<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 31, 1996
SOLECTRON CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
CALIFORNIA 1-11098 94-2447045
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
777 GIBRALTAR DRIVE, MILPITAS, CALIFORNIA 95035
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 957-8500
------------------------------
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 2. ACQUISITION OF ASSETS
On March 31, 1996, Solectron Corporation ("Registrant") effected the
purchase (the "Purchase") of Texas Instruments Incorporated's ("TI") custom
manufacturing services ("CMS") business in Austin, Texas and certain assets of
TI's CMS business in Kuala Lumpur, Malaysia. The Purchase was pursuant to the
terms of an Amended and Restated Asset Purchase Agreement dated March 29, 1996
(the "Agreement"), for approximately $130 million, subject to post-closing
adjustments.
The funds used for the payment made to effect the Purchase was from
Registrant's available funds (including, without limitation, certain proceeds
from the Registrant's private placements of 6% Convertible Subordinated Notes
due 2006 and 7 3/8% Senior Notes due 2006 in February, 1996). Prior to the
Purchase, there was no material relationship between TI and Registrant or
their officers, directors, affiliates or associates.
Under the terms of the Agreement, Registrant has purchased the assets
and assumed certain liabilities of TI's CMS business in Austin, Texas and has
purchased certain assets of TI's CMS business in Kuala Lumpur, Malaysia.
Registrant has offered employment to all TI CMS employees in Austin, Texas
and is leasing space at TI's Austin, Texas site. TI's CMS business is
electronics manufacturing. Registrant intends to continue TI's CMS business
in Austin, Texas and to integrate TI's Austin, Texas operations with its own
as soon as reasonably practicable. The assets and certain customer contracts
purchased from TI's CMS business in Kuala Lumpur, Malaysia will be
transitioned to Registrant's Penang, Malaysia operations over the course of
the next year.
The purchase of the TI CMS business will be treated as a purchase for
accounting purposes.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following financial statements, pro forma financial
information and exhibits are filed as part of this report, where indicated.
(a) Financial statements of the business acquired, prepared pursuant to Rule
3.05 of Regulation S-X and provided to Registrant by TI.
Item
- ----
Audited financial statements of the CMS business of TI
in Austin, Texas and Kuala Lumpur, Malaysia
SEQUENTIALLY
NUMBERED PAGE
-------------
Report of Independent Auditors 5
Statement of Assets to be Acquired and Liabilities
to be Assumed as of December 31, 1995 6
Statement of Revenues and Direct Operating Expenses
for the year ended December 31, 1995 7
Notes to Financial Statements 8
-2-
<PAGE>
(b) Pro forma financial information required pursuant to Article 11 of
Regulation S-X.
SEQUENTIALLY
NUMBERED PAGE
-------------
Pro Forma financial statement of Registrant
and CMS business of TI
Pro Forma Combined Financial Information
(unaudited) 12
Pro Forma Combined Balance Sheet as of
February 29, 1996 (unaudited) 13
Pro Forma Combined Statement of Income for
Year Ended August 31, 1995 (unaudited) 14
Pro Forma Combined Statement of Income for the
Six Months Period Ended February 29, 1996
(unaudited) 15
Notes to Pro Forma Combined Financial Information
(unaudited) 16
(c) Exhibits in accordance with the provisions of Item 601 of
Regulation S-K:
SEQUENTIALLY
EXHIBITS NUMBERED PAGE
- -------- -------------
4.1 Indenture dated as of February 15, 1996 between
Registrant and State Street Bank & Trust Company 18
4.2 Registration Rights Agreement dated as of February 15,
1996 by and among the Registrant and Merrill Lynch,
Pierce, Fenner & Smith, Incorporated, Morgan Stanley &
Co. Incorporated and Hambrecht & Quist LLC 99
10.1 Purchase Agreement dated as of February 15, 1996 by
and between the Registrant and Merrill Lynch, Pierce,
Fenner & Smith, Incorporated, Morgan Stanley & Co.
Incorporated and Hambrecht & Quist LLC 122
24.1 Consent of Independent Auditors 149
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 15, 1996 SOLECTRON CORPORATION
/s/ Susan S. Wang
----------------------------------------
Susan S. Wang
Executive Vice President, Finance
(as principal financial and accounting
officer and on behalf of Registrant)
-4-
<PAGE>
[ERNST & YOUNG LLP Letterhead]
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Texas Instruments Incorporated
We have audited the accompanying statement of assets to be acquired and
liabilities to be assumed of the Custom Manufacturing Services Business (CMS)
of Texas Instruments Incorporated at December 31, 1995, and the related
statement of revenues and direct operating expenses for the year then ended.
These statements are the responsibility of the management of Texas
Instruments Incorporated. Our responsibility is to express an opinion on
these statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As described in Note 1, the accompanying statement of revenues and direct
operating expenses was prepared solely to present the revenues and direct
operating expenses of CMS and is not intended to be a complete presentation
of the results of operations of CMS. As discussed in Note 1, CMS is a part
of Texas Instruments Incorporated and has no separate legal status or
existence.
In our opinion, the statements referred to above present fairly, in all
material respects, the assets to be acquired and liabilities to be assumed of
CMS at December 31, 1995, and the related revenues and direct operating
expenses for the year then ended in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Dallas, Texas
February 1, 1996
-5-
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
<PAGE>
CUSTOM MANUFACTURING SERVICES
BUSINESS OF TEXAS INSTRUMENTS INCORPORATED
STATEMENT OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED
DECEMBER 31, 1995
(IN THOUSANDS)
ASSETS
Receivables $58,129
Inventory (NOTE 3) 67,620
Equipment, net (NOTE 4) 17,773
--------
Total assets to be acquired $143,522
--------
--------
LIABILITIES
Accounts payable $ 42,310
Customer deposits 326
--------
Total liabilities to be assumed 42,636
--------
Assets to be acquired less liabilities to be assumed $100,886
--------
--------
SEE ACCOMPANYING NOTES.
-6-
<PAGE>
CUSTOM MANUFACTURING SERVICES
BUSINESS OF TEXAS INSTRUMENTS INCORPORATED
STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31,1995
(IN THOUSANDS)
Revenues $461,278
Direct operating expenses:
Cost of revenues 424,008
Selling, general, and administrative 24,827
--------
Total direct operating expenses 448,835
Revenues less direct operating expenses $ 12,443
--------
--------
SEE ACCOMPANYING NOTES.
-7-
<PAGE>
CUSTOM MANUFACTURING SERVICES
BUSINESS OF TEXAS INSTRUMENTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. BASIS OF PRESENTATION
The Custom Manufacturing Services (CMS) business provides services to
customers for the manufacture and assembly of printed circuit boards on a
contract basis. CMS also offers services for electronic design. CMS
primarily serves customers in the networking, telecommunications and computer
market segments in the United States and Europe.
CMS has operated as a business activity of Texas Instruments Incorporated (TI).
On the contractually designated closing date, Solectron Texas L.P. (the
Buyer) will acquire certain assets and assume certain liabilities of CMS.
The acquisition is to be made pursuant to an Asset Purchase Agreement (the
Agreement) dated January 29, 1996. The assets to be acquired will include
accounts receivable, inventory, and equipment related to CMS operations in
Austin, Texas and Kuala Lumpur, Malaysia. Cash and real property are
specifically excluded from the assets to be purchased. In addition, no
liability for income taxes is recorded, and the statement of revenues and
direct operating expenses does not include tax expense.
Historically, CMS has had no separate legal status as it was an integral part
of TI's overall operations. As a result, separate financial statements have not
been maintained for CMS. The accompanying financial statements have been
prepared from the historical accounting records of TI and present the assets
that are to be acquired and the liabilities to be assumed as of December 31,
1995, and the revenues and direct operating expenses of CMS for the year then
ended including allocations of certain common expenses based upon selected
criteria, as defined (Note 2). Since only certain assets of CMS are being
acquired and only certain liabilities assumed, statements of financial
position and cash flows are not applicable. The accompanying statement of
revenues and direct operating expenses was prepared to present the net
revenues and direct operating costs of CMS. Accordingly, it is not intended
to be a complete presentation of the results of operations of CMS, and it
does not purport to reflect the revenues and direct operating costs that
would have resulted if CMS had operated as an unaffiliated independent entity.
The preparation of the statements requires the use of management's estimates,
which may vary from actual results.
-8-
<PAGE>
CUSTOM MANUFACTURING SERVICES
BUSINESS OF TEXAS INSTRUMENTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES
ALLOCATION OF EXPENSES
TI provides various administrative services to CMS including, but not
necessarily limited to, marketing, data processing and personnel services.
TI charged these expenses and all other central operating costs, first on the
basis of direct usage when identifiable, with the remainder allocated among
TI's division entities on the basis of their respective revenues, headcount,
or level of effort. Rent expense for facilities occupied by CMS was
allocated based on square footage used. In the opinion of management of
Texas Instruments Incorporated, these methods of allocation are reasonable.
EQUIPMENT
Equipment is recorded at cost and depreciated using the 150% declining
balance method with an estimated useful life of five years. Amounts related
to fully depreciated assets are removed from the financial records.
Maintenance and repairs are charged to expense as incurred. At December 31,
1995, commitments for the acquisition of equipment amounted to approximately
$1 million.
INVENTORY
Inventory is stated at the lower of standard cost (which approximates
actuals) or market. Cost is determined using a first-in, first-out method.
REVENUES
Revenues represent sales to unaffiliated customers and certain other TI
operating units. Revenues am recognized when shipments are made. See Note 5
for further discussion of sales to affiliated customers.
DIRECT OPERATING EXPENSES
Direct operating expenses include the costs of manufacturing the related CMS
product shipments included in net revenues. Cost of revenues include direct
labor and direct material, and allocation of costs associated with
engineering, production planning, manufacturing plant administration,
purchasing, and other costs incurred at the manufacturing plants. These
direct operating costs are not necessarily indicative of the costs that would
have been incurred had CMS operated as a stand-alone business.
-9-
<PAGE>
CUSTOM MANUFACTURING SERVICES
BUSINESS OF TEXAS INSTRUMENTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVENTORY
DECEMBER 31,1995
----------------
(IN THOUSANDS)
Raw materials and purchased parts $54,703
Work in process 15,500
Finished goods 1,154
--------
71,357
Less: Reserves for salability and obsolescence 3,737
--------
$67,620
--------
--------
4. EQUIPMENT
DECEMBER 31,1995
----------------
(IN THOUSANDS)
Equipment, at cost $32,566
Less: Accumulated depreciation 14,793
--------
Equipment, net $17,773
--------
--------
Depreciation expense was $5.7 million in 1995.
5. RELATED PARTY TRANSACTIONS
CMS had sales to other business units of TI of approximately $2.8 million for
the year ended December 31, 1995. These revenues are recorded at cost plus a
negotiated gross margin and are not necessarily indicative of revenues that
would be recognized on third-party sales.
6. SIGNIFICANT CUSTOMERS
In 1995, sales to three customers exceeding 10% of total CMS sales were 25%
to one customer, 15% to another, and 14% to a third customer.
-10-
<PAGE>
CUSTOM MANUFACTURING SERVICES
BUSINESS OF TEXAS INSTRUMENTS INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
CMS was notified by a major customer that it was reducing volume requirements
due to reduced demand for a significant product line. Management is
uncertain regarding the impact of the loss of this product line, but
discussions are underway with this customer as well as others to identify
additional business to replace the product line.
7. LEASES
CMS leases certain data processing and other equipment under operating
leases. Rental expense for such leases was approximately $577,000 in 1995.
-11-
<PAGE>
SOLECTRON CORPORATION AND CUSTOM MANUFACTURING SERVICES BUSINESS
OF TEXAS INSTRUMENTS INCORPORATED
PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)
The following pro forma combined financial information gives effect to the
acquisition of the operations of Texas Instruments Incorporated's (TI) custom
manufacturing services ("CMS") business in Austin, Texas and certain assets
of TI's CMS site in Kuala Lumpur, Malaysia (the CMS operations) by Solectron
Corporation ("Solectron") on a "purchase accounting" basis. The pro forma
balance sheet combines Solectron's February 29, 1996 balance sheet with the
CMS operations' December 31, 1995 statement of assets to be acquired and
liabilities to be assumed. The pro forma statement of income for the year
ended August 31, 1995 combines Solectron's statement of income for the year
ended August 31, 1995 with the CMS operations' statement of revenues and
direct operating expenses for the year ended September 30, 1995. The pro
forma statement of income for the six-month period ended February 29, 1996
combines Solectron's statement of income for the six-month period ended
February 29, 1996 with the CMS operations' statement of revenues and direct
operating expenses for the six-month period ended December 31, 1995.
These pro forma combined statements of income do not purport to be indicative
of the results that would actually have been obtained if the combination had
been in effect on the dates indicated, or that may be obtained in the future.
The pro forma combined financial information are based upon the attached
historical financial statements of the CMS operations and the historical
consolidated financial statements of Solectron included in its Annual Report
on Form 10-K for the fiscal year ended August 31, 1995 and Quarterly Report
on Form 10-Q for the fiscal quarter ended February 29, 1996, and should be
read in conjunction with those financial statements and related notes.
-12-
<PAGE>
SOLECTRON CORPORATION AND CUSTOM MANUFACTURING SERVICE BUSINESS
OF TEXAS INSTRUMENTS INCORPORATED
PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
FEBRUARY 29, 1996
The following pro forma combined balance sheet presents the combined balance
sheet of Solectron as of February 29, 1996 and statement of assets to be
acquired and liabilities to be assumed of the CMS operations as of December
31, 1995. Such pro forma information gives effect to the acquisition of the
CMS operations by Solectron under the purchase method of accounting and the
pro forma adjustments described in the accompanying notes to the pro forma
combined financial information.
<TABLE>
<CAPTION>
PRO FORMA
-------------------------
ASSETS SOLECTRON CMS ADJUSTMENTS COMBINED
--------- --- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Current assets:
Cash, cash equivalents and short-term
investments $309,170 $ - $(134,217)(a) $ 174,953
Accounts receivable, net 288,417 58,129 (6,489)(a) 340,057
Inventories 349,572 67,620 (11,566)(a) 405,626
Prepaid expenses and other current assets 28,964 - 3,000 (a) 31,964
---------- -------- --------- ----------
Total current assets 976,123 125,749 (149,272) 952,600
Property and equipment, net 236,957 17,773 6,000 (a) 260,730
Other assets 15,475 - 36,150 (a) 51,625
---------- -------- --------- ----------
Total assets $1,228,555 $143,522 $(107,122) $1,264,955
---------- -------- --------- ----------
---------- -------- --------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $2,762 $ - $ - $2,762
Current portion of long-term debt and
capital lease obligations 995 - - 995
Accounts payable 302,832 42,310 (6,236)(a) 338,906
Accrued employee compensation 34,730 - - 34,730
Accrued expenses 4,535 - - 4,535
Other current liabilities 12,040 326 - 12,366
---------- -------- --------- ----------
Total current liabilities 357,894 42,636 (6,236) 394,294
---------- -------- --------- ----------
Long-term debt and capital lease obligations 258,131 - - 258,131
Other long-term liabilities 8,142 - - 8,142
---------- -------- --------- ----------
Total liabilities 624,167 42,636 (6,236) 660,567
Shareholders' equity:
Common stock 341,010 - - 341,010
Texas Instruments equity - 100,886 (100,886)(a) -
Retained earnings 261,318 - - 261,318
Cumulative translation adjustment and other 2,060 - - 2,060
---------- -------- --------- ----------
Total shareholders' equity 604,388 100,886 (100,886) 604,388
---------- -------- --------- ----------
Total liabilities and
shareholders' equity $1,228,555 $143,522 $(107,122) $1,264,955
---------- -------- --------- ----------
---------- -------- --------- ----------
</TABLE>
See notes to unaudited pro forma combined financial information.
-13-
<PAGE>
SOLECTRON CORPORATION AND CUSTOM MANUFACTURING SERVICES BUSINESS
OF TEXAS INSTRUMENTS INCORPORATED
The following pro forma combined statements of income give effect to the
acquisition of the CMS operations by Solectron under the purchase method of
accounting. The pro forma combined statements of income for the year ended
August 31, 1995, combine Solectron's statement of income for the year ended
August 31, 1995 with the CMS operations' statement of revenues and direct
operating expenses for the twelve-month period ended September 30, 1995. The
pro forma combined statement of income for the six-month period ended
February 29, 1996 combines Solectron's statement of income for the six-month
period ended February 29, 1996 with the CMS operations' statement of revenues
and direct operating expenses for the six-month period ended December 31,
1995.
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
FOR THE YEAR ENDED AUGUST 31, 1995
<TABLE>
<CAPTION>
PRO FORMA
---------------------------
SOLECTRON CMS ADJUSTMENTS COMBINED
---------- -------- ----------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales $2,065,559 $429,771 $(2,800)(c) $2,492,530
Cost of sales 1,863,729 395,046 (2,660)(c) 2,257,615
1,500 (b)
---------- -------- -------- ----------
Gross profit 201,830 34,725 (1,640) 234,915
---------- -------- -------- ----------
Operating expenses:
Selling, general and administrative 73,554 23,571 3,615 (d) 100,740
Research and development 4,842 - - 4,842
---------- -------- -------- ----------
Operating income 123,434 11,154 (5,255) 129,333
Interest income 6,611 - (5,700)(e) 911
Interest expense (9,551) - - (9,551)
---------- -------- -------- ----------
Income before income taxes 120,494 11,154 (10,955) 120,693
Provision for income taxes 40,968 - 74 (f) 41,042
---------- -------- -------- ----------
Net income $79,526 $11,154 $(11,029) $79,651
---------- -------- -------- ----------
---------- -------- -------- ----------
Net income per share:
Primary $ 1.82 $ 1.82
---------- ----------
---------- ----------
Fully diluted $ 1.62 $ 1.62
---------- ----------
---------- ----------
Shares used in computation:
Primary 43,773 43,773
---------- ----------
---------- ----------
Fully diluted 52,582 52,582
---------- ----------
---------- ----------
</TABLE>
See notes to unaudited pro forma combined financial information.
-14-
<PAGE>
SOLECTRON CORPORATION AND CUSTOM MANUFACTURING SERVICES BUSINESS
OF TEXAS INSTRUMENTS INCORPORATED
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
For the Six-Month Period Ended February 29, 1996
<TABLE>
<CAPTION>
PRO FORMA
---------------------------
SOLECTRON CMS ADJUSTMENTS COMBINED
---------- -------- --------------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales $1,347,800 $248,770 $ (1,400)(c) $1,595,170
Cost of sales 1,216,093 228,669 (1,330)(c) 1,444,432
1,000 (b)
---------- -------- ----------- ----------
Gross profit 131,707 20,101 (1,070) 150,738
---------- -------- ----------- ----------
Operating expenses:
Selling, general and
administrative 45,421 12,762 1,808 (d) 59,991
Research and development 3,539 - - 3,539
---------- -------- ----------- ----------
Operating income 82,747 7,339 (2,878) 87,208
Interest income 2,571 - (2,571)(e) -
Interest expense (1,990) - (635)(e) (2,625)
---------- -------- ----------- ----------
Income before income taxes 83,328 7,339 (6,084) 84,583
Provision for income taxes 28,331 - 467 (f) 28,798
---------- -------- ----------- ----------
Net income $ 54,997 $ 7,339 $ (6,551) $ 55,785
---------- -------- ----------- ----------
---------- -------- ----------- ----------
Net income per share:
Primary $ 1.07 $ 1.09
---------- ----------
---------- ----------
Fully diluted $ 1.03 $ 1.05
---------- ----------
---------- ----------
Shares used in computation
Primary 51,280 51,280
---------- ----------
---------- ----------
Fully diluted 53,730 53,730
---------- ----------
---------- ----------
</TABLE>
See notes to unaudited pro forma combined financial information.
-15-
<PAGE>
SOLECTRON CORPORATION AND CUSTOM MANUFACTURING SERVICES BUSINESS
OF TEXAS INSTRUMENTS INCORPORATED
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)
(In thousands)
On March 31, 1996, Solectron Corporation, effected the purchase of the
operations of Texas Instruments Incorporated's (TI) custom manufacturing
services ("CMS") business in Austin, Texas and certain assets of TI's CMS site
in Kuala Lumpur, Malaysia (the CMS operations). The pro forma financial
information reflects an assumed purchase price of approximately $134 million.
(1) The acquisition of CMS will be accounted for using the purchase method of
accounting.
(2) The following adjustments were applied to the historical consolidated
financial statements of Solectron Corporation and the historical
statement of assets to be acquired and liabilities to be assumed or
historical statements of revenues and direct operating expenses of the
CMS operations to arrive at the pro forma combined balance sheet and pro
forma combined statements of income.
(a) Reflects cash disbursed for the total purchase price, elimination of
certain assets not acquired and liabilities not assumed, adjustment of
assets acquired to their assumed purchase price allocation and
elimination of Texas Instruments equity.
(b) Reflects an increase in depreciation expense assuming an increase in
property and equipment to reflect the fair value.
(c) Reflects the elimination of transactions with affiliates.
(d) Reflects the amortization of goodwill over a ten-year period.
(e) Interest income is assumed to decrease by $5,700 and $2,571 for the
year ended August 31, 1995 and the six-month period ended February 29,
1996, respectively, and interest expense is assumed to increase by $635
for the six-month period ended February 29, 1996, representing the
issuance of debt and use of cash noted in item (a).
(f) Reflects pro forma effects on income taxes on a combined basis
assuming a 37.4% and 37.2% effective tax rate for the year ended
August 31, 1995 and the six-month period ended February 29, 1996,
respectively.
-16-
<PAGE>
INDEX TO EXHIBITS
SEQUENTIALLY
NUMBERED
EXHIBIT DESCRIPTION PAGE
- ----------- -------------------------------------------------- ------------
4.1 Indenture dated as of February 15,
1996 between Registrant and State
Street Bank & Trust Company 18
4.2 Registration Rights Agreement dated
as of February 15, 1996 by and
among the Registrant and Merrill
Lynch, Pierce, Fenner & Smith,
Incorporated, Morgan Stanley & Co.
Incorporated and Hambrecht & Quist
LLC 99
10.1 Purchase Agreement dated as of
February 15, 1996 by and between
the Registrant and Merrill Lynch,
Pierce, Fenner & Smith,
Incorporated, Morgan Stanley & Co.
Incorporated and Hambrecht & Quist
LLC 122
24.1 Consent of Ernst & Young LLP 149
-17-
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SOLECTRON CORPORATION
TO
STATE STREET BANK AND TRUST COMPANY
Trustee
INDENTURE
Dated as of February 15, 1996
6% Convertible Subordinated Notes due 2006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
-18-
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . 2
Cedel. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Change in Control. . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . 2
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 2
Company. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Conversion Price . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . 3
Credit Agreement . . . . . . . . . . . . . . . . . . . . . 3
Custodian. . . . . . . . . . . . . . . . . . . . . . . . . 3
default. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . 3
Designated Senior Indebtedness . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . 4
Euroclear. . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . 4
Foreign Person . . . . . . . . . . . . . . . . . . . . . . 4
Global Note. . . . . . . . . . . . . . . . . . . . . . . . 4
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . 5
Initial Purchasers . . . . . . . . . . . . . . . . . . . . 5
Lease Agreement. . . . . . . . . . . . . . . . . . . . . . 5
Note or Notes. . . . . . . . . . . . . . . . . . . . . . . 5
Noteholder or holder . . . . . . . . . . . . . . . . . . . 5
Note register. . . . . . . . . . . . . . . . . . . . . . . 5
Offering Memorandum. . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate. . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 6
outstanding. . . . . . . . . . . . . . . . . . . . . . . . 6
Payment Blockage Notice. . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . 6
PORTAL Market. . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Note . . . . . . . . . . . . . . . . . . . . . 7
QIB. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Registration Rights Agreement. . . . . . . . . . . . . . . 7
Regulation S . . . . . . . . . . . . . . . . . . . . . . . 7
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(CONTINUED) PAGE
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Regulation S Global Note . . . . . . . . . . . . . . . . . 7
Representative . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer. . . . . . . . . . . . . . . . . . . . 7
Repurchase Date. . . . . . . . . . . . . . . . . . . . . . 7
Repurchase Price . . . . . . . . . . . . . . . . . . . . . 7
Restricted Securities. . . . . . . . . . . . . . . . . . . 8
Rule 144A. . . . . . . . . . . . . . . . . . . . . . . . . 8
Rule 144A Global Note. . . . . . . . . . . . . . . . . . . 8
Rule 144(k). . . . . . . . . . . . . . . . . . . . . . . . 8
Securities Act . . . . . . . . . . . . . . . . . . . . . . 8
Senior Indebtedness. . . . . . . . . . . . . . . . . . . . 8
Subsidiary:. . . . . . . . . . . . . . . . . . . . . . . . 8
Trading Day. . . . . . . . . . . . . . . . . . . . . . . . 9
Trigger Event. . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act. . . . . . . . . . . . . . . . . . . . 9
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.1 Designation, Amount and Issue of Notes . . . . . . . . . . 9
Section 2.2 Form of Notes. . . . . . . . . . . . . . . . . . . . . . .10
Section 2.3 Date and Denomination of Notes;
Payments of Interest . . . . . . . . . . . . . . . . . . .10
Section 2.4 Execution of Notes . . . . . . . . . . . . . . . . . . . .12
Section 2.5 Exchange and Registration of Transfer of Notes:
Restrictions on Transfer: Depositary . . . . . . . . . . .12
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . .23
Section 2.7 Temporary Notes. . . . . . . . . . . . . . . . . . . . . .24
Section 2.8 Cancellation of Notes Paid, Etc. . . . . . . . . . . . . .24
ARTICLE III REDEMPTION OF NOTES . . . . . . . . . . . . . . . . . . . . . . .25
Section 3.1 Redemption Prices. . . . . . . . . . . . . . . . . . . . .25
Section 3.2 Notice of Redemption: Selection of Notes . . . . . . . . .25
Section 3.3 Payment of Notes Called for Redemption . . . . . . . . . .26
Section 3.4 Conversion Arrangement on Call for Redemption. . . . . . .27
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ARTICLE IV SUBORDINATION OF NOTES . . . . . . . . . . . . . . . . . . . . . .28
Section 4.1 Agreement of Subordination . . . . . . . . . . . . . . . .28
Section 4.2 Payments to Noteholders. . . . . . . . . . . . . . . . . .28
Section 4.3 Subrogation of Notes . . . . . . . . . . . . . . . . . . .31
Section 4.4 Authorization to Effect Subordination. . . . . . . . . . .33
Section 4.5 Notice to Trustee. . . . . . . . . . . . . . . . . . . . .33
Section 4.6 Trustee's Relation to Senior Indebtedness. . . . . . . . .34
Section 4.7 No Impairment of Subordination . . . . . . . . . . . . . .34
Section 4.8 Certain Conversions Deemed Payment . . . . . . . . . . . .34
Section 4.9 Article Applicable to Paying Agents. . . . . . . . . . . .35
Section 4.10 Senior Indebtedness Entitled to Rely. . . . . . . . . . .35
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . .35
Section 5.1 Payment of Principal, Premium and Interest . . . . . . . .35
Section 5.2 Maintenance of Office or Agency. . . . . . . . . . . . . .35
Section 5.3 Appointments to Fill Vacancies in Trustee's Office . . . .36
Section 5.4 Provisions as to Paying Agent. . . . . . . . . . . . . . .36
Section 5.5 Corporate Existence. . . . . . . . . . . . . . . . . . . .38
Section 5.6 Rule 144A Information Requirement. . . . . . . . . . . . .38
Section 5.7 Stay, Extension and Usury Laws . . . . . . . . . . . . . .38
Section 5.8 Compliance Certificate . . . . . . . . . . . . . . . . . .38
ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE . .39
Section 6.1 Noteholders' Lists . . . . . . . . . . . . . . . . . . . .39
Section 6.2 Preservation and Disclosure of Lists . . . . . . . . . . .39
Section 6.3 Reports by Trustee . . . . . . . . . . . . . . . . . . . .39
Section 6.4 Reports by Company . . . . . . . . . . . . . . . . . . . .40
ARTICLE VII REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF
DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Section 7.1 Events of Default. . . . . . . . . . . . . . . . . . . . .40
Section 7.2 Payments of Notes on Default: Suit Therefor. . . . . . . .43
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Section 7.3 Application of Monies Collected by Trustee . . . . . . . .44
Section 7.4 Proceedings by Noteholder. . . . . . . . . . . . . . . . .45
Section 7.5 Proceedings by Trustee . . . . . . . . . . . . . . . . . .46
Section 7.6 Remedies Cumulative and Continuing . . . . . . . . . . . .46
Section 7.7 Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders. . . . . . . . . . . . . . . . . .46
Section 7.8 Notice of Defaults . . . . . . . . . . . . . . . . . . . .47
Section 7.9 Undertaking to Pay Costs . . . . . . . . . . . . . . . . .47
ARTICLE VIII CONCERNING THE TRUSTEE . . . . . . . . . . . . . . . . . . . . .48
Section 8.1 Duties and Responsibilities of Trustee . . . . . . . . . .48
Section 8.2 Reliance on Documents, Opinions. Etc.. . . . . . . . . . .49
Section 8.3 No Responsibility for Recitals, Etc. . . . . . . . . . . .50
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar
May Own Notes . . . . . . . . . . . . . . . . . . . . . .50
Section 8.5 Monies to Be Held in Trust . . . . . . . . . . . . . . . .50
Section 8.6 Compensation and Expenses of Trustee . . . . . . . . . . .51
Section 8.7 Officers' Certificate as Evidence. . . . . . . . . . . . .51
Section 8.8 Conflicting Interests of Trustee . . . . . . . . . . . . .51
Section 8.9 Eligibility of Trustee . . . . . . . . . . . . . . . . . .52
Section 8.10 Resignation or Removal of Trustee. . . . . . . . . . . . .52
Section 8.11 Acceptance by Successor Trustee. . . . . . . . . . . . . .53
Section 8.12 Succession by Merger, Etc. . . . . . . . . . . . . . . . .54
Section 8.13 Limitation on Rights of Trustee as Creditor. . . . . . . .54
ARTICLE IX CONCERNING THE NOTEHOLDERS . . . . . . . . . . . . . . . . . . . .55
Section 9.1 Action by Noteholders. . . . . . . . . . . . . . . . . . .55
Section 9.2 Proof of Execution by Noteholders. . . . . . . . . . . . .55
Section 9.3 Who Are Deemed Absolute Owners . . . . . . . . . . . . . .55
Section 9.4 Company-Owned Notes Disregarded. . . . . . . . . . . . . .56
Section 9.5 Revocation of Consents: Future Holders Bound . . . . . . .56
ARTICLE X NOTEHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . . .57
Section 10.1 Purpose of Meetings. . . . . . . . . . . . . . . . . . . .57
Section 10.2 Call of Meetings by Trustee. . . . . . . . . . . . . . . .57
Section 10.3 Call of Meetings by Company or Noteholders . . . . . . . .57
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Section 10.4 Qualifications for Voting. . . . . . . . . . . . . . . . .58
Section 10.5 Regulations. . . . . . . . . . . . . . . . . . . . . . . .58
Section 10.6 Voting.. . . . . . . . . . . . . . . . . . . . . . . . . .59
Section 10.7 No Delay of Rights by Meeting. . . . . . . . . . . . . . .59
ARTICLE XI SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . .59
Section 11.1 Supplemental Indentures Without Consent of Noteholders.. .59
Section 11.2 Supplemental Indentures with Consent of Noteholders. . . .61
Section 11.3 Effect of Supplemental Indenture . . . . . . . . . . . . .62
Section 11.4 Notation on Notes. . . . . . . . . . . . . . . . . . . . .62
Section 11.5 Evidence of Compliance of Supplemental Indenture to
Be Furnished Trustee . . . . . . . . . . . . . . . . . . .62
ARTICLE XII CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE . . . . . . . .62
Section 12.1 Company May Consolidate Etc. on Certain Terms. . . . . . .62
Section 12.2 Successor Corporation to Be Substituted. . . . . . . . . .63
Section 12.3 Opinion of Counsel to Be Given Trustee . . . . . . . . . .64
ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE. . . . . . . . . . . . .64
Section 13.1 Discharge of Indenture . . . . . . . . . . . . . . . . . .64
Section 13.2 Deposited Monies to Be Held in Trust by Trustee. . . . . .65
Section 13.3 Paying Agent to Repay Monies Held. . . . . . . . . . . . .65
Section 13.4 Return of Unclaimed Monies . . . . . . . . . . . . . . . .65
Section 13.5 Reinstatement. . . . . . . . . . . . . . . . . . . . . . .65
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
Section 14.1 Indenture and Notes Solely Corporate Obligations . . . . .66
ARTICLE XV CONVERSION OF NOTES. . . . . . . . . . . . . . . . . . . . . . . .66
Section 15.1 Right to Convert . . . . . . . . . . . . . . . . . . . . .66
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Section 15.2 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for
Interest or Dividends. . . . . . . . . . . . . . . . . . .66
Section 15.3 Cash Payments in Lieu of Fractional Shares . . . . . . . .68
Section 15.4 Conversion Price . . . . . . . . . . . . . . . . . . . . .68
Section 15.5 Adjustment of Conversion Price . . . . . . . . . . . . . .68
Section 15.6 Effect of Reclassification, Consolidation,
Merger or Sale . . . . . . . . . . . . . . . . . . . . . .78
Section 15.7 Taxes on Shares Issued . . . . . . . . . . . . . . . . . .79
Section 15.8 Reservation of Shares; Shares to Be Fully Paid;
Compliance with Governmental Requirements;
Listing of Common Stock. . . . . . . . . . . . . . . . . .80
Section 15.9 Responsibility of Trustee. . . . . . . . . . . . . . . . .80
Section 15.10 Notice to Holders Prior to Certain Actions . . . . . . . .81
ARTICLE XVI REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON CHANGE IN
CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 16.1 Right to Require Repurchase. . . . . . . . . . . . . . . .82
Section 16.2 Notices; Method of Exercising Repurchase Right, Etc . . .82
Section 16.3 Certain Definitions. . . . . . . . . . . . . . . . . . . .84
Section 16.4 Change in Control. . . . . . . . . . . . . . . . . . . . .84
Section 16.5 Consolidation, Merger, etc . . . . . . . . . . . . . . . .85
ARTICLE XVII MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . .86
Section 17.1 Provisions Binding on Company's Successors . . . . . . . .86
Section 17.2 Official Acts by Successor Corporation . . . . . . . . . .86
Section 17.3 Addresses for Notices, Etc. . . . . . . . . . . . . . . .86
Section 17.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . .87
Section 17.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee . . . . . . . . . . . . . . . . .87
Section 17.6 Legal Holidays . . . . . . . . . . . . . . . . . . . . . .87
Section 17.7 Trust Indenture Act. . . . . . . . . . . . . . . . . . . .87
Section 17.8 No Security Interest Created . . . . . . . . . . . . . . .88
Section 17.9 Benefits of Indenture. . . . . . . . . . . . . . . . . . .88
Section 17.10 Table of Contents, Headings, Etc. . . . . . . . . . . . .88
Section 17.11 Authenticating Agent . . . . . . . . . . . . . . . . . . .88
Section 17.12 Execution in Counterparts. . . . . . . . . . . . . . . . .89
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<PAGE>
INDENTURE dated as of February 15, 1996, between Solectron Corporation, a
California corporation (hereinafter sometimes called the "Company", as more
fully set forth in Section 1.1), and State Street Bank and Trust Company, a
Massachusetts trust company duly organized and existing under the laws of the
State of Massachusetts, as trustee hereunder (hereinafter sometimes called the
"Trustee", as more fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 6% Convertible Subordinated Notes due 2006 (hereinafter
sometimes called the "Notes"), in an aggregate principal amount not to exceed
$230,000,000 and, to provide the terms and conditions upon which the Notes are
to be authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect repurchase upon a Change
in Control and a form of conversion notice to be borne by the Notes are to be
substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders thereof,
the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. The terms defined in this Section 1.1 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder," and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as
the singular.
AFFILIATE: The term "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified
<PAGE>
Person. For the purposes of this definition, "control," when used with respect
to any specified Person means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board of
Directors of the Company or a committee of such Board duly authorized to act for
it hereunder.
BUSINESS DAY: The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York, San Jose, California or the city in which
the Corporate Trust Office is located are authorized or obligated by law or
executive order to close or be closed.
CEDEL: The term "Cedel" shall mean Cedel, S.A.
CHANGE IN CONTROL: The term "Change in Control" shall have the meaning
specified in Section 16.4.
CLOSING PRICE: The term "Closing Price" shall have the meaning specified
in Section 15.5(h)(1).
COMMISSION: The term "Commission" shall mean the Securities and Exchange
Commission.
COMMON STOCK: The term "Common Stock" shall mean any stock of any class of
the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the Company.
Subject to the provisions of Section 15.6, however, shares issuable on
conversion of Notes shall include only shares of the class designated as common
stock of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company; PROVIDED
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
COMPANY: The term "Company" shall mean Solectron Corporation, a California
corporation, and subject to the provisions of Article XII, shall include its
successors and assigns.
CONVERSION PRICE: The term "Conversion Price" shall have the meaning
specified in Section 15.4.
CORPORATE TRUST OFFICE: The term "Corporate Trust Office" or other similar
term, shall mean the principal office of the Trustee at which at any particular
time its corporate trust business shall be principally administered, which
office is, at the date as of which this Indenture is dated, located at 2
International Place, 4th Floor, Boston, Massachusetts 02110, Attention:
Corporate Trust Division (Solectron Corporation, 6% Convertible Subordinated
Notes due 2006).
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<PAGE>
CREDIT AGREEMENT: The term "Credit Agreement" means that certain
Multicurrency Credit Agreement, dated as of June 30, 1993, by and among the
Company, Solectron California, Inc., a California corporation, Solectron
Technology, Inc., a California corporation and Solectron Washington, a
California corporation (collectively, the "Borrowers"), the several financial
institutions listed on the signature pages thereto (collectively, the "Banks"),
and Bank of America National Trust and Savings Association, as agent for itself
and the Banks (the "Agent"), as amended through the date hereof, as further
amended, amended and restated, supplemented or otherwise modified from time to
time.
CUSTODIAN: The term "Custodian" shall mean State Street Bank and Trust
Company, as custodian with respect to the Notes in global form, or any successor
entity thereto.
DEFAULT: The term "default" shall mean any event that is, or after notice
or passage of time, or both, would be, an Event of Default.
DEPOSITARY: The term "Depositary" means, with respect to the Notes
issuable or issued in whole or in part in global form, the person specified in
Section 2.5(d) as the Depositary with respect to such Notes, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
DESIGNATED SENIOR INDEBTEDNESS: The term "Designated Senior Indebtedness"
means the Credit Agreement, the Lease Agreement and any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Senior Indebtedness shall be
"Designated Senior Indebtedness" for purposes of the Indenture (provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness).
EXCHANGE ACT: The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
as in effect from time to time.
EUROCLEAR: The term "Euroclear" shall mean the Euroclear System.
EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 7.1(a), (b), (c), (d), (e), (f) or (g).
FOREIGN PERSON: The term "Foreign Person" shall have the meaning specified
in Section 2.5(b).
GLOBAL NOTE: The term "Global Note" shall have the meaning specified in
Section 2.5(d).
INDEBTEDNESS: The term "Indebtedness" means, with respect to any Person,
and without duplication, (a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money (including
obligations of the Company in respect of overdrafts, foreign exchange contracts,
currency exchange agreements, interest rate protection agreements, and any loans
or advances from banks, whether or not evidenced by notes or similar
instruments) or evidenced by bonds, debentures, notes or similar instruments
(whether or not the recourse of the lender is to the whole of the assets of such
Person or to only a portion thereof) (other than any account payable or other
accrued current liability or obligation incurred in the ordinary course of
business in connection with the
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<PAGE>
obtaining of materials or services), (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances, (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person and all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in connection
with the lease of real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased property to the lessor
and the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property, (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement, (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d), (f) any indebtedness or
other obligations described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
INDENTURE: The term "Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
INITIAL PURCHASERS: The term "Initial Purchasers" means Merrill Lynch,
Pierce Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and
Hambrecht & Quist LLC.
LEASE AGREEMENT: The term "Lease Agreement" means that certain Lease
Agreement, dated as of September 6, 1994 between BNP Leasing Corporation, a
Delaware corporation, as Landlord, and the Company, as Tenant, including all
security agreements and other documents executed by (or on behalf of) the
Company in connection therewith, as amended through the date hereof, as further
amended, amended and restated, supplemented or otherwise modified from time to
time.
NOTE or NOTES: The terms "Note" or "Notes" shall mean any Note or Notes,
as the case may be, authenticated and delivered under this Indenture.
NOTEHOLDER or HOLDER: The terms "Noteholder" or "holder" as applied to any
Note, or other similar terms (but excluding the term "beneficial holder"), shall
mean any person in whose name at the time a particular Note is registered on the
Note registrar's books.
NOTE REGISTER: The term "Note register" shall have the meaning specified
in Section 2.5.
OFFERING MEMORANDUM: The term "Offering Memorandum" means that certain
Offering Memorandum, dated February 15, 1996, used in connection with the
offering of the Notes by the Company.
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<PAGE>
OFFICERS' CERTIFICATE: The term "Officers' Certificate," when used with
respect to the Company, shall mean a certificate signed by both (a) the
President, the Chief Executive Officer, Executive or Senior Vice President or
any Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and (b) by the Treasurer
or any Assistant Treasurer or Secretary or any Assistant Secretary of the
Company.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an opinion in
writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee.
OUTSTANDING: The term "outstanding," when used with reference to Notes,
shall, subject to the provisions of Section 9.4, mean, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for the redemption of which monies in
the necessary amount shall have been deposited in trust with the Trustee or
with any paying agent (other than the Company) or shall have been set aside
and segregated in trust by the Company (if the Company shall act as its own
paying agent); PROVIDED that if such Notes are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as in
Article III provided, or provision satisfactory to the Trustee shall have
been made for giving such notice;
(c) Notes in lieu of which, or in substitution for which, other Notes
shall have been authenticated and delivered pursuant to the terms of Sec-
tion 2.6 unless proof satisfactory to the Trustee is presented that any
such Notes are held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article XV and
Notes deemed not outstanding pursuant to Article III.
PAYMENT BLOCKAGE NOTICE: The term "Payment Blockage Notice" has the
meaning specified in Section 4.2.
PERSON: The term "Person" shall mean a corporation, an association, a
partnership, an individual, a joint venture, a joint stock company, a trust, an
unincorporated organization or a government or an agency or a political
subdivision thereof.
PORTAL MARKET: The term "PORTAL Market" shall mean the Private Offerings,
Resales and Trading through Automated Linkages Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
PREDECESSOR NOTE: The term "Predecessor Note" of any particular Note shall
mean every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this definition, any
Note authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
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QIB: The term "QIB" shall mean a "qualified institutional buyer" as defined
in Rule 144A.
REGISTRATION RIGHTS AGREEMENT: The term "Registration Rights Agreement"
means that certain Registration Rights Agreement, dated as of February 15, 1996,
between the Company and the Initial Purchasers.
REGULATION S: The term "Regulation S" shall mean Regulation S as
promulgated under the Securities Act.
REGULATION S GLOBAL NOTE: The term "Regulation S Global Note" shall have
the meaning specified in Section 2.5(d).
REPRESENTATIVE: The term "Representative" means the (a) indenture trustee
or other trustee, agent or representative for any Senior Indebtedness or (b)
with respect to any Senior Indebtedness that does not have any such trustee,
agent or other representative, (i) in the case of such Senior Indebtedness
issued pursuant to an agreement providing for voting arrangements as among the
holders or owners of such Senior Indebtedness, any holder or owner of such
Senior Indebtedness acting with the consent of the required persons necessary to
bind such holders or owners of such Senior Indebtedness and (ii) in the case of
all other such Senior Indebtedness, the holder or owner of such Senior
Indebtedness.
RESPONSIBLE OFFICER: The term "Responsible Officer," when used with
respect to the Trustee, shall mean an officer of the Trustee in the Corporate
Trust Office assigned and duly authorized by the Trustee to administer its
corporate trust matters.
REPURCHASE DATE: The term "Repurchase Date" shall have the meaning
specified in Section 16.1.
REPURCHASE PRICE: The term "Repurchase Price" shall have the meaning
specified in Section 16.1.
RESTRICTED SECURITIES: The term "Restricted Securities" has the meaning
specified in Section 2.5.
RULE 144A: The term "Rule 144A" shall mean Rule 144A as promulgated under
the Securities Act.
RULE 144A GLOBAL NOTE: The term "Rule 144A Global Note" shall have the
meaning specified in Section 2.5(d).
RULE 144(K): The term "Rule 144(k)" shall mean Rule 144(k) as promulgated
under the Securities Act.
SECURITIES ACT: The term "Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
SENIOR INDEBTEDNESS: The term "Senior Indebtedness" means the principal of,
premium, if any, interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar
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proceeding, whether or not a claim for post-petition interest is allowable as a
claim in any such proceeding) and rent payable on or in connection with, and all
fees, costs, expenses and other amounts accrued or due on or in connection with,
Indebtedness of the Company, whether outstanding on the date of this Indenture
or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing), unless in the case
of any particular Indebtedness the instrument creating or evidencing the same or
the assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to the Notes or expressly provides that
such Indebtedness is "pari passu" or "junior" to the Notes. Notwithstanding the
foregoing, the term Senior Indebtedness shall not include any Indebtedness of
the Company to any subsidiary of the Company, a majority of the voting stock of
which is owned, directly or indirectly, by the Company or the Company's Liquid
Yield Option Notes due 2012 (Zero Coupon-Subordinated).
SUBSIDIARY: The term "Subsidiary" means, with respect to any person, (i)
any corporation, association or other business entity of which more than 50% of
the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such person or one or more of the other subsidiaries of that
person (or a combination thereof) and (ii) any partnership (a) the sole general
partner or managing general partner of which is such person or a subsidiary of
such person or (b) the only general partners of which are such person or one or
more subsidiaries of such person (or any combination thereof).
TRADING DAY: The term "Trading Day" shall have the meaning specified in
Section 15.5(h)(5).
TRIGGER EVENT: The term "Trigger Event" shall have the meaning specified
in Section 15.5(d).
TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture, except as provided in Sections 11.3, 15.6 and 16.5; PROVIDED,
HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the extent required
by such amendment, the Trust Indenture Act of 1939 as so amended.
TRUSTEE: The term "Trustee" shall mean State Street Bank and Trust Company
and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee hereunder.
The definitions of certain other terms are as specified in Section 2.5,
Article XV and Article XVI.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 DESIGNATION, AMOUNT AND ISSUE OF NOTES. The Notes shall be
designated as "6% Convertible Subordinated Notes due 2006." Notes not to exceed
the aggregate principal amount
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of $200,000,000 (or $230,000,000 if the over-allotment option set forth in
Section 2 of the Purchase Agreement dated February 15, 1996 (as amended from
time to time by the parties thereto) by and between the Company and the Initial
Purchasers is exercised in full) (except pursuant to Sections 2.5, 2.6, 3.3,
15.2 and 16.2 hereof) upon the execution of this Indenture, or from time to time
thereafter, may be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes to or upon the written order of the Company, signed by its (a) President,
Executive or Senior Vice President or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President") and (b) Treasurer or Assistant Treasurer or its
Secretary or any Assistant Secretary, without any further action by the Company
hereunder.
Section 2.2 FORM OF NOTES. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Notes in
accordance with this Indenture. Payment of principal of and interest and
premium, if any, on any Note in global form shall be made to the holder of such
Note.
The terms and provisions contained in the form of Note attached as Exhibit
A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.3 DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the applicable
date in each case as specified on the face of the form of Note attached as
Exhibit A hereto. Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
The person in whose name any Note (or its Predecessor Note) is registered
at the close of business on any record date with respect to any interest payment
date (including any Note that is converted after the record date and on or
before the interest payment date) shall be entitled to receive
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the interest payable on such interest payment date notwithstanding the
cancellation of such Note upon any transfer, exchange or conversion subsequent
to the record date and on or prior to such interest payment date; PROVIDED, that
in the case of any Note, or portion thereof, called for redemption on a
redemption date or repurchased in connection with a Change in Control on a
Repurchase Date that is after a record date and prior to (but excluding) the
next succeeding interest payment date, interest shall not be paid to the person
in whose name the Note, or portion thereof, is registered on the close of
business on such record date and the Company shall have no obligation to pay
interest on such Note or such portion except to the extent required to be paid
upon redemption or repurchase of such Note or portion thereof pursuant to
Section 3.3 or 16.1 hereof. Interest may, at the option of the Company, be paid
by check mailed to the address of such person on the Note register; PROVIDED
that, with respect to any holder of Notes with an aggregate principal amount
equal to or in excess of $5,000,000, at the request of such holder in writing to
the Company (who shall then furnish written notice to such effect to the
Trustee), interest on such holder's Notes shall be paid by wire transfer in
immediately available funds in accordance with the wire transfer instructions
supplied by such holder to the Trustee and paying agent (if different from the
Trustee). The term "record date" with respect to any interest payment date
shall mean the February 15 or August 15 preceding said March 1 or September 1,
respectively.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any said March 1 or September 1 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder; and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest to be paid on each Note and the date of the
payment (which shall be not less than twenty-five (25) days after the
receipt by the Trustee of such notice, unless the Trustee shall consent to
an earlier date), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall be not more than fifteen (15) days and
not less than ten (10) days prior to the date of the proposed payment and
not less than ten (10) days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company of
such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first-class
postage prepaid, to each Noteholder at his address as it appears in the
Note register, not less than ten (10) days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Notes (or their respective
Predecessor Notes) were registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause
(2).
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(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange and automated quotation system on which the Notes may
be listed or designated for issuance, and upon such notice as may be
required by such exchange and automated quotation system, if, after notice
given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the
Trustee.
Section 2.4 EXECUTION OF NOTES. The Notes shall be signed in the name
and on behalf of the Company by the facsimile signature of its President, any
Executive or Senior Vice President or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President") and attested by the facsimile signature of its Secretary
or any of its Assistant Secretaries (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Notes as shall bear
thereon a certificate of authentication substantially in the form set forth on
the form of Note attached as Exhibit A hereto, manually executed by the Trustee
(or an authenticating agent appointed by the Trustee as provided by
Section 17.11), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.5 EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES: RESTRICTIONS
ON TRANSFER: DEPOSITARY.
(a) The Company shall cause to be kept at the Corporate Trust Office
a register (the register maintained in such office and in any other office
or agency of the Company designated pursuant to Section 5.2 being herein
sometimes collectively referred to as the "Note register") in which,
subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. The
Note register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "Note registrar" for the purpose of registering
Notes and transfers of Notes as herein provided. The Company may appoint
one or more co-registrars in accordance with Section 5.2.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for
such transfer set forth in this Section 2.5, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
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Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant
to Section 5.2. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Notes which the Noteholder making the exchange is entitled to receive
bearing registration numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Note registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, and the Notes shall be duly executed by the Noteholder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient
to cover any tax, assessment or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Notes.
Neither the Company nor the Trustee nor any Note registrar nor any co-
registrar shall be required to exchange or register a transfer of (a) any
Notes for a period of fifteen (15) days next preceding any selection of
Notes to be redeemed or (b) any Notes or portions thereof called for
redemption pursuant to Article III or (c) any Notes or portion thereof
surrendered for conversion pursuant to Article XV.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary, unless otherwise required by law, all Notes to be traded
(i) on the PORTAL Market shall be represented by a Note in global form (the
"144A Global Note") or (ii) to a Person who is not a U.S. Person (as
defined in Regulation S) who is acquiring the Note in an offshore
transaction (a "Foreign Person") in accordance with Regulation S shall be
represented by a Note in global form (the "Regulation S Global Note") (the
Rule 144A Global Note and the Regulation S Global Note collectively
referred to in this Indenture as the "Global Note"), the Rule 144A Global
Note and the Regulation S Global Note being registered in the name of the
Depositary or the nominee of the Depositary. The transfer and exchange of
beneficial interests in the Global Note, which does not involve the
issuance of a Note in certificated form, 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.
At any time at the request of the beneficial holder of an interest in
the Global Note to obtain a Note in certificated form, such beneficial
holder shall be entitled to obtain a Note in certificated form upon written
request to the Trustee and the Custodian in accordance with the standing
instructions and procedures existing between the Custodian and Depositary
for the issuance thereof. Upon receipt of any such request, the Trustee,
or the Custodian at the direction of the Trustee, will cause, in accordance
with the standing instructions and procedures
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existing between the Depositary and the Custodian, the aggregate principal
amount of the Rule 144A Global Note or Regulation S Global Note, as
appropriate, to be reduced by the principal amount of the Note in
certificated form issued upon such request to such beneficial holder and,
following such reduction, the Company will execute and the Trustee will
authenticate and deliver to such beneficial holder (or its nominee) a Note
or Notes in certificated form in the appropriate aggregate principal amount
in the name of such beneficial holder (or its nominee) and bearing such
restrictive legends as may be required by this Indenture.
Any transfer of a beneficial interest in the Global Note which cannot
be effected through book-entry settlement must be effected by the delivery
to the transferee (or its nominee) of a Note or Notes in certificated form
registered in the name of the transferee (or its nominee) on the books
maintained by the Note registrar in accordance with the transfer
restrictions set forth herein. With respect to any such transfer, the
Trustee, or the Custodian at the direction of the Trustee, will cause, in
accordance with the standing instructions and procedures existing between
the Depositary and the Custodian, the aggregate principal amount of the
Rule 144A Global Note or Regulation S Global Note to be reduced by the
principal amount of the respective beneficial interest in the Rule 144A
Global Note or Regulation S Global Note being transferred and, following
such reduction, the Company will execute and the Trustee will authenticate
and deliver to the transferee (or such transferee's nominee, as the case
may be), a Note or Notes in certificated form in the appropriate aggregate
principal amount in the name of such transferee (or its nominee) and
bearing such restrictive legends as may be required by this Indenture.
(c) So long as the Notes are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer of a Note in
certificated form to a QIB in accordance with Rule 144A or a Foreign Person
in accordance with Regulation S, and upon receipt of the Note or Notes in
certificated form being so transferred, together with a certification from
the transferor that the transferee is a QIB or a Foreign Person (or other
evidence satisfactory to the Trustee), the Trustee shall make, or direct
the Custodian to make, an endorsement on the Rule 144A Global Note or
Regulation S Global Note to reflect an increase in the aggregate principal
amount of the Notes represented by the Rule 144A Global Note or
Regulation S Global Note, and the Trustee shall cancel such Note or Notes
in certificated form 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 Rule 144A Global Note or Regulation S Global Note to be
increased accordingly; PROVIDED that no Note in certificated form, or
portion thereof, in respect of which the Company or an Affiliate of the
Company held any beneficial interest shall be included in the Global Note
until such Note in certificated form is freely tradable in accordance with
Rule 144(k); PROVIDED FURTHER that the Trustee shall issue Notes in
certificated form upon any transfer of a beneficial interest in the Global
Note to the Company or an Affiliate of the Company.
Any Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the
Depositary or by the National Association of Securities Dealers, Inc. in
order for the Notes to be tradeable on the PORTAL Market or tradeable on
Euroclear
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or Cedel or as may be required for the Notes to be tradeable on any other
market developed for trading of securities pursuant to Rule 144A or
Regulation S under the Securities Act or required to comply with any
applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange or automated quotation system upon
which the Notes may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to
which any particular Notes are subject.
(d) Every Note that bears or is required under this Section 2.5(d) to
bear the legend set forth in this Section 2.5(d) (together with any Common
Stock issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.5(e), collectively, the "Restricted Securities")
shall be subject to the restrictions on transfer set forth in this
Section 2.5(d) (including those set forth in the legend set forth below)
unless such restrictions on transfer shall be waived by written consent of
the Company, and the holder of each such Restricted Security, by such
Noteholder's acceptance thereof, agrees to be bound by all such
restrictions on transfer. As used in Sections 2.5(d) and 2.5(e), the term
"transfer" encompasses any sale, pledge, transfer or other disposition
whatsoever of any Restricted Security.
Until three (3) years after the original issuance date of any Note,
any certificate evidencing such Note (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued
upon conversion thereof, which shall bear the legend set forth in
Section 2.5(e), if applicable) shall bear a legend in substantially the
following form, unless otherwise agreed by the Company in writing, with
written notice thereof to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)( 1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS
AFTER THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO SOLECTRON
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THE NOTE
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EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, OR (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE); AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF SUCH NOTE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS NOTE TO STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO
IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS
LEGEND WILL BE REMOVED UPON ANY TRANSFER OF THE NOTE EVIDENCED HEREBY
AFTER THE EXPIRATION OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE
NOTE EVIDENCED HEREBY. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance
with their terms or as to which the conditions for removal of the foregoing
legend set forth therein have been satisfied may, upon surrender of such
Note for exchange to the Note registrar in accordance with the provisions
of this Section 2.5, be exchanged for a new Note or Notes, of like tenor
and aggregate principal amount, which shall not bear the restrictive legend
required by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(b) and in this
Section 2.5(d)), a Global Note may not be transferred as a whole or in part
except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company
to act as Depositary with respect to the Global Note. Initially, the
Rule 144A Global Note and the Regulation S Global Note shall be issued to
the Depositary, registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Custodian for Cede & Co.
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If at any time the Depositary for the Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for the Note, the
Company may appoint a successor Depositary with respect to such Note. If a
successor Depositary is not appointed by the Company within ninety (90)
days after the Company receives such notice, the Company will execute, and
the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of Notes, will authenticate and deliver, Notes
in certificated form, in an aggregate principal amount equal to the
principal amount of the Global Note, in exchange for the Global Note.
If a Note in certificated form is issued in exchange for any portion
of a Global Note after the close of business at the office or agency where
such exchange occurs on any record date and before the opening of business
at such office or agency on the next succeeding interest payment date,
interest will not be payable on such interest payment date in respect of
such Note, but will be payable on such interest payment date only to the
person to whom interest in respect of such portion of such Global Note is
payable in accordance with the provisions of this Indenture.
Notes in certificated form issued in exchange for all or a part of a
Global Note pursuant to this Section 2.5 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such Notes in certificated form to the persons in whose names such
Notes in certificated form are so registered.
At such time as all interests in a Global Note have been redeemed,
repurchased, converted, canceled, exchanged for Notes in certificated form,
or transferred to a transferee who receives Notes in certificated form
thereof, such Global Note shall, upon receipt thereof, be canceled by the
Trustee in accordance with standing procedures and instructions existing
between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Global Note is exchanged for Notes in
certificated form, redeemed, converted, repurchased or canceled, or
transferred to a transferee who receives Notes in certificated form
therefor or any Note in certificated form is exchanged or transferred for
part of a Global Note, the principal amount of such Global Note shall, in
accordance with the standing procedures and instructions existing between
the Depositary and the Custodian, be appropriately reduced or increased, as
the case may be, and an endorsement shall be made on such Global Note, by
the Trustee or the Custodian, at the direction of the Trustee, to reflect
such reduction or increase. In the event of any transfer of any beneficial
interest between the Rule 144A Global Note and the Regulation S Global Note
in accordance with the standing procedures and instructions between the
Depository and the Custodian and the transfer restrictions set forth
herein, the aggregate principal amount of each Rule 144A Global Note and
Regulation S Global Note shall be appropriately increased or decreased, as
the case may be, and an endorsement shall be made on each Rule 144A Global
Note and Regulation S Global Note by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.
(e) Until three (3) years after the original issuance date of any
Note, any stock certificate representing Common Stock issued upon
conversion of such Note shall bear a legend in substantially the following
form, unless such Common Stock has been transferred
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pursuant to a registration statement that has been declared effective under
the Securities Act (and which continues to be effective at the time of such
transfer) or such Common Stock has been issued upon conversion of Notes
that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise
agreed by the Company in writing with written notice thereof to the
transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE
EXPIRATION OF THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE
UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY
WAS ISSUED: (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO SOLECTRON CORPORATION
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) OR A PURCHASER WHO IS NOT A U.S. PERSON THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO BOSTON EQUISERVE LIMITED PARTNERSHIP, AS
TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE COMMON STOCK
EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE)), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2)
PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
1(F) ABOVE), IT WILL FURNISH BOSTON EQUISERVE LIMITED
PARTNERSHIP, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE
COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A
TRANSFER
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PURSUANT TO CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
PURSUANT TO CLAUSE 1(F) ABOVE OR AFTER THE EXPIRATION OF THREE YEARS
FROM THE ORIGINAL ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH
THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED OR UPON THE EARLIER
SATISFACTION OF BOSTON EQUISERVE LIMITED PARTNERSHIP, AS TRANSFER
AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), THAT THE COMMON
STOCK HAS BEEN OR IS BEING OFFERED AND SOLD IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions
for removal of the foregoing legend set forth therein have been satisfied
may, upon surrender of the certificates representing such shares of Common
Stock for exchange in accordance with the procedures of the transfer agent
for the Common Stock, be exchanged for a new certificate or certificates
for a like number of shares of Common Stock, which shall not bear the
restrictive legend required by this Section 2.5(e).
(f) Any certificate evidencing a Note that has been transferred to an
Affiliate of the Company within three years after the original issuance
date of the Note, as evidenced by a notation on the Assignment Form for
such transfer or in the representation letter delivered in respect thereof
(substantially in the form attached as an exhibit to the Offering
Memorandum), shall, until three years after the last date on which the
Company or any Affiliate of the Company was an owner of such Note, bear a
legend in substantially the following form, unless otherwise agreed by the
Company (with written notice thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE
EXCEPT (A) TO SOLECTRON CORPORATION OR ANY SUBSIDIARY THEREOF,
(B) IN A TRANSACTION REGISTERED UNDER THE SECURITIES ACT OR (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) AND (2) THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS LEGEND SHALL BE REMOVED UPON THE TRANSFER OF THE NOTE
EVIDENCED HEREBY OR THE COMMON
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STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE PURSUANT TO THE
IMMEDIATELY PRECEDING SENTENCE. IF THE PROPOSED TRANSFER IS PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH STATE
STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any stock certificate representing Common Stock issued upon conversion
of such Note shall also bear a legend in substantially the form indicated
above, unless otherwise agreed by the Company (with written notice thereof
to the Trustee).
(g) Notwithstanding any provision of Section 2.5 to the contrary, in
the event Rule 144(k) (or any successor rule) is amended to shorten the
three-year period under Rule 144(k) (or the corresponding period under any
successor rule), from and after receipt by the Trustee of the Officers'
Certificate and Opinion of Counsel provided for in this Section 2.5(g), (i)
the references in the first sentence of the second paragraph of Section
2.5(d) to "three (3) years" and in the restrictive legend set forth in such
paragraph to "THREE YEARS" shall be deemed for all purposes hereof to be
references to such shorter period, (ii) the references in the first
paragraph of Section 2.5(e) to "three (3) years" and in the restrictive
legend set forth in such paragraph to "THREE YEARS" shall be deemed for all
purposes hereof to be references to such shorter period and (iii) all
corresponding references in the Notes and the restrictive legends on the
Restricted Securities shall be deemed for all purposes hereof to be
references to such shorter period, provided that such changes shall not
become effective if they are otherwise prohibited by, or would otherwise
cause a violation of, the then-applicable federal securities laws. As soon
as practicable after the Company has knowledge of the effectiveness of any
such amendment to shorten the three-year period under Rule 144(k) (or the
corresponding period under any successor rule), unless such changes would
otherwise be prohibited by, or would otherwise cause a violation of, the
then-applicable securities laws, the Company shall provide to the Trustee
an Officers' Certificate and Opinion of Counsel informing the Trustee of
the effectiveness of such amendment and the effectiveness of the foregoing
changes to Sections 2.5(d) and 2.5(e) and the restrictive legends on the
Restricted Securities. This Section 2.5(g) shall apply to successive
amendments to Rule 144(k) (or any successor rule) shortening the holding
period thereunder.
Section 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its request the Trustee or an authenticating
agent appointed by the Trustee shall authenticate and deliver, a new Note,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Note, or in lieu of and in substitution for the Note so
destroyed, lost or stolen. In every case
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the applicant for a substituted Note shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution, and,
in every case of destruction, loss or theft, the applicant shall also furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or is about to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in case of destruction, loss or theft,
evidence satisfactory to the Company, the Trustee and, if applicable, any paying
agent or conversion agent of the destruction, loss or theft of such Note and of
the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.6
by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.7 TEMPORARY NOTES. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed, typewritten or lithographed).
Temporary Notes shall be issuable in any authorized denomination, and
substantially in the form of the Notes in certificated form, but with such
omissions, insertions and variations as may be appropriate for temporary Notes,
all as may be determined by the Company. Every such temporary Note shall be
executed by the Company and authenticated by the Trustee or such authenticating
agent upon the same conditions and in substantially the same manner, and with
the same effect, as the Notes in certificated form. Without unreasonable delay
the Company will execute and deliver to the Trustee or such authenticating agent
Notes in certificated form (other than in the case of Notes in global form) and
thereupon any or all temporary Notes (other than any such Note in global form)
may be surrendered in exchange therefor, at each office or agency maintained by
the Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and deliver in exchange for
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such temporary Notes an equal aggregate principal amount of Notes in
certificated form. Such exchange shall be made by the Company at its own
expense and without any charge therefor. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits and subject to the
same limitations under this Indenture as Notes in certificated form
authenticated and delivered hereunder.
Section 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for
the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent or any Note registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Notes shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture; PROVIDED that
any Note or portion thereof surrendered for repurchase shall only be canceled at
such time as such Note or portion thereof has been repurchased pursuant to
Article XVI hereof. The Trustee shall destroy canceled Notes (unless the
Company directs it to do otherwise) and, after such destruction, shall, if
requested by the Company, deliver a certificate of such destruction to the
Company. If the Company shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Notes unless and until the same are delivered to the Trustee for
cancellation.
ARTICLE III
REDEMPTION OF NOTES
Section 3.1 REDEMPTION PRICES. The Company may not redeem the Notes
prior to March 3, 1999. At any time on or after March 3, 1999, the Company may,
at its option, redeem all or from time to time any part of the Notes on any date
prior to maturity, upon notice as set forth in Section 3.2, and at the optional
redemption prices set forth in the form of Note attached as Exhibit A hereto,
together with accrued interest to, but excluding, the date fixed for redemption.
Section 3.2 NOTICE OF REDEMPTION: SELECTION OF NOTES. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its request, the Trustee in the name of and at the
expense of the Company, shall mail or cause to be mailed a notice of such
redemption at least 15 and not more than 60 days prior to the date fixed for
redemption to the holders of Notes so to be redeemed as a whole or in part at
their last addresses as the same appear on the Note register (PROVIDED that if
the Company shall give such notice, it shall also give written notice, and
written notice of the Notes to be redeemed, to the Trustee). Such mailing shall
be by first class mail. The notice if mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice. In any case, failure to give such notice by mail
or any defect in the notice to the holder of any Note designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note.
Each such notice of redemption shall specify the aggregate principal amount
of Notes to be redeemed, the date fixed for redemption, the redemption price at
which Notes are to be redeemed, the place or places of payment, that payment
will be made upon presentation and surrender of such Notes, that interest
accrued to the date fixed for redemption will be paid as specified in said
notice, and that on
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and after said date interest thereon or on the portion thereof to be redeemed
will cease to accrue. Such notice shall also state the current Conversion Price
and the date on which the right to convert such Notes or portions thereof into
Common Stock will expire. If fewer than all the Notes are to be redeemed, the
notice of redemption shall identify the Notes to be redeemed. In case any Note
is to be redeemed in part only, the notice of redemption shall state the portion
of the principal amount thereof to be redeemed and shall state that on and after
the date fixed for redemption, upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of redemption
given as provided in this Section 3.2, the Company will deposit with the Trustee
or with one or more paying agents (or, if the Company is acting as its own
paying agent, set aside, segregate and hold in trust as provided in Section 5.4)
an amount of money sufficient to redeem on the redemption date all the Notes (or
portions thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Stock) at the appropriate redemption
price, together with accrued interest to, but excluding, the date fixed for
redemption; PROVIDED that if such payment is made on the redemption date it must
be received by the Trustee or paying agent, as the case may be, by 10:00 a.m.
New York City time, on such date. If any Note called for redemption is
converted pursuant hereto, any money deposited with the Trustee or any paying
agent or so segregated and held in trust for the redemption of such Note shall
be paid to the Company upon its written request, or, if then held by the Company
shall be discharged from such trust. If fewer than all the Notes are to be
redeemed, the Company will give the Trustee written notice in the form of an
Officers' Certificate not fewer than forty-five (45) days (or such shorter
period of time as may be acceptable to the Trustee) prior to the redemption date
as to the aggregate principal amount of Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed (in principal amounts of $1,000 or
integral multiples thereof), by lot or, in its discretion, on a pro rata basis
with such adjustments up to $1,000 in order to retain the minimum denominations
of the Notes. If any Note selected for partial redemption is converted in part
after such selection, the converted portion of such Note shall be deemed (so far
as may be) to be the portion to be selected for redemption. The Notes (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Note is converted as a whole
or in part before the mailing of the notice of redemption.
Upon any redemption of less than all Notes, the Company and the Trustee may
(but need not) treat as outstanding any Notes surrendered for conversion during
the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as outstanding any Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Note converted in part during such period.
Section 3.3 PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date and at
the place or places stated in such notice at the applicable redemption price,
together with interest accrued to (but excluding) the date fixed for redemption,
and on and after said date (unless the Company shall default in the payment of
such Notes at the redemption price, together with interest accrued to said date)
interest on the Notes or portion of Notes so called for redemption shall cease
to accrue and such Notes shall cease after the close of business on the Business
Day next
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preceding the date fixed for redemption to be convertible into Common Stock and,
except as provided in Sections 8.5 and 13.4, to be entitled to any benefit or
security under this Indenture, and the holders thereof shall have no right in
respect of such Notes except the right to receive the redemption price thereof
and unpaid interest to (but excluding) the date fixed for redemption. On
presentation and surrender of such Notes at a place of payment in said notice
specified, the said Notes or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price, together with
interest accrued thereon to (but excluding) the date fixed for redemption;
PROVIDED that, if the applicable redemption date is an interest payment date,
the semi-annual payment of interest becoming due on such date shall be payable
to the holders of such Notes registered as such on the relevant record date
instead of the holders surrendering such Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not pay the redemption
price of any Notes or mail any notice of optional redemption during the
continuance of a default in payment of interest or premium on the Notes or of
any Event of Default of which, in the case of any Event of Default other than
under Sections 7.1(a) or 7.1(b), a Responsible Officer of the Trustee has
knowledge. If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Note and such Note shall remain convertible
into Common Stock until the principal and premium, if any, shall have been paid
or duly provided for.
Section 3.4 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
bankers or other purchasers to purchase such Notes by paying to the Trustee in
trust for the Noteholders, on or before the date fixed for redemption, an amount
not less than the applicable redemption price, together with interest accrued to
(but excluding) the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article III, the obligation of the
Company to pay the redemption price of such Notes, together with interest
accrued to (but excluding) the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into (a copy of which shall be
filed with the Trustee prior to the date fixed for redemption), any Notes not
duly surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary con-
tained in Article XV) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the date fixed for redemption (and
the right to convert any such Notes shall be extended through such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of any such amount paid to it in the
same manner as it would monies deposited with it by the Company for the
redemption of Notes. Without the Trustee's prior written consent, no
arrangement between the Company and such purchasers for the purchase and conver-
sion of any Notes shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture,
and the Company agrees to indemnify the Trustee from, and hold it harmless
against, any loss, liability or expense arising out of or in connection with any
such arrangement for the purchase and
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conversion of any Notes between the Company and such purchasers to which the
Trustee has not consented in writing, including the costs and expenses,
including reasonable legal fees, incurred by the Trustee in the defense of any
claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations under
this Indenture.
ARTICLE IV
SUBORDINATION OF NOTES
Section 4.1 AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Notes issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article IV; and each Person holding any Note, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all Notes
(including, but not limited to, the redemption price with respect to the Notes
called for redemption in accordance with Section 3.2 or submitted for repurchase
in accordance with Section 16.2, as the case may be, as provided in the
Indenture) issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full of all Senior Indebtedness, whether outstanding at the date of this
Indenture or thereafter incurred.
No provision of this Article IV shall prevent the occurrence of any default
or Event of Default hereunder.
Section 4.2 PAYMENTS TO NOTEHOLDERS. No payment shall be made with
respect to the principal of, or premium, if any, or interest on the Notes
(including, but not limited to, the redemption price with respect to the Notes
to be called for redemption in accordance with Section 3.2 or submitted for
repurchase in accordance with Section 16.2, as the case may be, as provided in
the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 4.5, if:
(i) a default in the payment of principal, premium, interest, rent or
other obligations due on any Senior Indebtedness occurs and is continuing
(or, in the case of Senior Indebtedness for which there is a period of
grace, in the event of such a default that continues beyond the period of
grace, if any, specified in the instrument or lease evidencing such Senior
Indebtedness), unless and until such default shall have been cured or
waived or shall have ceased to exist; or
(ii) a default, other than a payment default, on any Designated Senior
Indebtedness occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Representative or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to clause (ii)
above, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section unless and until (A)
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at least 365 days shall have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice, and (B) all scheduled payments of
principal, premium, if any, and interest on the Notes that have come due have
been paid in full in cash. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in respect
of the Notes upon the earlier of:
(1) the date upon which the default is cured or waived or ceases to exist,
or
(2) in the case of a default referred to in clause (ii) above, 179 days
pass after notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated,
unless this Article IV otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or payment thereof in
accordance with its terms provided for in cash or other payment satisfactory to
the holders of such Senior Indebtedness, before any payment is made on account
of the principal of, premium, if any, or interest on the Notes (except payments
made pursuant to Article XIII from monies deposited with the Trustee pursuant
thereto prior to commencement of proceedings for such dissolution, winding-up,
liquidation or reorganization); and upon any such dissolution or winding-up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other proceeding, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the holders of the Notes or the Trustee would be entitled,
except for the provision of this Article IV, shall (except as aforesaid) be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the holders of
the Notes or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, or
as otherwise required by law or a court order) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay all
Senior Indebtedness in full, in cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness, before any
payment or distribution or provision therefor is made to the holders of the
Notes or to the Trustee.
For purposes of this Article IV, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article IV with respect to
the Notes to the payment
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of all Senior Indebtedness which may at the time be outstanding; PROVIDED that
(i) the Senior Indebtedness is assumed by the new corporation, if any, resulting
from any reorganization or readjustment, and (ii) the rights of the holders of
Senior Indebtedness (other than leases which are not assumed by the Company or
the new corporation, as the case may be) are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article XII shall not
be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 4.2 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article XII.
In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, premium, if any, or interest on the
Notes (including, but not limited to, the redemption price with respect to the
Notes called for redemption in accordance with Section 3.2 or submitted for
repurchase in accordance with Section 16.2, as the case may be, as provided in
the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 4.5, until all Senior
Indebtedness has been paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Indenture. If payment of the Notes is accelerated
because of an Event of Default, the Company shall promptly notify holders of
Senior Indebtedness of the acceleration and the Trustee shall use its best
efforts to promptly notify the Bank of America National Trust and Savings
Association, as Agent under the Credit Agreement (or any successor agent
thereunder of which it has received prior written notice) and BNP Leasing
Corporation, as Landlord under the Lease Agreement (or any successor landlord
thereunder of which it has received prior written notice) of such acceleration,
in each case at the address set forth in the notice from the Agent (or successor
agent) or Landlord (or successor landlord) to the Trustee as being the address
to which the Trustee should send its notice pursuant to this Section 4.2,
unless, in each case, there are no payment obligations of the Company thereunder
and all obligations thereunder to extend credit have been terminated or expired.
In the event that, notwithstanding the foregoing provisions, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing, shall be received by the Trustee or the
holders of the Notes before all Senior Indebtedness is paid in full in cash or
other payment satisfactory to the holders of such Senior Indebtedness, or
provision is made for such payment thereof in accordance with its terms in cash
or other payment satisfactory to the holders of such Senior Indebtedness, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or
other payment satisfactory to the holders of such Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the holders of
such Senior Indebtedness.
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Nothing in this Section 4.2 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject to
the further provisions of Section 4.5.
Section 4.3 SUBROGATION OF NOTES. Subject to the payment in full of all
Senior Indebtedness, the rights of the holders of the Notes shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Indebtedness pursuant to the provisions of this Article IV (equally and
ratably with the holders of all indebtedness of the Company which by its express
terms is subordinated to other indebtedness of the Company to substantially the
same extent as the Notes are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal, premium, if any, and
interest on the Notes shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Notes or the Trustee would be entitled except for the provisions of this
Article IV, and no payment over pursuant to the provisions of this Article IV,
to or for the benefit of the holders of Senior Indebtedness by holders of the
Notes or the Trustee, shall, as between the Company, its creditors other than
holders of Senior Indebtedness, and the holders of the Notes, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness; and no
payments or distributions of cash, property or securities to or for the benefit
of the holders of the Notes pursuant to the subrogation provisions of this
Article IV, which would otherwise have been paid to the holders of Senior
Indebtedness shall be deemed to be a payment by the Company to or for the
account of the Notes. It is understood that the provisions of this Article IV
are and are intended solely for the purposes of defining the relative rights of
the holders of the Notes, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of (and premium, if any) and interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article IV of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article IV, the Trustee, subject to the provisions of Section 8.1, and the
holders of the Notes shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article IV.
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Section 4.4 AUTHORIZATION TO EFFECT SUBORDINATION. Each holder of a
Note by the holder's acceptance thereof authorizes and directs the Trustee on
the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article IV and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.2 hereof at least 30 days before the expiration of the time to file such
claim, the holders of any Senior Indebtedness or their representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.
Section 4.5 NOTICE TO TRUSTEE. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article IV.
Notwithstanding the provisions of this Article IV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article IV,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness or from any trustee thereof; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section 8.1,
shall be entitled in all respects to assume that no such facts exist; PROVIDED
that if on a date not fewer than two Business Days prior to the date upon which
by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the principal of, or premium, if
any, or interest on any Note) the Trustee shall not have received, with respect
to such monies, the notice provided for in this Section 4.5, then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such monies and to apply the same to the purpose
for which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date.
Notwithstanding anything in this Article IV to the contrary, nothing shall
prevent any payment by the Trustee to the Noteholders of monies deposited with
it pursuant to Section 13.1, and any such payment shall not be subject to the
provisions of Section 4.1 or 4.2.
The Trustee, subject to the provisions of Section 8.1, shall be entitled to
rely on the delivery to it of a written notice by a Representative or a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article IV, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article IV, and if such
evidence is not furnished the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
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Section 4.6 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article IV in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in
Section 8.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article IV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.1, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Notes, the
Company or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article IV or otherwise.
Section 4.7 NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Section 4.8 CERTAIN CONVERSIONS DEEMED PAYMENT. For the purposes of
this Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Notes or on account of the purchase or other acquisition
of Notes, and (2) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 15.2), property or
securities (other than junior securities) upon conversion of a Note shall be
deemed to constitute payment on account of the principal of such Note. For the
purposes of this Section 4.8, the term "junior securities" means (a) shares of
any stock of any class of the Company, or (b) securities of the Company which
are subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Notes are so
subordinated as provided in this Article. Nothing contained in this Article IV
or elsewhere in this Indenture or in the Notes is intended to or shall impair,
as among the Company, its creditors other than holders of Senior Indebtedness
and the Noteholders, the right, which is absolute and unconditional, of the
Holder of any Note to convert such Note in accordance with Article XV.
Section 4.9 ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article in addition to or in
place of the Trustee; PROVIDED, HOWEVER, that the first paragraph of Section 4.5
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as paying agent.
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Section 4.10 SENIOR INDEBTEDNESS ENTITLED TO RELY. The holders of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
shall have the right to rely upon this Article IV, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes. Each installment of interest on the Notes due on any semi-annual
interest payment date may be paid by mailing checks for the interest payable to
or upon the written order of the holders of Notes entitled thereto as they shall
appear on the Note register; PROVIDED, that with respect to any holder of Notes
with an aggregate principal amount equal to or in excess of $5,000,000, at the
request of such holder in writing to the Company (who shall then furnish notice
to such effect to the Trustee), interest on such holder's Notes shall be paid by
wire transfer in immediately available funds in accordance with the wire
transfer instructions supplied by such holder to the Trustee and paying agent
(if different from the Trustee).
Section 5.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in the Borough of Manhattan, The City of New York, an office or agency where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office or the office or
agency of the Trustee in the Borough of Manhattan, The City of New York.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes. The Company will give prompt written notice to
the holders of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent, Note
registrar, Custodian and conversion agent, and each of the Corporate Trust
Office of the Trustee and the office or agency of the Trustee in the Borough of
Manhattan, The City of New York (which shall initially be State Street Bank and
Trust Company, N.A., an Affiliate of the Trustee located at 61 Broadway,
Concourse Level, Corporate Trust Window, New York, New York 10006), one such
office or agency of the Company for each of the aforesaid purposes.
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The Trustee agrees to mail, or cause to be mailed, the notices set forth in
Section 8.10(a) and the third paragraph of Section 8.11.
Section 5.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.4 PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, it will cause
such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of
this Section 5.4:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Notes (whether such sums have been paid to it by the Company or by any
other obligor on the Notes) in trust for the benefit of the holders of
the Notes;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of
the principal of and premium, if any, or interest on the Notes when
the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a
sum sufficient to pay such principal, premium, if any, or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action; PROVIDED that if such
deposit is made on the due date, such deposit shall be received by the
paying agent by 10:00 a.m. New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest on
the Notes, set aside, segregate and hold in trust for the benefit of the
holders of the Notes a sum sufficient to pay such principal, premium, if
any, or interest so becoming due and will notify the Trustee of any failure
to take such action and of any failure by the Company (or any other obligor
under the Notes) to make any payment of the principal of, premium, if any,
or interest on the Notes when the same shall become due and payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust by the Company or any paying
agent hereunder as required by this Section 5.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying
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agent to the Trustee, the Company or such paying agent shall be released
from all further liability with respect to such sums.
(d) Anything in this Section 5.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.4 is subject
to Sections 13.3 and 13.4.
Section 5.5 CORPORATE EXISTENCE. Subject to Article XII, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
Section 5.6 RULE 144A INFORMATION REQUIREMENT. During the period
beginning on the latest date of the original issuance of the Notes and ending on
the date that is three years from such date, the Company covenants and agrees
that it shall, during any period in which it is not subject to Section 13 or
15(d) under the Exchange Act, make available to any holder or beneficial holder
of Notes or any Common Stock issued upon conversion thereof which continue to be
Restricted Securities in connection with any sale thereof and any prospective
purchaser of Notes or such Common Stock from such holder or beneficial holder,
the information required pursuant to Rule 144A(d)(4) under the Securities Act
upon the request of any holder or beneficial holder of the Notes or such Common
Stock and it will take such further action as any holder or beneficial holder of
such Notes or such Common Stock may reasonably request, all to the extent
required from time to time to enable such holder or beneficial holder to sell
its Notes or Common Stock without registration under the Securities Act within
the limitation of the exemption provided by Rule 144A, as such Rule may be
amended from time to time. Upon the request of any holder or any beneficial
holder of the Notes or such Common Stock, the Company will deliver to such
holder a written statement as to whether it has complied with such requirements.
Section 5.7 STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 5.8 COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending closest to August 31, 1996) an Officers'
Certificate stating whether or not the signers know of any Event of Default that
occurred during such period. If they do, such Officers' Certificate shall
describe the Event of Default and its status.
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ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 NOTEHOLDERS' LISTS. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each February 15 and August 15 in each year
beginning with August 15, 1996, and at such other times as the Trustee may
request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in order
to enable it to timely provide any notice to be provided by it hereunder), a
list in such form as the Trustee may reasonably require of the names and
addresses of the holders of Notes as of a date not more than fifteen (15) days
(or such other date as the Trustee may reasonably request in order to so provide
any such notices) prior to the time such information is furnished, except that
no such list need be furnished so long as the Trustee is acting as Note
registrar.
Section 6.2 PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders
of Notes contained in the most recent list furnished to it as provided in
Section 6.1 or maintained by the Trustee in its capacity as Note registrar,
if so acting. The Trustee may destroy any list furnished to it as provided
in Section 6.1 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes,
and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Notes
made pursuant to the Trust Indenture Act.
Section 6.3 REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with the year
1996, the Trustee shall transmit to holders of Notes such reports dated as
of May 15 of the year in which such reports are made concerning the Trustee
and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed and with the
Company. The Company will notify the Trustee within a reasonable time when
the Notes are listed on any stock exchange and automated quotation system.
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Section 6.4 REPORTS BY COMPANY. The Company shall file with the Trustee
(and the Commission if at any time the Indenture becomes qualified under the
Trust Indenture Act), and transmit to holders of Notes, such information,
documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; PROVIDED that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
Section 7.1 EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest upon any of
the Notes as and when the same shall become due and payable, and
continuance of such default for a period of thirty (30) days, whether or
not such payment is permitted under Article IV hereof; or
(b) default in the payment of the principal of or premium, if any, on
any of the Notes as and when the same shall become due and payable either
at maturity or in connection with any redemption pursuant to Article III or
repurchase pursuant to Article XVI, by acceleration or otherwise, whether
or not such payment is permitted under Article IV hereof; or
(c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Notes or in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section 7.1
specifically dealt with) continued for a period of sixty (60) days after
the date on which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the Trustee, or to
the Company and a Responsible Officer of the Trustee by the holders of at
least 25 percent in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 9.4; or
(d) failure on the part of the Company to make any payment at
maturity, including any applicable grace period, in respect of indebtedness
for borrowed money of the Company, which payment is in an amount in excess
of $30 million, and continuance of such failure for a period of thirty (30)
days after the date on which the written notice of such failure, requiring
the Company to remedy the same, shall have been given to the Company by the
Trustee, or to the Company and a Responsible Officer of the Trustee by the
holders of at least 25 percent in aggregate principal amount of the Notes
at the time outstanding determined in accordance with Section 9.4; or
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(e) default by the Company with respect to any indebtedness for
borrowed money of the Company, which default results in acceleration of any
such indebtedness which is in an amount of in excess of $30 million without
such indebtedness having been discharged, or such acceleration having been
rescinded or annulled for a period of thirty (30) days after the date on
which the written notice of such default, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee, or to the
Company and a Responsible Officer of the Trustee by the holders of at least
25 percent in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 9.4; or
(f) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due; or
(g) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety
(90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1(f) or (g)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than 25 percent in aggregate principal amount of the Notes then outstanding
hereunder determined in accordance with Section 9.4, by notice in writing to the
Company (and to the Trustee if given by Noteholders), may declare the principal
of all the Notes and the interest accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes con-
tained to the contrary notwithstanding. If an Event of Default specified in
Section 7.1(f) or (g) occurs, the principal of all the Notes and the interest
accrued thereon shall be immediately and automatically due and payable without
necessity of further action. This provision, however, is subject to the
condition that if, at any time after the principal of the Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the monies due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all Notes and the principal of and
premium, if any, on any and all Notes which shall have become due otherwise than
by acceleration (with interest on overdue installments of interest (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal and premium, if any, at the rate borne by the Notes, to the date
of such payment or deposit) and amounts due to the Trustee pursuant to
Section 8.6, and if any and all defaults under this Indenture, other than the
nonpayment of principal of and premium, if any, and accrued interest on Notes
which shall have become due by acceleration, shall have been cured or waived
pursuant to Section 7.7 -- then and in every such case the holders of a majority
in aggregate principal amount of the Notes then outstanding, by written notice
to the Company and to the Trustee, may waive all defaults or
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Events of Default and rescind and annul such declaration and its consequences;
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify a Responsible Officer of the Trustee,
promptly upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
Section 7.2 PAYMENTS OF NOTES ON DEFAULT: SUIT THEREFOR. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of thirty
(30) days, or (b) in case default shall be made in the payment of the principal
of or premium, if any, on any of the Notes as and when the same shall have
become due and payable, whether at maturity of the Notes or in connection with
any redemption or repurchase, under this Indenture, by declaration or otherwise
- -- then, upon demand of the Trustee, the Company will pay to the Trustee, for
the benefit of the holders of the Notes, the whole amount that then shall have
become due and payable on all such Notes for principal and premium, if any, or
interest, or both, as the case may be, with interest upon the overdue principal
and premium, if any, and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest at
the rate borne by the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Notes to the
registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file
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and prove a claim or claims for the whole amount of principal, premium, if any,
and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.6; and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders to make such payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of such payments directly to the Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including counsel fees incurred by it up to the date of such distribution. To
the extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
which the holders of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Trustee without the possession of any
of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
Section 7.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under
Section 8.6;
Second: Subject to the provisions of Article IV, in case the
principal of the outstanding Notes shall not have become due and be unpaid,
to the payment of interest on the Notes in default in the order of the
maturity of the installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by the Notes, such payments to
be made ratably to the persons entitled thereto;
Third: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid to the payment of the whole amount then owing and
unpaid upon the Notes for principal and premium, if any, and
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interest, with interest on the overdue principal and premium, if any, and
(to the extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the rate borne by the Notes; and in
case such monies shall be insufficient to pay in full the whole amounts so
due and unpaid upon the Notes, then to the payment of such principal and
premium, if any, and interest without preference or priority of principal
and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other
installment of interest, or of any Note over any other Note, ratably to the
aggregate of such principal and premium, if any, and accrued and unpaid
interest; and
Fourth: Subject to the provisions of Article IV, to the payment of
the remainder, if any, to the Company or any other person lawfully entitled
thereto.
Section 7.4 PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have
any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than 25 percent in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 7.7; it being understood and intended, and being expressly
covenanted by the taker and holder of every Note with every other taker and
holder and the Trustee, that no one or more holders of Notes shall have any
right in any manner whatever by virtue of or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Notes, or to obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of
Notes (except as otherwise provided herein). For the protection and enforcement
of this Section 7.4, each and every Noteholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in his own behalf and for his own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, his rights of
conversion as provided herein.
Section 7.5 PROCEEDINGS BY TRUSTEE. In case of an Event of Default the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate
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judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Section 7.6 REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
the last paragraph of Section 2.6, all powers and remedies given by this
Article VII to the Trustee or to the Noteholders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any thereof or of any other
powers and remedies available to the Trustee or the holders of the Notes, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Indenture, and no delay or
omission of the Trustee or of any holder of any of the Notes to exercise any
right or power accruing upon any default or Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or any acquiescence therein; and,
subject to the provisions of Section 7.4, every power and remedy given by this
Article VII or by law to the Trustee or to the Noteholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee
or by the Noteholders.
Section 7.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY
OF NOTEHOLDERS. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4 shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; PROVIDED, HOWEVER, that (a) such direction shall
not be in conflict with any rule of law or with this Indenture, and (b) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4 may on behalf of the holders of all of the Notes waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest or premium, if any, on, or the principal of, the
Notes, (ii) a failure by the Company to convert any Notes into Common Stock,
(iii) a default in the payment of redemption price pursuant to Article III or
repurchase price pursuant to Article XVI or (iv) a default in respect of a
covenant or provisions hereof which under Article XI cannot be modified or
amended without the consent of the holders of all Notes then outstanding. Upon
any such waiver the Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder; but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 7.7, said default
or Event of Default shall for all purposes of the Notes and this Indenture be
deemed to have been cured and to be not continuing; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
Section 7.8 NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after it has knowledge of the occurrence of a default, mail to all
Noteholders, as the names and addresses of such holders appear upon the Note
register, notice of all defaults known to a Responsible Officer, unless such
defaults shall have been cured or waived before the giving of such notice; and
PROVIDED that, except in the case of default in the payment of the principal of,
or premium, if any, or interest on any of the Notes, the Trustee shall be
protected in withholding such notice if and so long as a trust committee
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of directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interests of the Noteholders.
Section 7.9 UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; PROVIDED that the provisions of this Section 7.9 (to the extent
permitted by law) shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Noteholder, or group of Noteholders, holding in the
aggregate more than ten percent in principal amount of the Notes at the time
outstanding determined in accordance with Section 9.4, or to any suit instituted
by any Noteholder for the enforcement of the payment of the principal of or
premium, if any, or interest on any Note on or after the due date expressed in
such Note or to any suit for the enforcement of the right to convert any Note in
accordance with the provisions of Article XV or to require the Company to
repurchase any Note in accordance with Article XVI.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the
Trust Indenture Act, and the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture and the Trust Indenture Act against the
Trustee; and
(2) in the absence of bad faith and willful misconduct on the
part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions
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furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions which
by any provisions hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the Notes
at the time outstanding determined as provided in Section 9.4 relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture; and
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or
affording protection to, the Trustee shall be subject to the provisions of
this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 8.2 RELIANCE ON DOCUMENTS, OPINIONS. ETC. Except as otherwise
provided in Section 8.1:
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon or other paper or
document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the
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Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; PROVIDED, HOWEVER, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liability as a condition to so
proceeding; the reasonable expenses of every such examination shall be paid
by the Company or, if paid by the Trustee or any predecessor Trustee, shall
be repaid by the Company upon demand; and
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder.
Section 8.3 NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 8.4 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY
OWN NOTES. The Trustee, any paying agent, any conversion agent or Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
Section 8.5 MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as may be
agreed from time to time by the Company and the Trustee.
Section 8.6 COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture
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(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence, willful misconduct,
recklessness or bad faith. The Company also covenants to indemnify the Trustee
in any capacity under this Indenture and its agents and any authenticating agent
for, and to hold them harmless against, any loss, liability or expense incurred
without negligence, willful misconduct, recklessness, or bad faith on the part
of the Trustee or such agent or authenticating agent, as the case may be, and
arising out of or in connection with the acceptance or administration of this
trust or in any other capacity hereunder, including the costs and expenses of
defending themselves against any claim of liability in the premises. The
obligations of the Company under this Section 8.6 to compensate or indemnify the
Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall be secured by a lien prior to that of the Notes upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Notes. The obligation of the
Company under this Section shall survive the satisfaction and discharge of this
Indenture.
When the Trustee and its agents and any authenticating agent incur expenses
or render services after an Event of Default specified in Section 7.1(f) or (g)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy, insolvency or
similar laws.
Section 8.7 OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness,
or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee.
Section 8.8 CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
Section 8.9 ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If such person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Notes. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
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the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment sixty (60) days after the mailing of such notice of resignation
to the Noteholders, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Noteholder who has been a bona fide holder of a Note or Notes for at least
six months may, subject to the provisions of Section 7.9, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section 8.8 after
written request therefor by the Company or by any Noteholder who has
been a bona fide holder of a Note or Notes for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.9 and shall fail to resign after written
request therefor by the Company or by any such Noteholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or, subject
to the provisions of Section 7.9, any Noteholder who has been a bona fide
holder of a Note or Notes for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so
removed or any Noteholder, upon the terms and conditions and otherwise as
in Section 8.10(a) provided, may petition any court of competent
jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.11.
Section 8.11 ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor
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trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company or of the
successor trustee, the trustee ceasing to act shall, upon payment of any amounts
then due it pursuant to the provisions of Section 8.6, execute and deliver an
instrument transferring to such successor trustee all the rights and powers of
the trustee so ceasing to act. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon
all property and funds held or collected by such trustee as such, except for
funds held in trust for the benefit of holders of particular Notes, to secure
any amounts then due it pursuant to the provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, the Company (or the former trustee, at the written direction of
the Company) shall mail or cause to be mailed notice of the succession of such
trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within
ten (10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12 SUCCESSION BY MERGER, ETC. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by such successor
trustee may authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
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Section 8.13 LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR. If and when
the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1 ACTION BY NOTEHOLDERS. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article X, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
Section 9.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Noteholder or his agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.6.
Section 9.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee,
any authenticating agent, any paying agent, any conversion agent and any Note
registrar may deem the person in whose name such Note shall be registered upon
the Note register to be, and may treat him as, the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of or
on account of the principal of, premium, if any, and interest on such Note, for
conversion of such Note and for all other purposes; and neither the Company nor
the Trustee nor any paying agent nor any conversion agent nor any authenticating
agent nor any Note registrar shall be affected by any notice to the contrary.
All such payments so made to any holder for the time being, or upon his order,
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for monies payable upon any such Note.
Section 9.4 COMPANY-OWNED NOTES DISREGARDED. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or
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other action under this Indenture, Notes which are owned by the Company or any
other obligor on the Notes or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any other obligor on the Notes shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; PROVIDED that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent, waiver or other action only Notes which a Responsible
Officer knows are so owned shall be so disregarded. Notes so owned which have
been pledged in good faith may be regarded as outstanding for the purposes of
this Section 9.4 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Notes and that the pledgee is not the
Company, any other obligor on the Notes or a person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor. In the case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above described persons; and, subject to Section 8.1, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such determination.
Section 9.5 REVOCATION OF CONSENTS: FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in
Section 9.1, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Notes specified in this Indenture in
connection with such action, any holder of a Note which is shown by the evidence
to be included in the Notes the holders of which have consented to such action
may, by filing written notice with the Trustee at its Corporate Trust Office and
upon proof of holding as provided in Section 9.2, revoke such action so far as
it concerns such Note. Except as aforesaid, any such action taken by the holder
of any Note shall be conclusive and binding upon such holder and upon all future
holders and owners of such Note and of any Notes issued in exchange or
substitution therefor, irrespective of whether any notation in regard thereto is
made upon such Note or any Note issued in exchange or substitution therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1 PURPOSE OF MEETINGS. A meeting of Noteholders may be called
at any time and from time to time pursuant to the provisions of this Article X
for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to consent
to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article VII;
(2) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VIII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2; or
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(4) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable law.
Section 10.2 CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place at a location within 10 miles of the
Corporate Trust Office or the Borough of Manhattan, The City of New York, as the
Trustee shall determine. Notice of every meeting of the Noteholders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting and the establishment of any record date
pursuant to Section 9.1, shall be mailed to holders of Notes at their addresses
as they shall appear on the Note register. Such notice shall also be mailed to
the Company. Such notices shall be mailed not less than twenty (20) nor more
than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.3 CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place at any location within
10 miles of the Corporate Trust Office or the Borough of Manhattan, The City of
New York for such meeting and may call such meeting to take any action
authorized in Section 10.1, by mailing notice thereof as provided in
Section 10.2.
Section 10.4 QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes. The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 10.5 REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
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of the meeting shall be elected by vote of the holders of a majority in
principal amount of the Notes represented at the meeting and entitled to vote at
the meeting.
Subject to the provisions of Section 9.4, at any meeting each Noteholder or
proxyholder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; PROVIDED, HOWEVER, that no vote shall be cast
or counted at any meeting in respect of any Note challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.2 or 10.3 may be adjourned from time to
time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 10.6 VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 10.2. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7 NO DELAY OF RIGHTS BY MEETING. Nothing in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
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(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.6 or the
repurchase obligations of the Company pursuant to the requirements of
Section 16.5;
(b) subject to Article IV, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article XII;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; PROVIDED, HOWEVER, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of such Notes with the Notes issued hereunder
in fully registered form and to make all appropriate changes for such
purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture which shall not
materially adversely affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
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Any supplemental indenture authorized by the provisions of this
Section 11.1 may be executed by the Company and the Trustee without the consent
of the holders of any of the Notes at the time outstanding, notwithstanding any
of the provisions of Section 11.2.
Section 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. With
the consent (evidenced as provided in Article IX) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Notes, or modify
the provisions of this Indenture with respect to the subordination of the Notes
in a manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to repurchase any Note upon the occurrence of a Change
in Control in a manner adverse to the holder of Notes, or impair the right to
convert the Notes into Common Stock subject to the terms set forth herein,
including Section 15.6, without the consent of the holder of each Note so
affected, or (ii) reduce the aforesaid percentage of Notes, the holders of which
are required to consent to any such supplemental indenture, without the consent
of the holders of all Notes then outstanding.
Upon the request of the Company, accompanied by a copy of the resolutions
of the Board of Directors certified by its Secretary or an Assistant Secretary
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Noteholders as aforesaid,
the Trustee shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.3 EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental
indenture executed pursuant to the provisions of this Article XI shall comply
with the Trust Indenture Act, as then in effect; PROVIDED that this Section 11.3
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act, nor shall it constitute any admission
or acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the
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Company and the holders of Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
Section 11.4 NOTATION ON NOTES. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this
Article XI may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee
shall so determine, new Notes so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 17.11)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.
Section 11.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. The Trustee, subject to the provisions of Sections 8.1 and
8.2, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 COMPANY MAY CONSOLIDATE ETC. ON CERTAIN TERMS. Subject to
the provisions of Section 12.2, nothing contained in this Indenture or in any of
the Notes shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company, to any other corporation
(whether or not affiliated with the Company), authorized to acquire and operate
the same and which, in each case, shall be organized under the laws of the
United States of America, any state thereof or the District of Columbia;
PROVIDED, that upon any such consolidation, merger, sale, conveyance or lease,
the due and punctual payment of the principal of and premium, if any, and
interest on all of the Notes, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the corporation (if other than the Company) formed
by such consolidation, or into which the Company shall have been merged, or by
the corporation which shall have acquired or leased such property, and such
supplemental indenture shall provide for the applicable conversion rights set
forth in Section 15.6.
Section 12.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the
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Company, with the same effect as if it had been named herein as the party of the
first part. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Solectron Corporation any or
all of the Notes issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver, or cause to be authenticated and delivered, any
Notes which previously shall have been signed and delivered by the officers of
the Company to the Trustee for authentication, and any Notes which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Notes so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Notes had been issued at the date of the execution hereof. In the event
of any such consolidation, merger, sale or conveyance (but not in the event of
any such lease), the person named as the "Company" in the first paragraph of
this Indenture or any successor which shall thereafter have become such in the
manner prescribed in this Article XII may be dissolved, wound up and liquidated
at any time thereafter and such person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
Section 12.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee,
subject to Sections 8.1 and 8.2, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance or lease and any such assumption complies with the provisions
of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 DISCHARGE OF INDENTURE. When (a) the Company shall deliver
to the Trustee for cancellation all Notes theretofore authenticated (other than
any Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all
of the Notes (other than any Notes which shall have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) not theretofore canceled or delivered to
the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to such date of maturity or redemption date, as
the case may be, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Notes, (ii) rights
hereunder of
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Noteholders to receive payments of principal of and premium, if any, and
interest on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel as required by Section 17.5
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
Section 13.2 DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1 and
not in violation of Article IV shall be held in trust for the sole benefit of
the Noteholders and not to be subject to the subordination provisions of Article
IV, and such monies shall be applied by the Trustee to the payment, either
directly or through any paying agent (including the Company if acting as its own
paying agent), to the holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest and premium, if
any.
Section 13.3 PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent for
the Notes (other than the Trustee) shall, upon written request of the Company,
be repaid to the Company or paid to the Trustee, and thereupon such paying
agent shall be released from all further liability with respect to such monies.
Section 13.4 RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.
Section 13.5 REINSTATEMENT. If the Trustee or the paying agent is unable
to apply any money in accordance with Section 13.2 by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.1 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.2;
PROVIDED, HOWEVER, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.
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ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor corpora-
tion, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1 RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Indenture, the holder of any Note shall have the right, at
his option, at any time after sixty (60) days following the latest date of
original issuance of the Notes and prior to the close of business on March 1,
2006 (except that, with respect to any Note or portion of a Note which shall be
called for redemption, such right shall terminate, except as provided in
Section 15.2 or Section 3.4, at the close of business on the Business Day next
preceding the date fixed for redemption of such Note or portion of a Note unless
the Company shall default in payment due upon redemption thereof) to convert the
principal amount of any such Note, or any portion of such principal amount which
is $1,000 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Note or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Note so to be converted in whole or in part in the manner
provided, together with any required funds, in Section 15.2. A holder of Notes
is not entitled to any rights of a holder of Common Stock until such holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article XV.
Section 15.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK
ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise
the conversion privilege with respect to any Note in certificated form, the
holder of any such Note to be converted in whole or in part shall surrender such
Note, duly endorsed, at an office or agency maintained by the Company pursuant
to Section 5.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 15.2, and shall give written notice of conversion in
the form provided on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to convert such Note or
the portion thereof specified in said notice. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common
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Stock which shall be issuable on such conversion shall be issued, and shall be
accompanied by transfer taxes, if required pursuant to Section 15.7. Each such
Note surrendered for conversion shall, unless the shares issuable on conversion
are to be issued in the same name as the registration of such Note, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any interest
in a Note in global form, the beneficial holder must complete the appropriate
instruction form for conversion pursuant to the Depository's book-entry
conversion program, deliver by book-entry delivery an interest in such Note in
global form, furnish appropriate endorsements and transfer documents if required
by the Company or the Trustee or conversion agent, and pay the funds, if any,
required by this Section 15.2 and any transfer taxes if required pursuant to
Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such holder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.2, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof in accordance with the provisions of this Article and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 15.3. In case any Note of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.3, the Company shall execute and the Trustee shall
authenticate and deliver to the holder of the Note so surrendered, without
charge to him, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.2 have been satisfied as to such Note (or portion thereof), and
the person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares represented thereby; PROVIDED,
HOWEVER, that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date to
the close of business on the Business Day next preceding the following interest
payment date shall (unless such Note or portion thereof being converted shall
have been called for redemption during the period from the close of business on
such record date to the close of business on the Business Day next preceding the
following interest payment date) be accompanied by payment, in New York Clearing
House funds or other funds acceptable to the Company, of an amount equal to the
interest payable on such interest payment date on the principal amount being
converted; PROVIDED, HOWEVER, that no such payment need be made if there shall
exist at the time of conversion a default in the payment of interest on the
Notes. Except as provided above in
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this Section 15.2, no adjustment shall be made for interest accrued on any Note
converted or for dividends on any shares issued upon the conversion of such Note
as provided in this Article.
Upon the conversion of an interest in a Note in global form, the Trustee,
or the Custodian at the direction of the Trustee, shall make a notation on such
Note in global form as to the reduction in the principal amount represented
thereby.
Section 15.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares which shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market value thereof to
the holder of Notes. The current market value of a share of Common Stock shall
be the Closing Price on the first Trading Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.
Section 15.4 CONVERSION PRICE. The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article XV.
Section 15.5 ADJUSTMENT OF CONVERSION PRICE. The Conversion Price shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and the denominator shall
be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following
the date fixed for such determination. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Company. If any dividend or distribution of the type
described in this Section 15.5(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which
would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period
expiring within 45 days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for
or purchase shares of Common Stock at a price per share less than the
Current Market Price (as defined below) on the date fixed for determination
of stockholders entitled to receive such rights or warrants, the Conversion
Price shall be adjusted so that the same shall equal the price determined
by multiplying the Conversion Price in effect immediately prior to
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the date fixed for determination of stockholders entitled to receive such
rights or warrants by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for determination of stockholders entitled to receive such rights and
warrants plus the number of shares which the aggregate offering price of
the total number of shares so offered would purchase at such Current Market
Price, and of which the denominator shall be the number of shares of Common
Stock outstanding on the date fixed for determination of stockholders
entitled to receive such rights and warrants plus the total number of
additional shares of Common Stock offered for subscription or purchase.
Such adjustment shall be successively made whenever any such rights and
warrants are issued, and shall become effective immediately after the
opening of business on the day following the date fixed for determination
of stockholders entitled to receive such rights or warrants. To the extent
that shares of Common Stock are not delivered after the expiration of such
rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually delivered.
In the event that such rights or warrants are not so issued, the Conversion
Price shall again be adjusted to be the Conversion Price which would then
be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle the holders to subscribe
for or purchase shares of Common Stock at less than such Current Market
Price, and in determining the aggregate offering price of such shares of
Common Stock, there shall be taken into account any consideration received
by the Company for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of
Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of
the Company (other than any dividends or distributions to which
Section 15.5(a) applies) or evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
Section 15.5(b), and excluding any dividend or distribution paid
exclusively in cash (any of the foregoing hereinafter in this
Section 15.5(d) called the "Securities")), then, in each such case (unless
the Company elects to reserve such Securities for distribution to the
Noteholders upon the conversion of the Notes so that any such holder con-
verting Notes will receive upon such conversion, in addition to the shares
of Common Stock to which such holder is entitled, the amount and kind of
such Securities which such holder would have received if such holder had
converted its Notes into Common Stock immediately prior to the Record Date
(as defined in Section 15.5(h) for such distribution of the Securities)),
the Conversion Price shall be reduced so that the same shall be equal to
the price determined by multiplying the Conversion Price in
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effect on the Record Date with respect to such distribution by a fraction
of which the numerator shall be the Current Market Price per share of the
Common Stock on such Record Date less the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date of
the portion of the Securities so distributed applicable to one share of
Common Stock and the denominator shall be the Current Market Price per
share of the Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following such Record Date;
PROVIDED, HOWEVER, that in the event the then fair market value (as so
determined) of the portion of the Securities so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market
Price of the Common Stock on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall
have the right to receive upon conversion the amount of Securities such
holder would have received had such holder converted each Note on the
Record Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines
the fair market value of any distribution for purposes of this
Section 15.5(d) by reference to the actual or when issued trading market
for any securities, it must in doing so consider the prices in such market
over the same period used in computing the Current Market Price of the
Common Stock.
In the event the Company implements a stockholder rights plan, such
rights plan shall provide that upon conversion of the Notes the holders
will receive, in addition to the Common Stock issuable upon such
conversion, the rights issued under such rights plan (notwithstanding the
occurrence of an event causing such rights to separate from the Common
Stock at or prior to the time of conversion).
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of
the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable; and
(iii) are also issued in respect of future issuances of Common Stock, shall
be deemed not to have been distributed for purposes of this Section 15.5
(and no adjustment to the Conversion Price under this Section 15.5 will be
required) until the occurrence of the earliest Trigger Event, whereupon
such rights and warrants shall be deemed to have been distributed and an
appropriate adjustment (if any is required) to the Conversion Price shall
be made under this Section 15.5(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the
date of this Indenture, are subject to events, upon the occurrence of which
such rights or warrants become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the date of the
occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with
such rights (and a termination or expiration of the existing rights or
warrants without exercise by any of the holders thereof). In addition, in
the event of any distribution (or deemed distribution) of rights or
warrants, or any Trigger Event or other event (of the type described in the
preceding sentence) with respect thereto that was counted for purposes of
calculating a distribution amount for which an adjustment to the Conversion
Price under this Section 15.5 was made, (1) in the case of any such rights
or warrants which shall all have been redeemed or repurchased without
exercise by
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any holders thereof, the Conversion Price shall be readjusted upon such
final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution,
equal to the per share redemption or repurchase price received by a holder
or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all
holders of Common Stock as of the date of such redemption or repurchase,
and (2) in the case of such rights or warrants which shall have expired or
been terminated without exercise by any holders thereof, the Conversion
Price shall be readjusted as if such rights and warrants had not been
issued.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that
also includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of Common Stock (or both), shall be deemed instead
to be (1) a dividend or distribution of the evidences of indebtedness,
assets or shares of capital stock other than such shares of Common Stock or
rights or warrants (and any Conversion Price reduction required by this
Section 15.5(d) with respect to such dividend or distribution shall then be
made) immediately followed by (2) a dividend or distribution of such shares
of Common Stock or such rights or warrants (and any further Conversion
Price reduction required by Sections 15.5(a) and (b) with respect to such
dividend or distribution shall then be made), except (A) the Record Date of
such dividend or distribution shall be substituted as "the date fixed for
the determination of stockholders entitled to receive such dividend or
other distribution" and "the date fixed for such determination" within the
meaning of Sections 15.5(a) and (b) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding
at the close of business on the date fixed for such determination" within
the meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding (x) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of
(A) the amount per share of Common Stock of the next preceding quarterly
cash dividend on the Common Stock to the extent that such preceding
quarterly dividend did not require any adjustment of the Conversion Price
pursuant to this Section 15.5(e) (as adjusted to reflect subdivisions or
combinations of the Common Stock), and (B) 3.75% of the arithmetic average
of the Closing Prices (determined as set forth in Section 15.5(h)) during
the ten consecutive Trading Days (as defined in Section 15.5(h))
immediately prior to the date of declaration of such dividend, and (y) any
dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary), then, in such
case, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on the Record Date for such
distribution by a fraction of which the numerator shall be the Current
Market Price of the Common Stock on the Record Date less the amount of cash
so distributed (and not excluded as provided above) applicable to one share
of Common Stock and the denominator shall be such Current Market Price of
the Common Stock, such reduction to be effective immediately prior to the
opening of business on the day following the Record Date; PROVIDED,
HOWEVER, that in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the
Current Market Price of the Common Stock on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon
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conversion the amount of cash such holder would have received had such
holder converted each Note on the Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not been declared. If any adjustment
is required to be made as set forth in this Section 15.5(e) as a result of
a distribution that is a quarterly dividend, such adjustment shall be based
upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 15.5(e)
above as a result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
(f) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per
share of Common Stock having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described
in a resolution of the Board of Directors) that as of the last time (the
"Expiration Time") tenders or exchanges may be made pursuant to such tender
or exchange offer (as it may be amended) that exceeds the Current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect immedi-
ately prior to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the
Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time and the denominator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) on the Expiration Time
and the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become effective as of
immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such purchases
or all such purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a person other than
the Company or any subsidiary of the Company for an amount which increases
the offeror's ownership of Common Stock to more than 25% of the Common
Stock outstanding and shall involve the payment by such person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive, and described in a resolution of the Board of Directors) at the
last time (the "Expiration Time") tenders or exchanges may be made pursuant
to such tender or exchange offer (as it shall have been amended) that
exceeds the Current Market Price of the Common Stock on the Trading
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Day next succeeding the Expiration Time, and in which, as of the Expiration
Time the Board of Directors is not recommending rejection of the offer, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the Expiration Time by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) on the Expiration Time multiplied by the current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time and the denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time and the
Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective as of immediately
prior to the opening of business on the day following the Expiration Time.
In the event that such person is obligated to purchase shares pursuant to
any such tender or exchange offer, but such person is permanently prevented
by applicable law from effecting any such purchases or all such purchases
are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment
described in this Section 15.5(g) shall not be made if, as of the
Expiration Time, the offering documents with respect to such offer disclose
a plan or intention to cause the Company to engage in any transaction
described in Article XII.
(h) For purposes of this Section 15.5, the following terms shall have
the meaning indicated:
(1) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case
no such sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in each case on the New
York Stock Exchange, or, if such security is not listed or admitted to
trading on such Exchange, on the principal national security exchange
or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the
average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally
accepted reporting service, or if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof,
whose determination shall be conclusive.
(2) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive
Trading Days immediately prior to the date in question; PROVIDED,
HOWEVER, that (1) if the "ex" date (as hereinafter defined) for any
event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Sec-
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tion 15.5(a), (b), (c), (d), (e), (f) or (g) occurs during such ten
consecutive Trading Days, the Closing Price for each Trading Day prior
to the "ex" date for such other event shall be adjusted by multiplying
such Closing Price by the same fraction by which the Conversion Price
is so required to be adjusted as a result of such other event, (2) if
the "ex" date for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f)
or (g) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such
other event, and (3) if the "ex" date for the issuance or distribution
requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause (1) or
(2) of this proviso, the Closing Price for each Trading Day on or
after such "ex" date shall be adjusted by adding thereto the amount of
any cash and the fair market value (as determined by the Board of
Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof in a manner consistent with any
determination of such value for purposes of Section 15.5(d), (f) or
(g), whose determination shall be conclusive and described in a
resolution of the Board of Directors or such duly authorized committee
thereof, as the case may be) of the evidences of indebtedness, shares
of capital stock or assets being distributed applicable to one share
of Common Stock as of the close of business on the day before such
"ex" date. For purposes of any computation under Section 15.5(f) or
(g), the Current Market Price of the Common Stock on any date shall be
deemed to be the average of the daily Closing Prices per share of
Common Stock for such day and the next two succeeding Trading Days;
PROVIDED, HOWEVER, that if the "ex" date for any event (other than the
tender or exchange offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 15.5(a), (b),
(c), (d), (e), (f) or (g) occurs on or after the Expiration Time for
the tender or exchange offer requiring such computation and prior to
the day in question, the Closing Price for each Trading Day on and
after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by
which the Conversion Price is so required to be adjusted as a result
of such other event. For purposes of this paragraph, the term "ex"
date, (1) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular way on
the relevant exchange or in the relevant market from which the Closing
Price was obtained without the right to receive such issuance or
distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes
effective, and (3) when used with respect to any tender or exchange
offer means the first date on which the Common Stock trades regular
way on such exchange or in such market after the Expiration Time of
such offer.
(3) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
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(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is exchanged for or converted into any combination of cash, securities
or other property, the date fixed for determination of shareholders
entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract
or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New York Stock
Exchange or another national security exchange is open for business or
(y) if the applicable security is quoted on the Nasdaq National
Market, a day on which trades may be made on thereon or (z) if the
applicable security is not so listed, admitted for trading or quoted,
any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5 (a), (b), (c), (d), (e), (f)
and (g), as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time
if the period is at least twenty (20) days, the reduction is irrevocable
during the period and the Board of Directors shall have made a
determination that such reduction would be in the best interests of the
Company, which determination shall be conclusive. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail
to holders of record of the Notes a notice of the reduction at least
fifteen (15) days prior to the date the reduced Conversion Price takes
effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 15.5(j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article XV shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may
be. No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest. To
the extent the Notes become convertible into cash, assets, property or
securities (other than capital stock of the Company), no adjustment need be
made thereafter as to the cash, assets, property or such securities.
Interest will not accrue on the cash.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion
Price after such adjustment and setting forth a brief
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statement of the facts requiring such adjustment. Promptly after delivery
of such certificate, the Company shall prepare a notice of such adjustment
of the Conversion Price setting forth the adjusted Conversion Price and the
date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Price to the holder of each Note at
his last address appearing on the Note register provided for in Section 2.5
of this Indenture, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 15.5 provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the holder of any Note converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash
in lieu of any fraction pursuant to Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury
of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
Section 15.6 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that such Note shall be convertible
into the kind and amount of shares of stock and other securities or property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Notes (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock
available to convert all such Notes) immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance assuming such
holder of Common Stock did not exercise his rights of election, if any, as to
the kind or amount of shares of stock and other securities or property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance (provided that, if the kind or amount of
shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
("nonelecting share")), then for the purposes of this Section 15.6 the kind and
amount of shares of stock and other securities or property or assets (including
cash)
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receivable upon such reclassification change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares. Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 15.6 applies to any event or occurrence, Section 15.5 shall
not apply.
Section 15.7 TAXES ON SHARES ISSUED. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
Section 15.8 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE
WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company shall
reserve, free from preemptive rights, out of its authorized but unissued shares
or shares held in treasury, sufficient shares of Common Stock to provide for the
conversion of the Notes from time to time as such Notes are presented for
conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Notes will upon issue be fully paid and non-assessable by the
Company and free from all taxes, liens and charges with respect to the issue
thereof.
The Company covenants that if any shares of Common Stock to be provided for
the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that if at any time the Common Stock shall be
listed on the New York Stock Exchange or any other national securities exchange
the Company will, if permitted by
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the rules of such exchange, list and keep listed so long as the Common Stock
shall be so listed on such exchange, all Common Stock issuable upon conversion
of the Notes.
Section 15.9 RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Subject to
the provisions of Section 8.1, neither the Trustee nor any conversion agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion or
to comply with any of the duties, responsibilities or covenants of the Company
contained in this Article. Without limiting the generality of the foregoing,
neither the Trustee nor any conversion agent shall be under any responsibility
to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 15.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 15.10 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Conversion
Price pursuant to Section 15.5; or
(b) the Company shall authorize the granting to all or substantially
all the holders of its Common Stock of rights or warrants to subscribe for
or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value,
or from no par value to par value), or of any consolidation or merger to
which the Company is a party and for which approval of any shareholders of
the Company is required, or of the sale or transfer of all or substantially
all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register provided for in
Section 2.5 of this Indenture, as promptly as
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possible but in any event at least fifteen (15) days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, or
rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
ARTICLE XVI
REPURCHASE OF NOTES AT THE
OPTION OF THE HOLDER UPON CHANGE IN CONTROL
Section 16.1 RIGHT TO REQUIRE REPURCHASE. In the event that a Change in
Control (as hereinafter defined) shall occur, then each holder shall have the
right, at the holder's option, to require the Company to repurchase, and upon
the exercise of such right the Company shall repurchase, all of such holder's
Notes, or any portion of the principal amount thereof that is an integral
multiple of $1,000 (provided that no single Note may be repurchased in part
unless the portion of the principal amount of such Note to be outstanding after
such repurchase is equal to $1,000 or an integral multiples of $1,000), on the
date (the "Repurchase Date") that is 30 days after the date of the Company
Notice (as defined in Section 16.2) for cash at a purchase price equal to 100%
of the principal amount (the "Repurchase Price") plus interest accrued and
unpaid interest to, but excluding, the Repurchase Date; PROVIDED that if the
Repurchase Date is March 1 or September 1, then the interest payable on such
date shall be paid to the holder of record of the Note on the next preceding
February 15 or August 15, respectively. Whenever in this Indenture there is a
reference, in any context, to the principal of any Note as of any time, such
reference shall be deemed to include reference to the Repurchase Price payable
in respect of such Note to the extent that such Repurchase Price is, was or
would be so payable at such time, and express mention of the Repurchase Price in
any provision of this Indenture shall not be construed as excluding the
Repurchase Price in those provisions of this Indenture when such express mention
is not made.
Section 16.2 NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.
(a) Unless the Company shall have theretofore called for redemption
all of the outstanding Notes pursuant to Article III, on or before the 30th day
after the occurrence of a Change in Control, the Company or, at the request of
the Company on or before the 15th day after such occurrence, the Trustee shall
give to all holders of Notes notice (the "Company Notice") of the occurrence of
the Change in Control and of the repurchase right set forth herein arising as a
result thereof. The Company shall also deliver a copy of such notice of a
repurchase right to the Trustee.
Each notice of a repurchase right shall state:
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(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price,
(4) a description of the procedure which a holder must follow to
exercise a repurchase right,
(5) that on the Repurchase Date the Repurchase Price will become due
and payable upon each such Note designated by the holder to be repurchased, and
that interest thereon shall cease to accrue on and after said date,
(6) the Conversion Price, the date on which the right to convert the
Notes to be repurchased will terminate and the places where such Notes may be
surrendered for conversion, and
(7) the place or places where such Notes are to be surrendered for
payment of the Repurchase Price and accrued interest, if any.
No failure of the Company to give the foregoing notices or defect therein
shall limit any holder's right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of Notes.
If any of the foregoing provisions or other provisions of this Article are
inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a holder shall deliver to the
Trustee or any paying agent on or before the 30th day after the date of the
Company Notice (i) written notice of the holder's exercise of such right, which
notice shall set forth the name of the holder, the principal amount of the Notes
to be repurchased (and, if any Note is to repurchased in part, the serial number
thereof, the portion of the principal amount thereof to be repurchased and the
name of the Person in which the portion thereof to remain outstanding after such
repurchase is to be registered) and a statement that an election to exercise the
repurchase right is being made thereby, and (ii) the Notes with respect to which
the repurchase right is being exercised.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
or the paying agent the Repurchase Price in cash, for payment to the holder on
the Repurchase Date, together with accrued and unpaid interest to, but
excluding, the Repurchase Date payable with respect to the Notes as to which the
purchase right has been exercised.
(d) If any Note (or portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal amount of such Note (or
portion thereof, as the case may be) shall, until paid, bear interest from the
Repurchase Date at the rate of 6% per annum, and each Note shall remain
convertible into Common Stock until the principal of such Note (or portion
thereof, as the case may be) shall have been paid or duly provided for.
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(e) Any Note which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the holder of such Note without service
charge, a new Note or Notes, containing identical terms and conditions, each in
an authorized denomination in aggregate principal amount equal to and in
exchange for the portion of the principal of the Note so surrendered that was
not repurchased.
(f) Any holder that has delivered to the Trustee its written notice
exercising its right to require the Company to repurchase its Notes upon a
Change in Control shall have the right to withdraw such notice at any time prior
to the close of business on the Repurchase Date by delivery of a written notice
of withdrawal to the Trustee prior to the close of business on such date. A
Note in respect of which a holder is exercising its option to require repurchase
upon a Change in Control may be converted into Common Stock in accordance with
Article XV only if such holder withdraws its notice in accordance with the
preceding sentence.
Section 16.3 CERTAIN DEFINITIONS. For purposes of this Article XVI,
(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3 promulgated by the Commission pursuant to the Exchange Act; and
(b) the term "Person" shall include any syndicate or group which
would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act.
Section 16.4 CHANGE IN CONTROL. A "Change in Control" shall be deemed to
have occurred at such time after the original issuance of the Notes as:
(a) any Person, other than the Company, any subsidiary of the
Company, or any employee benefit plan of the Company or any such subsidiary, is
or becomes the beneficial owner, directly or indirectly, through a purchase or
other acquisition transaction or series of transactions (other than a merger or
consolidation involving the Company), of shares of capital stock of the Company
entitling such Person to exercise in excess of 50% of the total voting power of
all shares of capital stock of the Company entitled to vote generally in the
election of directors; or
(b) there occurs any consolidation of the Company with, or merger of
the Company into, any other Person, any merger of another Person into the
Company, or any sale or transfer of all or substantially all of the assets of
the Company to another Person (other than (i) any such transaction pursuant to
which the holders of the Common Stock immediately prior to such transaction
have, directly or indirectly, shares of capital stock of the continuing or
surviving corporation immediately after such transaction which entitle such
holders to exercise in excess of 50% of the total voting power of all shares of
capital stock of the continuing or surviving corporation entitled to vote
generally in the election of directors and (ii) any merger (1) which does not
result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock or (2) which is effected solely to change the
jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares
of common stock);
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provided, however, that a Change in Control shall not be deemed to have occurred
if either (a) the Closing Price per share of the Common Stock for any ten
Trading Days within the period of twenty consecutive Trading Days ending
immediately before the Change in Control shall equal or exceed 105% of the
Conversion Price in effect on each such Trading Day, or (b) at least 90% of the
consideration (excluding cash payments for fractional shares) in the transaction
or transactions constituting the Change in Control consists of shares of common
stock with full voting rights traded on a national securities exchange or quoted
on the Nasdaq National Market (or which will be so traded or quoted when issued
or exchanged in such connection with such Change in Control) and as a result of
such transaction or transactions such Notes become convertible solely into such
common stock.
Section 16.5 CONSOLIDATION, MERGER, ETC. In the case of any
reclassification, change, consolidation, merger, combination, sale or conveyance
to which Section 15.6 applies, in which the Common Stock of the Company is
changed or exchanged as a result into the right to receive shares of stock and
other securities or property or assets (including cash) which includes shares of
Common Stock of the Company or common stock of another person that are, or upon
issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States and such shares constitute at the time such change or
exchange becomes effective in excess of 50% of the aggregate fair market value
of such shares of stock and other securities, property and assets (including
cash) (as determined by the Company, which determination shall be conclusive and
binding), then the person formed by such consolidation or resulting from such
merger or combination or which acquires the properties or assets (including
cash) of the Company, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
modifying the provisions of this Indenture relating to the right of holders of
the Notes to cause the Company to repurchase the Notes following a Change in
Control, including without limitation the applicable provisions of this Article
XVI and the definitions of the Common Stock and Change in Control, as
appropriate, and such other related definitions set forth herein as determined
in good faith by the Company (which determination shall be conclusive and
binding), to make such provisions apply to the common stock and the issuer
thereof if different from the Company and Common Stock of the Company (in lieu
of the Company and the Common Stock of the Company).
ARTICLE XVII
MISCELLANEOUS PROVISIONS
Section 17.1 PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 17.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
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Section 17.3 ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Solectron Corporation, 847 Gibraltar Drive, Building 5, Milpitas,
California 95035, Attention: Chief Financial Officer. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as of which this Indenture is dated, located at 2 International Place, Boston,
Massachusetts, Attention: Corporate Trust Division (Solectron Corporation, 6%
Convertible Subordinated Notes due 2006).
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 17.4 GOVERNING LAW. This Indenture and each Note shall be deemed
to be a contract made under the laws of New York, and for all purposes shall be
construed in accordance with the laws of New York.
Section 17.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 17.6 LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of the Notes or the date fixed for redemption or
repurchase of any Note will not be a Business
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Day, then payment of such interest on or principal of the Notes need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption or repurchase, and no interest shall accrue for the period from and
after such date.
Section 17.7 TRUST INDENTURE ACT. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the Trust Indenture Act required
to be part of and to govern indentures qualified under the Trust Indenture Act;
PROVIDED, HOWEVER, that, unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect or as hereafter amended or modified;
PROVIDED, FURTHER, that this Section 17.7 shall not require this Indenture or
the Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to such
supplemental indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.
Section 17.8 NO SECURITY INTEREST CREATED. Nothing in this Indenture or
in the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction where property of the
Company or its subsidiaries is located.
Section 17.9 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 17.10 TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 17.11 AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3, 15.2 and 16.2, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a person
eligible to serve as trustee hereunder pursuant to Section 8.9.
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Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture, and upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 17.11 shall
be applicable to any authenticating agent.
Section 17.12 EXECUTION IN COUNTERPARTS. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
State Street Bank and Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed, all as of the date first written above.
SOLECTRON CORPORATION
By:
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Name:
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Title:
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Attest:
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Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
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Name:
------------------------------------
Title:
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Attest:
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Title:
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of February 15, 1996, by and among Solectron Corporation, a California
corporation (the "Company"), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Hambrecht & Quist LLC (the
"Initial Purchasers") pursuant to the Purchase Agreement, dated as of February
15, 1996 (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 of this Agreement is a condition to
the closing under the Purchase Agreement.
The Company agrees with the Initial Purchasers, (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the holders from time to time of
the Notes (including the Initial Purchasers) and the holders from time to time
of the Common Stock issued upon conversion of the Notes (each of the foregoing a
"Holder" and together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:
AFFILIATE: "Affiliate" means, with respect to any specified person,
(i) any other person directly or indirectly controlling or controlled by, or
under direct or indirect common control with, such specified person or (ii) any
officer or director of such other person. For purposes of this definition, the
term "control" (including the terms "controlling," "controlled by" and "under
common control with") of a person means the possession, direct or indirect, of
the power (whether or not exercised) to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
COMMON STOCK: The shares of common stock, no par value, of the Company
and any other shares of common stock as may constitute "Common Stock" for
purposes of the Indenture, in each case, as issuable or issued upon conversion
of the Notes.
DAMAGES ACCRUAL PERIOD: See Section 2(c) hereof.
DAMAGES PAYMENT DATE: Each of the semi-annual interest payment dates
provided in the Indenture, whether or not Liquidated Damages are payable on such
date.
DEFERRAL PERIOD: See Section 2(d) hereof.
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EFFECTIVENESS PERIOD: The period commencing with the date hereof and
ending on the earlier of the date that is three years after the latest date of
original issuance of the Notes and the date that all Registrable Securities have
ceased to be Registrable Securities.
EVENT: See Section 2(e) hereof.
EVENT DATE: See Section 2(e) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
FILING DATE: See Section 2(a) hereof.
HOLDER: See the second paragraph of this Agreement.
INDENTURE: The Indenture, dated as of February 15, 1996, between the
Company and State Street Bank and Trust Company, as trustee, pursuant to which
the Notes are being issued, as amended or supplemented from time to time in
accordance with the terms hereof.
INITIAL PURCHASERS: Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Hambrecht & Quist LLC.
INITIAL SHELF REGISTRATION: See Section 2(a) hereof.
LIQUIDATED DAMAGES: See Section 2(e) hereof.
LOSSES: See Section 6 hereof.
MANAGING UNDERWRITERS: The investment banking firm or firms that
shall manage or co-manage an Underwritten Offering.
NOTES: The 6% Convertible Subordinated Notes due 2006 of the Company
being issued and sold pursuant to the Purchase Agreement and the Indenture.
NOTICE HOLDER: See Section 2(d)(i) hereof.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
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PURCHASE AGREEMENT: See the first paragraph of this Agreement.
RECORD HOLDER: (i) with respect to any Damages Payment Date relating
to any Note as to which any Liquidated Damages have accrued, the registered
holder of such Note on the record date with respect to the interest payment date
under the Indenture on which such Damages Payment Date shall occur and (ii) with
respect to any Damages Payment Date relating to any Common Stock as to which any
Liquidated Damages have accrued, the registered holder of such Common Stock 15
days prior to such Damages Payment Date.
REGISTRABLE SECURITIES: The Common Stock of the Company into which
the Notes are convertible or converted, whether or not such Notes have been
converted (and associated rights), and at all times subsequent thereto, and any
Common Stock issued with respect thereto upon any stock dividend, split or
similar event until, in the case of any such Common Stock, (i) it is effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it, (ii) it is saleable by the holder thereof
pursuant to Rule 144(k) or (iii) it is sold to the public pursuant to Rule 144,
and, as a result of the event or circumstance described in any of the foregoing
clauses (i) through (iii), the legends with respect to transfer restrictions
required under the Indenture (other than any such legends required solely as the
consequences of the fact that the Registrable Securities (or the Notes, upon the
conversion of which, such Registrable Securities were issued or are issuable)
are owned by, or were previously owned by, the Company or an Affiliate of the
Company) are removed or removable in accordance with the terms of the Indenture.
REGISTRATION EXPENSES: See Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
RULE 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
RULE 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
SELLING PERIOD: See Section 2(d)(i) hereof.
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SHELF REGISTRATION: See Section 2(a) hereof.
SPECIAL COUNSEL: Mayer, Brown & Platt, or such other successor counsel
as shall be specified by the holders of a majority of the Registerable
Securities, the fees and expenses of which will be paid by the Company pursuant
to Section 5 hereof.
SUBSEQUENT SHELF REGISTRATION: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The Trustee under the Indenture.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. SHELF REGISTRATION.
(a) SHELF REGISTRATION. The Company shall prepare and file with the
SEC, as soon as practicable but in any event on or prior to the date sixty (60)
days following the latest date of original issuance of the Notes (the "Filing
Date"), a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 of the Securities Act (a "Shelf Registration")
registering the resale from time to time by Holders thereof of all of the
Registrable Securities upon and following conversion of the Notes (the "Initial
Shelf Registration"). The Initial Shelf Registration shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by such Holders in the manner or manners designated by them
(including, without limitation, one or more Underwritten Offerings). The
Company shall use its reasonable efforts to cause the Initial Shelf Registration
to be declared effective under the Securities Act as soon as practicable and to
keep the Initial Shelf Registration continuously effective under the Securities
Act until the earlier of the expiration of the Effectiveness Period or the date
a Subsequent Shelf Registration, as defined below, covering all of the
Registrable Securities has been declared effective under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason as a
result of the issuance of a stop order by the SEC at any time during the
Effectiveness Period, the Company shall use its reasonable efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall within thirty (30) days of such cessation of effectiveness amend the
Shelf Registration in a manner reasonably expected to obtain the withdrawal of
the order suspending the effectiveness thereof, or file an additional Shelf
Registration covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Company shall
use its reasonable efforts to cause the Subsequent Shelf Registration to be
declared effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective until the end of the Effectiveness
Period.
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(c) The Company shall supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration, if required
by the Securities Act, or if reasonably requested by the Initial Purchasers or
by the Trustee on behalf of a majority of the Holders of the Registrable
Securities covered by such Registration Statement or by any Managing Underwriter
of such Registrable Securities in the event of an Underwritten Offering of the
Registrable Securities.
(d) Each Holder of Registrable Securities agrees that if Holder
wishes to sell its Registrable Securities pursuant to a Shelf Registration and
related Prospectus, it will do so only in accordance with this Section 2(d).
Each Holder of Registrable Securities agrees to give written notice to the
Company at least three Business Days prior to any intended distribution of
Registrable Securities under the Shelf Registration, which notice shall specify
the date on which such Holder intends to begin such distribution and such
information with respect to such Holder and the intended distribution of
Registrable Securities by such Holder as may be required to amend the
Registration Statement or supplement the related Prospectus with respect to such
intended distribution of Registrable Securities by such Holder. As soon as
practicable after the date such notice is provided, and in any event within two
Business Days after such date, the Company shall either:
(i) (A) If necessary, prepare and file with the Commission a
post-effective amendment to the Shelf Registration or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and so that, as thereafter delivered
to purchasers of the Registrable Securities being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (B) provide the Notice Holders (as defined below) copies of any
documents filed pursuant to Section 2(d)(i)(A); and (C) inform the Notice Holder
that the Company has complied with its obligations in Section 2(d)(i)(A) (or
that, if the Company has filed a post-effective amendment to the Shelf
Registration which has not yet been declared effective, the Company will notify
the Notice Holder to that effect, will use its reasonable efforts to secure the
effectiveness of such post-effective amendment and will immediately notify the
Notice Holder when the amendment has become effective); each Holder who has
given notice of intention to distribute such Holder's Registrable Securities in
accordance with Section 2(d) hereof (a "Notice Holder") will sell all or any of
such Registrable Securities pursuant to the Shelf Registration and related
Prospectus only during the 45-day period commencing with the date on which the
Company gives notice, pursuant to Section 2(d)(i)(C), that the Registration
Statement and Prospectus may be used for such purpose (such 45-day period is
referred to as a "Selling Period"). The Notice Holders will not sell any
Registrable Securities pursuant to such Registration Statement or Prospectus
after such Selling Period
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without giving a new notice of intention to sell pursuant to Section 2(d) hereof
and receiving a further notice from the Company pursuant to Section 2(d)(i)(C)
hereof.
(ii) in the event (A) of the happening of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) hereof
or (B) that, in the judgment of the Company, it is advisable to suspend use of
the Prospectus for a discrete period of time due to pending material corporate
developments or similar material events that have not yet been publicly
disclosed and as to which the Company believes public disclosure will be
prejudicial to the Company, the Company shall deliver a certificate in writing,
signed by an authorized executive officer of the Company, to the Notice Holders,
the Special Counsel and the Managing Underwriters, if any, to the effect of the
foregoing and, upon receipt of such certificate, each such Notice Holder's
Selling Period will not commence until such Notice Holder's receipt of copies of
the supplemented or amended Prospectus provided for in Section 2(d)(i)(A)
hereof, or until it is advised in writing by the Company that the Prospectus may
be used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus. The
Company will use its reasonable efforts to ensure that the use of the Prospectus
may be resumed, and the Selling Period will commence, as soon as practicable
and, in the case of a pending development or event referred to in
Section 2(d)(ii)(B) hereof, as soon as the earlier of (x) public disclosure of
such pending material corporate development or similar material event or (y) in
the judgment of the Company, public disclosure of such material corporate
development or similar material event would not be prejudicial to the Company.
Notwithstanding the foregoing, the Company shall not under any circumstances be
entitled to exercise its right under this Section 2(d)(ii) to defer the
commencement of a Selling Period (whether as a result of events referred to in
Section 2(d)(ii)(A) hereof or as a result of the pending development or event
referred to in Section 2(d)(ii)(B) hereof) more than one (1) time in any three
(3) month period or two (2) times in any twelve (12) month period, and the
period in which a Selling Period is suspended shall not exceed fifteen (15) days
unless the Company shall deliver to such Notice Holders a second notice to the
effect set forth above, which shall have the effect of extending the period
during which such Selling Period is deferred by up to an additional fifteen (15)
days, or such shorter period of time as is specified in such second notice. In
no event shall the Company be permitted to extend the period during which such
Selling Period is deferred from and after the date a Notice Holder provides
notice to the Company in accordance with this Section 2(d) of its intention to
distribute Registrable Securities (a "Deferral Period") beyond such thirty (30)
day period.
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
has not been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act, (iii) the aggregate number of days in any one Deferral Period exceeds the
periods permitted pursuant to Section 2(d)(ii) hereof or (iv) the number of
Deferral Periods exceeds the number permitted
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pursuant to Section 2(d)(ii) hereof (each of the events of a type described in
any of the foregoing clauses (i) through (iv) are individually referred to
herein as an "Event," and the Filing Date in the case of clause (i), the date on
which the effectiveness of the Shelf Registration has been suspended or
proceedings with respect to the Shelf Registration under Section 8(d) or 8(e) of
the Securities Act have been commenced in the case of clause (ii), the date on
which the duration of a Deferral Period exceeds the periods permitted by
Section 2(d)(ii) hereof in the case of clause (iii), and the date of the
commencement of a Deferral Period that causes the limit on the number of
Deferral Periods under Section 2(d)(ii) hereof to be exceeded in the case of
clause (iv), being referred to herein as an "Event Date"). Events shall be
deemed to continue until the date of the termination of such Event, which shall
be the following dates with respect to the respective types of Events: the date
the Initial Registration Statement is filed in the case of an Event of the type
described in clause (i), the date that all stop orders suspending effectiveness
of the Shelf Registration have been removed and the proceedings initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act have terminated, as the case may be, in the case of Events of the types
described in clause (ii), termination of the Deferral Period which caused the
aggregate number of days in any one Deferral Period to exceed the number
permitted by Section 2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iii), and termination of the Deferral Period the
commencement of which caused the number of Deferral Periods permitted by
Section 2(d)(ii) to be exceeded in the case of Events of the type described in
clause (iv).
Accordingly, upon the occurrence of any Event and until such time as there
are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): (A)(i) to each holder of a Note
that is a Notice Holder, accruing at a rate equal to one-half of one percent per
annum (50 basis points) on the aggregate principal amount of Notes held by such
Notice Holder and (ii) to each holder of Common Stock that is a Notice Holder,
accruing at a rate equal to one-half of one percent per annum (50 basis points)
calculated on an amount equal to the product of (x) the then-applicable
Conversion Price (as defined in the Indenture), times (y) the number of shares
of Common Stock held by such holder; and (B) if the Damages Accrual Period
continues for a period in excess of thirty (30) days from the Event Date, from
and after the end of such thirty (30) day period until such time as there are no
Events which have occurred and are continuing, (i) to each holder of a Note
(whether or not a Notice Holder), accruing at a rate equal to one-half of one
percent per annum (50 basis points) on the aggregate principal amount of Notes
held by such holder and (ii) to each holder of Common Stock (whether or not a
Notice Holder), accruing at a rate equal to one-half of one percent per annum
(50 basis points) calculated on an amount equal to the product of (x) the then-
applicable Conversion Price (as defined in the Indenture), times (y) the number
of shares of Common Stock held by such holder. Notwithstanding the foregoing,
no Liquidated Damages shall accrue under clause (A) for the preceding sentence
during any period for which Liquidated Damages accrue under clause (B) of the
preceding sentence or as to any Registrable Securities from and after the
earlier of (x) the date such securities are no longer Registrable Securities,
and (y) the expiration of the Effectiveness Period. The rate of accrual of the
Liquidated Damages
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with respect to any period shall not exceed the rate provided for in this
paragraph notwithstanding the occurrence of multiple concurrent Events.
The Company shall pay the Liquidated Damages due on any Notes or Common
Stock by depositing with the Trustee under the Indenture, in trust, for the
benefit of the holders of Notes or Common Stock or Notice Holder, as the case
may be, entitled thereto, at least one Business Day prior to the applicable
Damages Payment Date, sums sufficient to pay the Liquidated Damages accrued or
accruing since the last preceding Damages Payment Date through such Damages
Payment Date. The Liquidated Damages shall be paid by the Company to the Record
Holders on each Damages Payment Date by wire transfer of immediately available
funds to the accounts specified by them or by mailing checks to their registered
addresses as they appear in the Note register (as defined in the Indenture), in
the case of the Notes, and in the register of the Company for the Common Stock,
in the case of the Common Stock, if no such accounts have been specified on or
before the Damage Payment Date; PROVIDED, HOWEVER, that any Liquidated Damages
accrued with respect to any Note or portion thereof called for redemption on a
redemption date, or repurchased in connection with a Change in Control (as
defined in the Indenture) on a repurchase date, or converted into Common Stock
on a conversion date prior to the Damages Payment Date, shall, in any such
event, be paid instead to the holder who submitted such Note or portion thereof
for redemption, repurchase or conversion on the applicable redemption date,
repurchase date or conversion date, as the case may be, on such date (or
promptly following the conversion date, in the case of conversion of a Note).
If a holder of a Note submits a Note for conversion during the period between a
record date for the payment of Liquidated Damages and the related Damages
Payment Date, Liquidated Damages for the period from the conversion date through
the next succeeding Damages Payment Date shall accrue and be payable to the
holder of Common Stock received on conversion on the next succeeding Damages
Payment Date, notwithstanding that such holder was not a Record Holder with
respect to such Damages Payment Date. The Trustee shall be entitled, on behalf
of the holders of Notes, Common Stock and Notice Holder, to seek any available
remedy for the enforcement of this Agreement, including for the payment of such
Liquidated Damages. Notwithstanding the foregoing, the parties agree that the
sole damages payable for a violation of the terms of this Agreement with respect
to which Liquidated Damages are expressly provided shall be such Liquidated
Damages. Nothing shall preclude a Notice Holder or holder of Registrable
Securities from pursuing or obtaining specific performance or other equitable
relief with respect to this Agreement.
All of the Company's obligations set forth in this Section 2(e) which are
outstanding with respect to any Registrable Securities at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section 8(o)).
The parties hereto agree that the Liquidated Damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by holders of Registrable Securities (other than the Initial
Purchasers) by reason of the failure of the Shelf Registration to
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be filed or declared effective or unavailable (absolutely or as a practical
matter) for effecting resales of Registrable Securities, as the case may be, in
accordance with the provisions hereof.
3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations under Section 2 hereof, the Company shall effect such
registrations to permit the sale of the Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Company shall as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders thereof in
accordance with the intended method or methods of distribution thereof, and use
its reasonable efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; PROVIDED, that before filing
any such Registration Statement or Prospectus or any amendments or supplements
thereto (other than documents that would be incorporated or deemed to be
incorporated therein by reference and that the Company is required by applicable
securities laws or stock exchange requirements to file) the Company shall
furnish to the Initial Purchasers, the Special Counsel and the Managing
Underwriters of such offering, if any, copies of all such documents proposed to
be filed, which documents will be subject to the review of the Initial
Purchasers, the Special Counsel and such Managing Underwriters, and the Company
shall not file any such Registration Statement or amendment thereto or any
Prospectus or any supplement thereto (other than such documents which, upon
filing, would be incorporated or deemed to be incorporated by reference therein
and that the Company is required by applicable securities laws or stock exchange
requirements to file) to which the Holders of a majority of the Registrable
Securities covered by such Registration Statement, the Initial Purchasers or the
Special Counsel shall reasonably object in writing within two full Business
Days.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement as so amended or such
Prospectus as so supplemented.
(c) Notify the Notice Holders, the Initial Purchasers, the Special
Counsel and the Managing Underwriters, if any, promptly, and (if requested by
any such person) confirm such notice in writing, (i) when a Prospectus, any
Prospectus supplement, a Registration Statement or a post-effective amendment to
a Registration Statement has been filed with the SEC, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the SEC or any other federal or state
governmental authority for amendments or supplements to a Registration
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<PAGE>
Statement or related Prospectus or for additional information, (iii) of the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) of the existence of any fact or happening of
any event which makes any statement of a material fact in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue or which would require the making of
any changes in the Registration Statement or Prospectus in order that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and that in the case
of the Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Company's determination that a post-
effective amendment to a Registration Statement would be appropriate.
(d) Use its reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.
(e) If reasonably requested by the Initial Purchasers or the Managing
Underwriters, if any, or the Holders of a majority of the Registrable Securities
being sold, (i) promptly incorporate in a Prospectus supplement or post-
effective amendment to a Registration Statement such information as the Initial
Purchaser, the Special Counsel, the Managing Underwriters, if any, or such
Holders, in connection with any offering of Registrable Securities, agree should
be included therein as required by applicable law, and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
PROVIDED, that the Company shall not be required to take any actions under this
Section 3(e) that are not, in the reasonable opinion of counsel for the Company,
in compliance with applicable law.
(f) Furnish to the Special Counsel and the Initial Purchasers, and
each Managing Underwriter, if any, without charge, at least one conformed copy
of the Registration Statement or Statements and any amendment thereto, including
financial statements but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits (unless
requested in writing by such counsel, Initial Purchasers or underwriter).
(g) Deliver to each selling Holder, the Special Counsel and the
Initial Purchasers and each Managing Underwriter, if any, in connection with any
offering of
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Registrable Securities, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such persons may
reasonably request; and the Company hereby consents to the use of such
Prospectus or each amendment or supplement thereto by each of the selling
Holders of Registrable Securities and the Underwriters, if any, in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders, the Managing
Underwriters, if any, and the Special Counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any selling Holder or Managing Underwriter reasonably requests in writing; keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
applicable Registration Statement; PROVIDED, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it is
not then so qualified or (ii) take any action that would subject it to general
service of process in suits or to taxation in any such jurisdiction where it is
not then so subject.
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, except as may be
required solely as a consequence of the nature of such selling Holder, in which
case the Company will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals, as may be
necessary to enable the selling Holder or Holders thereof or the Managing
Underwriters, if any, to consummate the disposition of such Registrable
Securities.
(j) During any Selling Period (other than during a Deferral Period),
immediately upon the existence of any fact or the occurrence of any event as a
result of which a Registration Statement shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or a Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, promptly prepare and file a post-effective amendment to each
Registration Statement or a supplement to the related Prospectus or any document
incorporated therein by reference or file any other required document (such as a
Current Report on Form 8-K) that would be incorporated by reference into the
Registration Statement so that the Registration Statement shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and so that the Prospectus will not contain any untrue statement of a material
fact or omit to state any material fact or omit to state
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<PAGE>
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a post-
effective amendment to a Registration Statement, use its best efforts to cause
it to become effective as soon as practicable.
(k) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including, in the event of an underwritten offering, those
reasonably requested by the Managing Underwriters, if any, or the Holders of a
majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into, and if the
registration is an underwritten registration, (i) make such representations and
warranties, subject to the Company's ability to do so, to the Holders of such
Registrable Securities and the underwriters with respect to the business of the
Company and its subsidiaries, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by reference, if any,
in each case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested; (ii) use its reasonable efforts to obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters, if
any, Special Counsel and the Holders of a majority of the Registrable Securities
being sold) addressed to each of the underwriters covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Special Counsel and
Managing Underwriters; (iii) use its reasonable efforts to obtain "cold comfort"
letters and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other certified public accountants of any
subsidiary of the Company or any business acquired or to be acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each of the
Managing Underwriters, if any, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in connection
with Underwritten Offerings; and (iv) deliver such documents and certificates as
may be reasonably requested by the Holders of a majority of the Registrable
Securities being sold, the Special Counsel and the Managing Underwriters, if
any, to evidence the continued validity of the representations and warranties of
the Company and its subsidiaries made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company. The above shall be
done at each closing under such underwriting or similar agreement as and to the
extent required thereunder.
(l) If requested in connection with a disposition of Registrable
Securities pursuant to a Registration Statement, make available for inspection
by a representative of the Holders of Registrable Securities being sold, any
Managing Underwriter participating in any disposition of Registrable Securities,
if any, and any attorney or accountant retained by such
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<PAGE>
selling holders or underwriter, financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
executive officers, directors and employees of the Company and its subsidiaries
to supply all information reasonably requested by any such representative,
Managing Underwriter, attorney or accountant in connection with such
disposition; subject to reasonable assurances by each such person that such
information will only be used in connection with matters relating to such
Registration Statement, PROVIDED, HOWEVER, that such persons shall first agree
in writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons, unless
(i) disclosure of such information is required by court or administrative order
or is necessary to respond to inquiries of regulatory authorities,
(ii) disclosure of such information is required by law (including any disclosure
requirements pursuant to Federal securities laws in connection with the filing
of any Registration Statement or the use of any prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement.
(m) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements (which need
not be audited) satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable Securities
are sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering, commencing on
the first day of the first fiscal quarter of the Company commencing after the
effective date of a Registration Statement, which statements shall cover said
12-month periods.
(n) Cooperate with the selling holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends; and
enable such Registrable Securities to be in such denominations and registered in
such names as the holders may request.
(o) Provide the transfer agent for the Common Stock with printed
certificates for the Registrable Securities which are in a form eligible for
deposit with The Depository Trust Company.
(p) Cause all Registrable Securities covered by the Registration
Statement to be listed on each securities exchange or quotation system on which
the Company's Common Stock is then listed no later than the date the
Registration Statement is declared effective and, in connection therewith, to
the extent applicable, to make such filings under the Exchange Act (e.g., the
filing of a Registration Statement on Form 8-A) and to have such filings
declared effective thereunder.
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<PAGE>
(q) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.
4. HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition of the Notes
and Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with the notice required pursuant to Section 2(d) hereof,
such notice to include such other information regarding such Holder and the
distribution of such Registrable Securities as may be required to be included in
the Registration Statement or the Prospectus or as the Company may from time to
time reasonably request. The Company may exclude from such registration the
Registrable Securities of any Holder who does not furnish such information
provided above for so long as such information is not so furnished. Each Holder
of Registrable Securities as to which any Registration Statement is being
effected agrees promptly to furnish to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not misleading. Any sale of any Registrable Securities
by any Holder shall constitute a representation and warranty by such Holder that
the information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to such Holder or its plan of
distribution and that such Prospectus does not as of the time of such sale omit
to state any material fact relating to such Holder or its plan of distribution
necessary to make the statements in such Prospectus, in light of the
circumstances under which they were made, not misleading.
5. REGISTRATION EXPENSES. All fees and expenses incident to the
Company's performance of or compliance with this Agreement shall be borne by the
Company whether or not any of the Registration Statements become effective.
Such fees and expenses shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses (x) with
respect to filings required to be made with the National Association of
Securities Dealers, Inc. and (y) of compliance with federal securities or Blue
Sky laws (including, without limitation, fees and disbursements of Special
Counsel in connection with Blue Sky qualifications of the Registrable Securities
laws of such jurisdictions as the Managing Underwriters, if any, or Holders of a
majority of the Registrable Securities being sold may designate)), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses if the printing of prospectuses is
requested by the Special Counsel or the holders of a majority of the Registrable
Securities included in any Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) reasonable fees and disbursements of counsel for the
Company and the Special Counsel in connection with the Shelf Registration
(provided that the Company shall not be liable for the fees and expenses of more
than one separate firm for all parties participating in any transaction
hereunder), (v) fees and disbursements of all independent certified public
accountants referred to in Section 3(k)(iii) hereof (including the expenses of
any special audit and "cold comfort" letters
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required by or incident to such performance) and (vi) Securities Act liability
insurance obtained by the Company in its sole discretion. In addition, the
Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange on which similar securities issued by the Company are
then listed and the fees and expenses of any person, including special experts,
retained by the Company. Notwithstanding the provisions of this Section 5, each
seller of Registrable Securities shall pay all selling expenses and all
registration expenses to the extent that the Company is prohibited by applicable
Blue Sky laws from paying for or on behalf of such seller of Registrable
Securities.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and
hold harmless each Holder and each person, if any, who controls any Holder
(within the meaning of either Section 15 of the Securities Act or Section 20(a)
of the Exchange Act) from and against all losses, liabilities, damages and
expenses (including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action or claim)
(collectively, "Losses"), arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
Losses arise out of or are based upon the information relating to any Holder
furnished to the Company in writing by such Holder expressly for use therein;
PROVIDED, that the Company shall not be liable to any holder of Registrable
Securities (or any person controlling such Holder) to the extent that any such
Losses arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus if
either (A)(i) such Holder failed to send or deliver a copy of the Prospectus
with or prior to the delivery of written confirmation of the sale by such Holder
to the person asserting the claims from which such Losses arise and (ii) the
Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B)(x) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such holder thereafter fails to deliver such Prospectus
as so amended or supplemented, with or prior to the delivery of written
confirmation of the sale of a Registrable Security to the person asserting the
claim from which such Losses arise. The Company shall also indemnify each
underwriter and each person who controls such person (within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act) to the
same extent and with the same limitations as provided above with respect to the
indemnification of the holders of Registrable Securities.
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(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. Each Holder
agrees severally and not jointly to indemnify and hold harmless the Company, its
directors, its officers who sign a Registration Statement, and each person, if
any, who controls the Company (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act), from and against all losses
arising out of or based upon any untrue statement of a material fact contained
in any Registration Statement, Prospectus or preliminary prospectus or arising
out of or based upon any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information relating to such Holder so furnished in writing by
such Holder to the Company expressly for use in such Registration Statement or
Prospectus. In no event shall the liability of any selling holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all Holders
and all persons, if any, who control any Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and (b) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign a Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section, and that all such fees and expenses shall be reimbursed
as they are incurred. In the case of any such separate firm for the Company,
and such directors, officers and control persons of the Company, such firm shall
be designated in writing by the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such
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settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 6 is unavailable to an indemnified party under Section 6(a) or 6(b)
hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the initial placement (before deducting expenses) of the Notes
pursuant to the Purchase Agreement. Benefits received by the Initial Purchasers
shall be deemed to be equal to the total purchase discounts and commissions
received by them pursuant to the Purchase Agreement and benefits received by any
other Holders shall be deemed to be equal to the value of receiving Notes
registered under the Securities Act. Benefits received by any underwriter shall
be deemed to be equal to the total underwriting discounts and commissions, as
set forth on the cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. The relative fault of the Holders on
the one hand and the Company on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Holders or by the Company and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this paragraph are several in proportion
to the respective number of Registrable Securities they have sold pursuant to a
Registration Statement, and not joint.
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<PAGE>
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by PRO RATA
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages which such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement obligations of the
Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder, under the Purchase Agreement or otherwise. The
provisions of this Section 6 shall survive so long as Registrable Securities
remain outstanding, notwithstanding any transfer of the Registrable Securities
by any holder or any termination of this Agreement.
The indemnity and contribution provisions contained in this Section 6 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any Holder or
any person controlling any Holder, or the Company, its officers or directors or
any person controlling the Company and (iii) the sale of any Registrable
Securities by any Holder.
7. INFORMATION REQUIREMENTS.
(a) The Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act, and if at any time the Company is
not required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will cooperate with any
holder of Registrable Securities and take such further reasonable action as any
holder of Registrable Securities may reasonably request (including, without
limitation making such reasonable representations as any such holder may
reasonably request), all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 and Rule 144A
under the Securities Act. Upon the request of any holder of Registrable
Securities, the Company shall deliver to such holder a written statement as to
whether it has complied with such filing requirements. Notwithstanding the
foregoing, nothing in this
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<PAGE>
Section 7 shall be deemed to require the Company to register any of its
securities under any section of the Exchange Act.
(b) The Company shall file the reports required to be filed by it
under the Exchange Act and shall comply with all other requirements set forth in
the instructions to Form S-3 in order to allow the Company to be eligible to
file registration statements on Form S-3.
8. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company of its
obligations under this Agreement, each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement, provided that the sole damages payable for a violation of
the terms of this Agreement for which Liquidated Damages are expressly provided
pursuant to Section 2(e) hereof shall be such Liquidated Damages. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) NO CONFLICTING AGREEMENTS. The Company has not, as of the date
hereof and shall not, on or after the date of this Agreement, enter into any
agreement with respect to its securities which conflicts with the rights granted
to the holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of holders
of a majority of the then outstanding Common Stock constituting Registrable
Securities (with holders of Notes deemed to be the holders, for purposes of this
Section, of the number of outstanding shares of Common Stock into which such
Notes are convertible). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other holders of Registrable Securities may
be given by holders of at least a majority of the Registrable Securities being
sold by such holders; PROVIDED, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing and shall be deemed given (i) when
made, if made by hand
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delivery, (ii) upon confirmation, if made by telecopier or (iii) one business
day after being deposited with a reputable next-day courier, postage prepaid, to
the parties as follows:
(x) if to a holder of Registrable Securities, at the most
current address given by such holder to the Company in accordance with the
provisions of Section 8(e);
(y) if to the Company, to:
Solectron Corporation
847 Gibraltar Drive, Building 5
Milpitas, California 95035
Attention: Chief Financial Officer
Telecopy No.: (408) 956-6059
with a copy to:
Wilson, Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Steven Bochner, Esq.
Telecopy No.: (415) 493-6811
and
(z) if to the Special Counsel to:
Mayer, Brown & Platt
190 South LaSalle Street, Suite 3900
Chicago, Illinois 60603
Attention: David A. Schuette, Esq.
Telecopy No.: (312) 701-7711
or to such other address as such person may have furnished to the other persons
identified in this Section 8(d) in writing in accordance herewith.
(e) OWNER OF REGISTRABLE SECURITIES. The Company will maintain, or
will cause its registrar and transfer agent to maintain, a register with respect
to the Registrable Securities in which all transfers of Registrable Securities
of which the Company has received notice will be recorded. The Company may deem
and treat the person in whose name Registrable Securities are registered in such
register of the Company as the owner thereof for all purposes, including,
without limitation, the giving of notices under this Agreement.
(f) APPROVAL OF HOLDERS. Whenever the consent or approval of holders
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held
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by the Company or its affiliates (as such term is defined in Rule 405 under the
Securities Act) (other than the Initial Purchasers or subsequent holders of
Registrable Securities if such subsequent holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the holders of such required percentage.
(g) SUCCESSORS AND ASSIGNS. Any person who purchases any
Registerable Securities from an Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of such Initial Purchaser. The Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
holder of any Registrable Securities.
(h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
(k) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such which may be hereafter declared
invalid, illegal void or unenforceable.
(l) ENTIRE AGREEMENT This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Common Stock of the Company into
which Notes are convertible sold pursuant to the Purchase Agreement. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Common Stock of the Company into which
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<PAGE>
the Notes are convertible. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such registration rights.
(m) ATTORNEYS' FEES. In any action or proceeding brought to enforce
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) FURTHER ASSURANCES. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
(o) TERMINATION. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Sections 4, 5 or 6 hereof and the
obligations to make payments of and provide for Liquidated Damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each which shall remain in effect in accordance with their
terms.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SOLECTRON CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
HAMBRECHT & QUIST LLC
By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
------------------------------------
<PAGE>
SOLECTRON CORPORATION
(a California corporation)
$200,000,000
6% Convertible Subordinated Notes
Due 2006
PURCHASE AGREEMENT
February 15, 1996
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
HAMBRECHT & QUIST LLC
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1305
Ladies and Gentlemen:
Solectron Corporation, a California corporation (the "Company") confirms
its agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") and each of the other Initial Purchasers named in Schedule A hereto
(collectively, the "Initial Purchasers") with respect to the sale by the Company
and the purchase by the Initial Purchasers, acting severally and not jointly, of
the respective principal amounts set forth in Schedule A, of $200,000,000
aggregate principal amount of its 6% Convertible Subordinated Notes due 2006
(the "Notes") and with respect to the grant by the Company to the Initial
Purchasers of the option described in Section 2(b) hereof to purchase all or any
part of an additional $30,000,000 aggregate principal amount of its Notes solely
to cover over-allotments. The aforesaid $200,000,000 aggregate principal amount
of Notes (the "Initial Securities") to be purchased by the Initial Purchasers
and all or any part of the $30,000,000 aggregate principal amount of the Notes
subject to the over-allotment option described in Section 2(b) hereof (the
"Option Securities") are collectively referred to herein as the "Securities."
The Securities are to be issued pursuant to an indenture to be dated as of
February 15, 1996 (the "Indenture") between the Company and State Street Bank
and Trust Company, a national banking association, as trustee (the "Trustee").
<PAGE>
The Securities are convertible into shares of Common Stock, no par
value, of the Company (the "Common Stock"), at any time after 60 days following
the latest date of the original issuance thereof and before the close of
business on the maturity date of the Securities. Securities issued in book-
entry form will be issued to Cede & Co. as nominee of The Depository Trust
Company ("DTC") pursuant to a letter agreement, to be dated as of the Closing
Time (as defined in Section 2(b)), among the Company, the Trustee and DTC.
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are
to be offered and sold through the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the "1933 Act"), in reliance upon
exemptions therefrom. Pursuant to the terms of the Securities and the
Indenture, investors that acquire Securities may only resell or otherwise
transfer such Securities if such Securities are hereafter registered under the
1933 Act or if an exemption from the registration requirements of the 1933 Act
is available (including the exemption afforded by Rule 144A ("Rule 144A") or
Regulation S ("Regulation S") of the rules and regulations promulgated under the
1933 Act by the Securities and Exchange Commission (the "Commission")).
The Company has prepared and delivered to each Initial Purchaser copies
of a preliminary offering memorandum dated February 7, 1996 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to each Initial
Purchaser, on the date hereof, copies of a final offering memorandum dated
February 15, 1996 (the "Final Offering Memorandum"), each to be used by such
Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities. "Offering Memorandum" means, with respect to any
date or time referred to in this Agreement, the most recent offering memorandum
(whether the Preliminary Offering Memorandum or the Final Offering Memorandum,
or any amendment or supplement to either such document), including exhibits
thereto and any documents incorporated therein by reference, which has been
prepared and delivered by the Company to the Initial Purchasers in connection
with their solicitation of purchases of, or offering of, the Securities.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," "stated" or "described"
in the Offering Memorandum (or other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Offering Memorandum.
Section 1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each Initial Purchaser as of the date hereof and as of the Closing
Time and agrees with each Initial Purchaser as follows:
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<PAGE>
(a) The Offering Memorandum does not, and at the Closing
Time referred to in Section 2 will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representation and warranty in this subsection shall
not apply to statements in or omissions from the Offering Memorandum made in
reliance upon and in conformity with information furnished to the Company in
writing by any Initial Purchaser expressly for use in the Offering Memorandum.
(b) The accountants who certified the financial statements
and supporting schedules included in the Offering Memorandum are independent
public accountants with respect to the Company and its subsidiaries within the
meaning of Regulation S-X under the 1933 Act.
(c) The financial statements included in the Offering
Memorandum present fairly the financial position of the Company and its
consolidated subsidiaries as at the dates indicated and the results of their
operations for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis; and the supporting schedules included in the Offering
Memorandum present fairly the information required to be stated therein.
(d) Since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated or contemplated
therein, (i) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) there have been
no transactions entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material with respect
to the Company and its subsidiaries considered as one enterprise, and (iii)
there has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
California with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum;
and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(f) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether
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<PAGE>
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify would not have a material adverse effect
on the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; all of the issued and outstanding capital stock of each subsidiary
has been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(g) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Offering Memorandum under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans or the exercise of convertible securities referred to in
the Offering Memorandum); the shares of issued and outstanding Common Stock set
forth thereunder have been duly authorized and validly issued and are fully paid
and non-assessable; the Common Stock conforms to all statements relating thereto
contained in the Offering Memorandum; and the issuance of the Securities is not
subject to preemptive or other similar rights.
(h) Except as disclosed in the Offering Memorandum, neither
the Company nor any of its subsidiaries is in violation of its charter or in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of its subsidiaries may be bound,
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, which default or violation would have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, or would, either immediately or with the passage
of time, allow any material indebtedness of the Company to be accelerated; and
the execution, delivery and performance of this Agreement, the Indenture and the
Registration Rights Agreement dated as of February 15, 1996 among the Company
and the Initial Purchasers (the "Registration Rights Agreement") and the
consummation of the transactions contemplated herein and therein have been duly
authorized by all necessary corporate action and, except as disclosed in the
Offering Memorandum, will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the charter or
bylaws of the Company or any of its subsidiaries or any applicable law,
administrative regulation or administrative or court decree.
(i) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers or contractors
which, in either case, might be expected to result in any material adverse
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<PAGE>
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise.
(j) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries, which is required to be disclosed in the Offering
Memorandum (other than as disclosed therein), or which might result in any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or which might materially and
adversely affect the properties or assets thereof or which might materially and
adversely affect the consummation of this Agreement or the acquisition of the
custom manufacturing service business of Texas Instruments Incorporated as
described in the Offering Memorandum; all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or of
which any of their respective property or assets is the subject which are not
described in the Offering Memorandum, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material to
the Company and its subsidiaries considered as one enterprise; and there are no
contracts or documents of the Company or any of its subsidiaries which are
required by the 1934 Act or by the rules and regulations of the Commission
thereunder (the "1934 Act Regulations") to be filed or incorporated by reference
as exhibits to the documents incorporated by reference into the Offering
Memorandum which have not been so filed or incorporated by reference.
(k) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names presently employed by them in
connection with the business now operated by them which, if the Company or its
subsidiaries did not so own or possess or could not so acquire, would result in
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(l) No authorization, approval or consent of any court or
governmental authority or agency on the part of the Company is necessary in
connection with the sale of the Securities hereunder or the consummation by the
Company of any of the other transactions contemplated hereby.
(m) The Company and its subsidiaries possess such
certificates, authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them, and neither the Company nor any of its subsidiaries has
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<PAGE>
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(n) Gibraltar Drive Associates (the "Partnership") is a duly
formed and validly existing limited partnership, and the Company is a limited
partner, and not a general partner, of the Partnership.
(o) The Securities have been duly authorized, and, at the
Closing Time, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor specified herein, will be duly issued and
will constitute valid and binding obligations of the Company enforceable in
accordance with their terms, subject as to enforcement (i) to bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent conveyance and
other laws of general applicability relating to or affecting creditors' rights
and (ii) to general principles of equity whether such enforcement is considered
in a proceeding in equity or at law and, except as set forth above, will be
entitled to the benefits of the Indenture.
(p) The shares of Common Stock issuable upon conversion of
the Securities have been duly authorized and validly reserved for issuance upon
such conversion, and such shares, when issued and delivered upon such conversion
in the manner provided for in the Indenture, will be validly issued, fully paid
and non-assessable; and the issuance of such shares upon such conversion will
not be subject to preemptive or other similar rights.
(q) Each of the Indenture and the Registration Rights
Agreement has been duly authorized and, when executed and delivered by the
Company (assuming the due authorization, execution and delivery thereof by the
other parties thereto), will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
as to enforcement (i) to bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors' rights, (ii) to general principles of
equity, whether such enforcement is considered in a proceeding in equity or at
law and (iii) to the possible unenforceability of the rights to indemnity and
contribution thereunder insofar as they may be limited by federal or state
securities laws or the policies underlying such laws.
(r) This Agreement has been duly authorized, executed and
delivered by the Company.
(s) The Company has not, directly or indirectly, solicited
any offer to buy or offered to sell, and will not, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to any United
States citizen or resident, any security which is or would be integrated with
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<PAGE>
the sale of the Securities in a manner that would require the Securities to be
registered under the 1933 Act.
(t) The Offering Memorandum as delivered from time to time
shall incorporate by reference the most recent Annual Report of the Company on
Form 10-K filed with the Commission and each Quarterly Report of the Company on
Form 10-Q and each Current Report of the Company on Form 8-K filed with the
Commission since the filing of the then most recent Annual Report of the Company
on Form 10-K. The documents incorporated or deemed to be incorporated by
reference in the Offering Memorandum at the time they were or hereafter are
filed with the Commission complied and will comply in all material respects with
the requirements of the 1934 Act and the 1934 Act Regulations, and, when read
together with the other information in the Offering Memorandum, at the date of
the Offering Memorandum and at the Closing Time, will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(u) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder or is exempt
therefrom.
(v) The Securities are eligible for resale pursuant to Rule
144A and will not be, at the Closing Time, of the same class as securities
listed on a national securities exchange registered under Section 6 of the 1934
Act, or quoted in a U.S. automated interdealer quotation system.
(w) None of the Company, its affiliates (as defined in Rule
501(b) under the 1933 Act) or any person (other than the Initial Purchasers and
their respective affiliates, as to whom the Company makes no representation)
acting on its behalf has engaged or will engage, in connection with the offering
of the Securities, in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the 1933 Act.
(x) Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 2 and the procedures set
forth in Section 6 hereof, it is not necessary in connection with the offer,
sale and delivery of the Securities to the Initial Purchasers and to each
Subsequent Purchaser in the manner contemplated by this Agreement and the
Offering Memorandum to register the Securities under the 1933 Act or to qualify
the Indenture under the Trust Indenture Act of 1939, as amended (the "1939
Act").
(y) With respect to those Securities sold in reliance on
Regulation S, (A) none of the Company, its affiliates or any person acting on
its or their behalf (other than the Initial Purchasers, as to whom the Company
makes no representation) has engaged or will engage in any directed selling
efforts as that term is defined in Regulation S and (B) each of the Company and
its affiliates and any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes
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<PAGE>
no representation) has complied and will comply with the offering restrictions
requirement of Regulation S.
Any certificate designated as such and signed by any officer of the
Company and delivered to the Initial Purchasers or to counsel for the Initial
Purchasers pursuant to Section 5 shall be deemed a representation and warranty
by the Company to the Initial Purchasers as to the matters covered thereby.
Section 2. SALE AND DELIVERY TO INITIAL PURCHASERS; CLOSING.
(a) On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, severally and not jointly, and
each Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Initial Purchaser.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Initial Purchasers, to
purchase from it any or all of the Option Securities at the same price as is to
be paid by the Initial Purchasers for the Initial Securities plus, in the case
of the Option Securities, accrued interest, if any, from the Closing Time to the
Date of Delivery (as defined below). The option hereby granted will expire
thirty (30) days after the date hereof and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial Securities
upon notice by the Initial Purchasers to the Company setting forth the number of
Option Securities as to which the Initial Purchasers are then exercising the
option and the time, date and place of payment and delivery for such Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the Initial Purchasers but shall not be later than seven (7) full
business days after the exercise of said option, nor in any event prior to
Closing Time (as hereinafter defined) unless otherwise agreed upon by the
Initial Purchasers and the Company. If the option is exercised as to all or a
portion of the Option Securities, the Initial Purchasers, acting severally and
not jointly, shall purchase that proportion of the total principal amount of
Option Securities then being purchased which the principal amount of Initial
Securities set forth in Schedule A opposite the name of such Initial Purchaser
bears to the total principal amount of Initial Securities.
(c) Delivery of the Initial Securities shall be made at the
offices of Merrill Lynch in New York City and payment of the purchase price for
the Initial Securities shall be made at the offices of Wilson, Sonsini, Goodrich
& Rosati, 650 Page Mill Road, Palo Alto, California 94304, or in each case at
such other place as shall be agreed upon by the Initial Purchasers and the
Company, at 7:00 a.m. on the fourth business day following the date hereof, or
such other time not later than ten (10) business days after such date as shall
be agreed upon by the Initial Purchasers and the Company (such time and date of
payment and delivery being herein called "Closing Time"). In addition, in the
event that any or all of the Option Securities are purchased by the Initial
Purchasers,
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<PAGE>
delivery of such Option Securities and payment of the purchase price for such
Option Securities shall be made at the above-mentioned of offices of Merrill
Lynch and Wilson, Sonsini, Goodrich & Rosati, respectively, or in each case at
such other place as shall be mutually agreed upon by the Initial Purchasers and
the Company, on each Date of Delivery as specified in the notice from the
Initial Purchasers to the Company. Payment shall be made to the Company by
certified or official bank check drawn in New York Clearing House funds or
similar next day funds payable to the order of the Company, against delivery to
the Initial Purchasers of certificates for the Securities to be purchased by
them. Certificates for the Initial Securities, and the Option Securities, if
any, shall be in such denominations and registered in such names as the Initial
Purchasers may request in writing at least two (2) business days before Closing
Time or the Date of Delivery, as the case may be. The certificates for the
Initial Securities and the Option Securities will be made available for
examination and packaging by the Initial Purchasers not later than 10:00 a.m.
(New York time) on the last business day prior to Closing Time or the Date of
Delivery, as the case may be, at the offices of the Trustee or its agent in New
York City.
(d) Each Initial Purchaser, severally and not jointly,
hereby represents and warrants to, and agrees with, the Company that it (i) is a
"qualified institutional buyer" within the meaning of Rule 144A under the 1933
Act (a "Qualified Institutional Buyer") and an "accredited investor" within the
meaning of Regulation D under the 1933 Act (an "Accredited Investor"); (ii) has
not and will not solicit offers for, or offer or sell, Securities by means of
any general solicitation or general advertising within the meaning of Rule
502(c) under Regulation D under the 1933 Act; and (iii) will otherwise act in
accordance with the terms and conditions set forth in this Agreement, including
Section 6 hereof, and in the section entitled "Transfer Restrictions" in the
Offering Memorandum in connection with the placement of the Securities
contemplated hereby.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the
Initial Purchasers as follows:
(a) The Company, as promptly as possible, will furnish to
each Initial Purchaser, without charge, such number of copies of the Preliminary
Offering Memorandum, the Final Offering Memorandum and any amendments and
supplements thereto and documents incorporated by reference therein as such
Initial Purchaser may reasonably request.
(b) The Company will immediately notify each Initial
Purchaser, and confirm such notice in writing, of (x) any filing made by the
Company of information relating to the offering of the Securities with any
securities exchange or any other regulatory body in the United States or any
other jurisdiction, and (y) prior to the completion of the placement of the
Securities by the Initial Purchasers as evidenced by a notice in writing from
the Initial Purchasers to the Company, any material changes in or affecting the
earnings, business affairs or business prospects of the Company and its
subsidiaries which (i) make any statement in the Offering Memorandum false or
misleading in any material respect or (ii) if not disclosed in the Offering
Memorandum, would constitute a material omission therefrom. In such event or if
during such time any event shall occur as a result of which it is necessary, in
the reasonable opinion of the Company, its counsel, the Initial Purchasers or
counsel for the Initial
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<PAGE>
Purchasers, to amend or supplement the Final Offering Memorandum in order that
the Final Offering Memorandum not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances then existing, the
Company will forthwith amend or supplement the Final Offering Memorandum by
preparing and furnishing to each Initial Purchaser an amendment or amendments
of, or a supplement or supplements to, the Final Offering Memorandum (in form
and substance satisfactory in the reasonable opinion of counsel for the Initial
Purchasers) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) The Company will advise each Initial Purchaser promptly
of any proposal to amend or supplement the Offering Memorandum, will furnish the
Initial Purchasers with copies of such amendment or supplement a reasonable
amount of time prior thereto, and will not effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object. Neither the
consent of the Initial Purchasers, nor the Initial Purchaser's delivery of any
such amendment or supplement, shall constitute a waiver of any of the conditions
set forth in Section 5 hereof.
(d) The Company will endeavor, in cooperation with the
Initial Purchasers, to qualify the Securities and the shares of Common Stock
issuable upon conversion of the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Initial Purchasers may reasonably designate; provided, however,
that the Company shall not be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or which would subject it to
taxation where it is not already subject to taxation. In each jurisdiction in
which the Securities or such shares of Common Stock issuable upon conversion of
the Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required in connection with the
distribution of the Securities.
(e) The Company agrees that no future offer and sale of debt
securities of the Company of any class will be made if, as a result of the
doctrine of "integration" referred to in Rule 502 under the 1933 Act, such offer
and sale would render invalid (for the purpose of (i) the sale of the Securities
by the Company to the Initial Purchasers, (ii) the resale of the Securities by
the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the
Securities by such Subsequent Purchasers to others) the exemption from the
registration requirements of the 1933 Act provided by Section 4(2) thereof or by
Rule 144A or by Regulation S thereunder.
(f) The Company shall take all reasonable action necessary
to enable Standard & Poor's Corporation ("S&P") and Moody's Investors Service,
Inc ("Moody's") to provide their respective credit ratings of the Securities.
(g) The Company agrees that, in order to render the
Securities eligible for resale pursuant to Rule 144A under the 1933 Act, while
any of the Securities are "restricted securities"
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<PAGE>
within the meaning of the 1933 Act, to make available, upon request, to any
holder of Securities or prospective purchasers of Securities the information
specified in Rule 144A(d)(4), unless the Company furnishes information to the
Commission pursuant to Section 13 or 15(d) of the 1934 Act.
(h) Until the expiration of three years after the original
issuance of the Securities, the Company will not, and will cause its
"affiliates" (as such term is defined in Rule 144(a)(1) under the 1933 Act) not
to, purchase or agree to purchase or otherwise acquire any Securities which are
"restricted securities" (as such term is defined under Rule 144(a)(3) under the
1933 Act), whether as beneficial owner or otherwise (except as agent on behalf
of and for the account of customers in the ordinary course of business as a
securities broker in unsolicited broker's transactions) unless, immediately upon
any such purchase, the Company or any such affiliate shall submit such
Securities to the Trustee for cancellation.
(i) The Company intends to use the net proceeds received by
it from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds."
(j) Except pursuant to reservations, agreements, employee
benefit plans or the exercise of convertible securities described in the
Offering Memorandum, the Company will not, for a period of ninety (90) days from
the date hereof, without the prior written consent of Merrill Lynch, directly or
indirectly offer to sell, sell, grant any option for the sale of or otherwise
dispose of any Common Stock or securities convertible into Common Stock other
than the Securities issued to the Initial Purchasers pursuant to this Agreement
or Common Stock issued upon conversion of the Securities.
(k) The Company will use its best efforts to permit the
Securities to be designated as PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers, Inc.
relating to the PORTAL Market.
Section 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing of the Preliminary Offering Memorandum, the Final Offering
Memorandum and of each amendment or supplement thereto, (ii) the printing of
this Agreement and the Indenture, (iii) the preparation, issuance and delivery
of the certificates for the Securities to the Initial Purchasers, (iv) the fees
and disbursements of the Company's counsel and accountants, (v) the
qualification of the Securities and the shares of Common Stock issuable upon
conversion of the Securities under securities laws in accordance with the
provisions of Section 3(d), including filing fees and the fee and disbursements
of counsel for the Initial Purchasers in connection therewith and in connection
with the preparation of the Blue Sky Survey, (vi) any fees of the National
Association of Securities Dealers, Inc., (vii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, and (viii) any fees payable in connection with
the rating of the Securities.
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<PAGE>
If this Agreement is terminated by the Initial Purchasers in accordance
with the provisions of Section 5 or Section 10(a)(i) or by its terms in
accordance with Section 11 or 12, the Company shall reimburse the Initial
Purchasers for all of their actual, accountable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Initial
Purchasers.
Section 5. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the several Initial Purchasers hereunder are subject to the
accuracy of the representations and warranties of the Company herein contained,
to the performance by the Company of its obligations hereunder, and to the
following further conditions:
(a) At Closing Time the Initial Purchasers shall have
received:
(1) The favorable opinion, dated as of Closing
Time, of Wilson, Sonsini, Goodrich & Rosati, counsel for the Company, (or in the
case of foreign subsidiaries covered by subparagraph (vii) below, other counsel
reasonably satisfactory to counsel for the Initial Purchasers) in form and
substance reasonably satisfactory to counsel for the Initial Purchasers, to the
effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
California.
(ii) The Company has corporate power and
authority to own, lease and operate properties and to conduct its business as
described in the Offering Memorandum.
(iii) To their knowledge, the Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each United States jurisdiction in which such qualification is required,
except where the failure so to qualify would not have a material adverse effect
on the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(iv) The authorized, issued and outstanding
capital stock of the Company as of November 30, 1995 is as set forth in the
Offering Memorandum under "Capitalization" and "Description of Capital Stock"
(except for subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans or the exercise of convertible securities referred to in
the Offering Memorandum), and the shares of issued and outstanding Common Stock
have been duly authorized and validly issued and are fully paid and non-
assessable.
(v) The shares of Common Stock issuable upon
conversion of the Securities (based on the initial conversion price) have been
duly authorized and validly reserved by the Company for issuance upon such
conversion and, when issued and delivered upon such conversion in the manner
provided in the Indenture, will be validly issued and fully paid and non-
assessable.
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<PAGE>
(vi) The issuance of the Securities and the
shares of Common Stock issuable upon conversion of the Securities is not
presently subject to preemptive rights set forth in the Company's charter or
bylaws or, to their knowledge, other similar rights.
(vii) Each subsidiary of the Company that is a
"significant subsidiary" within the meaning of Rule 1.01(w) of Regulation S-X
(as certified to such counsel and you by the Company) has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Offering Memorandum and, to their knowledge, is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, except where the failure so to qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; all of the issued and
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued, is fully paid and non-assessable and, to their
knowledge, is owned by the Company (except for director qualifying shares),
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(viii) This Agreement, the Indenture and the
Registration Rights Agreement have been duly authorized, executed and delivered
by Company.
(ix) The documents incorporated by reference
in the Offering Memorandum (other than the financial statements and supporting
schedules and other financial and statistical data included therein, as to which
no opinion need be rendered), when they were filed with the Commission complied,
assuming the accuracy and completeness of the information set forth therein, as
to form in all material respects with the requirements of the 1934 Act and the
1934 Act Regulations.
(x) Assuming the accuracy of the Company's
representations and warranties set forth in subparagraphs (s), (v), (w) and (y)
of Section 1, the accuracy of the Initial Purchasers' representations and
warranties set forth in subparagraph (d) of Section 2, and compliance with the
procedures set forth in Section 6 hereof, and in reliance upon the
acknowledgments, representations and agreements made, or deemed to be made, by
each purchaser of Notes as set forth in the Offering Memorandum, it is not
necessary in connection with the offer, sale and delivery of the Securities to
the Initial Purchasers or the initial offer, resale and delivery of the
Securities by the Initial Purchasers, in each case, in the manner contemplated
by this Agreement and the Offering Memorandum to register the Securities under
the 1933 Act or to qualify the Indenture under the 1939 Act; it being understood
that no opinion need be given as to any subsequent offers, sales or deliveries
of the Securities.
(xi) The Securities, the Common Stock
issuable upon the conversion of the Securities and the Indenture conform in all
material respects to the descriptions
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<PAGE>
thereof contained in the Offering Memorandum, and the form of certificate used
to evidence the Common Stock is in due and proper form and complies with all
applicable statutory requirements.
(xii) To their knowledge, there are no legal
or governmental proceedings pending or threatened which are required to be
disclosed in the Offering Memorandum, other than those disclosed therein, and
all pending legal or governmental proceedings of which such counsel is aware,
and to which the Company or any of its subsidiaries is a party or to which any
of their property is subject which are not described in the Offering Memorandum,
including ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material to the Company and its subsidiaries,
considered as one enterprise.
(xiii) The information in the Offering
Memorandum under the caption "Description of Capital Stock," to the extent that
it constitutes summaries of documents, has been reviewed by them and is correct
in all material respects.
(xiv) To their knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be filed or incorporated by reference as exhibits to the
documents incorporated by reference in the Offering Memorandum other than those
filed or incorporated by reference as exhibits thereto and the descriptions
thereof or references thereto are correct in all material respects.
(xv) No authorization, approval, consent or
order of any court or governmental authority or agency is required in connection
with the sale of the Securities to the Initial Purchasers or the initial resale
by the Initial Purchasers in accordance with this Agreement and the Offering
Memorandum, except (i) such as are specified and have been obtained and such as
may be required by the securities or Blue Sky laws of the various jurisdictions
in connection with the purchase and distribution of the Securities by the
Initial Purchasers, (ii) the filing of registration statements(s) and related
actions required to be taken by the Company pursuant to the Registration Rights
Agreement, and (iii) as may be required with respect to any subsequent offers,
sales or deliveries of the Securities; to such counsel's knowledge, except as
disclosed in the Offering Memorandum, the execution and delivery of this
Agreement, the Indenture or the Registration Rights Agreement by the Company and
the consummation of the transactions contemplated herein and therein will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any of
its subsidiaries is subject which has been filed as an exhibit to the documents
incorporated by reference into the Offering Memorandum or is required to be
filed as an exhibit to the documents incorporated by reference into the Offering
Memorandum pursuant to the 1934 Act or the 1934 Act Regulations, nor will such
action result in any violation of the provisions of the charter or bylaws of the
Company, or any applicable law, or any violation of any administrative or court
decree of which they are aware.
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<PAGE>
(xvi) The form of certificate representing the
Securities is in the form contemplated by the Indenture; the sale and issuance
of the Securities have been duly authorized by all necessary corporate action on
the part of the Company and, when executed by the Company and authenticated by
the Trustee in the manner provided for in the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee) and
delivered against payment of the purchase price therefor specified herein, the
Securities will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except (a) to
the extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent conveyance and
other laws relating to or affecting creditors' rights generally and (ii) general
principles of equity, whether such enforcement is considered in a proceeding in
equity or at law and (b) that no opinion need be expressed as to the
enforceability or effect of Section 5.7 or Section 8.6 of the Indenture and,
except as set forth above, will be entitled to the benefits of the Indenture.
(xvii) Assuming the due authorization,
execution and delivery thereof by the Initial Purchasers, the Registration
Rights Agreement is a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (a) to the
extent that enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent conveyance and other laws
relating to or affecting creditors' rights generally and (ii) general principles
of equity, whether such enforcement is considered in a proceeding in equity or
at law, and (b) rights to indemnity and contribution thereunder may be limited
by federal or state securities laws or the policies underlying such laws.
(xviii)Assuming the due authorization,
execution and delivery thereof by the Trustee, the Indenture is a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (a) to the extent that enforcement thereof may
be limited by (i) bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors' rights generally and (ii) general principles
of equity, whether such enforcement is considered in a proceeding in equity or
at law and (b) that no opinion need be expressed as to the enforceability or
effect of Section 5.7 or Section 8.6 of the Indenture.
(xix) The information in the Offering
Memorandum under the caption "Certain Federal Income Tax Considerations" while
not purporting to discuss all possible income tax matters relating to the
Securities, to the extent that it constitutes a summary of Federal income tax
matters relating to the Securities, is correct in all material respects.
(2) The favorable opinion, dated as of Closing Time, of
Mayer, Brown & Platt, counsel for the Initial Purchasers, with respect to the
matters set forth in subparagraphs (i), (v), (viii), (x), (xi) and (xvi) to
(xix), inclusive of subsection (a)(1) of this Section.
(3) In giving their opinions required by subsections
(a)(1) and (a)(2), respectively, of this Section, Wilson, Sonsini, Goodrich &
Rosati and Mayer, Brown & Platt shall
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each additionally state that nothing has come to their attention that would lead
them to believe that the Offering Memorandum (except for financial statements,
schedules and other financial or statistical data, as to which counsel need make
no statement), at the time the Offering Memorandum was issued, at the time it
was supplemented or amended, if applicable, or at Closing Time, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In connection with their opinions required by subsections (a)(1) and
(a)(2), respectively, of this Section, Wilson, Sonsini, Goodrich & Rosati and
Mayer, Brown & Platt shall be entitled to rely in respect of matters of fact
upon certificates of officers of the Company or its subsidiaries or the transfer
agent (with respect to the opinion in subparagraph (iv) regarding the number of
shares of outstanding capital stock of the Company) and, in respect of the
matters referred to in subparagraphs (iii) and (vii), upon opinions of local
counsel, and, in respect to the matters referred to in subparagraphs (xvi),
(xvii) and (xviii), the opinion of Mayer, Brown & Platt referenced in
subparagraph (2) above with respect to the validity, binding effect and
enforceability of the Securities, the Registration Rights Agreement and the
Indenture, provided that in each case such counsel shall state that they believe
that you and they are justified in relying upon such certificates and opinions.
(b) At Closing Time there shall not have been, since the date
hereof or since the date as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Initial Purchasers shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial officer, chief accounting officer or the treasurer of
the Company, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
l are true and correct with the same force and effect as though expressly made
at and as of Closing Time and (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time.
(c) At the time of the execution of this Agreement, the Initial
Purchasers shall have received from KPMG Peat Marwick a letter dated such date,
in form and substance satisfactory to the Initial Purchasers, to the effect that
(i) they are independent public accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations;
(ii) it is their opinion that the financial statements and supporting schedules
included in the Offering Memorandum and covered by their opinions therein comply
as to form in all material respects with the applicable accounting requirements
of the 1934 Act and the 1934 Act Regulations; (iii) based upon limited
procedures set forth in detail in such letter, nothing has come to their
attention which causes them to believe that (A) the unaudited financial
statements and data and supporting schedules of the Company and its subsidiaries
included in the Offering Memorandum do not comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act and the
1934 Act Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements included
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in the Offering Memorandum and (B) at a specified date not more than five (5)
days prior to the date of this Agreement, there has been any material change in
the capital stock of the Company or any material increase in the consolidated
long-term debt of the Company and its subsidiaries or any material decrease in
consolidated net current assets or net assets as compared with the amounts shown
in the November 30, 1995 balance sheet included in the Offering Memorandum or,
during the period from December 1, 1995 to a specified date not more than five
(5) days prior to the date of this Agreement, there were any decreases, as
compared with the corresponding period in the preceding year, in consolidated
net sales, net income or net income per share of the Company and its
subsidiaries, except in all instances for changes, increases or decreases which
the Offering Memorandum disclose have occurred or may occur; and (iv) in
addition to the examination referred to in clause (iii) above, they have carried
out certain specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are included in the
Offering Memorandum and which are specified by the Initial Purchasers, and have
found such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the Company and its
subsidiaries identified in such letter.
(d) At Closing Time the Initial Purchasers shall have received
from KPMG Peat Marwick a letter, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(c) of this Section, except that the specified date referred to shall be a date
not more than five (5) days prior to Closing Time.
(e) At the Closing Time, the Securities shall be rated at least
Ba3 by Moody's Investor's Service Inc. and at least BB+ by Standard & Poor's
Corporation, and the Company shall have delivered to the Initial Purchasers a
letter dated the Closing Time, from each such rating agency, or other evidence
satisfactory to the Initial Purchasers confirming that the Securities have such
ratings.
(f) At Closing Time and each Date of Delivery, counsel for the
Initial Purchasers shall have been furnished with such documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities and with respect to the shares of Common Stock issuable
upon conversion of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Initial Purchasers and counsel for the
Initial Purchasers.
(g) In the event the Initial Purchasers exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company hereunder shall
be true and correct as of each Date of Delivery, and, on the relevant Date of
Delivery, the Initial Purchasers shall have received:
-17-
<PAGE>
(1) A certificate, dated such Date of Delivery, of
officers of the Company reasonably satisfactory to you confirming that the
certificate of the officers of the Company delivered at Closing Time pursuant to
Section 5(b) hereof remains true and correct as of such Date of Delivery.
(2) The favorable opinion of Wilson, Sonsini, Goodrich
& Rosati, in form and substance reasonably satisfactory to your counsel, dated
such Date of Delivery, relating to the Option Securities and otherwise to the
same effect as the opinion required by Section 5(a)(1) hereof.
(3) The favorable opinion of your counsel, Mayer, Brown
& Platt, dated such Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section 5(a)(2) hereof.
(4) A letter from KPMG Peat Marwick, in form and
substance satisfactory to you and dated such Date of Delivery, substantially the
same in scope and substance as the letter furnished to you pursuant to Section
5(d) hereof, except that the specified date in the letter furnished pursuant to
this Section 5(g) shall be a date not more than five days prior to such Date of
Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Initial Purchasers by notice to the Company at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 4.
Section 6. SUBSEQUENT OFFERS AND RESALES OF THE SECURITIES.
(a) Each of the Initial Purchasers and the Company hereby
establish and agree to observe the following procedures in connection with the
offer and sale by the Initial Purchasers of the Securities.
(i) Offers and sales of the Securities will
be made by the Initial Purchasers only to (A) institutional investors that are
reasonably believed to qualify as Accredited Investors within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the 1933 Act (each such
institutional investor being hereinafter referred to as an "Institutional
Accredited Investor") that agree in writing to comply with the transfer
restrictions and other conditions set forth in the Offering Memorandum under the
caption "Transfer Restrictions", or (B) in the case of Securities resold or
otherwise transferred pursuant to Rule 144A, to institutional investors that are
reasonably believed to qualify as Qualified Institutional Buyers or (C) to non-
U.S. persons in offshore transactions in reliance upon Regulation S under the
1933 Act.
(ii) The Securities will be offered by the
Initial Purchasers only by approaching prospective Subsequent Purchasers on an
individual basis. No general solicitation or general advertising (within the
meaning of Rule 502(c) under the 1933 Act) will be used in connection with the
offering of the Securities.
-18-
<PAGE>
(iii) Until the completion of the placement of
the Securities by the Initial Purchasers, the transfer restrictions and the
other provisions set forth in Section 2.5 of the Indenture, including the legend
required thereby, shall apply to the Securities except as otherwise agreed by
the Company and the Initial Purchasers. Following the sale of the Securities by
the Initial Purchasers to Subsequent Purchasers pursuant to the terms hereof,
the Initial Purchasers shall not be liable or responsible to the Company for any
losses, damages or liabilities suffered or incurred by the Company, including
any losses, damages or liabilities under the 1933 Act, arising from or relating
to any subsequent resale or transfer of any Security.
(iv) Each Initial Purchaser will deliver at
or prior to sale to each purchaser of the Securities from such Initial
Purchaser, in connection with its original distribution of the Securities, a
copy of the Offering Memorandum, as amended and supplemented at the date of such
delivery.
(v) In connection with the original
distribution of the Securities, the Company agrees that, prior to any offer or
resale of the Securities by the Initial Purchasers, the Initial Purchasers and
counsel for the Initial Purchasers shall have the right to make reasonable
inquiries into the business of the Company and its subsidiaries. The Company
also agrees to provide answers to each prospective Subsequent Purchaser of
Securities who so requests concerning the Company and its subsidiaries (to the
extent that such information is available or can be acquired and made available
to prospective Subsequent Purchasers without unreasonable effort or expense and
to the extent the provision thereof is not prohibited by applicable law) and the
terms and conditions of the offering of the Securities, as provided in the
Offering Memorandum.
(vi) The Initial Purchasers will notify the
Company in writing of the completion of the placement of the Securities by them.
(b) Each Initial Purchaser understands that the Securities have
not been and will not be registered under the 1933 Act and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the 1933 Act or pursuant to
an exemption from the registration requirements of the 1933 Act. Each Initial
Purchaser represents and agrees, that, except as permitted by this Section 6(b)
as set forth below, it has offered and sold Securities and will offer and sell
Securities (i) as part of their distribution at any time and (ii) otherwise
until forty days after the later of the date upon which the offering of the
Securities commences and the Closing Time, only in accordance with Rule 903 of
Regulation S or Rule 144A under the 1933 Act. Accordingly, neither the Initial
Purchasers, their affiliates nor any persons acting on their behalf have engaged
or will engage in any directed selling efforts with respect to Securities, and
the Initial Purchasers, their affiliates and any person acting on their behalf
have complied and will comply with the offering restriction requirements of
Regulation S. Each Initial Purchaser agrees that, at or prior to confirmation
of a sale of Securities (other than a sale of Securities pursuant to Rule 144A),
it will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it or
through it during the restricted period a confirmation or notice to
substantially the following effect:
-19-
<PAGE>
"The Securities covered hereby have not been registered
under the United States Securities Act of 1933 (the
"Securities Act") and may not be offered or sold within
the United States or to or for the account or benefit of
U.S. persons (i) as part of their distribution at any time
and (ii) otherwise until forty days after the later of the
date upon which the offering of the Securities commenced and
the date of closing, except in either case in accordance with
Regulation S or Rule 144A under the Securities Act. Terms
used above have the meaning given to them by Regulation S."
Terms used in the above paragraph have the meanings given to them by Regulations
S.
Each Initial Purchaser severally represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect to the
distribution of the Securities, except with its affiliates or with the prior
written consent of the Company.
Section 7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any Initial Purchaser
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
(1) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of material fact contained in any
Preliminary Offering Memorandum or the Final Offering Memorandum (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(2) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, if such settlement is
effected with written consent of the Company; and
(3) against any and all expense whatsoever, as
incurred (including, subject to Section 7(c) hereof, the fees and
disbursements of counsel chosen by Merrill Lynch), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (1) or (2) above;
-20-
<PAGE>
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser expressly for use in the Offering Memorandum (or any amendment
or supplement thereto).
The foregoing indemnity with respect to any untrue statement contained
in or omission from a Preliminary Offering Memorandum shall not inure to the
benefit of any Initial Purchaser (or any person controlling such Initial
Purchaser) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Securities which are the subject thereof,
if the Company shall sustain the burden of proving that such person was not sent
or given a copy of the Final Offering Memorandum (or the Final Offering
Memorandum as amended or supplemented) at or prior to the written confirmation
of the sale of such Securities to such person and the untrue statement contained
in or omission from such Preliminary Offering Memorandum was corrected in the
Final Offering Memorandum (or the Final Offering Memorandum as amended or
supplemented).
(b) Each Initial Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers and each person, if any, who
controls the Company within the meaning of either Section 15 of the 1933 Act or
Section 20 of the Exchange Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Offering
Memorandum (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Initial
Purchaser expressly for use in the Offering Memorandum (or any amendment or
supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to one local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 7 or Section 8 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
-21-
<PAGE>
Section 8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 7 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the Initial
Purchasers shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Initial Purchasers, as incurred, in such
proportions that the Initial Purchasers are responsible for that portion
represented by the percentage that the difference between the purchase price to
be paid by the Initial Purchasers and the initial offering price of the
Securities bears to the initial offering price of the Securities and the Company
is responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8, each person,
if any, who controls an Initial Purchaser within the meaning of either Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Initial Purchaser, and each director of the Company, each
officer of the Company, and each person, if any, who controls the Company within
the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company. The Initial
Purchasers' respective obligations to contribute pursuant to this Section 8 are
several in proportion to the principal amount of Securities set forth opposite
their respective names in Schedule A hereto and not joint.
Section 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Initial Purchaser or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Initial Purchasers.
Section 10. TERMINATION OF AGREEMENT.
(a) The Initial Purchasers may terminate this Agreement, by notice to
the Company, at any time at or prior to Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or other calamity or crisis,
the effect of which is such as to make it, in the judgment of the Initial
Purchasers, impracticable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii) if trading in the Common Stock has been
suspended by the Commission or the New York Stock Exchange, or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
Exchanges or by order of the Commission or any other governmental authority, or
if a banking moratorium has
-22-
<PAGE>
been declared by either federal, New York or California authorities, or (iv) if
any downgrading shall have occurred in the rating accorded the Securities or any
other debt securities of the Company by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for purposes of
Rule 436(g)(2) of the 1933 Act Regulations, or any such organization shall have
announced publicly that it has under surveillance or review, with possible
negative implications, its rating accorded the Securities or any other debt
securities of the Company.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 and provided further that Sections 7 and 8
hereof shall survive such termination.
Section 11. DEFAULT BY THE COMPANY. If the Company shall fail at
Closing Time to sell and deliver the number of Securities which it is obligated
to sell hereunder, then this Agreement shall terminate without any liability on
the part of any non-defaulting party. No action taken pursuant to this Section
shall relieve the Company from liability, if any, in respect of such default.
Section 12. DEFAULT BY INITIAL PURCHASERS. If one or more of the
Initial Purchasers shall fail at the Closing Time to purchase the Securities
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the non-defaulting Initial Purchasers shall have the right, but
not the obligation, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Initial Purchasers, or any other Initial Purchasers,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the non-defaulting Initial Purchasers shall not have completed such arrangements
within such 24-hour period, then this Agreement shall terminate without
liability on the part of any non-defaulting Initial Purchaser.
No action pursuant to this Section shall relieve any defaulting Initial
Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the non-defaulting Initial Purchasers or the Company
shall have the right to postpone the Closing Time for a period not exceeding
seven days in order to effect any required changes in the Offering Memorandum or
in any other documents or arrangements. As used herein, the term "Initial
Purchaser" includes any person substituted for an Initial Purchaser under this
Section 12.
Section 13. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchasers shall be directed to them c/o Merrill Lynch at 101 California Street,
Suite 120, San Francisco, California 91111, attention of D. Casey Safreno,
Managing Director; and notices to the Company shall be directed to it at 777
Gibraltar Drive, Milpitas, California 95035, attention of Susan Wang, Senior
Vice President and Chief Financial Officer.
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<PAGE>
Section 14. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors, heirs and legal representatives,
and the controlling persons and officers and directors referred to in Sections 7
and 8 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof is intended
to be for the sole and exclusive benefit of the Initial Purchasers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Initial Purchasers shall be deemed to be a successor by reason merely
of such purchase.
Section 15. GOVERNING LAW AND TIME. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in said State.
-24-
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
SOLECTRON CORPORATION
By:
-------------------------------------
Name:
Title:
Confirmed and Accepted,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
HAMBRECHT & QUIST LLC
By: MERRILL LYNCH, PIERCE, FENNER & SMITH,
INCORPORATED
By:
-------------------------------------
Authorized Signatory
-25-
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal
Amount of
Name of Initial Purchaser Securities
------------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................... $100,000,000
Morgan Stanley & Co. Incorporated................................. 60,000,000
Hambrecht & Quist LLC............................................. 40,000,000
------------
Total............................................................. $200,000,000
------------
------------
</TABLE>
A-1
<PAGE>
SCHEDULE B
1. The initial offering price of the Securities shall be 100% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the
Securities shall be 97.5% of the principal amount thereof.
3. The interest rate on the Securities shall be 6% per annum.
4. The initial conversion price of the Securities shall be $67.61
per share.
5. The Securities shall not be redeemable at the option of the
Company prior to March 3, 1999. Thereafter, the Securities may be redeemed at
the option of the Company at the following redemption prices, expressed as a
percentage of the original principal amount of the Securities. If redeemed
during the 12-month period beginning March 1:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
1999 104.20%
2000 103.60
2001 103.00
2002 102.40
2003 101.80
2004 101.20
2005 100.60
</TABLE>
B-1
<PAGE>
Exhibit 24.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated February 1, 1996, with respect to
the financial statements of the Custom Manufacturing Services Business of
Texas Instruments Incorporated included in the Current Report on Form 8-K of
Solectron Corporation dated April 15, 1996.
We also consent to the incorporation by reference in the following
registration statements, and in the related prospectuses thereto, of our
report dated February 1, 1996 with respect to the financial statements of
the Custom Manufacturing Services Business of Texas Instruments Incorporated,
included in this Current Report on Form 8-K: Registration Statements Numbers
33-33461; 33-46686; 33-57575; 33-58580; and 33-75270 on Form S-8.
Dallas, Texas
April 11, 1996
