05 and 13.04, such Notes
or portions thereof shall be deemed not to be entitled to any benefit under this
Indenture except to receive payment of the Redemption Price, together with
interest accrued and unpaid to the date fixed for redemption. On presentation
and surrender of such Notes at such place of payment in such notice specified,
provided that the Company shall have deposited prior to such date fixed for
redemption the amount sufficient to pay the Redemption Price together with
interest accrued and unpaid to the date fixed for redemption in accordance with
Section 3.02, such Notes or the specified portions thereof shall be paid and
redeemed at the applicable Redemption Price, together with interest accrued and
unpaid to the date fixed for redemption; provided, however, 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 2.03 hereof.
Upon surrender of any Note redeemed in part only, the Company
shall execute and the Trustee shall register or cause to be registered on the
Register and shall authenticate and deliver a new Note or Notes of authorized
denominations in aggregate principal amount equal to the unredeemed portion of
the Note so surrendered.
The Trustee shall not mail any notice of redemption of Notes
during the continuance of any Event of Default known to it, except that where
notice of redemption of any Notes theretofore has been mailed, the Trustee,
subject to the provisions of Article Ten, shall redeem such Notes; provided,
--------
however, that funds have theretofore been deposited with it for such purpose.
- -------
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Note and such Note shall remain convertible
into Common Stock until the principal and premium, if any, and interest shall
have been paid or duly provided for.
36
<PAGE>
Any cash deposited in respect of Notes to be redeemed that are
thereafter converted as provided in Article Four shall be returned to the
Company as promptly as practicable after the date fixed for redemption.
ARTICLE FOUR
Conversion of Notes
-------------------
SECTION 4.01. Conversion Privilege. Subject to and upon compliance
--------------------
with the provisions of this Article Four, the holder of any Note shall have the
right, at its option, at any time after the 60th day following the date of
original issuance of Notes under this Indenture and on or prior to the close of
business on March 15, 2002 (or if such Note or portion thereof is called for
redemption prior to March 15, 2002, then in respect of such Note or portion
thereof, to and including but not after the close of business on the date fixed
for such redemption, 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 that is $1,000 or an integral multiple thereof,
into that number of fully paid and non-assessable shares of Common Stock
(calculated as to each conversion to the nearest 1/100th of a share) obtained by
dividing the principal amount of the Note or portion thereof to be converted by
the Conversion Price in effect at such time and by surrender of the Note so to
be converted in whole or in part, such surrender to be made in the manner
provided in Section 4.02.
SECTION 4.02. Manner of Exercise of Conversion Privilege. In order
------------------------------------------
to exercise the conversion privilege, the holder of any Note to be converted in
whole or in part shall surrender such Note at any of the offices or agencies to
be maintained for such purpose by the Company pursuant to Section 5.02,
accompanied by the funds, if any, required by the last paragraph of this
Section, and shall give written notice of conversion in the form provided on the
Note (or such other notice as is acceptable to the Company) to the Company at
such office or agency that the holder elects to convert such Note or the portion
thereof specified in such notice. Such notice shall also state the name or
names, together with the address or addresses, in which the certificate or
certificates for shares of Common Stock issuable in such conversion shall be
issued. Each Note surrendered for conversion shall, unless the shares issuable
on conversion are to be issued in the same name as the name in which such Note
is registered, be accompanied by instruments of transfer, in form satisfactory
to the Company, duly executed by the holder or its duly authorized attorney and
an amount sufficient to pay any transfer or similar tax. As promptly as
practicable after the surrender of such Note and the receipt of such notice,
instruments of transfer and funds, if any, as aforesaid, the Company shall issue
and shall deliver at such office or agency to such holder, or on its written
order, a certificate or certificates for the number of full shares of Common
Stock issuable upon the conversion of such Note or portion thereof in accordance
with the provisions of this Article Four and a check or cash in respect of any
fractional interest in a share of Common Stock arising upon such conversion, as
provided in Section 4.03. In case any Note of a denomination greater than $1,000
shall be surrendered for partial conversion, the Company shall execute and the
Trustee shall register or cause to be registered on the Note register and shall
authenticate and deliver to or upon the order of the holder of the Note so
surrendered, at the expense of the Company, a new Note or Notes in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Note.
37
<PAGE>
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which such Note shall have been
surrendered and such notice (and any applicable instruments of transfer and any
required taxes and payments) shall have been received by the Company as
aforesaid, and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date, and such conversion shall be at
the Conversion Price in effect at such time on such date, unless the stock
transfer books of the Company shall be closed on that date, in which event such
person or persons shall be deemed to have become such holder or holders of
record at the close of business 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 have been surrendered and such
notice (and any applicable instruments of transfer and any required taxes and
payments) shall have been received by the Company.
Any Note or portion thereof surrendered for conversion during the
period beginning immediately after the close of business on the Regular Record
Date for any Interest Payment Date and ending at the close of business on such
Interest Payment Date shall 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 need be made if such Note or portion thereof being
- -------
converted shall have been called for redemption and the Redemption Date for such
Note falls during the period beginning immediately after the close of business
on such Regular Record Date and ending at the close of business on such Interest
Payment Date. An amount equal to such payment shall be paid by the Company on
such Interest Payment Date to the holder of such Note at the close of business
on such Regular 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. Except as provided
for above in this Section, no payment or adjustment shall be made for interest
accrued on any Note converted or for any dividends or distributions on any
shares of Common Stock issued upon the conversion of such Note as provided in
this Article.
SECTION 4.03. Cash Payments in Lieu of Fractional Shares. No
------------------------------------------
fractional shares or scrip representing fractions of shares of Common Stock
shall be issued upon conversion of the Notes. If more than one Note shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Notes, or specified portions
thereof to be converted, so surrendered. Instead of any fractional interest in a
share of Common Stock that would otherwise be deliverable upon the conversion of
any Note or Notes, the Company shall pay to the holder of such Note an amount in
cash (computed to the nearest cent) equal to the Daily Market Price thereof at
the close of business on the business day next preceding the day of conversion
multiplied by the fractional interest (expressed as a percentage) that otherwise
would have been deliverable upon conversion of the Notes.
SECTION 4.04. Adjustment of Conversion Price. The Conversion Price
------------------------------
shall be as specified in the form of Note hereinabove set forth, subject to
adjustment as provided below . The Conversion Price shall be adjusted from time
to time by the Company as follows:
38
<PAGE>
(a) In case the Company shall (i) pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
or (iv) issue by reclassification of its Common Stock any shares of capital
stock of the Company, the Conversion Price in effect immediately prior to such
action shall be adjusted so that the holder of any Note thereafter surrendered
for conversion shall be entitled to receive the number of shares of Common Stock
or other capital stock of the Company that it would have owned or been entitled
to receive immediately following such action had such Note been converted
immediately prior to the occurrence of such action. An adjustment made pursuant
to this subsection (a) shall become effective immediately after the record date,
in the case of a dividend or distribution, or immediately after the effective
date, in the case of a subdivision, combination or reclassification. If, as a
result of an adjustment made pursuant to this subsection (a), the holder of any
Note thereafter surrendered for conversion shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose determination
shall be conclusive and shall be described in a statement filed by the Company
with the Trustee and with any conversion agent as soon as practicable) shall
determine the allocation of the adjusted Conversion Price between or among
shares of such classes of capital stock or shares of Common Stock and other
capital stock.
(b) In case the Company shall issue rights, warrants or options to
all holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price per share (as determined pursuant to subsection (g) of
this Section 4.04) of the Common Stock, the Conversion Price in effect
immediately prior thereto shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the date of issuance of such rights, warrants or options by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights, warrants or options (immediately prior to such
issuance) plus the number of shares that the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price,
and of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, warrants or options
(immediately prior to such issuance) plus the number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall be made
successively whenever any rights, warrants or options are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights, warrants or options. In
determining whether any rights, warrants or options entitle the holders to
subscribe for or purchase shares of Common Stock at less than such Current
Market Price, and in determining the aggregate offering price of such shares of
Common Stock, there shall be taken into account any consideration received by
the Company for such rights, warrants or options, the value of such
consideration, if other than cash, to be determined by the Board of Directors
(whose determination shall be conclusive and shall be described in a certificate
filed by the Company with the Trustee and with any conversion agent as soon as
practicable); provided, however, that rights, warrants or options issued by the
-------- -------
Company to all holders of its Common Stock entitling the holders thereof to
subscribe for or purchase shares of Common Stock, which rights,
39
<PAGE>
warrants or options (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, in each case in
clauses (i) through (iii) until the occurrence of a specified event
or events, shall, for purposes of this Section 4.04, not be deemed
issued until the occurrence of the earliest such specified event.
(c) In case the Company shall distribute to all holders of
its outstanding Common Stock any shares of a capital stock (other
than Common Stock), evidence of its indebtness or assets (including
securities and cash, but excluding any regular periodic cash
dividend paid from surplus of the Company and dividends or
distributions payable in stock for which adjustment is made pursuant
to subsection (a) of this Section 4.04) or rights, warrants or
options to subscribe for or purchase securities of the Company
(excluding those referred to in subsection (b) of this Section 4.04),
then in each such case 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 record date of
such distribution by a fraction of which the numerator shall be the
Current Market Price per share (as determined pursuant to subsection
(g) of this Section 4.04) of the Common Stock less the fair market
value on such record date (as determine by the Board of Directors,
whose determination shall be conclusive and shall be described in a
certificate filed by the Company with the Trustee and with any
conversion agent as soon as practicable) of the portion of the
capital stock or the evidence of indebtdness or the assets so
distributed to the holder of one share of Common Stock or of such
subscription rights. warrants or options applicable to one share of
Common Stock, and of which the denomonator shall be such Current
Market Price per share of Common Stock. Such adjustment shall become
effective immediately after the record date for the determination of
Stockholders entitled to receive such distribution; provided,
--------
however, that rights, warrants or options issued by the Company to
-------
all holders of its Common Stock entitling the holders thereof to
subscribe for or purchase shares of securities of the Company
(excluding those referred to in subsection (b) of this Section 4.04),
which rights, warrants or options (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, in
each case in clauses (i) through (iii) until the occurrence of a
specified events or events, shall, for purposes of this Section
4.04, not be deemed issued until the occurrence of the earliest such
specified event.
(d) In case the Company shall issue to an Affiliate shares
of its Common Stock at a net price per share less than the Current
Market Price per share (as determined pursuant to subsection (g) of
this Section 4.04) on the date the Company fixes the offering price
of such additional shares, the Conversion Price shall be reduced
immediately thereafter so that the same shall equal the price
determined by multiplying such conversion price in effect immediately
prior thereto by a fraction of which the numerator shall be number of
shares of Common Stock outstanding immediately prior to the issuance
of such additional shares plus the number of shares of Common Stock
that the aggregate offering price of the total number of shares of
Common Stock so offered would purchase at the Current Market Price
and the denominator shall be the number of shares of Common Stock
outstanding immediately after the issuance of such additional shares.
Such adjustment shall be made successively whenever such an issuance
is made. This subsection (d) shall not apply to Common Stock issued
to any Affiliate under a bona
----
40
<PAGE>
fide employee or director benefit plan adopted by the Board of
----
Directors and approved by the holders of Common Stock when required
by law.
(e) In case the Company shall, by dividend or otherwise, at
any time distribute to all holders of the Company's Common Stock cash
(excluding any cash that is distributed as part of a distribution
referred to in subsection (c) of this Section 4.04 [or in connection
with a transaction to which Section 4.09 applies]) in an aggregate
amount that, together with (A) the aggregate amount of any other
distributions to all holders of the Company's Common Stock made
exclusively in cash (excluding any cash that was distributed as part
of a distribution referred to in subsection (c) or in connection with
a transaction to which Section 4.09 applies) within the 12 months
preceding the date fixed for the determination of shareholders
entitled to such distribution and in respect of which no conversion
price adjustment pursuant to this subsection (e) has been made and
(B) the aggregate of any cash plus the fair market value (as
determined in good faith by the Board of Directors, whose
determination shall be conclusive and shall be described in a
certificate filed by the Company with the Trustee and with any
conversion agent as soon as practicable) of other consideration
payable in respect of any previous tender offer by the Company or a
Subsidiary for the Company's Common Stock consummated within the 12
months preceding such distribution and in respect of which no
adjustment pursuant to subsection (f) of this Section 4.04 has been
made, exceeds 10% of the product of the Current Market Price per
share (determined pursuant to subsection (g) of this Section 4.04) of
the Common Stock on such date of determination times the number of
shares of Common Stock outstanding on such date, the Conversion Price
shall be reduced by multiplying the Conversion Price in effect
immediately prior to the close of business on such date of
determination by a fraction of which the numerator shall be the
Current Market Price per share (determined pursuant to subsection (g)
of this Section 4.04) of Common Stock on such date of determination
less the amount of cash to be distributed at such time applicable to
one share of Common Stock and the denominator of which shall be such
Current Market Price, such reduction to become effective immediately
prior to the opening of business on the day after such date of
determination.
(f) In case a tender offer made by the Company or any
Subsidiary for all or any portion of the Company's Common Stock shall
be consummated and such tender offer shall involve an aggregate
consideration having a fair market value (as determined in good faith
by the Board of Directors, whose determination shall be conclusive
and shall be described in a certificate filed by the Company with the
Trustee and with any conversion agent as soon as practicable) on the
last time (the "Expiration Time") tenders may be made pursuant to
such tender offer (as it may have been amended) that, together with
the aggregate of the cash plus the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be
conclusive and shall be described in a certificate filed by the
Company with the Trustee and with any conversion agent as soon as
practicable), of other consideration paid or payable in respect of
any previous tender offer by the Company or a Subsidiary for all or
any portion of the Company's Common Stock consummated within the 12
months preceding the consummation of such tender offer and in respect
of which no conversion price adjustment pursuant to this paragraph
(f) has been made, such cash plus the fair market value of other
consideration to be calculated in each case as of the expiration of
each such previous tender offer, exceeds 10% of the product of the
Current Market Price per share (determined pursuant to
41
<PAGE>
subsection (g) of this Section 4.04) of the Common Stock at the
Expiration Time times the number of shares of Common Stock
outstanding (including any tendered shares) at 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 (i) the product of the Current Market Price per
share (determined pursuant to subsection (g) of this Section 4.04) of
the Common Stock at the Expiration Time times the number of shares of
Common Stock outstanding (including any tendered shares) at the
Expiration Time minus (ii) the fair market value (determined as
aforesaid) of the aggregate consideration paid or payable to
stockholders based on the number of validly tendered shares to be
purchased and not withdrawn prior to the Expiration Time (the number
of shares so purchased being hereinafter referred to as the
"Purchased Shares") and the denominator of which shall be the product
of (i) such Current Market Price per share on the Expiration Time
times (ii) such number of outstanding shares on the Expiration Time
less the number of Purchased Shares, such reduction to become
effective immediately prior to the opening of business on the day
following the Expiration Time.
(g) For the purpose of any computation under subsections
(b), (c), (d) (e) and (f) of this Section 4.04, the Current Market
Price per share of Common Stock on any date shall be deemed to be the
average of the Daily Market Prices for the shorter of (i) 30
consecutive business days ending on the last full trading day on the
exchange or market referred to in determining such daily market
prices prior to the Time of Determination or (ii) the period
commencing on the date next succeeding the first public announcement
of the issuance of such rights or warrants, such distribution, such
issuance of Common Stock to an Affiliate or such tender offer, as the
case may be, through such last full trading day prior to the Time of
Determination.
(h) In any case in which this Section 4.04 shall require
that an adjustment be made immediately following a record date or an
effective date, the Company may elect to defer (but only until five
business days following the filing by the Company with the Trustee
and any conversion agent of the certificate of independent public
accountants required by subsection (j) of this Section 4.04) issuing
to the holder of any Note converted after such record date or
effective date the shares of Common Stock issuable upon such
conversion over and above the shares of Common Stock issuable upon
such conversion on the basis of the Conversion Price prior to
adjustment, and paying to such holder any amount of cash in lieu of a
fractional share.
(i) No adjustment in the Conversion Price shall be required
to be made unless such adjustment would require an increase or
decrease of at least 1% of such price; provided, however, that any
-------- -------
adjustments that by reason of this subsection (i) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4.04 shall
be made to the nearest cent or to the nearest 1/100th of a share, as
the case may be. Anything in this Section 4.04 to the contrary
notwithstanding, the Company shall be entitled to make such reduction
in the Conversion Price, in addition to those adjustments required by
this Section 4.04, as it in its discretion shall determine to be
advisable in order that any stock dividend, subdivision of shares,
distribution of rights to purchase stock or securities or
distribution of securities
42
<PAGE>
convertible into or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable to the recipients.
(j) Whenever the Conversion Price is adjusted as herein
provided, (i) the Company shall promptly file with the Trustee and
any conversion agent other than the Trustee a certificate of a firm
of independent public accountants (who may be the regular accountants
employed by the Company) setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts
requiring such adjustment and the manner of computing the same, which
certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) a notice stating that the Conversion Price has
been adjusted and setting forth the adjusted Conversion Price shall
forthwith be given by the Company to the Noteholders in the manner
provided in Section 16.10. Except as otherwise provided in Section
8.01, neither the Trustee nor any conversion agent shall be under any
duty or responsibility with respect to the certificate required by
this subsection (i) except to exhibit the same to any holder of Notes
who requests to inspect it.
(k) In the event that at any time as a result of an
adjustment made pursuant to subsection (a) of this Section 4.04, the
holder of any Note thereafter surrendered for conversion shall become
entitled to receive any shares of the Company other than shares of
Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of any Note shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained
in this Article Four.
SECTION 4.05. Notice to Holders Prior to Certain
----------------------------------
Corporate Actions. In case:
-----------------
(a) the Company shall take any action that would require
an adjustment in the Conversion Price pursuant to Section 4.04(c),
(d), (e) or (f); or
(b) the Company shall authorize the granting to the
holders of its Common Stock generally of rights, warrants or options
to subscribe for or purchase any shares of stock of any class or of
any other rights, which rights, warrants or options are exercisable
upon the occurrence of a specified event or events; or
(c) there shall be any reorganization or reclassification
of the Common Stock (other than a subdivision or combination of the
outstanding Common Stock and other than a change in the par value of
the Common Stock), or any consolidation or merger to which the
Company is a party or any statutory exchange of securities with
another corporation and for which approval of any stockholders of the
company is required, or any sale or transfer of all or substantially
all of the assets of the Company; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then the Company shall cause to be filed with the Trustee and any conversion
agent, and shall cause to be given to the Noteholders, in the manner provided in
Section 16.10, as promptly as possible, but in any event at least 10 days prior
to the applicable date hereinafter specified, a notice stating (i) the date on
which a record is to be taken for the purpose of the relevant dividend or
distribution or, if a record is not to be taken, the date as of which the
holders of Common
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Stock of record to be entitled to such dividend or distribution are to be
determined, or (ii) the date on which the relevant issuance of Common Stock to
an Affiliate, tender offer, reorganization, reclassification, consolidation,
merger, statutory exchange, sale, transfer, dissolution, liquidation, or
winding-up is expected to become effective or occur, and, if applicable, the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, statutory exchange, sale, transfer, dissolution, liquidation or winding-
up, if applicable. Failure to give such notice or any defect therein shall not
affect the legality or validity of the proceedings described in subsection (a),
(b), (c) or (d) of this Section 4.05.
SECTION 4.06. Reservation of Shares of Common Stock. The
-------------------------------------
Company covenants that it will at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
shares of Common Stock or its issued shares of Common Stock held in its
treasury, or both, for the purpose of effecting conversions of Notes, the full
number of shares of Common Stock deliverable upon the conversion of all
outstanding Notes not theretofore converted. For purposes of this Section 4.06,
the number of shares of Common Stock that shall be deliverable upon the
conversion of all outstanding Notes shall be computed as if at the time of
computation all outstanding Notes were held by a single holder.
Before taking any action that would cause an adjustment
reducing the Conversion Price below the then par value (if any) of the shares of
Common Stock deliverable upon conversion of the Notes, the Company will take any
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock at such adjusted Conversion Price.
SECTION 4.07. Shares Issued Upon Conversion. The
-----------------------------
Company will pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issuance or delivery of shares of Common Stock
upon conversion of Notes pursuant hereto; provided, however, that the Company
-------- -------
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance or delivery of shares of Common Stock in a
name other than that of the holder of the Notes to be converted and no such
issuance or delivery shall be made unless and until the person requesting such
issuance or delivery has paid to the Company the amount of any such tax or has
established, to the satisfaction of the Company, that such tax has been paid.
SECTION 4.08. Covenants as to Common Stock. The Company
-----------------------------
covenants that all shares of Common Stock that may be delivered upon conversion
of Notes will upon delivery be duly and validly issued and fully paid and non-
assessable, free of all liens and charges and not subject to any preemptive
rights.
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.
44
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The Company further covenants that for so long as the
Common Stock shall be listed on the New York Stock Exchange or any other
national securities exchange, the Company will, if permitted by the rules of
such exchange, list and keep listed all Common Stock issuable upon conversion of
the Notes.
SECTION 4.09. Consolidation or Merger or Sale of Assets.
-----------------------------------------
Notwithstanding any other provision herein to the contrary, in case of any
consolidation or merger to which the Company is a party (other than a merger or
consolidation in which the Company is the continuing corporation and in which
the Company's Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash or the securities or other property of
another corporation), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (other than in connection with a merger or acquisition), the
corporation formed by such consolidation or the corporation whose securities,
cash or other property will immediately after the merger or consolidation be
owned, by virtue of the merger or consolidation by the holders of Common Stock
of the company immediately prior to the merger, or the corporation that shall
have acquired such assets or securities of the company, as the case may be,
shall promptly execute and deliver to the Trustee a supplemental indenture
providing that the holder of each Note then outstanding shall have the right
thereafter to convert such Note into the kind and amount of securities, cash or
other property receivable upon such consolidation, merger, statutory exchange,
sale or conveyance by a holder of the number of shares of Common Stock into
which such Note might have been converted immediately prior to such
consolidation, merger, statutory exchange, sale or conveyance assuming such
holder of Common Stock did not exercise its 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 (a "non-electing share"), then for the purposes of this
Section 4.09, 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 appropriate adjustment with respect to
the rights of the holders of the Notes, to the end that the provisions set forth
in this Article Four shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares of stock or other
securities or property thereafter deliverable on the conversion of the Notes.
Any such adjustment shall be approved by a firm of independent public
accountants, evidenced by a certificate to that effect delivered to the Trustee
and any paying agent; and any adjustment so approved shall for all purposes
hereof conclusively be deemed to be an appropriate adjustment.
The above provisions of this Section 4.09 shall similarly
apply to successive consolidations, mergers, statutory exchanges, sales or
conveyances.
The Company shall give notice of the execution of such a
supplemental indenture to the holders of Notes in the manner provided in Section
16.10 within 30 days after the execution thereof; provided, however, that such
-------- -------
notice need not be given if such information has been provided prospectively in
the notice given pursuant to Section 4.05. Failure to give such
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notice, or any defects therein, shall not affect the legality or validity of any
such supplemental indenture.
SECTION 4.10. Disclaimer of Responsibility for Certain Matters.
------------------------------------------------
Neither the Trustee nor any conversion agent shall at any time be under any duty
or responsibility to any holder of Notes to determine whether any facts exist
that may require any adjustment of the Conversion Price, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor any conversion agent shall be
accountable with respect to the listing or registration referred to in Section
4.08 or the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities, cash or other property that may at any time be
issued or delivered upon the conversion of any Note; and neither the Trustee nor
any conversion agent makes any representation with respect thereto. 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 to make any cash payment upon
the surrender of any Note for the purpose of conversion or, subject to the
provisions of Section 8.01, to comply with any of the covenants contained in
this Article Four.
ARTICLE FIVE
Particular Covenants of the Company
-----------------------------------
SECTION 5.01. 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 place, at the respective times and in the manner provided in the Notes and
this Indenture.
Each installment of interest on the Notes will be made (i) in respect
of Notes held by the Depositary or its nominee, in same day funds on or prior to
the respective Interest Payment Dates (but in no event later than 12:00 noon EST
on any such Interest Payment Date), and (ii) in respect of Notes held of record
by Noteholders other than the Depositary or its nominee, at the office of the
Trustee in New York, New York or at such other office or agency of the Company
as it shall maintain for that purpose pursuant to Section 5.02; provided,
--------
however, that, at the option of the Company, interest on any Note held of record
- -------
by Noteholders other than the Depositary or its nominee may be paid by mailing
checks to the addresses of such Noteholders as such addresses appear in the
Register.
SECTION 5.02. Office for Notices, Payments and Conversions, etc. So
-------------------------------------------------
long as any of the Notes remain outstanding, the Company will maintain in the
Borough of Manhattan, The City and State of New York, an office or agency where
the Notes may be presented for registration of transfer and for exchange as in
this Indenture provided, where the Notes may be presented for conversion, where
notices and demands to or upon the Company in respect of the Notes or of this
Indenture may be served and where the Notes may be presented for payment;
provided, however, that the Company may maintain in such Borough one or more
- -------- -------
other offices or agencies for any or all of the foregoing purposes. The Company
will give to the Trustee written notice of the location of any such office or
agency and of any change of location thereof. In case the Company shall fail to
maintain any such office or agency or shall fail to give such notice of
46
<PAGE>
the location or of any change in the location thereof, presentations may be
made and notices and demands may be served at the corporate trust office of the
Trustee.
The Company hereby initially appoints the corporate trust office of the
Trustee in Boston, Massachusetts, which office at the date of the execution of
this Indenture is located at 225 Franklin Street, Boston, Massachusetts 02110 as
Registrar and paying agent and, as its office or agency in the Borough of
Manhattan, The City and State of New York, State Street Bank and Trust Company,
N.A., 61 Broadway, Concourse Level, Corporate Trust Window, New York, New York
10006.
SECTION 5.03. 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 5.04. Provision as to Paying Agent. (a) If the Company
----------------------------
shall appoint a paying agent other than the Trustee, 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 5.04:
(1) that it will hold all sums held by it as such agent for the payment
of the principal of and premium, if any, and 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 or the
Trustee, as the case may be;
(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 or premium, if any, or interest on the Notes when the same shall be due
and payable; and
(3) that it will at any time during the continuance of any such failure
specified in subparagraph (2) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
paying agent.
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 or 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 or 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 by any other obligor on the Notes) to make
any payment of the principal of or premium, if any, or interest on the Notes
when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by
47
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it or any paying agent hereunder, as required by this Section 5.04, such sums to
be held by the Trustee upon the trusts herein contained.
(d) Anything in this Section 5.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.04 is subject to
Section 13.03 and 13.04.
SECTION 5.05. Annual Statement. The Company will deliver to the
----------------
Trustee within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that (a) a review of the activities of the Company
during such year and of performance under this Indenture has been made under
their supervision, and (b) to the best of their knowledge, based upon such
review, the Company has fulfilled all its obligations under this Indenture
throughout such year, or, if there has been a default in the fulfillment of any
such obligation and such default is continuing, specifying each such default of
which the signers have knowledge, and the nature and status thereof.
ARTICLE SIX
Noteholder Lists and Reports by the
-----------------------------------
Company and the Trustee
-----------------------
SECTION 6.01. Noteholder Lists. The Company covenants and agrees
----------------
that it will furnish or cause to be furnished to the Trustee a list in such form
as the Trustee may reasonably require of the names and addresses of the holders
of Notes:
(a) semi-annually, not more than 15 days after each Regular Record
Date, as of such record date; and
(b) at such other times as the Trustee may request in writing, within
30 days after receipt by the Company of any such request, as of a date not more
than 15 days prior to the time such information is furnished;
provided, however, that so long as the Trustee shall be the Registrar, such list
- -----------------
shall not be required to be furnished.
SECTION 6.02. 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 6.01 or maintained
by the Trustee in its capacity as Registrar, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 6.01 upon receipt of a
new list so furnished.
(b) In case three or more holders of Notes (hereinafter referred to as
"applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Note for a period of at
least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other holders of Notes
with respect to their rights under this Indenture or under the Notes and submit
therewith a copy of the form of proxy or other communication that such
applicants propose to
48
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transmit, then the Trustee shall, within five business days after the receipt of
such application, at its election, either:
(1) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section 6.02, or
(2) inform such applicants as to the approximate number of holders of
Notes whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section 6.02, and as to the approximate cost of mailing to such
Noteholders the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford such applicants access to the
information specified in subsection (b)(1) of this Section 6.02, the Trustee
shall, upon the written request of such applicants, mail to each Noteholder
whose name and address appear in the information preserved at the time by the
Trustee in accordance with the provisions of subsection (a) of this Section
6.02, a copy of the form of proxy or other communication that is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Securities and Exchange
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Notes or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Securities and Exchange Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the Securities and
Exchange Commission shall find, after notice and opportunity for hearing, that
all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Noteholders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every holder of the Notes, by receiving and holding the
same, agrees with the Company and Trustee that neither the Company nor the
Trustee nor any paying agent nor any Registrar shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the holders of the Notes in accordance with the provisions of subsection (b)
of this Section 6.02, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under said subsection (b).
SECTION 6.03. Reports by the Company. (a) The Company covenants and
----------------------
agrees to file with the Trustee, within 15 days after the Company is required to
file the same with the Securities and Exchange Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Securities and Exchange Commission may
from time to time by rules and regulations prescribe) that the Company is
required to file with the Securities and Exchange Commission pursuant to Section
13 or Section 15(d) of the Exchange Act; or, if the Company is not required to
file information,
49
<PAGE>
documents or reports pursuant to either of such Sections, then to file with the
Trustee and the Securities and Exchange Commission, in accordance with rules and
regulations prescribed from time to time by the Securities and Exchange
Commission, such of the supplementary and periodic information, documents and
reports that may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Securities and Exchange Commission, in accordance with the rules and regulations
prescribed from time to time by the Securities and Exchange Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants provided for in this Indenture as may
be required from time to time by such rules and regulations.
(c) The Company covenants and agrees to transmit, in the manner and
to the extent provided in Section 6.04(c), within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to subsections (a) and (b)
of this Section 6.03 as may be required by rules and regulations prescribed from
time to time by the Securities and Exchange Commission.
SECTION 6.04. Reports by the Trustee. (a) On or before July 15, 1997
----------------------
and on or before July 15 in every year thereafter so long as any Notes remain
outstanding hereunder, the Trustee shall transmit to the Noteholders and the
Company, as hereinafter in this Section 6.04 provided, a brief report dated as
of the preceding May 15 with respect to any of the following events that may
have occurred within the previous twelve months (but if no such event has
occurred within such period no report need be transmitted):
(1) any change to its eligibility and its qualifications under
Section 310 of the Trust Indenture Act or Sections 8.08 or 8.09 hereof;
(2) the creation of or any material change to a relationship
specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
Indenture Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) that remain unpaid on the date of such report, and
for the reimbursement of which it claims or may claim a lien or charge
prior to that of the Notes, on any property or funds held or collected by
it as Trustee, except that the Trustee shall not be required (but may
elect) to state such advances if such advances so remaining unpaid
aggregate not more than one-half of one percent (0.5%) of the principal
amount of the Notes outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Notes) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in paragraph (2), (3), (4) or
(6) of subsection (b) of Section 8.13;
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(5) any change to the property and funds, if any, physically in the
possession of the Trustee, as such, on the date of such report;
(6) any additional issue of Notes that the Trustee has not previously
reported; and
(7) any action taken by the Trustee in the performance of its duties
under this Indenture that it has not previously reported and that in its
opinion materially affects the Notes, except action in respect of a
default, notice of which has been or is to be withheld by it in accordance
with the provisions of Section 7.08.
(b) Reports pursuant to this Section 6.04 shall be transmitted by
mail to all Noteholders as the names and addresses of such Noteholders appear
upon the registry books on the Company.
(c) A copy of each such report shall, at the time of such
transmission to Noteholders, be filed by the Trustee with each stock exchange,
if any, upon which the Notes are listed and also with the Securities and
Exchange Commission and the Company. The Company will notify the Trustee when
and as the Notes become listed on any stock exchange.
SECTION 6.05. Rule 144A Information Requirement. If at any time
---------------------------------
prior to the Resale Restriction Termination Date, the Company is no longer
subject to Section 13 or 15(d) of the Exchange Act, the Company will furnish to
Noteholders or beneficial holders of the Notes and prospective purchasers of the
Notes designated by the Noteholders, upon their request, information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act until the
earlier of (i) the date on which the Notes and the underlying Common Stock are
registered under the Securities Act or (ii) the Resale Restriction Termination
Date.
ARTICLE SEVEN
Remedies of the Trustee and Noteholders
---------------------------------------
on Event of Default
-------------------
SECTION 7.01. Events of Default. In case one or more of the
-----------------
following events (each, an "Event of Default") (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or pursuant to
the subordination provisions of Article Ten, or to be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body) shall have occurred
and be continuing:
(a) default in the payment of any installment of interest upon any of
the Notes as and when the same shall become due and payable, whether or not
such payment is prohibited by the subordination provisions of Article Ten,
and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of or premium, if any, on
any of the Notes as and when the same shall become due and payable, either
in connection with any redemption by declaration or otherwise, whether or
not such payment is prohibited by the subordination provisions of Article
Ten; or
51
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(c) default in the payment of Change of Control Repurchase Price in
respect of any Note on the Repurchase Date therefor in accordance with the
provisions of Article Fifteen, whether or not such payment is prohibited by
the subordination provisions of Article Ten; or
(d) failure to provide timely notice of a Change of Control as
required by Article Fifteen; or
(e) 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 continued for a period of 45 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, by
registered or certified mail, or to the Company and the Trustee by the
holders of at least 25% in aggregate principal amount of the Notes at the
time outstanding; or
(f) the occurrence of any defaults in payment of any principal of,
interest on or premium in respect of any instrument or instruments
evidencing or securing other indebtedness of the Company for borrowed money
having an aggregate principal amount $25,000,000 or more that shall have
occurred and be continuing and that (except in the case of a default in the
payment of principal at maturity) shall have been accelerated, which
acceleration shall not have been rescinded or annulled within 30 days after
notice is given to the Company by the Trustee or to the Company and the
Trustee by the holders of 25% or more in aggregate principal amount of the
Notes; or
(g) the Company, or any Material Subsidiary (as defined below) 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
(unless such debts are the subject of a bona fide dispute); or
---- -------
(h) an involuntary case or other proceeding shall be commenced
against the Company or any Material Subsidiary (as defined below) seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 consecutive days;
then and in each and every such case (other than an Event of Default described
in subsections (g) or (h) above), unless the principal of all of the Notes shall
have already become due and payable, and subject to the provisions of Article
Ten, either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by Noteholders), so long as the
Event of Default shall be
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continuing, may declare the principal of all the Notes 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 the Notes contained to
the contrary notwithstanding. However, 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 moneys due shall have been obtained or entered as
hereinafter provided, 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 and rescind and annul such declaration and its
consequences, if the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all of the Notes and
the principal of and premium, if any, on any and all Notes that shall have
become due otherwise than by acceleration (with interest on overdue installments
of interest and to the extent that payment of such interest is enforceable under
applicable law and on such principal and premium, if any, at the rate borne by
the Notes, to the date of such payment or deposit) and all sums paid or advanced
by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and if any
and all defaults under this Indenture (other than the nonpayment of principal of
and premium, if any, and accrued interest on Notes that shall have become due by
acceleration) shall have been remedied. No such waiver or rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon. In the case of an Event of Default
described in subsection (g) or (h) above, all unpaid principal of and accrued
interest on the Notes shall be due and payable immediately without any
declaration or other act on the part of the Trustee or the holders of Notes.
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 rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Notes shall be restored respectively
to their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the Trustee and the holders of the Notes shall continue
as though no such proceeding had been taken.
For the purpose of this Section 7.01, the term "Material Subsidiary"
shall mean, with respect to the Company, any Subsidiary of the Company that (i)
for the most recent fiscal year of the Company accounted for more than 10% of
the consolidated revenues of the Company, or (ii) as of the end of such fiscal
year, was the owner of more than 10% of the consolidated assets of the Company,
all as shown on the consolidated financial statements for such fiscal year.
SECTION 7.02. Payment of Notes on Default; Suit Therefor; Filing of
-----------------------------------------------------
Proofs of Claim. 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 and premium, if any, on any of the Notes as and when the same shall
become due and payable, whether at maturity of the Notes or in connection with
any redemption, by declaration or otherwise; then, upon written 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 so 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
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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 a reasonable compensation to the
Trustee, its agents, attorneys and counsel, and any expenses or liabilities
incurred and any advances made by the Trustee hereunder other than through its
negligence or bad faith.
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 moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code or any other applicable law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, custodian or
similar official shall have been appointed for or taken possession of the
Company, the property of the Company or such other obligor, or in the case of
any similar judicial proceedings relative to the Company or 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 7.02, 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 and 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 and to take such other
actions (including participating as a member, voting or otherwise, of any
committee of creditors appointed in the matter) 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 moneys or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of its charges and expenses; 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 and expenses,
including reasonable counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable compensation,
expenses and counsel fees 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, money, securities
and other property that the holders of the Notes may be entitled to receive in
such proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof 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
54
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trust, and any recovery of judgment shall be for the ratable benefit of the
holders of the Notes in respect of which such judgment has been recovered.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such proceeding.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
SECTION 7.03. Application of Moneys Collected by Trustee. Subject to
------------------------------------------
the provisions of Article Ten, any moneys collected by the Trustee pursuant to
this Article shall be applied in the order following, at the date or dates fixed
by the Trustee for the distribution of such moneys, 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 to the Trustee under Section
8.06;
SECOND: 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: In case the principal of the outstanding Notes shall have
become due, by declaration or otherwise, and shall be unpaid, to the
payment of the whole amount then owing and unpaid on 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 moneys shall be insufficient to
pay in full the whole amount so due and unpaid on 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: To the payment of the remainder, if any, to the Company, its
successors or assigns, or to whosoever may be lawfully entitled to the
same, or as a court of competent jurisdiction may determine.
SECTION 7.04. Proceedings by Noteholders. 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
55
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default and of the continuance thereof, as hereinabove provided, and unless the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding shall have made written request of 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 request has been given to the
Trustee pursuant to Section 7.07 during such 60-day period by the holders of a
majority in aggregate principal amount of the Notes then outstanding; it being
understood and intended, and being expressly covenanted by the holder of every
Note with every other 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 such 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 7.04, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Subject to the provisions of Article Ten, but notwithstanding any
other provisions in this Indenture, the rights 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 or to convert Notes in accordance with this Indenture 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 its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
SECTION 7.05. Proceedings by Trustee. In case of an Event of Default
----------------------
hereunder, 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 7.06. Remedies Cumulative and Continuing. All powers and
----------------------------------
remedies given by this Article Seven 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
Noteholders, 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 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 an acquiescence
56
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therein; and every power and remedy given by this Article Seven 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 7.07. Direction of Proceeding 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 9.04 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 (subject to
-------- -------
the provisions of Section 8.01) the Trustee shall have the right to decline to
follow any such direction if the Trustee shall be advised by counsel that the
action or proceeding so directed may not lawfully be taken or would conflict
with this Indenture or if the Trustee in good faith by its board of directors or
trustees, executive committee, or a trust committee of directors or trustees or
responsible officers shall determine that the action or proceeding so directed
would involve the Trustee in personal liability or would be unduly prejudicial
to the rights of holders not joining in such directions.
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 in writing
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
or (iii) a default in respect of a covenant or provision hereof that under
Article Eleven 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, respectively; 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 7.07, 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.
SECTION 7.08. Notice of Defaults. The Trustee shall, within 90 days
------------------
after the occurrence of a default, give to all Noteholders, in the manner
provided in Section 16.10, notice of all defaults known to the Trustee, unless
such defaults shall have been cured before the giving of such notice (the term
"defaults" for the purpose of this Section 7.08 and Section 8.01(d) being hereby
defined to be the events specified in clauses (a), (b), (c), (d), (e), (f), (g)
and (h) of Section 7.01 not including periods of grace or the giving of any
notice, or both, provided for therein); provided, however, 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 the board of directors or trustees, the executive
committee, or a trust committee of directors or trustees 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 7.09. Undertaking to Pay Costs. All parties to this
------------------------
Indenture agree, and each holder of any Note by its 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
57
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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;
but the provisions of this Section 7.09 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in aggregate more than 10% in principal amount of the Notes
outstanding, 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 this Indenture.
ARTICLE EIGHT
Concerning the Trustee
----------------------
SECTION 8.01. Duties and Responsibilities of Trustee. The Trustee,
--------------------------------------
prior to the occurrence of an Event of Default and after the curing or waiving
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 its exercise of such
rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her 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
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
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 provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) 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 proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(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
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than a majority in aggregate principal amount of the Notes at the time
outstanding determined as provided in Section 9.04 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.
(d) The Trustee shall not be deemed to have notice of any fact or
matter with respect hereto, including without limitation, the occurrence of
a default or Event of Default, unless such fact or matter is actually known
to a Responsible Officer of the Trustee charged with responsibility for
administering this Indenture or unless the Trustee is notified of such fact
or matter in a writing received by the Trustee and making specific
reference to this Indenture.
None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any personal financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 8.02. Reliance on Documents, Opinions, etc. Except as
------------------------------------
otherwise provided in Section 8.01:
(a) The Trustee may rely and shall be protected in acting, or
refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request, 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 Clerk or an Assistant Clerk of the Company;
(c) the Trustee may consult with counsel and any written advice of
such counsel or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in 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 liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default which may have
occurred, the Trustee shall not
59
<PAGE>
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, debenture or other paper or
document, unless requested in writing to do so by the holders of not less
than a majority in aggregate principal amount of the Notes then
outstanding; 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 are, 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 expense or liability as a condition to
so proceeding; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys.
SECTION 8.03. 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 8.04. Trustee, Paying Agent, Conversion Agent or Note
-----------------------------------------------
Registrar May Own Notes. The Trustee, any paying agent, conversion agent or
- -----------------------
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights, subject to the provisions of Sections
8.08 and 8.13, it would have if it were not Trustee, paying agent, conversion
agent or Registrar.
SECTION 8.05. Moneys to Be Held in Trust. Subject to the provisions
--------------------------
of Section 13.04, all moneys 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 otherwise agreed with the Company.
SECTION 8.06. 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 (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 agents and
counsel) except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
reasonable costs and expenses of defending itself against any claim of liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligations of the
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<PAGE>
Company under this Section 8.06 to compensate or indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness shall
be secured by a lien prior to that of 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. When the Trustee incurs expenses or renders
services after an Event of Default specified in Section 7.01(g) or (h) occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under the United States bankruptcy laws.
SECTION 8.07. Officers' Certificate as Evidence. Except as otherwise
---------------------------------
provided in Section 8.01, 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, suffering 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 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, suffered or omitted by it under the
provisions of this Indenture in reliance thereon.
SECTION 8.08. Conflicting Interest of Trustee. If the Trustee has or
-------------------------------
shall acquire any "conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Trustee and the Company shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 8.09. Eligibility of Trustee. The Trustee hereunder shall at
----------------------
all times be
(a) a corporation organized and doing business under the laws of
the United States, any State or territory thereof or of the District of
Columbia authorized under such laws to exercise corporate trust powers,
and subject to supervision or examination by Federal, State or District of
Columbia or territorial authority, or
(b) a corporation or other person organized and doing business
under the laws of a foreign government that is permitted to act as Trustee
pursuant to a rule, regulation or order of the Commission, authorized
under such laws to exercise corporate trust powers, and subject to
supervision or examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to supervision or
examination applicable to United States institutional trustees,
in either case having a combined capital and surplus of at least $10,000,000. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 8.09, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. Neither the Company
nor any person directly or indirectly controlling, controlled by or under common
control with the Company shall serve as Trustee for the Notes. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section 8.09, the Trustee shall resign immediately in the manner and with
the effect specified in Section 8.10.
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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.
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 within 60 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee, 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 7.09, 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 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 310(b) of the
Trust Indenture Act pursuant to Section 8.08 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, unless the Trustee's
duty to resign is stayed in accordance with the provisions of Section
310(b) of the Trust Indenture Act; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.09 and shall fail to resign after written request
therefor by the Company or by any such Noteholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case the Company may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 7.09, any Noteholder who has been a bona fide holder of a
---- ----
Note or Notes for at least six months may, on behalf of itself 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, by giving written notice to the Company and
the Trustee, at any time remove the Trustee and nominate a successor Trustee
which shall be deemed appointed as successor Trustee unless within 10 days after
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
subsection (a) of this Section 8.10 provided, may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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(d) Any resignation or removal of the Trustee and any 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
8.06, 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 in order more fully and certainly to vest in and confirm to such
successor Trustee all such rights and powers. Any Trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of Section
8.06.
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 8.08 and eligible under the
provisions of Section 8.09.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.11, the Company shall mail notice of the succession of such
Trustee hereunder to all holders of the Notes as the names and addresses of such
holders appear on the registry books. 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 corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be qualified
under the provisions of Section 8.08 and eligible under the provisions of
Section 8.09, 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, 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 may authenticate such Notes either
in the name of any predecessor 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 certificates
of the Trustee shall have; provided, however, that the right to adopt
-------- -------
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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 a Creditor. (a)
---------------------------------------------
Subject to the provisions of subsection (b) of this Section 8.13, if the Trustee
shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company or of any other obligor on the Notes within three
months prior to a default, as defined in subsection (c) of this Section 8.13, or
subsequent to such a default, then, unless and until such default shall be
cured, the Trustee shall set apart and hold in a special account for the benefit
of the Trustee individually, the holders of the Notes, and the holders of other
indenture securities (as defined in paragraph (2) of subsection (c) of this
Section 8.13)
(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three-month period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this subsection (a), or from the exercise of
any right of setoff which the Trustee could have exercised if a petition
in bankruptcy had been filed by or against the Company upon the date of
such default; and
(2) all property received by the Trustee in respect of any claim
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
------- -------
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made on account of
any such claim by any person (other than the Company) who is liable
thereon, (ii) the proceeds of the bona fide sale of any such claim by the
---- ----
Trustee to a third person, and (iii) distributions made in cash,
securities, or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable State law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
three-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
subsection (c) of this Section 8.13, would occur within three months; or
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(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such
claim as provided in such paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three-month period for property held as
security at the time of such substitution shall to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any preexisting claim of the Trustee as such creditor, such claim shall have the
same status as such preexisting claim.
If the Trustee shall be required to account for the funds and
property held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Noteholders and the holders of other
indenture securities in such manner that the Trustee, the Noteholders and the
holders of other indenture securities realize, as a result of payments from such
special account and payments of dividends on claims filed against the Company in
bankruptcy or receivership, or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law, the same percentage
of their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee, the Noteholders, and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to Title 11 of the United States Code
or applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion among the
Trustee, the Noteholders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee, the Noteholders and the holders of other indenture securities with
respect to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three-month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
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(i) the receipt of property or reduction of claim that would have
given rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a)
of this Section 8.13 a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien of
this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the Noteholders at the time and
in the manner provided in Section 6.04 with respect to reports pursuant to
subsections (a) and (b) thereof, respectively;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) any indebtedness created as a result of services rendered or
premises rented; or any indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section 8.13;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within
the classification of self-liquidating paper as defined in subsection (c)
of this Section 8.13.
(c) As used in this Section 8.13:
(1) the term "default" shall mean any failure to make payment in
full of the principal of or interest upon any of the Notes or upon the
other indenture securities when and as such principal or interest becomes
due and payable;
(2) the term "other indenture securities" shall mean securities
upon which the Company is an obligor (as defined in the Trust Indenture
Act) outstanding under any other indenture (A) under which the Trustee is
also trustee, (B) which contains provisions substantially similar to the
provisions of subsection (a) of this Section 8.13, and (C) under
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which a default exists at the time of the apportionment of the funds and
property held in said special account;
(3) the term "cash transaction" shall mean any transaction in
which full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" shall mean any draft, bill
of exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security; provided, however, that
-------- -------
the security is received by the Trustee simultaneously with the creation
of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation; and
(5) the term "Company" shall mean any obligor upon the Notes.
ARTICLE NINE
Concerning the Noteholders
--------------------------
SECTION 9.01. 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, or (c) by a combination of such instrument or instruments and any such
record of such a meeting of Noteholders.
SECTION 9.02. Proof of Execution by Noteholders. Subject to the
---------------------------------
provisions of Sections 8.01 and 8.02, proof of the execution of any instruments
by a Noteholder or its 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 ownership of
Notes shall be proved by the registry of such Notes or by a certificate of the
Note registrar.
SECTION 9.03. Who Are Deemed Absolute Owners. The Company, the
------------------------------
Trustee, any paying agent, conversion agent and Registrar may deem the person in
whose name any Notes shall be registered upon the Register to be, and may treat
such person 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 and premium, if any, and interest on such Note, for the conversion of such
Note, and for all other purposes; and neither the Company nor the Trustee nor
any paying agent nor any
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conversion agent nor any Note registrar shall be affected by any notice to the
contrary. All such payments and all such conversions shall be valid and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for money payable upon any such Note.
SECTION 9.04. Company-Owned Notes Disregarded. In determining
-------------------------------
whether the holders of the requisite aggregate principal amount of Notes have
concurred in any direction, consent or waiver under this Indenture, Notes that
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, however, that for the purposes of determining whether
-------- -------
the Trustee shall be protected in relying on any such direction, consent or
waiver only Notes that the Trustee knows are so owned shall be so disregarded.
SECTION 9.05. Revocation of Consents; Future Holders Bound. At any
--------------------------------------------
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 9.01, 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 the serial number of 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
principal office and upon proof of holding as provided in Section 9.02, 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.
SECTION 9.06. Record Date for Noteholder Acts. If the Company shall
-------------------------------
solicit from the Noteholders any request, demand, authorization, direction,
notice, consent, waiver or other act, the Company may, at its option, by
resolution of the Board of Directors, fix in advance a record date for the
determination of Noteholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other act, which date shall
not be more than 15 days prior to the date of commencement of solicitation of
such action, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other act may be given before or after the record date, but only the
Noteholders of record at the close of business on the record date shall be
deemed to be Noteholders for the purposes of determining whether Noteholders of
the requisite proportion of outstanding Notes have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other act, and for that purpose the outstanding Notes shall be
computed as of the record date; provided, however, that no such authorization,
-------- -------
agreement or consent by the Noteholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
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ARTICLE TEN
Subordination of Notes
----------------------
SECTION 10.01. Notes Subordinate to Senior Indebtedness. The
----------------------------------------
Company, for itself, its successors and assigns, covenants and agrees, and each
Noteholder, by its acceptance thereof, likewise covenants and agrees, that all
Notes issued hereunder shall be subordinated and subject, to the extent and in
the manner herein set forth, in right of payment to the prior payment in full of
all Senior Indebtedness. The provisions of this Article are made for the benefit
of all holders of Senior Indebtedness, and any such holder may proceed to
enforce such provisions.
SECTION 10.02. Payments to Noteholders. (a) In the event of (x) any
-----------------------
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relative to the Company or to its creditors, as such, or to its assets, or (y)
any liquidation, dissolution or other winding-up of the Company, whether total
or partial, whether voluntary or involuntary and whether involving insolvency or
bankruptcy, or (z) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company, then and in any such
event:
(i) the holders of all Senior Indebtedness shall first be entitled
to receive payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness before the holders of the Notes are
entitled to receive any payment on account of principal of, premium, if
any, or interest on the Notes (other than payment (a "Permitted Payment")
consisting solely of shares of stock of the Company as reorganized or
adjusted or securities or indebtedness of the Company or any other person
provided by a plan of reorganization or adjustment, the payment of which
is subordinated, at least to the same extent as the Notes, to the payment
of all Senior Indebtedness that may at the time be outstanding; provided,
--------
however, that the rights of the holders of the Senior Indebtedness are not
-------
altered adversely by such reorganization or adjustment); and
(ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Noteholders or the Trustee would be entitled but
for the provisions of this Article Ten, including any such payment or
distribution that may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of the Notes (other than a Permitted Payment), shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver, liquidating
trustee, custodian, assignee, agent or otherwise, directly to the holders
of Senior Indebtedness or their representative or representatives or to
the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued to the
extent necessary to make payment in full of all amounts payable on or in
respect of Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to or for the holders of such
Senior Indebtedness; and
(iii) in the event that, notwithstanding the foregoing provisions of
this Section 10.02, the Trustee or the holder of any Note shall have
received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property
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or securities, including any such payment or distribution that may be
payable or deliverable by reason of the payment of any other indebtedness
of the Company being subordinated to the payment of the Notes, before all
amounts payable on or in respect of Senior Indebtedness is paid in full or
payment in full is provided for, then and in such event such payment or
distribution (other than a Permitted Payment) shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other person making payment or
distribution of assets of the Company for application to the payment of all
amounts payable on or in respect of Senior Indebtedness remaining unpaid,
to the extent necessary to pay in full all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution to or
for the holders of such Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
into, another person or the liquidation or dissolution of the Company following
the conveyance or transfer of all or substantially all its properties and assets
as an entirety to another person upon the terms and conditions set forth in
Article Twelve shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Section 10.02 if the
person formed by such consolidation or into which the Company is merged or that
acquires by conveyance or transfer such properties and assets as an entirety, as
the case may be, shall, as part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Article Twelve.
(b) (i) In the event of and during the continuation of any default
in the payment when due of principal of, or premium, if any, or interest on any
Senior Indebtedness or (ii) in the event that any other default with respect to
any Senior Indebtedness shall have occurred and be continuing, then no payment
shall be made by the Company on account of the principal of, or premium, if any,
or interest on the Notes or on account of the purchase or redemption or other
acquisition of Notes (x) in the case of any event of default described in
subclause (i) above, unless and until the Senior Indebtedness to which such
event of default relates is discharged or such event of default shall have been
cured or waived or shall have ceased to exist or the holders of such Senior
Indebtedness or their agents have waived the benefits of this Section 10.02(b),
and (y) in the case of any event of default specified in clause (ii) above, from
the date the Company or the Trustee receives written notice of such default (a
"Senior Default Notice") from the holders of at least 25% in principal amount of
the kind or category of Senior Indebtedness to which such event of default
relates or any representative of such holders until the earlier of (A) 180 days
after such date or (B) the date, if any, on which the Senior Indebtedness to
which such default relates is discharged or such default shall have been cured
or waived or shall have ceased to exist or the holders of such Senior
Indebtedness or their agents shall have waived the benefits of this Section
10.02(b); provided, however, that not more than one Senior Default Notice shall
-------- -------
be given during any period of 360 consecutive days, regardless of the number of
defaults with respect to Senior Indebtedness during such 360-day period.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or to any Noteholder prohibited by the foregoing
provisions of this Section 10.02(b), then, and in such event, such payment shall
be paid over and delivered forthwith to the Company.
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The provisions of this subsection (b) shall not apply to any payment
with respect to which subsection (a) would be applicable.
(c) Notwithstanding anything in this Indenture to the contrary,
neither the Trustee nor any Noteholder shall exercise any right either may have
to accelerate the maturity of the Notes at any time when payment of any amount
owing on the Notes is prohibited, in whole or in part, pursuant to Section
10.02(a) or (b); provided, however, that such right may nevertheless be so
-------- -------
exercised upon the earliest of (i) the acceleration of the maturity of any
Senior Indebtedness, (ii) the exercise by any holder of Senior Indebtedness of
any remedies available to it upon a default or an Event of Default with respect
to Senior Indebtedness, or (iii) the occurrence of an Event of Default described
in Section 7.01(e) or (f).
(d) No holder of Senior Indebtedness shall be prejudiced in its
right to enforce subordination of the Notes by any act or failure to act on the
part of the Company.
(e) Without notice to or the consent of the Noteholders or the
Trustee the holders of Senior Indebtedness may at any time and from time to
time, without impairing or releasing the subordination herein made: change the
manner, place or terms of payment, or change or extend the time of payment of or
renew or alter the Senior Indebtedness, or amend or supplement in any manner any
instrument evidencing the Senior Indebtedness, any agreement pursuant to which
the Senior Indebtedness was issued or incurred or any instrument securing or
relating to the Senior Indebtedness; release any person liable in any manner for
the payment or collection of the Senior Indebtedness; exercise or refrain from
exercising any rights in respect of the Senior Indebtedness against the Company
or any other person; apply any moneys or other property paid by any person or
released in any manner to the Senior Indebtedness; or accept or release any
security for the Senior Indebtedness.
(f) Subject to the payment in full of all Senior Indebtedness, the
Noteholders shall be subrogated (equally and ratably with the holders of all
indebtedness of the Company that, by its express terms, ranks on a parity with
the Notes and is entitled to like rights of subrogation) to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets of
the Company applicable to the Senior Indebtedness until the Notes shall be paid
in full. For purposes of such subrogation, no payments or distributions on the
Senior Indebtedness pursuant to this Section that otherwise would have been
payable to the Noteholders shall, as between the Company, its creditors other
than the holders of Senior Indebtedness, and the holders of the Notes, be deemed
to be a payment by the Company to or on account of Senior Indebtedness, and no
payments or distributions by the Trustee or the holders of the Notes over to the
holders of Senior Indebtedness of cash, property or securities by virtue of the
subrogation provided in this Article Ten shall, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Notes, be deemed to be a payment to or on account of the Notes. The provisions
of this Article are and are intended solely for the purpose of defining the
relative rights of the holders of the Notes, on the one hand, and the holders of
Senior Indebtedness, on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Notes is intended to or shall impair the
obligation of the Company, which is unconditional and absolute, to pay 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 to affect the
relative rights of the holders of the Notes and creditors of the Company other
than the holders of Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the holder of
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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,
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company otherwise payable or delivered to the Trustee or such Noteholder
upon the exercise of any such remedy.
(g) Upon any payment or distribution pursuant to this Section
10.02, the Trustee and the Noteholders shall be entitled to rely upon any order
or decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in this Section are pending, and the Trustee, subject to the
provisions of Section 8.01, and the Noteholders, shall be entitled to rely upon
a certificate of the liquidating trustee or agent or other person making such
payment or distribution delivered to the Trustee or to the Noteholders, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Section.
In the event that the Trustee determines, in good faith, that 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
Section, 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, as to the extent to which such person is entitled to
participate in such payment or distribution, and as to other facts pertinent to
the rights of such person under this Section, 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.
(h) Nothing contained in this Article or elsewhere in this
Indenture, or in any of the Notes, shall prevent (x) the application by the
Trustee or any paying agent (including by the Company if the Company shall then
be acting as paying agent) of any moneys deposited with it hereunder to the
payment of or on account of the principal of and premium, if any, or interest on
Notes, including, without limitation, redemptions or repurchases pursuant to
Articles Three or Fifteen, if, at the time of such deposit (provided that the
time of such deposit was not more than 10 days prior to the time of such
payment), such payment would not have been prohibited by the foregoing
provisions of this Section, or (y) conversion of Notes.
SECTION 10.03. Authorization by Noteholders. The holder of each
----------------------------
Note by its acceptance thereof authorizes and directs the Trustee on its behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the holders of Notes and the holders of
Senior Indebtedness as provided in this Article and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.04. Trustee Not Charged with Knowledge of Prohibition.
-------------------------------------------------
Notwithstanding the provisions of this Article or any other provision of this
Indenture, but subject to the provisions of Section 8.01, the Trustee and any
paying agent shall not be charged with knowledge of the existence of any Senior
Indebtedness, or of any default in the payment of the principal of, premium, if
any, or interest on any Senior Indebtedness, or of any facts that would prohibit
the making of any payment of moneys to or by the Trustee or any such paying
agent, unless and until the Trustee or such paying agent shall have received
written notice thereof from the Company or the holders in aggregate of at least
10% in principal amount of any kind or category of any Senior Indebtedness or
the representative or trustee of such holders; nor shall the Trustee or any such
paying agent be charged with knowledge of the curing of any such default or
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of the elimination of the act or condition preventing any such payment unless
and until the Trustee or such paying agent shall have received an Officers'
Certificate to such effect.
SECTION 10.05. Rights of Trustee as Holder of Senior Indebtedness.
--------------------------------------------------
The Trustee shall be entitled to all the rights set forth in this Article with
respect to any Senior Indebtedness that may at any time be 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. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 8.06.
SECTION 10.06. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
- ------------
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Noteholders or the Company or any
other person moneys or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise.
SECTION 10.07. Article Applicable to Paying Agents. In case at any
-----------------------------------
time any paying agent other than the Trustee shall have been appointed by the
Company and be acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context shall otherwise require) 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 Sections 10.04,
-------- -------
10.05 and 10.06 shall not apply to the Company if it acts as paying agent.
ARTICLE ELEVEN
Supplemental Indentures
-----------------------
SECTION 11.01. Supplemental Indentures Without Consent of
------------------------------------------
Noteholders. The Company, when authorized by resolution 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 provisions with respect to the conversion rights of
holders of Notes pursuant to the provisions of Section 4.09;
(b) 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 Twelve;
(c) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the holders of the Notes
as the Board of Directors and the Trustee shall consider to be for the
protection of the holders of Notes, and to make the occurrence, or the
occurrence and continuance, of a default in any of 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
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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;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that 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 as shall not materially
adversely affect the interests of the holders of the Notes; and
(e) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted, and to add to this Indenture such other
provisions as may be expressly permitted by the Trust Indenture Act,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act as in effect at the date of execution of this Indenture
or any corresponding provisions provided for in 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 that may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to enter into any such supplemental indenture that
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this
Section 11.01 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 11.02.
SECTION 11.02. Supplemental Indentures with Consent of Noteholders.
---------------------------------------------------
With the consent (evidenced as provided in Section 9.01) 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 resolution 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 of 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 any premium 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 any premium or
interest thereon payable in any coin or currency other than that provided for in
the form of Note hereinabove set forth or modify the provisions of this
Indenture with respect to the subordination of the Notes in a manner adverse to
the Noteholders, or impair the right to convert the Notes into Common Stock or
to require the Company to repurchase the Notes upon the occurrence of a Change
of Control, subject to the terms set forth herein, 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.
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Upon the request of the Company, accompanied by a copy of the
resolution of the Board of Directors certified by its Clerk or an Assistant
Clerk authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Noteholders as aforesaid,
the Trustee shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Noteholders under
this Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 11.02, the
Company shall give notice in the manner provided in Section 16.10, setting forth
in general terms the substance of such supplemental indenture, to all holders of
Notes. Any failure of the Company so to give such notice or any defect therein
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 11.03. Compliance With Trust Indenture Act; Effect of
----------------------------------------------
Supplemental Indentures. Any supplemental indenture executed pursuant to the
- -----------------------
provisions of this Article Eleven 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 Eleven, this Indenture shall be and be deemed to be
modified and amended in accordance therewith, and the respective rights,
limitations 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 11.04. Notation on Notes. Notes authenticated and delivered
-----------------
after the execution of any supplemental indenture pursuant to the provisions of
this Article Eleven may, and shall, if required by the Trustee, bear a notation
in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company 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 modifications of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Company,
authenticated by the Trustee and delivered in exchange for the Notes then
outstanding without cost to the holders thereof.
SECTION 11.05. Evidence of Compliance of Supplemental Indenture to
---------------------------------------------------
Be Furnished To Trustee. The Trustee, subject to the provisions of Sections 8.01
- -----------------------
and 8.02, shall be entitled to receive and shall be fully protected in relying
upon an Officers' Certificate and an Opinion of Counsel that any supplemental
indenture executed pursuant hereto is authorized by, and complies with the
requirements of, this Article Eleven.
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ARTICLE TWELVE
Consolidation, Merger and Sale
------------------------------
SECTION 12.01. Company May Consolidate, etc., on Certain Terms. The
-----------------------------------------------
Company will not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and the Company will not permit any Person to consolidate with or merge
into the Company unless
(a) in case the Company shall consolidate with or merge into another
Person (whether or not affiliated with the Company) or convey, transfer or
lease all or substantially all of its properties and assets to another
Person, the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, all or substantially all of the properties and assets of the
Company is a corporation, partnership or trust organized and validly
existing under the laws of the United States, any State thereof or the
District of Columbia and expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and premium, if
any, and interest on the Notes and the performance and observance of every
covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in accordance with
Section 4.09;
(b) immediately after giving effect to such consolidation, merger,
conveyance, transfer or lease, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default
will have occurred and be continuing;
(c) such consolidation, merger, conveyance, transfer or lease does
not adversely affect the validity or enforceability of the Notes; and
(d) the Company or the successor Person has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture, comply with this Indenture and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 12.02. Successor Corporation to Be Substituted. In case of
---------------------------------------
any such consolidation, merger, conveyance, transfer or lease, and upon any such
assumption by the successor corporation, 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 Company, and the Company shall thereupon be released
from all obligations hereunder and under the Notes and the Company as the
predecessor corporation may thereupon or at any time thereafter be dissolved,
wound up or liquidated. Such successor corporation thereupon may cause to be
signed, and may issue either in its own name or in the name of EMC Corporation
any or all of the Notes issuable hereunder that 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 any Notes that previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Notes that such successor corporation
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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 execution hereof.
In case of any such consolidation, merger, conveyance, transfer 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 12.03. Opinion of Counsel to be Given Trustee. The Trustee,
--------------------------------------
subject to Sections 8.01 and 8.02, shall be entitled to receive and shall be
fully protected in relying upon an Opinion of Counsel that any such
consolidation, merger, sale or conveyance and any such assumption complies with
the provisions of this Article Twelve.
ARTICLE THIRTEEN
Satisfaction and Discharge of Indenture
---------------------------------------
SECTION 13.01. Discharge of Indenture. When (a) the Company shall
----------------------
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes that shall have been destroyed, lost or stolen and that
shall have been replaced or paid as provided in Section 2.06) and not
theretofore cancelled, or (b) all the Notes not theretofore cancelled 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 all of
the Notes (other than any Notes that shall have been mutilated, destroyed, lost
or stolen and that shall have been replaced or paid as provided in Section 2.06)
not theretofore cancelled 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, but excluding,
however, any moneys for the payment of the principal of and premium, if any, or
interest on the Notes (1) theretofore deposited with the Trustee and repaid by
the Trustee to the Company in accordance with the provisions of Section 13.04,
or (2) paid to any State or to the District of Columbia pursuant to its
unclaimed property or similar laws, 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 and at the
cost and expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture. Notwithstanding the satisfaction
and discharge of this Indenture, the obligations of the Company to the Trustee
under Section 8.06 shall survive.
SECTION 13.02. Deposited Moneys to Be Held in Trust by Trustee.
-----------------------------------------------
Subject to Section 13.04 and Article Ten, all moneys deposited with the Trustee
pursuant to Section 13.01
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<PAGE>
shall be held in trust and applied by it to the payment in accordance with the
provisions of the Notes and this Indenture, either directly or through any
paying agent (including the Company if acting as its own paying agent), as the
Trustee may determine, to the holders of the particular Notes for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal, premium, if any, and interest.
SECTION 13.03. Paying Agent to Repay Moneys Held. Upon the
---------------------------------
satisfaction and discharge of this Indenture, all moneys then held by any paying
agent (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 moneys.
SECTION 13.04. Return of Unclaimed Moneys. Any moneys deposited
--------------------------
with or paid to the Trustee or any paying agent for payment of the principal of
or premium, if any, or interest on Notes and not applied but remaining unclaimed
by the holders of Notes for six years after the date upon which the principal of
or 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 or any
paying agent on demand; and the holder of any of the Notes shall thereafter look
only to the Company for any payment that such holder may be entitled to collect;
provided, however, that the Trustee or any paying agent, before being required
- -------- -------
to make any such repayment, may at the expense of the Company cause to be mailed
to each such holder in the manner provided in Section 16.10 or cause to be
published once a week for two successive weeks (in each case on any day of the
week) a notice that said moneys have not been so applied and that after a date
specified therein any unclaimed balance of said moneys then remaining will be
returned to the Company. Any such notice shall be published in a newspaper
printed in the English language and customarily published at least once a day
for at least five days in each calendar week and of general circulation in the
Borough of Manhattan, The City and State of New York.
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders,
---------------------------------------
Officers and Directors
----------------------
SECTION 14.01. 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 therein or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the Company,
contained in this Indenture or in any supplemental indenture, or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, either directly
or through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Notes.
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ARTICLE FIFTEEN
Redemption at the Option of Noteholders
---------------------------------------
Upon the Occurrence of a Change of Control
------------------------------------------
SECTION 15.01. Right of Holders Upon the Occurrence of a Change of
---------------------------------------------------
Control. In the event that a Change of Control occurs, each holder of Notes
- -------
shall have the right, at the holder's option, and subject to the conditions of
this Article Fifteen and subject to the provisions of Article Ten, to require
the Company to purchase all or any part (which shall be $1,000 or a whole
multiple thereof) of such holder's Notes, on the date that is 40 business days
after the occurrence (or, in the case of a Change of Control referred to in
clause (b) of the definition thereof, after notice to the Company) of the Change
of Control (the "Repurchase Date"), at 100% of the principal amount thereof,
plus interest accrued and unpaid to the Repurchase Date (provided that if the
Repurchase Date is on or subsequent to the date on which interest is otherwise
payable on the Notes, such interest shall be payable to the holders of the Notes
as of the applicable record date for such interest payment) (the "Change of
Control Repurchase Price").
SECTION 15.02. Notice of Change of Control. Within 20 business days
---------------------------
after the occurrence (or, in the case of a Change of Control referred to in
clause (b) of the definition thereof, after notice to the Company) of a Change
of Control, the Company shall mail (by first-class mail) to the Trustee and each
holder of Notes a notice that shall state:
(1) that a Change of Control has occurred and describe such Change
of Control in reasonable detail;
(2) the Repurchase Date;
(3) the Change of Control Repurchase Price;
(4) that holders who want to exercise their right to cause Notes to
be purchased by the Company on the Repurchase Date must deliver to the
Trustee prior to the close of business on the Repurchase Date an exercise
notice satisfying the requirements described in the form of Note
hereinabove set forth and in Section 15.03, together with the Notes with
respect to which the right is being exercised, duly endorsed for transfer;
(5) the procedures for withdrawing such exercise notice, including
a form of notice of withdrawal; and
(6) that interest on Notes (or portions thereof) with respect to
which the right is exercised shall cease to accrue from and after the
Repurchase Date.
Neither the failure to mail such notice nor any defect in any notice
so mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders. The Company also shall cause a copy of
such notice to be published in a newspaper of general circulation in the Borough
of Manhattan, The City and State of New York, which shall be the Wall Street
Journal unless it is not then so circulated.
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SECTION 15.03. Notice of Exercise. For a holder to exercise the right
------------------
to cause the Company to purchase a Note, such holder must deliver to the Trustee
an exercise notice satisfying the requirements described in the form of Note
hereinabove set forth, together with the Note with respect to which the right is
being exercised, duly endorsed for transfer.
Such notice of exercise and such Note must be delivered no later than,
and the right of holders to exercise the purchase right will terminate, as of
the close of business on the Repurchase Date and the Company will not be
obligated to purchase any Notes presented and surrendered from and after such
termination date.
Notwithstanding anything herein to the contrary, any holder who
delivers to the Trustee an exercise notice satisfying the foregoing requirements
shall have the right to withdraw such notice by delivering a written notice of
withdrawal to the Trustee at any time prior to the close of business on the
Repurchase Date.
SECTION 15.04. Effect of Exercise. With respect to each Note (or
------------------
portion thereof) that has been presented and surrendered and as to which notice
has been given to the Trustee of the holder's exercise of its right to cause the
Company to purchase the same in accordance with Section 15.03, such Note (or
portion thereof) shall become due and payable on the Repurchase Date. Subject to
Article Ten, such Note (or portion thereof) shall be purchased by the Company at
100% of the principal amount thereof, together with interest accrued and unpaid
thereon to the Repurchase Date. Interest on such Note (or portion thereof) shall
cease to accrue from and after the Repurchase Date (unless the Company shall
default in the payment of any such Note at the purchase price, together with
interest accrued thereon to the Repurchase Date).
If a Note is to be purchased in part only, the Company shall execute
and the Trustee shall authenticate and deliver to the holder thereof, after the
purchase of the relevant part, a new Note or Notes in authorized denominations
in aggregate principal amount equal to the portion of the Note not purchased.
ARTICLE SIXTEEN
Miscellaneous Provisions
------------------------
SECTION 16.01. 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 16.02. 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 board, committee or officer
of any corporation that shall at the time be the lawful sole successor of the
Company.
SECTION 16.03. Addresses for Notices, etc. Any notice or demand that
--------------------------
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 may be given or
served by registered or certified mail (until another address is filed by the
Company with the Trustee) to EMC Corporation, 171 South
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Street, Hopkinton, Massachusetts 01748, to the attention of the Clerk. Any
notice, direction, request, or demand by any Noteholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the corporate trust office of the Trustee, as
defined in Section 1.01, or such other address of the Trustee as shall have been
set forth in a notice from the Trustee transmitted by mail to all holders of
Notes, as their names and addresses appear on the Note register of books of the
Company.
SECTION 16.04. GOVERNING LAW. THIS INDENTURE AND EACH 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 THE LAWS OF NEW YORK.
SECTION 16.05. Officers' Certificates and Opinions of Counsel. 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 each person
making such certificate or opinion has read such covenant or condition and the
definitions relating thereto; (2) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that, in the
opinion of each such person, he or she has made such examination or
investigation as is necessary to enable him or her 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 each such person,
such condition or covenant has been complied with.
SECTION 16.06. Legal Holidays. In any case where the date of maturity
--------------
of, or payment of premium, if any, or interest on or principal of the Notes or
the date fixed for redemption of any Note or the last day on which a Noteholder
has the right to convert its Note at a particular Conversion Price is not a
business day, then payment of such interest or principal or premium, if any, or
conversion of the Note need not be made on such date but may be made on the next
succeeding business day with the same force and effect as if made on the date of
maturity or the date fixed for redemption or the last day for conversion, and,
in the case of payment, no interest shall accrue for the period from and after
such date.
SECTION 16.07. Trust Indenture Act to Control. If and to the extent
------------------------------
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture
Act, through the operation of Section 318(c) thereof, such imposed duties shall
control.
SECTION 16.08. 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.
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SECTION 16.09. 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.
SECTION 16.10. Manner of Mailing Notice to Noteholders. Where this
---------------------------------------
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid, to each Noteholder affected by such
event, at its address as it appears on the Register referred to in Section 2.05,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Noteholders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for all purposes hereunder.
SECTION 16.11. 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 16.12. Benefits of Indenture. Nothing in this Indenture or in
---------------------
the Notes, express or implied, shall give to any person, other than the parties
hereto, any paying agent, any 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.
State Street Bank and Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
82
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective seals to be hereunto fixed and attested,
all as of the day and year first written above.
EMC CORPORATION
By:
-------------------------------------
William J. Teuber, Jr.
Vice President and Chief Financial
Officer
Attest:
By
-------------------------------
Paul T. Dacier
Vice President, General Counsel and
Assistant Clerk
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By
--------------------------------
Jill Olson
Assistant Vice President
83
<PAGE>
CROSS - REFERENCE TABLE
<TABLE>
<CAPTION>
Section of Trust-Indenture Act Section of Indenture
- ------------------------------ --------------------
<S> <C>
310 (a)(1), (2) and (5)................................. 8.09
(a)(3) and (4)...................................... Not applicable
(b)................................................. 8.08
(c)................................................. Not applicable
311 (a) and (b)......................................... 8.13
312 (a)................................................. 6.01 and 6.02(a)
(b)................................................. 6.02(b)
(c)................................................. 6.02(c)
313 (a)................................................. 6.04(a)
(b)................................................. 6.04(b)
(c)................................................. 6.04(c)
(d)................................................. 6.04(d)
314 (a)(1).............................................. 6.03(a)
(a)(2).............................................. 6.03(b)
(a)(3).............................................. 6.03(c)
(a)(4).............................................. 5.05
(b)................................................. Not applicable
(c)(1) and (2)...................................... 16.05
(c)(3).............................................. Not applicable
(d)................................................. Not applicable
(e)................................................. 16.05
315 (a),(c) and (d)..................................... 8.01 and 8.02
(b)................................................. 7.08
316 (a)(1).............................................. 7.01 and 7.07
(a)(2).............................................. Omitted
(a) last sentence................................... 9.04
317 (a)(1) and (2)...................................... 7.02
(b)................................................. 5.04
318 (a)................................................. 16.07
</TABLE>
This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
EXHIBIT A
---------
[FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
OF NOTES]
CERTIFICATE FOR EXCHANGE OR TRANSFER
Re: 3 1/4% Convertible Subordinated Notes due 2002
This certificate relates to $______________ principal amount of
Notes held in *__________________ book-entry or *________________ definitive
form by ____________ (the "Transferor").
The Transferor:*
[_] has requested the Trustee by written order to deliver in
exchange for its beneficial interest in a Global Note held by the Depositary a
Note or Notes in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or
[_] has requested the Trustee by written order to deliver in
exchange for its Security or Securities a beneficial interest in a Global Note
held by the Depositary in a principal amount equal to the aggregate principal
amount of such Note or Notes; or
[_] has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with such request and in respect of each such
security, the Transferor does hereby certify to the Company and the Trustee that
Transferor is familiar with the Indenture relating to the above captioned Notes
and, as provided in Section 2.05 of such Indenture, the transfer of this Note
does not require registration under the Securities Act (as defined below)
because/*/:
[_] Such Note is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 2.05(b)(ii)(A) or Section
2.05(f)(i)(A) of the Indenture).
[_] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A or pursuant to an exemption
from registration in accordance with Regulation S under the Securities Act (in
satisfaction of Section 2.05(b)(ii)(B), Section 2.05(c)(i), Section 2.05(d)(i),
Section 2.05(f)(i)(B), Section 2.05(g)(iii) or Section 2.05(h)(iii) of the
Indenture). An opinion of counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.05(b)(ii)(B),
- ---------------------------
* Check applicable box.
<PAGE>
Section 2.05(c)(i), Section 2.05(d)(i), Section 2.05(f)(i)(B), Section
2.05(g)(iii) or Section 2.05(h)(iii) of the Indenture).
[_] Such Note is being transferred in accordance with Rule 144
under the Securities Act, or pursuant to an effective registration statement
under the Securities Act (in satisfaction of Section 2.05(b)(ii)(B), Section
2.05(f)(i)(B) or Section 2.05(k)(ii) of the Indenture). If such Note is being
transferred in accordance with Rule 144 under the Securities Act, an opinion of
counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section
2.05(b)(ii)(B), Section 2.05(f)(i)(B) or Section 2.05(k)(ii) of the Indenture).
[_] Such Note is being transferred to an "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that is
an institutional investor (in satisfaction of Section 2.05(b)(ii)(C) or
2.05(f)(i)(C) of the Indenture). A signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
Note substantially in the form of Exhibit B to the Indenture and an opinion of
counsel to the effect that such transfer is in compliance with the Securities
Act accompanies this Certificate (in satisfaction of Section 2.05(b)(ii)(C) or
2.05(f)(i)(C) of the Indenture).
[_] Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A, 144 or Regulation S under the Securities
Act. An opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.05(b)(ii)(D) or Section 2.05(f)(i)(D) of the
Indenture).
You are entitled to rely upon this certificate and you are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
---------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------
Date:
--------------------
A-2
<PAGE>
EXHIBIT B
---------
[FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS]
EMC Corporation
171 South Street
Hopkinton, MA 01748
Smith Barney Inc.
Alex. Brown & Sons Incorporated
Morgan Stanley & Co. Incorporated
As Initial Purchasers
c/o Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
Gentlemen:
We are delivering this letter in connection with an offering of 3 1/4%
Convertible Subordinated Notes due 2002 (the "Notes"), which are convertible
into shares of the Common Stock, $0.01 par value (the "Common Stock"), of EMC
Corporation (the "Company"), all as described in the Offering Memorandum (the
"Offering Memorandum") relating to the offering.
We hereby confirm that:
(i) we are an institution that is an "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933, as amended (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), (3) or (7) 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 principal amount of not less than $250,000 for our
own account or for any separate account for which we are acting;
<PAGE>
(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 the Notes with a view to distribution
thereof or with any present intention of offering or selling 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 the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning
of the Securities Act and any applicable state securities laws and that
the Notes and the shares of Common Stock issuable upon conversion thereof
have not been registered under such laws, 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 (a) to the Company, or any of
its subsidiaries, (b) pursuant to a registration statement which has been
declared effective under the Securities Act, (c) for so long as the Notes
are eligible for resale pursuant to Rule 144A under the Securities Act to
a person who is or who the holder reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities
Act ("QIB") that purchases for its own account or for the account of a QIB
and to whom notice is given that the transfer is being made in reliance on
Rule 144A, (d) to an Institutional Accredited Investor that, prior to such
transfer, furnishes to the transfer agent or registrar 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 transfer agent or registrar), (e)
pursuant to offers and sales to non-U.S. persons that occur outside the
United States within the meaning of Regulation S under the Securities Act,
or (f) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases
to any requirement of law that the disposition of its property or the
property of such investor account or accounts be at all times within its
or their control and subject to any applicable securities laws. We further
agree to provide any person purchasing from us any of the Notes or the
Common Stock issuable upon conversion thereof other than pursuant to
clause (b) above 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 certificates representing Common Stock will be in
the form of definitive physical certificates and that such certificates
will
B-2
<PAGE>
bear a legend reflecting the substance of this paragraph other than
certificates representing Common Stock transferred pursuant to clause (b)
above.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments 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:
B-3
<PAGE>
REGISTRATION RIGHTS AGREEMENT
Dated as of March 6, 1997
relating to
3 1/4% Convertible Subordinated Notes due 2002
by and between
EMC Corporation
and
Smith Barney Inc.,
Alex. Brown & Sons Incorporated
and
Morgan Stanley & Co. Incorporated
as Initial Purchasers
<PAGE>
This Registration Rights Agreement (the "Agreement") is made and entered
into as of March 6, 1997, by and between EMC Corporation, a Massachusetts
corporation (the "Company") and Smith Barney Inc., Alex. Brown & Sons
Incorporated and Morgan Stanley & Co. Incorporated (the "Initial Purchasers"),
who have purchased the 3 1/4% Convertible Subordinated Notes due 2002 (the
"Notes") of the Company pursuant to the Purchase Agreement, dated March 6, 1997
(the "Purchase Agreement"), between the Company and the Initial Purchasers. In
order to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to
closing under the Purchase Agreement. All defined terms used but not defined
herein shall have the meanings ascribed to them in the Indenture (as defined
herein).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Closing Date: The date on which all the Notes are sold by the Company to
the Initial Purchasers pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Common Stock: The Common Stock, par value $.01 per share, of the
Company.
Damages Payment Date: With respect to the Notes or the Common Stock, as
applicable, each Interest Payment Date as defined in the Indenture.
Effectiveness Target Date: As defined in Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Notes to (i) certain "qualified institutional buyers" (as such term
is defined in Rule 144A under the Act), (ii) to a limited number of other
"accredited investors," as defined in Rule 501 (a)(1),(2), (3) or (7) under the
Act that are institutional investors and (iii) to certain persons in offshore
transactions in reliance on Regulation S under the Act.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of March 11, 1997, between the
Company and State Street Bank and Trust Company as trustee (the "Trustee"),
pursuant to which the Notes are
<PAGE>
to be issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture.
NASD: National Association of Securities Dealers, Inc.
Offering Memorandum: The Offering Memorandum, dated March 6, 1997, and
all amendments and supplements thereto, relating to the Notes and prepared by
the Company pursuant to the Purchase Agreement.
Person: An individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
Preliminary Prospectus: As defined in Section 3(g) hereof.
Prospectus: The prospectus included in the Shelf Registration Statement
as amended or supplemented by any Prospectus Supplement with respect to the
terms of the offering of any portion of the Transfer Restricted Securities (as
defined herein) covered by the Shelf Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective
amendments, and all material which may be incorporated by reference into such
prospectus.
Prospectus Supplement: As defined in Section 5(b) hereof.
Record Holder: (i) With respect to any Damages Payment Date relating to
the Notes, each Person who is registered on the Register as the holder of Notes
on the record date with respect to the Interest Payment Date on which such
Damages Payment Date shall occur and (ii) with respect to any Damages Payment
Date relating to the Common Stock, each Person who is a holder of record of such
Common Stock fifteen days prior to the Damages Payment Date.
Registration Expenses: As defined in Section 6(a) hereof.
Shelf Registration Statement: As defined in Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note and share of Common Stock of
the Company issuable upon conversion of a Note, until each such Note or share
(i) has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement covering it, (ii) is
distributed to the public pursuant to Rule 144 or (iii) may be sold or
transferred pursuant to Rule 144(k) (or any similar provisions then in force)
under the Securities Act or otherwise.
Underwriter: Any underwriter, placement agent, selling broker, dealer
manager, qualified independent underwriter or similar securities industry
professional.
2
<PAGE>
Underwritten Registration or Underwritten Offering: An offering in which
securities of the Company are sold to an Underwriter or with the assistance of
such Underwriter for reoffering to the public on a firm commitment or best
efforts basis.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be
a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) The Company shall cause to be filed with the Commission on or prior
to 60 days after the Closing Date, a shelf registration statement pursuant to
Rule 415 under the Act (as may then be amended) (the "Shelf Registration
Statement") on Form S-1 or Form S-3, if the use of such form is then available
and as determined by the Company, to cover resales of Transfer Restricted
Securities by the Holders thereof who satisfy certain conditions relating to the
provision of information in connection with the Shelf Registration Statement.
In order for their Transfer Restricted Securities to be included in the Shelf
Registration Statement, the Holders of such Transfer Restricted Securities shall
have provided the representations required pursuant to Section 3(g) hereof. The
Company shall use its reasonable best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or prior to 120 days
after the Closing Date. The Company shall use its reasonable best efforts to
keep such Shelf Registration Statement continuously effective for a period
ending three years following the Closing Date or such shorter period that will
terminate when each of the Transfer Restricted Securities covered by the Shelf
Registration Statement shall cease to be a Transfer Restricted Security. The
Company further agrees to use its reasonable best efforts to prevent the
happening of any event that would cause the Shelf Registration Statement to
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or to be not effective and usable for resale of the Transfer
Restricted Securities during the period that such Shelf Registration Statement
is required to be effective and usable.
Upon the occurrence of any event that would cause the Shelf Registration
Statement (i) to contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) to be not effective and usable for
resale of Transfer Restricted Securities during the period that such Shelf
Registration Statement is required to be effective and usable, the Company shall
as promptly as practicable file an amendment to the Shelf Registration
Statement, in the case of clause (i), correcting any such misstatement or
omission, and in the case of either clause (i) or (ii), use its best efforts to
cause such amendment to be declared effective and such Shelf Registration
Statement to become usable as soon as reasonably practicable thereafter.
3
<PAGE>
Notwithstanding anything to the contrary in this Section 3, subject to
compliance with Sections 4 and 5(b), if applicable, the Company may prohibit
offers and sales of Transfer Restricted Securities pursuant to the Shelf
Registration Statement at any time if (A) (i) it is in possession of material
non-public information, (ii) the Board of Directors of the Company or the
Executive Committee thereof determines (based on advice of counsel) that such
prohibition is necessary in order to avoid a requirement to disclose such
material non-public information and (iii) the Board of Directors of the Company
or the Executive Committee thereof determines in good faith that disclosure of
such material non-public information would not be in the best interests of the
Company and its shareholders or (B) the Company has made a public announcement
relating to an acquisition or business combination transaction including the
Company and/or one or more of its subsidiaries (i) that is material to the
Company and its subsidiaries taken as a whole and (ii) the Board of Directors of
the Company or the Executive Committee thereof determines in good faith that
offers and sales of Transfer Restricted Securities pursuant to the Shelf
Registration Statement prior to the consummation of such transaction (or such
earlier date as the Board of Directors or the Executive Committee thereof shall
determine) is not in the best interests of the Company and its shareholders (the
period during which any such prohibition of offers and sales of Transfer
Restricted Securities pursuant to the Shelf Registration Statement is in effect
pursuant to clause (A) or (B) of this subparagraph (a) is referred to herein as
a "Suspension Period"). A Suspension Period shall commence on and include the
date on which the Company provides written notice to Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement that offers
and sales of Transfer Restricted Securities cannot be made thereunder in
accordance with this Section 3 and shall end on the date on which each Holder of
Transfer Restricted Securities covered by the Shelf Registration Statement
either receives copies of a Prospectus Supplement contemplated by Section 5(b)
or is advised in writing by the Company that offers and sales of Transfer
Restricted Securities pursuant to the Shelf Registration Statement and use of
the Prospectus may be resumed.
(b) None of the Company nor any of its security holders (other than the
Holders of Transfer Restricted Securities in such capacity) shall have the right
to include any of the Company's securities in the Shelf Registration Statement.
(c) If the Holders of a majority of the Transfer Restricted Securities to
be covered by the Shelf Registration Statement so elect (with holders of Common
Stock constituting Transfer Restricted Securities being deemed to be Holders of
the aggregate principal amount of Notes converted into such Common Stock for
purposes of such calculation), an offering of Transfer Restricted Securities
pursuant to the Shelf Registration Statement may be effected in the form of an
Underwritten Offering; provided that the Company shall not be obligated to
--------
arrange for more than one underwritten offering during the period the Shelf
Registration Statement is required to be effective pursuant to Section 3(a). In
such event, and if the Underwriter(s) advise(s) the Company and the Holders of
such Transfer Restricted Securities in writing that in their opinion the amount
of Transfer Restricted Securities proposed to be sold in such offering exceeds
the amount or number of Transfer Restricted Securities which can be sold in such
offering, there shall be included in such Underwritten Offering the amount or
number of such Transfer Restricted Securities which in the opinion of such
Underwriters can be sold, and such amount or number of shares shall be allocated
pro rata among the Holders of such Transfer Restricted Securities on the basis
of the principal amount or number of shares of Transfer
4
<PAGE>
Restricted Securities requested to be included by such Holders. The Holders of
the Transfer Restricted Securities to be registered shall pay all underwriting
discounts and commissions of such Underwriter(s) and expenses of counsel to such
Holders of Transfer Restricted Securities in connection with such Underwritten
Offering.
(d) If any of the Transfer Restricted Securities covered by the Shelf
Registration Statement are to be sold in an Underwritten Offering, the
Underwriter(s) that will administer the offering will be selected by the Holders
of a majority of the Transfer Restricted Securities to be covered by such Shelf
Registration Statement (with holders of Common Stock constituting Transfer
Restricted Securities being deemed to be Holders of the aggregate principal
amount of Notes converted into such Common Stock for purposes of such
calculation); provided, however, that such Underwriter(s) shall be reasonably
satisfactory to the Company.
(e) Each Holder whose Transfer Restricted Securities are covered by a
Shelf Registration Statement filed pursuant to this Section 3 agrees, upon the
request of the Underwriter(s) in any Underwritten Offering, not to effect any
sale or distribution of securities of the Company of the same class as the
securities included in such Shelf Registration Statement, during the 45-day
period beginning on the date any such Underwritten Offering commences, to the
extent timely notified in writing by such Underwriter(s).
(f) The Company agrees not to effect any public or private offer, sale or
distribution of securities of the same quality and nature as the Transfer
Restricted Securities to be registered in an Underwritten Offering during the
10-day period prior to and during the 45-day period beginning on the date any
such Underwritten Offering made pursuant to the Shelf Registration Statement
commences, to the extent timely notified in writing by the Underwriter(s)
(except as part of such registration, if permitted, or pursuant to registrations
on Forms S-4 or S-8 or any successor form to such Forms), unless the
Underwriter(s) shall consent in writing to a shorter period of time (such
consent not to be unreasonably withheld or delayed); provided, however, that any
-------- -------
such agreement shall permit (A) the issuance by the Company of any shares of
Common Stock issued to employees of the Company or to any other eligible person
pursuant to any employee or director stock option plan, stock purchase plan,
stock ownership plan or dividend reinvestment plan of the Company in effect on
the date of such Underwritten Offering, (B) the issuance by the Company of
Common Stock upon the conversion of securities, or the exercise of options or
warrants, outstanding at the date of such Underwritten Offering, (C) the
issuance by the Company of shares of Common Stock or securities convertible into
or exchangeable for shares of Common Stock to existing shareholders of the
Company under a shareholder rights plan and (D) the issuance by the Company of
Common Stock, securities convertible into or exercisable or exchangeable for
Common Stock or options or warrants to purchase Common Stock as consideration
for the acquisition of a business or businesses; provided that any Common Stock
issued pursuant to clause (D) (whether directly or upon conversion or exercise
or exchange of any other securities) shall be subject to transfer restrictions
comparable to those applicable to the Transfer Restricted Securities during such
45-day period.
(g) No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in any Shelf Registration Statement pursuant to
this Agreement unless such Holder furnishes to the Company in writing, within 10
business days after receipt of
5
<PAGE>
a request therefor, such information as the Company may reasonably request for
use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus (a "Preliminary Prospectus") included therein.
SECTION 4. LIQUIDATED DAMAGES
(a) If (i) the Shelf Registration Statement is not filed with the
Commission on or prior to 60 days after the Closing Date, (ii) the applicable
Shelf Registration Statement has not been declared effective by the Commission
within 120 days after the Closing Date (the "Effectiveness Target Date"), or
(iii) the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by any
additional Shelf Registration Statement filed and declared effective) or useable
for the offer and sale of Transfer Restricted Securities for a period of time
(including any Suspension Period) which shall exceed 60 days in the aggregate in
any of the one-year periods ending on the first, second or third anniversaries
of the Closing Date, or which shall exceed 30 days in any calendar quarter
within any of such one-year periods (each such event referred to in clauses (i)
through (iii), a "Registration Default"), the Company will pay liquidated
damages to each Holder of Transfer Restricted Securities who has complied with
such Holder's obligations under this Agreement, which liquidated damages shall
constitute the sole monetary liability of the Company with respect to any such
Registration Default. The amount of liquidated damages payable during any
period during which a Registration Default shall have occurred and be continued
is that amount which is equal to one-quarter of one percent (25 basis points)
per annum per $1,000 principal amount of Notes or $2.50 per annum, per 22.0702.
shares of Common Stock (subject to adjustment in the event of stock splits,
stock recombinations, stock dividends and the like) constituting Transfer
Restricted Securities for each 90-day period until the applicable registration
statement is filed and the applicable registration statement is declared
effective, or the Shelf Registration Statement again becomes effective or
usable, as the case may be, up to a maximum amount of liquidated damages of
$0.25 per week per $1,000 principal amount of Notes or $12.50 per annum per
22.0702 shares of Common Stock (subject to adjustment as set forth above)
constituting Transfer Restricted Securities. The Company shall notify the
Trustee and the Initial Purchasers within three business days after the
occurrence of each and every Registration Default. All accrued liquidated
damages shall be paid to Record Holders by wire transfer of immediately
available funds or by federal funds check by the Company on each Damages Payment
Date. Following the cure of all Registration Defaults, liquidated damages will
cease to accrue with respect to such Registration Default.
All of the Company's obligations set forth in the preceding paragraph
which are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such security shall have
been satisfied in full.
The parties hereto agree that the liquidated damages provided in this
Section 4 constitute a reasonable estimate of the damages that will be incurred
by Holders of Transfer Restricted Securities by reason of the failure of the
Shelf Registration Statement to be filed, declared effective, or to remain
effective as the case may be.
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SECTION 5. REGISTRATION PROCEDURES
In connection with the Shelf Registration Statement, the Company will
use its best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution or disposition thereof, and pursuant thereto the
Company will as expeditiously as possible after the Closing Date:
(a) on or prior to the date 60 days after the Closing Date, prepare
and file with the Commission a Shelf Registration Statement relating to the
registration on Form S-1 or Form S-3, if the use of such form is then available
and as determined by the Company, for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of distribution
thereof and shall include all financial statements required to be included or
incorporated by reference therein; cooperate and assist in any filings required
to be made with the NASD and use its reasonable best efforts to cause such Shelf
Registration Statement to become effective on or prior to the date 120 days
after the Closing Date and approved on or prior to such date by such
governmental agencies or authorities as may be necessary to permit the selling
Holders to consummate the disposition of such Transfer Restricted Securities;
provided, however, that before filing a Shelf Registration Statement or any
Prospectus, or any amendments or supplements thereto, the Company will furnish
to the Initial Purchasers, counsel to the Holders and the Underwriter(s), if
any, copies of all such documents proposed to be filed (except that the Company
shall not be required to furnish any exhibits to such documents, including those
incorporated by reference, unless so requested by an Initial Purchaser, counsel
to the Holders or an Underwriter in writing), and the Company will not file any
Shelf Registration Statement or amendment thereto or any Prospectus or any
supplement thereto to which (i) the Initial Purchasers, counsel to the Holders
or the Underwriter(s), if any, shall reasonably object, in each such case within
five business days after the receipt thereof. An Initial Purchaser, counsel to
the Holders or an Underwriter, if any, shall be deemed to have reasonably
objected to such filing if the Shelf Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed contains any
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
which misstatement or omission is specifically identified to the Company in
writing within such five business days;
(b) prepare and file with the Commission such amendments and post-
effective amendments to the Shelf Registration Statement as may be necessary to
keep the Shelf Registration Statement effective for the applicable period set
forth in Section 3(a) hereof, or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Shelf Registration Statement have
been sold; cause the Prospectus to be supplemented by any required supplement
thereto (a "Prospectus Supplement"), and as so supplemented to be filed pursuant
to Rule 424 under the Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities covered
by such Shelf Registration Statement during the applicable period in accordance
with the intended method or methods of distribution by the sellers thereof set
forth in such Shelf Registration Statement, Prospectus or Prospectus Supplement;
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(c) if requested by the Holders of Transfer Restricted Securities, or
if the Transfer Restricted Securities are being sold in an Underwritten
Offering, the Underwriter(s) of such Underwritten Offering, promptly incorporate
in the Prospectus, any Prospectus Supplement or post-effective amendment to the
Shelf Registration Statement such information as the Underwriters and/or the
Holders of Transfer Restricted Securities being sold agree should be included
therein relating to the plan of distribution of the Transfer Restricted
Securities, including, without limitation, information with respect to the
principal amount of Transfer Restricted Securities being sold to such
Underwriter(s), the purchase price being paid therefor and any other terms with
respect to the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus, Prospectus
Supplement or post-effective amendment as soon as practicable after the Company
is notified of the matters to be incorporated in such Prospectus, Prospectus
Supplement or post-effective amendment;
(d) advise the Initial Purchasers, Underwriter(s), if any, and
selling Holders promptly and, if requested by such Persons, to confirm such
advice in writing, (i) when the Prospectus or any Prospectus Supplement or post-
effective amendment to the Shelf Registration Statement has been filed, and,
with respect to the Shelf Registration Statement or any post-effective amendment
thereto, when the same has become effective, (ii) of any request by the
Commission for amendments to the Shelf Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (iv) if at any
time the representations and warranties of the Company contemplated by paragraph
(m)(i) below cease to be true and correct, and (v) of the existence of any fact
and the happening of any event that makes any statement of a material fact made
in the Shelf Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Shelf Registration
Statement or the Prospectus in order to make the statements therein not
misleading. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer Restricted
Securities under state securities or Blue Sky laws, the Company shall use its
reasonable best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(e) promptly following the filing of any document that is to be
incorporated by reference into the Shelf Registration Statement or the
Prospectus subsequent to the initial filing of the Shelf Registration Statement,
provide copies of such document (excluding exhibits, unless requested by a
Holder in writing) to the Holders;
(f) furnish to each Initial Purchaser, each Holder and each of the
Underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein and
all exhibits (excluding exhibits to documents incorporated by reference therein
unless requested by such Initial Purchaser, Holder or Underwriter);
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(g) deliver to each Initial Purchaser, each selling Holder and each
of the Underwriter(s), if any, without charge, as many copies of any Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto as such
Persons may reasonably request; the Company consents to the use of any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto by each of the selling Holders and each of the Underwriter(s), if any,
in connection with the public offering and the sale of the Transfer Restricted
Securities covered by any Preliminary Prospectus and the Prospectus or any
amendments or supplements thereto;
(h) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the Underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or Underwriter(s) may request and do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however, that the Company shall not be
required (i) to register or qualify as a foreign corporation where it is not now
so qualified or (ii) to take any action that would subject it to the service of
process in suits, other than as to matters and transactions relating to the
Shelf Registration Statement, in any jurisdiction where it is not now so
subject;
(i) cooperate with the selling Holders and the Underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or the
Underwriter(s), if any, may request at least two business days prior to any sale
of Transfer Restricted Securities;
(j) use its best efforts to cause the Transfer Restricted Securities
covered by the Shelf Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the Underwriter(s), if any, to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in clause (h) above;
(k) if any fact or event contemplated by clause (d)(v) above shall
exist or have occurred, prepare a post-effective amendment or supplement to the
Shelf Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;
(l) provide a CUSIP number for all Transfer Restricted Securities not
later than the effective date of the Shelf Registration Statement and provide
the Trustee under the Indenture and/or the transfer agent for the Common Stock
with printed certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with the Depository Trust Company;
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<PAGE>
(m) enter into such agreements (including an underwriting agreement)
and take all such other actions in connection therewith as may reasonably be
required in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to the Shelf Registration Agreement, in
connection with an Underwritten Registration, and (i) make such representations
and warranties to the Holders and the Underwriter(s), in form, substance and
scope as they may reasonably request and as are customarily made by issuers to
Underwriters in primary Underwritten Offerings and covering matters including,
but not limited to, those set forth in the Purchase Agreement; (ii) obtain
opinions of counsel to the Company and updates thereof in customary form and
covering matters reasonably requested by the Underwriter(s) of the type
customarily covered in legal opinions to Underwriters in connection with primary
Underwritten Offerings addressed to each selling Holder and the Underwriter
requesting the same and covering the matters as may be reasonably requested by
such Holders and Underwriters; (iii) obtain "comfort" letters and updates
thereof from the Company's independent certified public accountants addressed to
the selling Holders of Transfer Restricted Securities and the Underwriters
requesting the same, such letters to be in customary form and covering matters
of the type customarily covered in "comfort" letters to Underwriters in
connection with primary Underwritten Offerings; (iv) set forth in full or
incorporate by reference in the underwriting agreement the indemnification
provisions and procedures of Section 7 hereof with respect to all parties to be
indemnified pursuant to said Section; and (v) deliver such documents and
certificates as may be reasonably requested by the Holders of the Transfer
Restricted Securities being sold or the Underwriter(s) of such Underwritten
Offering to evidence compliance with clause (i) above and with any customary
conditions contained in the underwriting agreement entered into by the Company
pursuant to this clause (m). The above shall be done at or prior to each closing
under such underwriting agreement, as and to the extent required thereunder;
(n) make available at reasonable times and in a reasonable manner for
inspection by a representative of the Holders of the Transfer Restricted
Securities, any Underwriter participating in any disposition pursuant to such
Shelf Registration Statement, and any attorney or accountant retained by such
selling Holders or any of the Underwriters, all relevant financial and other
records, pertinent corporate documents and properties of the Company and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, Underwriter, attorney or
accountant in connection with such Shelf Registration Statement prior to its
effectiveness, provided, however, that such representatives, attorneys or
accountants shall agree to keep confidential (which agreement shall be confirmed
in writing in advance to the Company if the Company shall so request) all
information, records or documents made available to such persons which are not
otherwise available to the general public unless disclosure of such records,
information or documents is required by court or administrative order (of which
the Company shall have been given prior notice and an opportunity to defend)
after the exhaustion of all appeals therefrom, and to use such information
obtained pursuant to this provision only in connection with the transaction for
which such information was obtained, and not for any other purpose;
(o) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders, as soon as practicable, but in any event not later than
15 months after the effective date of the Shelf
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Registration Statement, a consolidated earnings statement, which consolidated
earnings statement shall satisfy the provisions of Section 11(a) of the Act and
Rule 158 under the Act;
(p) cause the Indenture to be qualified under the TIA, and, in
connection therewith, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents as may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner;
(q) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Shelf Registration Statement as soon
as practicable;
(r) cause all Transfer Restricted Securities covered by the Shelf
Registration Statement to be listed on each securities exchange or quotation
system on which similar securities issued by the Company are then listed if
requested by the Holders of a majority of the outstanding Transfer Restricted
Securities (with Holders of Common Stock constituting Transfer Restricted
Securities being deemed to be Holders of the aggregate principal amount of notes
converted into such Common Stock for purposes of such calculation) or the
Underwriters, if any; cause the Notes covered by the Shelf Registration
Statement to be rated with the appropriate rating agencies, if so requested by
the Holders of a majority in aggregate principal amount of such Notes or the
Underwriters; and
(s) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
Underwriter (including any "qualified independent Underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD).
Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading or necessary to cause such
Shelf Registration Statement not to omit a material fact with respect to such
Holder necessary in order to make the statements therein not misleading.
Each Holder agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 5(d)(v) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings with respect to the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities current at the time of receipt of such notice.
SECTION 6. REGISTRATION EXPENSES
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(a) Except as set forth herein, all expenses incident to the Company's
performance of or compliance with this Agreement (the "Registration Expenses")
will be borne by the Company, regardless of whether a Shelf Registration
Statement becomes effective, including without limitation:
(i) all registration and filing fees and expenses (including filings
made with the NASD);
(ii) fees and expenses of compliance with federal securities or state
blue sky laws;
(iii) expenses of printing (including, without limitation, expenses of
printing or engraving certificates for the Transfer Restricted Securities in a
form eligible for deposit with Depository Trust Company and of printing the
Prospectus and any Preliminary Prospectus), messenger and delivery services and
telephone;
(iv) reasonable fees and disbursements of counsel for the Company and
for the Holders of the Transfer Restricted Securities (subject to the provisions
of Section 6(b) hereof);
(v) fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit and
"comfort" letters required by or incidental to the preparation and filing of a
Shelf Registration Statement and Prospectus and the disposition of Transfer
Restricted Securities);
(vi) fees and expenses associated with any NASD filing required to be
made in connection with the Shelf Registration Statement, including, if
applicable, the fees and expenses of any "qualified independent Underwriter"
(and its counsel in such capacity) that is required to be retained in accordance
with the rules and regulations of the NASD; and
(vii) fees and expenses of listing the Transfer Restricted Securities on
any securities exchange or quotation system in accordance with Section 5(q)
hereof.
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, rating
agency fees and the fees and expenses of any Person, including special experts,
retained by the Company. The Holders of Transfer Restricted Securities shall
bear the expense of any broker's commission or Underwriters' discount or
commission.
(b) In connection with the Shelf Registration Statement, the Company will
reimburse the Holders of Transfer Restricted Securities being registered
pursuant to such Shelf Registration Statement for the fees and disbursements of
not more than one counsel chosen by the Holders of a majority of the Transfer
Restricted Securities to be included in the Shelf Registration Statement (with
holders of Common Stock constituting Transfer Restricted Securities being deemed
to be Holders of the aggregate principal amount of Notes converted into such
Common Stock for purposes of such calculation).
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Notwithstanding the provisions of this Section 6(b), each Holder of
Transfer Restricted Securities shall pay all Registration Expenses to the extent
required by applicable law.
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each Initial
Purchaser, (ii) each Holder, (iii) each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) any of the
Initial Purchasers or any Holder (any of the persons referred to in this clause
(iii) being hereinafter referred to as a "controlling person") and (iv) the
respective officers, directors, employees, representatives and agents of any of
the Initial Purchasers or any Holder or any controlling person (any person
referred to in clause (i), (ii), (iii) or (iv) may hereinafter be referred to as
a "Non-Company Indemnitee"), to the fullest extent lawful from and against any
and all losses, claims, damages, judgments, liabilities and expenses (including
the reasonable fees and expenses of counsel and other expenses in connection
with investigating, defending or settling any such action or claim) as they are
incurred arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Shelf Registration Statement,
Prospectus or Preliminary Prospectus (or any amendment or supplement thereto),
including any document incorporated by reference therein, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except, with respect to any Non-Company Indemnitee, insofar as such
losses, claims, damages, judgments, liabilities or expenses (i) arise out of, or
are based upon, any such untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with information relating to such Non-Company
Indemnitee furnished in writing by or on behalf of such Non-Company Indemnitee
to the Company expressly for use therein or (ii) with respect to any Preliminary
Prospectus, results solely from the fact that such Non-Company Indemnitee sold
Transfer Restricted Securities to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the final
Prospectus as then amended or supplemented, if the Company shall have previously
furnished sufficient copies thereof to the Non-Company Indemnitee in accordance
with this Agreement and the final Prospectus, as amended or supplemented, would
have corrected such untrue statement or omission.
(b) If any action, suit or proceeding shall be brought against any Non-
Company Indemnitee with respect to which indemnity may be sought against the
Company pursuant to this Section 7, such Non-Company Indemnitee shall promptly
notify the Company in writing, and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Non-Company
Indemnitee and payment of all fees and expenses. Such Non-Company Indemnitee
shall have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Non-Company Indemnitee unless
(i) the Company agrees in writing to pay such fees and expenses, (ii) the
Company has failed to assume the defense and employ counsel reasonably
satisfactory to the Non-Company Indemnitee or (iii) the named parties to any
such action, suit or proceeding (including any impleaded parties) include both
the Non-Company Indemnitee and the Company and the Company and such Non-Company
Indemnitee shall have been advised by its counsel that representation of such
Non-Company
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Indemnitee and the Company by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the Company shall not have the right to
assume the defense of such action, suit or proceeding on behalf of such Non-
Company Indemnitee, it being understood, however, that the Company shall not, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all such Non-Company Indemnitees,
which firm shall be designated in writing by the Non-Company Indemnitees, and
that all such fees and expenses shall be reimbursed as they are incurred. The
Company shall not be liable for any settlement of any such action, suit or
proceeding effected without the written consent of the Company, but if settled
with the written consent of the Company, or if there is a final judgment for the
plaintiff in any such action, the Company agrees to indemnify and hold harmless
each Non-Company Indemnitee to the extent provided in paragraph (a) from and
against any amounts payable by reason of such settlement or judgment. The
Company shall not, without the prior written consent of each Non-Company
Indemnitee affected thereby (such consent not to be unreasonably withheld or
delayed), effect any settlement of any pending or threatened proceeding in which
such Non-Company Indemnitee is or could have been a party and indemnity could
have been sought hereunder, unless such settlement includes an unconditional
release of such Non-Company Indemnitee from all liability arising out of such
action or proceeding.
(c) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless (i) the Company, (ii) each of the
Initial Purchasers, (iii) each other Holder, (iv) any person controlling (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the
Company, any of the Initial Purchasers and each other Holder and (v) the
respective officers, directors, employees, representatives and agents of each of
the parties referred to in clauses (i), (ii), (iii), and (iv) (collectively the
"Company Indemnified Parties") to the same extent as the foregoing indemnity
from the Company to any Non-Company Indemnitee, but only with respect to
information relating to such Holder furnished in writing by or on behalf of such
Holder, expressly for use in the Registration Statement, Prospectus (or any
amendment or supplement thereto), or any Preliminary Prospectus. If any action,
suit or proceeding shall be brought against any Company Indemnified Party based
on the Registration Statement, Prospectus (or any amendment or supplement
thereto), or any Preliminary Prospectus and in respect of which indemnification
may be sought against each Holder of Transfer Restricted Securities pursuant to
this Section 7(c), each such Holder of Transfer Restricted Securities shall have
the rights and duties given to the Company by Section 7(b) (except that if the
Company shall have assumed the defense thereof, each such Holder of Transfer
Restricted Securities may, but shall not be required to, employ separate counsel
therein and participate in the defense thereof and the fees and expenses of such
counsel shall be at the expense of such Holder of Transfer Restricted
Securities) and the Company Indemnified Parties shall have the rights and duties
given to the Non-Company Indemnitees by Section 7(b). In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the
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proceeds received by such Holder upon the sales of the Transfer Restricted
Securities giving rise to such indemnification obligation.
(d) If the indemnification provided for in this Section 7 is unavailable
to any party entitled to indemnification pursuant to Section 7(a) or 7(c) in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, judgments, liabilities and expenses
(i) in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and each Holder of Transfer Restricted Securities on the
other hand in connection with the statements or omissions which resulted in such
losses, claims, damages, judgments, liabilities or expenses, as well as any
other relevant equitable considerations. The relative fault of the Company on
the one hand and each Holder of Transfer Restricted Securities 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 on the
one hand or by the Holder of Transfer Restricted Securities on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company and each Holder of Transfer Restricted Securities agree
that it would not be just and equitable if contribution pursuant to Section 7(d)
were determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in Section
7(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, judgments, liabilities or expenses referred to in
Section 7(d) 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 any claim or defending any such action , suit
or proceeding prior to the indemnifying party's assumption of the defense
thereof or subsequent thereto to the extent permitted by the second sentence of
Section 7(b) hereof. Notwithstanding the provisions of this Section 7, none of
the Holders shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the total amount received by such Holder with
respect to the sale of Transfer Restricted Securities exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective
principal amount of Notes held by each of the Holders hereunder and not joint.
(f) The indemnity and contribution agreements contained in this Section 7
are in addition to any liability that any indemnifying party may otherwise have
to any indemnified party.
(g) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have
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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 action, suit or proceeding.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any of the
Notes or shares of Common Stock that are Transfer Restricted Securities remain
outstanding and during any such period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, to make available to the Initial
Purchasers or any beneficial owner of the Notes or shares of such Common Stock
in connection with any sale thereof and any prospective purchaser of such Notes
or Common Stock from such Initial Purchaser or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements and
(c) furnishes the Company in writing information in accordance with Section 3(g)
and agrees to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement and any person controlling the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the extent contemplated by Section 7(c).
SECTION 10. MISCELLANEOUS
(a) Remedies. Each Holder of Transfer Restricted Securities, in addition
--------
to being entitled to exercise all rights provided herein, and as provided in the
Purchase Agreement and granted by law, including recovery of damages, will be
entitled to specific performance of such Holder's rights under this Agreement.
The Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement.
(b) No Inconsistent Agreements. The Company will not on or after the
--------------------------
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders of Transfer
Restricted Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders of Transfer Restricted
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's securities under any
other agreements.
(c) Amendments and Waivers. The provisions of this Agreement, including
----------------------
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or
16
<PAGE>
consents to departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of a majority of the
outstanding Transfer Restricted Securities affected by such amendment,
modification, supplement, waiver or departure (with holders of Common Stock
constituting Transfer Restricted Securities being deemed to be Holders of the
aggregate principal amount of Notes converted into such Common Stock for
purposes of such calculation). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders of Transfer Restricted Securities whose securities are being
sold pursuant to such Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Transfer Restricted Securities
shall be valid only with the written consent of Holders of at least a majority
of the Transfer Restricted Securities being sold, calculated as aforesaid.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder of Transfer Restricted Securities, at the address
set forth on the records of the Registrar under the Indenture, with a copy to
the Registrar; and
(ii) if to the Company or an Initial Purchaser, initially at its address
set forth in the Purchase Agreement and thereafter at such other address, notice
of which is given in accordance with the provisions of this Section.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder of Transfer Restricted Securities unless and to the extent
such successor or assign acquired Transfer Restricted Securities from such
Holder; and provided further that nothing herein shall be deemed to permit any
assignment, transfer or any disposition of Transfer Restricted Securities in
violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Transfer Restricted Securities, in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be held
subject to all of the terms of this Agreement and by taking and holding such
Transfer Restricted Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the
17
<PAGE>
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTACTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK.
(i) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement together with the other Operative
----------------
Documents (as defined in the Purchase Agreement) is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
18
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
EMC CORPORATION
By:
--------------------------------
Name:
Title:
SMITH BARNEY INC.
ALEX, BROWN & SONS INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
By: SMITH BARNEY INC.
By:
--------------------------------
Name:
Title:
19
<PAGE>
[LETTERHEAD OF ROPES & GRAY APPEARS HERE]
April 10, 1997
EMC Corporation
171 South Street
Hopkinton, Massachusetts 01748
Gentlemen:
This opinion is rendered to you in connection with a registration statement
(the "Registration Statement") on Form S-3 filed today with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, for the
registration of $517,500,000 principal amount of Convertible Subordinated Notes
due 2002 (the "Notes") of EMC Corporation ("EMC") and 11,421,319 shares of
Common Stock of EMC issuable upon conversion of the Notes plus such additional
indeterminate number of shares of Common Stock of EMC as may become issuable
upon conversion of the Notes by means of an adjustment in the conversion price
(the "Shares"). EMC originally sold the Notes pursuant to a Purchase Agreement
dated March 6, 1997 between EMC and Smith Barney Inc., Alex. Brown & Sons
Incorporated and Morgan Stanley & Co. Incorporated. The Notes were issued
pursuant to the provisions of an Indenture dated as of March 11, 1997 (the
"Indenture") between EMC and State Street Bank and Trust Company, as Trustee.
The Notes and the Shares are being registered to permit public secondary trading
of such securities by the holders thereof from time to time after the effective
date of the Registration Statement.
We have acted as special counsel for EMC in connection with the issuance
and sale of the Notes and the preparation of the Registration Statement. For
purposes of this opinion, we have examined and relied upon the information set
forth in the Registration Statement and such other documents and records as we
have deemed necessary.
We have assumed that no issuance of the Shares will result in the issuance
by EMC of shares in excess of its then authorized Common Stock and that the
price received by EMC for the Shares will not be less than the par value
thereof.
<PAGE>
ECM Corporation -2- April 10, 1997
Based on the foregoing, we are of the opinion that:
1. The Notes are valid and legally binding obligations of EMC and are
entitled to the benefits of the Indenture, except that enforcement of rights and
remedies created by the Notes is subject to bankruptcy, reorganization
insolvency or similar laws of general application affecting the rights and
remedies of creditors and that the availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
2. The Shares have been duly authorized and reserved for issuance upon
conversion of the Notes, and when issued upon such conversion in accordance with
the terms of the Notes, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as part of the Registration
Statement and to the use of our name therein and in the related prospectus under
the caption "Legal Matters".
It is understood that this opinion is to be used only in connection with
the offer and sale of the Notes while the Registration Statement is in effect.
Very truly yours,
Ropes & Gray
<PAGE>
EXHIBIT 12.1
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------
DEC. 31, DEC. 30, DEC. 31, JAN. 1, JAN. 2,
1996 1995 1994 1994 1993
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Income before income taxes........ $519,474 $450,821 $355,384 $179,656 $43,075
Add-back fixed charges:
Interest expense................ 11,967 12,857 15,311 6,043 4,865
Amortization of debt costs...... 1,080 1,126 1,109 243 134
-------- -------- -------- -------- -------
Earnings before fixed charges..... 532,521 464,804 371,804 185,942 48,074
======== ======== ======== ======== =======
Fixed charges:
Interest expense................ 11,967 12,857 15,311 6,043 4,865
Amortization of debt costs...... 1,080 1,126 1,109 243 134
-------- -------- -------- -------- -------
Total fixed charges............... 13,047 13,983 16,420 6,286 4,999
======== ======== ======== ======== =======
Ratio of Earnings to Fixed
Charges.......................... 40.8x 33.2x 22.6x 29.6x 9.6x
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 of our report dated January 23, 1997 on our audits of the
consolidated financial statements and financial statement schedule of EMC
Corporation as of December 31, 1996 and December 30, 1995 and for the three
years in the period ended December 31, 1996. We also consent to the reference
to our firm under the caption "Experts".
Coopers & Lybrand L.L.P.
Boston, Massachusetts
April 4, 1997
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)__
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617)654-3253
(Name, address and telephone number of agent for service)
---------------------
EMC CORPORATION
(Exact name of obligor as specified in its charter)
MASSACHUSETTS 04-2680009
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
171 South Street
Hopkinton, MA 01748
(Address of principal executive offices) (Zip Code)
3 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2002
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission
as Exhibit 1 to Amendment No. 1 to the Statement of Eligibility
and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
and is incorporated herein by reference thereto
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee
to commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No. 22-
17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter of the
obligor, the trustee has relied upon the information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer to Item 2. of this statement will be amended, if necessary, to
reflect any facts which differ from those stated and which would have been
required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 7th day of April, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Jill Olson
---------------
Jill Olson
Assistant Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by EMC CORPORATION
of its 3 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2002, we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Jill Olson
---------------
Jill Olson
Assistant Vice President
Dated: April 7, 1997
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business December
--------
31, 1996, published in accordance with a call made by the Federal Reserve Bank
- --------
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........ 1,561,409
Interest-bearing balances................................. 7,562,240
Securities.......................................................... 9,388,513
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary....................... 5,622,962
Loans and lease financing receivables:
Loans and leases, net of unearned income....4,858,187
Allowance for loan and lease losses......... 72,614
Loans and leases, net of unearned income and allowances... 4,785,573
Assets held in trading accounts..................................... 874,700
Premises and fixed assets........................................... 383,955
Other real estate owned............................................. 870
Investments in unconsolidated subsidiaries.......................... 93,621
Customers' liability to this bank on acceptances outstanding........ 35,022
Intangible assets................................................... 148,190
Other assets........................................................ 932,673
----------
Total assets........................................................ 31,389,728
==========
LIABILITIES
Deposits:
In domestic offices....................................... 8,508,096
Noninterest-bearing...............6,435,131
Interest-bearing..................2,072,965
In foreign offices and Edge subsidiary.................... 11,395,724
Noninterest-bearing..................27,508
Interest-bearing.................11,368,216
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary....................... 7,518,222
Demand notes issued to the U.S. Treasury and Trading Liabilities.... 733,935
Other borrowed money................................................ 650,578
Bank's liability on acceptances executed and outstanding............ 35,022
Other liabilities................................................... 770,029
----------
Total liabilities................................................... 29,611,606
----------
EQUITY CAPITAL
Common stock........................................................ 29,931
Surplus............................................................. 358,146
Undivided profits................................................... 1,389,720
Cumulative foreign currency translation adjustments................. 325
----------
Total equity capital................................................ 1,778,122
----------
Total liabilities and equity capital................................ 31,389,728
==========
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
