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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 22, 1996
BROADBAND TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-21766 56-1615990
(Commission File Number) (IRS Employer Identification No.)
4024 Stirrup Creek Drive
Durham, North Carolina 27703
(Address of principal executive offices) (Zip Code)
(919) 544-0015
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On May 22, 1996 the Company closed on the sale of U.S.
$115,000,000 principal amount of 5% Convertible Subordinated Notes due May 15,
2001 (the "Notes"), including the over-allotment option of U.S. $15,000,000
which was exercised in full immediately. Interest on the Notes is payable on May
15 and November 15, commencing on November 15, 1996. The Company received
proceeds from the sale of approximately $111,000,000, net of commissions and
other expenses. The Company intends to use the net proceeds of the sale of the
Notes for working capital and general business purposes. If future events or
opportunities arise which would require the use of cash, the Company may use the
proceeds for purposes not currently intended by the Company.
This description is a summary only. A full understanding of
the terms of the Notes financing can only be obtained by reading the exhibits to
this document, which are hereby incorporated by reference herein.
CONVERTIBILITY
The Notes are convertible into shares of the Company's Common
Stock at a conversion rate of 24.1080 shares per U.S. $1,000 principal amount of
Notes (equivalent to U.S. $41.480 per share), subject to adjustment. An
aggregate of approximately 2,772,420 shares of Common Stock are issuable upon
conversion of the Notes.
The Notes will be convertible into shares of Common Stock of
the Company at any time on or after the 90th day following May 22, 1996 and
prior to the close of business on the maturity date of the Notes at the
conversion price set forth above, unless previously redeemed or repurchased.
Holders of Notes called for redemption or repurchase will be entitled to convert
the Notes to and including, but not after, the close of business on the date
fixed for redemption or repurchase, as the case may be.
OPTIONAL REDEMPTION
The Notes may be redeemed at the option of the Company at any
time on or after the close of business on May 15, 1999, in whole or in part.
During the twelve month period beginning May 15, 1999, the redemption price is
102% of principal, plus accrued interest. During the twelve month period
beginning May 15, 2000, the redemption price is 101% of principal, plus accrued
interest. Thereafter, the redemption price is 100% of principal, plus accrued
interest.
REPURCHASE AT OPTION OF HOLDERS UPON CHANGE IN CONTROL
In the event of a Change in Control (as defined in the Notes
and related trust indenture), each Holder of Notes may require the Company to
repurchase its Notes, in whole or in part, at a repurchase price of 100% of the
principal amount thereof, plus accrued interest to the repurchase date. The
repurchase price is payable in cash or, at the option of the Company but subject
to the satisfaction of certain conditions on its part,in Common Stock (valued at
95% of the average closing bid prices of the Common Stock for the five trading
days immediately preceding and including the third trading day prior to the
repurchase date).
SUBORDINATION
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The Notes will be subordinated to present and future Senior
Debt (as defined in the Notes and related trust indenture) of the Company and
its subsidiaries. As of March 31, 1996, the aggregate amount of outstanding
Senior Debt was approximately U.S. $218,000. The trust indenture does not limit
the Company's ability to incur Senior Debt or any other indebtedness.
REGISTRATION RIGHTS
The Company has agreed to file a shelf registration statement
in respect of the Notes and the Common Stock issuable upon conversion thereof
pursuant to a Registration Rights Agreement within 90 days of May 22, 1996 and
to use its best efforts to have such shelf registration statement declared
effective within 180 days of May 22, 1996. If the Company fails to comply with
certain of its obligations under the Registration Rights Agreement, the interest
rate on the Notes will be increased as liquidated damages as provided in the
Notes and related trust indenture.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) 10.1 Indenture dated as of May 22, 1996, between the
Company and Marine Midland Bank, as Trustee
10.2 Purchase Agreement dated May 17, 1996 between the
Company, Goldman, Sachs & Co. and Bear,
Stearns & Co. Inc.
10.3 Registration Rights Agreement dated May 17, 1996
between the Company, Goldman, Sachs & Co. and
Bear, Stearns & Co. Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BROADBAND TECHNOLOGIES, INC.
Date: May ___, 1996 By:
Timothy K. Oakley
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
10.1 Indenture dated as of May 22, 1996,
between the Company and Marine Midland Bank,
as Trustee
10.2 Purchase Agreement dated May 17, 1996
between the Company, Goldman, Sachs & Co.
and Bear, Stearns & Co. Inc.
10.3 Registration Rights Agreement dated May 17, 1996
between the Company, Goldman, Sachs & Co.
and Bear, Stearns & Co. Inc.
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EXHIBIT A
BROADBAND TECHNOLOGIES, INC.
5% CONVERTIBLE SUBORDINATED NOTES DUE MAY 15, 2001
REGISTRATION RIGHTS AGREEMENT
Dated as of
May 17, 1996
Goldman, Sachs & Co.,
Bear, Stearns & Co. Inc.,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
BroadBand Technologies, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Goldman, Sachs & Co. and Bear, Stearns
& Co. Inc. (the "Purchasers") upon the terms set forth in a purchase agreement
dated May 17, 1996 (the "Purchase Agreement") between the Purchasers and the
Company, its 5% Convertible Subordinated Notes due May 15, 2001 (the
"Securities"). As an inducement to the Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Company agrees with the Purchasers, (i) for the
benefit of the Purchasers and (ii) for the benefit of the holders from time to
time of the Securities and the Common Stock, par value $0.01 per share of the
Company (the "Stock"), issuable upon conversion of the Securities (collectively,
the "Registrable Securities"), including the Purchasers (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 or pursuant to the
Purchase Agreement or the Offering Circular, dated May 17, 1996, in respect of
the Securities. As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Act" or "Securities Act" means the United States Securities
Act of 1933, as amended.
"Affiliate" of any specified person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
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"Commission" means the United States Securities and Exchange
Commission.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section
2(b) hereof.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering, if any, as set forth in Section 6 hereof.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" means the prospectus included in any Shelf
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 under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Statement" means a shelf registration
statement of the Company pursuant to the provisions of Section 2 hereof filed
with the Commission which covers some or all of the Registrable Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"underwriter" means any underwriter of Registrable Securities
in connection with an offering thereof under a Shelf Registration Statement.
2. SHELF REGISTRATION. (a) The Company shall, within 90 days
following the date of the first original issuance of the Securities (the "Issue
Date"), file with the Commission a Shelf Registration Statement relating to the
offer and sale of the Registrable Securities by the Holders from time to time in
accordance with the methods of distribution elected by such Holders and set
forth in such Shelf Registration Statement and, thereafter, shall use its best
efforts to cause such Shelf Registration Statement to be declared effective
under the Act within 180 days after the Issue Date; PROVIDED, HOWEVER, that no
Holder shall be entitled to have the Registrable Securities held by it covered
by such Shelf Registration unless such Holder is in compliance with Section 3(m)
hereof.
Not less than 30 days prior to the filing of the Shelf
Registration Statement, the Company shall give notice of its intention to make
such filing to each of the holders of the Registrable Securities in the same
manner as the Company would give notice to holders of Securities under Section
1.6 of the Indenture. Such notice shall seek a determination from each of such
holders as to whether such holder elects to sell Registrable Securities pursuant
to the Shelf Registration Statement. The Company may require each electing
Holder to furnish to the Company such information as may be required by Section
3(m) hereof. Each such electing Holder agrees to notify
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the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such electing Holder to the Company or of
the occurrence of any event in either case as a result of which any Prospectus
included in such Shelf Registration Statement contains or would contain an
untrue statement of a material fact regarding such electing Holder or such
electing Holder's intended method of distribution of such Registrable Securities
or omits to state any material fact regarding such electing Holder or such
electing Holder's intended method of distribution of such Registrable Securities
necessary to make the statements therein, in light of the circumstances then
existing, not misleading, and promptly to furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
electing Holder or the distribution of such Registrable Securities, an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances then existing, not
misleading.
(b) The Company shall use its best efforts:
(i) To keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of
three years from the date the Shelf Registration Statement is
declared effective or such shorter period that will terminate
upon the earlier of the following: (A) when all the Securities
covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, (B) when all
shares of Stock issued upon conversion of any such Securities
that had not been sold pursuant to the Shelf Registration
Statement have been sold pursuant to the Shelf Registration
Statement and (C) when, in the written opinion of independent
counsel to the Company, all outstanding Registrable Securities
held by persons that are not affiliates of the Company may be
resold without registration under the Act pursuant to Rule
144(k) under the Act or any successor provision thereto (in
any such case, such period being called the "Effectiveness
Period"); and
(ii) After the effectiveness of the Shelf
Registration Statement, promptly upon the request of any
Holder, to take any action reasonably necessary to register
the sale of any Registrable Securities of such Holder and to
identify such Holder as a selling securityholder; provided
that the Company need not promptly register the Registrable
Securities of any Holder that has elected to sell Registrable
Securities pursuant to the notice described above and has
failed to comply with Section 3(m) in a timely manner;
PROVIDED, FURTHER, that upon compliance by such Holder with
Section 3(m), the Company will use its best efforts to include
the Registrable Securities of such Holder in the next
amendment to the Shelf Registration Statement that it would
otherwise have to make.
The Company shall be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the requisite period if the Company
voluntarily takes any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell any such Registrable
Securities during that period, unless (i) such action is required by applicable
law, or (ii) the continued effectiveness of the Shelf Registration Statement
would require the Company to disclose a material financing, acquisition or other
corporate transaction, and the Board of Directors shall have determined in good
faith that such disclosure is not in the best interests of the Company and its
stockholders, and, in the case of clause (i) above, the Company thereafter
promptly complies with the requirements of paragraph 3(i) below.
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3. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Purchasers,
prior to the filing thereof with the Commission, a copy of any
Shelf Registration Statement, and each amendment thereof and
each amendment or supplement, if any, to the Prospectus
included therein and shall use its best efforts to reflect in
each such document, when so filed with the Commission, such
comments as the Purchasers reasonably may propose.
(b) The Company shall take such action as may be
necessary so that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto (and each report or other
document incorporated therein by reference in each case)
complies in all material respects with the Securities Act and
the Exchange Act and the respective rules and regulations
thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, 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 (iii) any
Prospectus forming part of any Shelf Registration Statement,
and any amendment or supplement to such Prospectus, does not
include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements, in the light of the circumstances under which they
were made, not misleading.
(c)(1) The Company shall advise the Purchasers and,
in the case of clause (i), the Holders and, if requested by
the Purchasers or any such Holder, confirm such advice in
writing:
(i) when a Shelf Registration Statement and
any amendment thereto has been filed with the
Commission and when the Shelf Registration
Statement or any post-effective amendment thereto
has become effective; and
(ii) of any request by the Commission for
amendments or supplements to the Shelf
Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise the Purchasers and the
Holders and, if requested by the Purchasers or any such
Holder, confirm such advice in writing of:
(i) the issuance by the Commission of any
stop order suspending effectiveness of the Shelf
Registration Statement or the initiation of any
proceedings for that purpose;
(ii) the receipt by the Company of any
notification with respect to the suspension of the
qualification of the securities included therein
for sale in any jurisdiction or the initiation of
any proceeding for such purpose; and
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(iii) the happening of any event that
requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that,
as of such date, the Shelf Registration Statement
and the Prospectus do not contain an untrue
statement of a material fact and do not omit to
state a material fact required to be stated therein
or necessary to make the statements therein (in the
case of the Prospectus, in light of the
circumstances under which they were made) not
misleading (which advice shall be accompanied by an
instruction to suspend the use of the Prospectus
until the requisite changes have been made).
(d) The Company shall use its best efforts to
prevent the issuance, and if issued to obtain the withdrawal,
of any order suspending the effectiveness of any Shelf
Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of
Registrable Securities included within the coverage of any
Shelf Registration Statement, without charge, at least one
copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so requests in
writing, all reports, other documents and exhibits (including
those incorporated by reference).
(f) The Company shall, during the Effectiveness
Period, deliver to each Holder of Registrable Securities
included within the coverage of any Shelf Registration
Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto
as such Holder may reasonably request; and the Company
consents (except during the continuance of any event described
in Section 3(c)(2)(iii)) to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders
of Registrable Securities in connection with the offering and
sale of the Registrable Securities covered by the Prospectus
or any amendment or supplement thereto during the Shelf
Registration Period.
(g) Prior to any offering of Registrable Securities
pursuant to any Shelf Registration Statement, the Company
shall register or qualify or cooperate with the Holders of
Registrable Securities included therein and their respective
counsel in connection with the registration or qualification
of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such
Holders reasonably request in writing and do any and all other
acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the Registrable Securities
covered by such Shelf Registration Statement; PROVIDED,
HOWEVER, that in no event shall the Company be obligated to
(i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be
required to so qualify but for this Section 3(g) or (ii) file
any general consent to service of process in any jurisdiction
where it is not as of the date hereof then so subject.
(h) Unless any Registrable Securities shall be in
book-entry only form, the Company shall cooperate with the
Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing
Registrable Securities sold pursuant to any Shelf Registration
Statement free of any restrictive legends and in such
permitted denominations and registered in such names as
Holders may request in connection with the sale of Registrable
Securities pursuant to such Shelf Registration Statement.
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(i) Upon the occurrence of any event contemplated
by paragraph 3(c)(2)(iii) above, the Company shall promptly
prepare a post-effective amendment to any Shelf Registration
Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include
an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. If the Company notifies the Holders of the
occurrence of any event contemplated by paragraph 3(c)(2)(iii)
above, the Holders shall suspend the use of the Prospectus and
the disposition of the Securities pursuant to the Shelf
Registration Statement until it has received a copy of the
supplemented or amended prospectus or until it has been
advised that use of the prospectus may be resumed.
(j) Not later than the effective date of any Shelf
Registration Statement hereunder, the Company shall provide a
CUSIP number for the Securities registered under such Shelf
Registration Statement.
(k) The Company shall use its best efforts to
comply with all applicable rules and regulations of the
Commission and shall make generally available to their
security holders or otherwise provide in accordance with
Section 11(a) of the Securities Act as soon as practicable
after the effective date of the applicable Shelf Registration
Statement an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act.
(l) The Company shall cause the Indenture to be
qualified under the Trust Indenture Act in a timely manner.
(m) The Company may require each Holder of
Registrable Securities to be sold pursuant to any Shelf
Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such
Registrable Securities as may be required by applicable law or
regulation for inclusion in such Shelf Registration Statement
and the Company may exclude from such registration the
Registrable Securities of any Holder that fails to furnish
such information within a reasonable time after receiving such
request.
(n) The Company in the event of an underwritten
offering, if any, as set forth in Section 6 hereof, shall, if
requested, promptly include or incorporate in a Prospectus
supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters
reasonably agree should be included therein and to which the
Company does not reasonably object and shall make all required
filings of such Prospectus supplement or post-effective
amendment as soon as practicable after they are notified of
the matters to be included or incorporated in such Prospectus
supplement or post-effective amendment.
(o) The Company shall enter into such customary
agreements (including an underwriting agreement in customary
form in the event of an underwritten offering, if any, as set
forth in Section 6 hereof), to take all other appropriate
actions in order to expedite or facilitate the registration of
the Registrable Securities and to otherwise perform its
obligations under this Agreement, and in connection therewith,
if an underwriting agreement is entered into, cause the same
to contain indemnification provisions and
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procedures substantially identical to those set forth in
Section 5 with respect to all parties to be indemnified
pursuant to Section 5.
(p) The Company shall:
(i) make reasonably available for inspection
by the Holders of Registrable Securities to be
registered thereunder, any underwriter
participating in any disposition pursuant to such
Shelf Registration Statement, and any attorney,
accountant or other agent retained by such Holders
or any such underwriter all relevant financial and
other records, pertinent corporate documents and
properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors
and employees to make reasonably available for
inspection all relevant information reasonably
requested by such Holders or any such underwriter,
attorney, accountant or agent in connection with
any such Shelf Registration Statement, in each
case, as is customary for similar due diligence
examinations; PROVIDED, HOWEVER, that any
information that is designated in writing by the
Company, in good faith, as confidential at the time
of delivery of such information shall be kept
confidential by such Holders or any such
underwriter, attorney, accountant or agent, unless
such disclosure is made in connection with a court
proceeding or required by law, or such information
becomes available to the public generally or
through a third party without an accompanying
obligation of confidentiality; and PROVIDED FURTHER
that the foregoing inspection and information
gathering shall be coordinated on behalf of the
Holders and the other parties entitled thereto by
one counsel designated by and on behalf of such
Holders and other parties;
(iii) in the event of an underwritten
offering, if any, as set forth in Section 6 hereof,
make such representations and warranties to the
underwriters, if any, in form, substance and scope
as are customarily made by the Company to
underwriters in primary underwritten offerings and
covering matters including, but not limited to,
those set forth in the Purchase Agreement;
(iv) in the event of an underwritten
offering, if any, as set forth in Section 6 hereof,
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)
addressed to the underwriters, if any, covering
such matters as are customarily covered in opinions
requested in underwritten offerings and such other
matters as may be reasonably requested by such
underwriters (it being agreed that the matters to
be covered by such opinion or written statement by
such counsel delivered in connection with such
opinions shall include in customary form, without
limitation, as of the effective date of the Shelf
Registration Statement or most recent
post-effective amendment thereto, as the case may
be, the absence from such Shelf Registration
Statement and the prospectus included therein, as
then amended or supplemented, including the
documents incorporated by reference therein, of an
untrue statement of a material fact or the omission
to state therein a material fact required to be
stated therein or necessary to make the statements
therein not misleading;
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(v) in the event of an underwritten
offering, if any, as set forth in Section 6 hereof,
obtain "cold comfort" letters and updates thereof
from the independent public accountants of the
Company (and, if necessary, any other independent
public accountants of any subsidiary of the Company
or of any business acquired by the Company for
which financial statements and financial data are,
or are required to be, included in the Shelf
Registration Statement), addressed to each such
Holder of Registrable Securities registered
thereunder (only if such Holder has provided such
letter, representations or documentation, if any,
required for such letter to be so addressed) and
the named underwriters in customary form and
covering matters of the type customarily covered in
"cold comfort" letters in connection with primary
underwritten offerings;
(vi) deliver such documents and certificates
as may be reasonably requested by any such Holders
and the Managing Underwriters, if any, including
those to evidence compliance with Section 3(i) and
with any customary conditions contained in the
underwriting agreement or other agreement entered
into by the Company.
The foregoing actions set forth in clauses (iii), (iv), (v)
and (vi) of this Section 3(p) shall be performed at each
closing under any underwritten offering to the extent required
thereunder.
(q) The Company will use its best efforts to cause
the Stock issuable upon conversion of the Securities to be
listed for quotation on the Nasdaq National Market or other
stock exchange or trading system on which the Stock primarily
trades on or prior to the effective date of any Shelf
Registration Statement hereunder.
(r) In the event that any broker-dealer registered
under the Exchange Act shall underwrite any Registrable
Securities or participate as a member of an underwriting
syndicate or selling group or "assist in the distribution"
(within the meaning of the Rules of Fair Practice and the
By-Laws of the National Association of Securities Dealers,
Inc. ("NASD")) thereof, whether as a Holder of such
Registrable Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or
otherwise, assist such broker-dealer in complying with the
requirements of such Rules and By-Laws, including, without
limitation, by (A) such Rules or By-Laws, including Schedule E
thereto, shall so require, engaging a "qualified independent
underwriter" (as defined in Schedule E) to participate in the
preparation of the Shelf Registration Statement relating to
such Registrable Securities and to exercise usual standards of
due diligence in respect thereto, (B) indemnifying any such
qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 5 hereof
and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with
the requirements of the Rules of Fair Practice of the NASD.
(s) The Company shall use its best efforts to take
all other steps necessary to effect the registration of the
Registrable Securities covered by the Shelf Registration
Statement contemplated hereby and to otherwise perform its
obligations hereunder.
4. REGISTRATION EXPENSES. Except as otherwise provided in
Section 6, the Company shall bear all fees and expenses incurred in connection
with the performance of its obligations under Sections 2 and 3 hereof and shall
bear or reimburse the Holders for the reasonable fees and disbursements of one
firm of counsel designated by the Company and reasonably acceptable
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to the Holders of a majority of the Registrable Securities covered by the Shelf
Registration Statement to act as counsel therefor in connection therewith.
5. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with
the Shelf Registration Statement, the Company shall indemnify and hold harmless
the Purchasers, each Holder, each underwriter who participates in an offering of
Registrable Securities, each person, if any, who controls any of such parties
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and each of their respective directors, officers, employees,
trustees and agents, as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, including any amounts paid in
settlement of any investigation, litigation, proceeding or
claim, joint or several, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in any Shelf Registration Statement (or any
amendment thereto) covering Registrable Securities, including
all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact
contained in any Prospectus (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; PROVIDED, that the Company shall
not be liable under this clause (i) for any settlement of any
action effected without its written consent, which consent
shall not be unreasonably withheld; and
(ii) against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of
counsel chosen by the Holders, such Holder or any underwriter
(except to the extent otherwise expressly provided in Section
5(c) hereof)), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any court or 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 subparagraph (i) of this Section
5(a);
PROVIDED that this indemnity shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of an 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 the Purchasers, such Holder
or any underwriter in writing expressly for use in the Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto); PROVIDED FURTHER that the foregoing indemnity with respect
to any untrue statement or omission or alleged untrue statement or omission made
in a preliminary prospectus shall not inure to the benefit of any underwriter
(or any person controlling such underwriter) from whom the person asserting any
such loss, liability, claim, damage or expense purchased any of the Registrable
Securities that are the subject thereof if such person was not sent or given a
copy of the Prospectus (or the Prospectus as amended or supplemented), at or
prior to the written confirmation of the sale of such Registrable Securities to
such person and the untrue statement or omission or alleged untrue statement or
omission made in such preliminary prospectus was corrected in the Prospectus (or
the Prospectus as amended or supplemented). Any amounts advanced by the Company
to an indemnified party pursuant to this Section 5 as a result of such losses
shall be returned to the Company if it shall be finally determined by such a
court in a
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judgment not subject to appeal or final review that such indemnified party was
not entitled to indemnification by the Company.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Purchasers, each underwriter who
participates in an offering of Registrable Securities and the other selling
Holders and each of their respective directors, officers (including each officer
of the Company who signed the Shelf Registration Statement), employees, trustees
and agents and each Person, if any, who controls the Company, the Purchasers,
any underwriter or any other selling Holder within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 5(a)(i) and (ii) hereof, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Shelf Registration Statement (or any amendment thereto)
or any Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such selling
Holder expressly for use in the Shelf Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto); PROVIDED,
HOWEVER, that, no such Holder shall be liable for any claims hereunder in excess
of the amount of net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers served on such
indemnified party, but failure to so notify an indemnifying party shall not
relieve it of any liability which it may have to the indemnified party otherwise
than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of any such action. If an
indemnifying party so elects within a reasonable time after receipt of such
notice, such indemnifying party, jointly with any other indemnifying party, may
assume the defense of such action with counsel chosen by it and approved by the
indemnified party or parties defendant in such action, PROVIDED that if any such
indemnified party reasonably determines that there may be legal defenses
available to such indemnified party which are different from or in addition to
those available to such indemnifying party or that representation of such
indemnifying party and any indemnified party by the same counsel would present a
conflict of interest, then such indemnifying party or parties shall not be
entitled to assume such defense. If an indemnifying party is not entitled to
assume the defense of such action as a result of the proviso to the preceding
sentence, counsel for such indemnifying party shall be entitled to conduct the
defense of such indemnifying party and counsel for each indemnified party or
parties shall be entitled to conduct the defense of such indemnified party or
parties. If an indemnifying party assumes the defense of an action in accordance
with and as permitted by the provisions of this paragraph, such indemnifying
party shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such action. In no
event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from its 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.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision agreement provided for in this
Section 5 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Purchasers
and the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred
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by the Company, the Purchasers and the Holders, as incurred; PROVIDED
that 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 that was not guilty of such fraudulent misrepresentation. As between the
Company, the Purchasers and the Holders, such parties shall contribute to such
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Company, on the one hand, and
the Purchasers and the Holders, on the other hand, with respect to the
statements or omissions which resulted in such loss, liability, claim, damage or
expense, or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Purchasers and the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or by or on
behalf of the Purchasers or the Holders, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. the Company, the Purchasers and the Holders of the
Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 5 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 5(d), each
director, officer, employee, trustee, agent and Person, if any, who controls the
Purchasers or a Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Purchasers or such Holder, and each director, officer, employee, trustee and
agent of the Company, and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company. No party shall be
liable for contribution with respect to any action, suit, proceeding or claim
settled without its written consent.
6. UNDERWRITTEN OFFERING. The Holders of Registrable
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Registrable Securities in a firm underwritten offering and the Company
will use their best efforts to facilitate such underwritten offering. In any
such underwritten offering, the investment banker or bankers and manager or
managers that will administer the offering will be selected by, and the
underwriting arrangements with respect thereto will be approved by, the Holders
of a majority of the Registrable Securities to be included in such offering;
PROVIDED, HOWEVER, that (i) such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company and
(ii) the Company shall not be obligated to allow more than one underwritten
offering during the Effectiveness Period. No Holder may participate in any
underwritten offering contemplated hereby unless such Holder (a) agrees to sell
such Holder's Registrable Securities in accordance with any approved
underwriting arrangements, (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements and (c) at least 20% of the outstanding Registrable
Securities are included in such underwritten offering. The Holders participating
in any underwritten offering shall be responsible for any expenses customarily
borne by selling securityholders, including underwriting discounts and
commissions and fees and expenses of counsel to the selling securityholders and
shall reimburse the Company for the fees and disbursements of their counsel,
their independent public accountants and any printing expenses incurred in
connection with such underwritten offerings. Notwithstanding the foregoing or
the provisions of Section 3(n) hereof, upon receipt of a request from the
Managing Underwriter or a representative of Holders of a majority of the
Registrable Securities outstanding to prepare and file an amendment or
supplement to the Shelf Registration Statement and Prospectus in
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<PAGE>
connection with an underwritten offering, the Company may delay the filing of
any such amendment or supplement for up to 90 days if the Company in good faith
has a valid business reason for such delay.
7. MISCELLANEOUS.
(a) OTHER REGISTRATION RIGHTS. The Company may grant
registration rights that would permit any Person that is a third party the right
to piggy-back on any registration statement relating to an underwritten offering
as described in Section 6, PROVIDED that if the Managing Underwriter, if any, of
such offering delivers an opinion to the selling Holders that the total amount
of securities which they and the holders of such piggy-back rights intend to
include in any Shelf Registration Statement is so large as to materially
adversely affect the success of such offering (including the price at which such
securities can be sold), then the amount, the number or kind of securities to be
offered for the account of the holders of such piggy-back rights and the selling
Holders will be reduced pro rata to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount, number or
kind recommended by the Managing Underwriter.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
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 the Purchasers.
(c) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address
given by such Holder to the Company in accordance with
the provisions of this Section 7(c);
(2) if to the Purchasers, initially at the address
set forth in the Purchase Agreement; and
(3) if to the Company, initially at its address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly given when
received.
The Purchasers or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the Holders, including, without the need for an express assignment or any
consent by the Company thereto, subsequent Holders of Registrable Securities.
The Company hereby agrees to extend the benefits of this Agreement to any Holder
of Registrable Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) COUNTERPARTS. This agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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<PAGE>
(f) HEADINGS. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
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<PAGE>
(h) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
Please confirm that the foregoing correctly sets forth the
agreement between the Company and you.
Very truly yours,
BROADBAND TECHNOLOGIES, INC.
By:_______________________________
Name: Salim A. Bhatia
Title: Chief Executive Officer
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
By: _______________________________
(Goldman, Sachs & Co.)
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<PAGE>
BroadBand Technologies, Inc.
5% Convertible Subordinated Notes due May 15, 2001
PURCHASE AGREEMENT
May 17, 1996
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
BroadBand Technologies, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$100,000,000 principal amount of the 5% Convertible Subordinated Notes due May
15, 2001, convertible into Common Stock, par value $0.01 per share ("Stock"), of
the Company, specified above (the "Firm Securities"), and, at the election of
the Purchasers, up to an aggregate of $15,000,000 additional principal amount of
such Notes (the "Optional Securities"). The Firm Securities and the Optional
Securities which the Purchasers elect to purchase pursuant to Section 2 hereof
are herein collectively called the "Securities". As used herein, the term
"Purchasers" shall be deemed to include Goldman Sachs International ("GSI"),
which is acting as Goldman, Sachs & Co.'s selling agent in making certain
resales of the Securities pursuant to Section 3 hereof.
The Purchasers and other holders (including subsequent transferees) of
Securities (and any holders of shares of Stock which have been then issued upon
conversion of such Securities) (collectively, the "Registrable Securities") will
be entitled to the benefits of the registration rights agreement, dated the date
hereof (the "Registration Rights Agreement") among the Company and the
Purchasers, in the form attached hereto as Exhibit A. Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission") under the circumstances
set forth therein a shelf registration statement pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Act") relating to the resale of (i)
such Securities and (ii) the shares of Stock initially issuable upon conversion
of
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<PAGE>
such Securities by holders thereof, and to use its best efforts to cause such
shelf registration statement to be declared effective.
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) An offering circular dated May 17, 1996 (including the
international supplement thereto, the "Offering Circular") has
been prepared in connection with the offering of the
Securities and the shares of Stock issuable upon conversion
thereof. Any reference herein to the Offering Circular shall
be deemed to refer to and include the Company's Annual Report
on Form 10-K for the year ended December 31, 1995 (as amended
by the Company's Form 10-KA filed with the Commission on May
1, 1996 (the "Form 10-KA")) including certain portions of the
Proxy Statement for the Annual Meeting of Shareholders on May
22, 1996 incorporated therein by reference, and Quarterly
Report on Form 10-Q for the quarter ended March 31, 1996 (the
"10-Q"), each of which is attached to and made a part of the
Offering Circular. The Company's Annual Report on Form 10-K
for the year ended December 31, 1995 (including the Form 10-KA
and all documents incorporated by reference therein) and the
10-Q (collectively, the "Exchange Act Reports"), when they
were filed with the Commission, conformed in all material
respects to the applicable requirements of the United States
Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the applicable rules and regulations of the
Commission thereunder. The Exchange Act Reports, when they
were so filed, did not contain an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Offering Circular and any amendments or supplements thereto
did not and will not, as of their respective dates, contain an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by you
expressly for use therein;
(b) The Company does not own or control, directly or
indirectly, any corporation, association or other entity. The
Company is a corporation duly organized, validly existing, and
in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority, and
all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and
other governmental authorities and all courts and other
tribunals, to own, lease, license, and use its respective
properties and assets and to carry on the business in the
manner described in the Offering Circular (except for such
consents, authorizations, approvals, orders, licenses,
certificates, permits, declarations, and filings which the
failure to have obtained, individually or in the aggregate,
does not and will not have a material adverse effect upon the
financial condition, results of operations, business,
properties, or assets of the Company, taken as a whole). The
Company is duly qualified to do business and is in good
standing in every jurisdiction in which its ownership,
leasing, licensing, or use of property and assets or the
conduct of its business makes such qualification necessary,
except where the failure to be so qualified or in good
standing (considering all
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<PAGE>
such failures together) does not and will not have a material
adverse effect upon the financial condition, results of
operations, business, properties, or
assets of the Company;
(c) The authorized capital stock of the Company consists
of 30,000,000 shares of Common Stock, of which 13,210,311
shares are outstanding and 7,500,000 shares of Convertible
Preferred Stock of which no shares are outstanding. Each
outstanding share of Common Stock, validly authorized, validly
issued, fully paid, and nonassessable, has not been, or will
not be, issued and is not, or will not be, owned or held in
violation of any preemptive rights of stockholders. There is
no commitment, plan or arrangement to issue, and no
outstanding option, warrant, or other right calling for the
issuance of, any share of capital stock of the Company or any
securities or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for capital
stock of the Company, except as properly described in the
Offering Circular and except for options granted since
December 31, 1996. There is outstanding no security or other
instrument which by its terms is convertible into or
exchangeable for capital stock of the Company, except as
properly described in the Offering Circular.
(d) The financial statements of the Company included in
the Offering Circular fairly present, in all material
respects, with respect to the Company, the financial position,
the results of operations, and the other information purported
to be shown therein at the respective dates and for the
respective periods to which they apply. In all material
respects, such financial statements have been prepared in
accordance with generally accepted accounting principles
consistently applied throughout the periods involved, are
correct and complete, and are in accordance with the books and
records of the Company. The accountants whose reports on the
audited financial statements are included in the Offering
Circular are, and during the periods covered by their reports
included in the Offering Circular were, independent certified
public accountants with respect to the Company within the
meaning of the Act and the regulations of the Commission
thereunder. There has at no time been a material adverse
change in the financial condition, results of operations,
business, properties, assets or prospects of the Company from
the latest information set forth in the Offering Circular,
except as properly described in the Offering Circular;
(e) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation pending or, to the knowledge of the Company,
threatened, or in prospect (or any basis therefor known to the
Company) with respect to the Company or any of its operations,
business, properties, or assets except as properly described
in the Offering Circular or such as individually or in the
aggregate do not now have and are not reasonably expected in
the future to have to have a material adverse effect upon the
financial condition, results of operations, business,
properties, or assets of the Company. The Company is not in
violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree except as properly
described in the Offering Circular or such as in the aggregate
do not now have and are not reasonably expected in the future
to have a material adverse effect upon the financial
condition, results of operations, business, properties, or
assets of the Company; nor is the Company required to take any
action in order to avoid any such violation or default;
(f) The Company does not have any ownership interest,
directly or indirectly, in any real property. The Company has
good title to all properties and assets which the Offering
Circular indicates are owned by it, free and clear of all
liens, security interests, pledges, charges, encumbrances, and
mortgages (except as properly described in the Offering
Circular or such as in the aggregate do not now have and are
not reasonably expected in
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<PAGE>
the future to have a material adverse effect upon the
financial condition, results of operations, business,
properties, or assets of the Company). No real property
leased, licensed, or used by the Company lies in an area which
is or, to the knowledge of the Company, will
be subject to zoning, use, or building code restrictions which
would prohibit, and no state of facts relating to the action
or inaction of another person or entity or his or its
ownership, leasing, licensing, or use of any real or personal
property exists or will exist which would prevent, the
continued effective leasing, licensing, or use of such real
property in the business of the Company as presently conducted
or as the Offering Circular indicates it contemplates
conducting (except as properly described in the Offering
Circular or such as in the aggregate do not now have and will
not in the future have a material adverse effect upon the
financial condition, results of operations, business,
properties, or assets of the Company);
(g) The Company possesses such authority, certificates,
and permits issued by the appropriate state, federal, or
foreign regulatory agencies or bodies necessary to conduct the
business now operated by it, except for such authority,
certificates, and permits the absence of which, singly or in
the aggregate, would not have a material adverse effect on the
financial condition, results of operations, business,
properties, or assets of the Company; and the Company has not
received any notice of proceedings relating to the revocation
or modification of any such authority, certificate, or permit
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would materially
affect the financial condition, results of operations,
business, properties, assets, or future prospects of the
Company;
(h) Neither the Company nor, to the Company's knowledge,
any other party is now or is expected by the Company to be in
violation or breach of, or in default with respect to,
complying with any material provision of any contract,
agreement, instrument, lease or license which is material to
the Company, and each such contract, agreement, instrument,
lease or license is in full force and is the legal, valid, and
binding obligation of the Company and, to the Company's
knowledge, the other parties thereto and is enforceable
against the Company and, to the Company's knowledge, against
other parties thereto in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
The Company enjoys peaceful and undisturbed possession under
all leases and licenses under which it is operating. The
Company is not a party to or bound by any contract, agreement,
instrument, lease, license, arrangement, or understanding, or
subject to any charter or other restriction, which has had or
is reasonably expected in the future to have a material
adverse effect on the financial condition, results of
operations, business, properties, assets, or future prospects
of the Company. The Company is not in violation or breach of,
or default with respect to, any term of its Certificate of
Incorporation or bylaws;
(i) All patents, patent applications, trademarks,
trademark applications, trade names, service marks,
copyrights, franchises, and other intangible properties and
assets (all of the foregoing being herein called
"Intangibles") that the Company owns or has pending, or under
which it is licensed, are in good standing and uncontested,
except as properly described in the Offering Circular. There
is no right under any Intangible necessary to the business of
the Company as presently conducted or as the Offering Circular
indicates it contemplates conducting, except as properly
described in the Offering Circular. The Company has not
infringed, is not infringing, and has not received notice of
infringement with respect to asserted Intangibles of others,
except for such infringement or alleged
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<PAGE>
infringement that has not had, or cannot be reasonably
expected to have, a material adverse effect on the financial
condition, results of operations, business, properties,
assets, or future prospects of the Company. To the knowledge
of the Company, there is no infringement by others of
Intangibles of the Company, except
as properly described in the Offering Circular. To the
knowledge of the Company, there is no Intangible of others
which has had or may in the future have a material adverse
effect on the financial condition, results of operations,
business, properties, assets, or future prospects of the
Company;
(j) None of the Company or any other person associated
with or acting on behalf of the Company, including, without
limitation, any director, officer, agent, or employee of the
Company has, directly or indirectly, while acting on behalf of
the Company: used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any
other unlawful payment;
(k) The Company has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary
corporate proceedings of the Company have been duly taken to
authorize the execution, delivery, and performance of this
Agreement by the Company. This Agreement has been duly
authorized, executed, and delivered by the Company. No
consent, authorization, approval, order, license, certificate,
or permit of or from, or declaration or filing with, any
federal, state, local, or governmental authority or any court
or other tribunal is required by the Company for the
execution, delivery, or performance of this Agreement by the
Company. No consent of any party to any material contract,
agreement, instrument, lease, license, arrangement, or
understanding to which the Company is a party, or to which any
of its properties or assets are subject, is required for the
execution, delivery, or performance of this Agreement; and the
execution, delivery, and performance of this Agreement will
not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both)
entitle any party to terminate or call a default under any
such contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a
breach of any term of the Certificate of Incorporation or
bylaws of the Company, or violate, result in a breach of, or
conflict with any law, rule, regulation (except for such law,
rule, or regulation the violation of which would not have a
material adverse effect on the financial condition, results of
operations, business, properties, or assets of the Company),
order, judgment, or decree binding on the Company or to which
any of its operations, business, properties, or assets is
subject;
(l) The Securities have been duly authorized and, when
issued, authenticated and delivered pursuant to this
Agreement, will have been duly executed, issued and delivered
and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the indenture
to be dated as of May 22, 1996 (the "Indenture") between the
Company and Marine Midland Bank, as Trustee (the "Trustee"),
under which they are to be issued, which will be substantially
in the form previously delivered to you; the Indenture has
been duly authorized and, when executed and delivered by the
Company and the Trustee, the Indenture will constitute a valid
and legally binding instrument, enforceable in accordance with
its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Securities and the
Indenture will conform to the descriptions thereof in the
Offering Circular and will be in substantially the form
previously delivered to you;
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<PAGE>
(m) Subsequent to the respective dates as of which
information is given in the Offering Circular and except as
otherwise properly described in the Offering Circular, the
Company has not (A) issued any securities or incurred any
liability or obligation, primary or contingent, for borrowed
money, (B) entered into any material transaction not in the
ordinary course of business, or (C) declared or paid any
dividend on its capital stock;
(n) Neither the Company nor any of its officers,
directors, or affiliates (as defined in the regulations under
the Act) has taken or will take, directly or indirectly, prior
to the termination of the offering contemplated by this
Agreement, any action designed to stabilize or manipulate the
price of any security of the Company or which has caused or
resulted in, or which might in the future reasonably be
expected to cause or result in, stabilization or manipulation
of the price of any security of the Company to facilitate the
sale or resale of any of the Securities;
(o) Each of the directors and officers of the Company
listed in Schedule II hereto has entered into a written
agreement with the Company in the form of Exhibit B hereto
(each such agreement, a "Lock-up Agreement"), and executed
originals of each Lock-up Agreement have been delivered to
you;
(p) The Company has filed all necessary federal, state,
and foreign income and franchise tax returns and has paid all
taxes shown as due thereon; and there is no tax deficiency
that has been, or to the knowledge of the Company might be,
asserted against the Company or any of its respective
properties or assets that would materially and adversely
affect the financial condition, results of operations,
business, properties or assets of the Company;
(q) There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course
of business), or guarantees of indebtedness by the Company to
or for the benefit of any of the officers or directors of the
Company or any of the members of the families of any of them,
except as properly disclosed in the Offering Circular;
(r) There are no rights of return or other agreements
between the Company and any customer of the Company which
would cause any sales reflected in the Company's financial
statements for the year ended December 31, 1995 and the three
months ended March 31, 1996 included in the Offering Circular
to fail to qualify as sales in accordance with generally
accepted accounting principles or the Company's revenue
recognition policy as reflected in the audited financial
statements included in the Offering Circular;
(s) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(t) None of the transactions contemplated by this
Agreement (including, without limitation, the use of the
proceeds from the sale of the Securities) will violate or
result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder,
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including, without limitation, Regulations G, T, U, and X of
the Board of Governors of the Federal Reserve System;
(u) When the Securities are issued and delivered pursuant
to this Agreement, the Securities will not be of the same
class (within the meaning of Rule 144A under the Act) as
securities which are listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a
U.S. automated inter-dealer quotation system;
(v) The Company is subject to Section 13 or 15(d) of the
Exchange Act;
(w) The Company is not, and after giving effect to the
offering and sale of the Securities, will not be an
"investment company", or an entity "controlled" by an
"investment company", as such terms are defined in the United
States Investment Company Act of 1940, as amended (the
"Investment Company Act");
(x) Neither the Company, nor any affiliate of the Company,
nor any person acting on its or their behalf, has, with
respect to the Securities or shares of Stock issuable upon
conversion thereof sold in the United States, offered or sold
the Securities or shares of Stock issuable upon conversion
thereof by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Act
or, with respect to Securities or shares of Stock issuable
upon conversion thereof sold in reliance on Rule 903 under the
Act, by means of any directed selling efforts within the
meaning of Rule 903 under the Act and the Company, any
affiliate of the Company and any person acting on its or their
behalf has complied with and will implement the offering
restriction requirements of such Rule 903;
(y) Within the preceding six months, neither the Company
nor any person acting on behalf of the Company has offered or
sold, directly or indirectly, in the United States or to any
U.S. person (as such terms are defined in Regulation S under
the Securities Act) any Securities, any Stock or any security
substantially similar to the Securities or the Stock issued by
the Company. The Company will take reasonable precautions
designed to ensure that any offer or sale, direct or indirect,
in the United States or to any U.S. person of any Securities,
any Stock or any security substantially similar to the
Securities or the Stock issued by the Company, within six
months subsequent to the date on which the distribution of the
Securities has been completed (as notified to the Company by
Goldman, Sachs & Co.), is made under restrictions and other
circumstances reasonably designed not to affect the status of
the offer and sale of the Securities and the Stock issuable
upon the conversion thereof in the United States and to U.S.
persons contemplated by Annex I to this Agreement as
transactions exempt from the registration requirements of the
Securities Act;
(z) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section
517.075, Florida Statutes;
(aa) None of the holders of outstanding shares of capital
stock of the Company and no other person has or will have any
preemptive or other rights to purchase, subscribe for or
otherwise acquire (i) the shares of Stock to be issued upon
conversion of the Securities or any rights to such shares or
(ii) as a result of or in connection with the transactions
contemplated by the Indenture or this Agreement, any other
capital stock of the Company or rights thereto;
(bb) Assuming the accuracy of the representations and
warranties of the Purchasers set forth herein, it is not
necessary in connection with the offer, sale and delivery of
the Securities to the Purchasers, or in connection with the
initial resale of the Securities by the
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Purchasers in accordance with this Agreement, to register the
Securities under the Act or to qualify the Indenture under the
Trust Indenture Act of 1939, as amended (the "TIA");
(cc) The Securities to be sold pursuant to Rule 144A
under the Act have been designated PORTAL eligible securities
in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc.;
(dd) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and
constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with the terms
thereof, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles;
(ee) Other than as set forth or contemplated in the
Offering Circular, there are no persons with registration
rights or other similar rights to have any securities of the
Company (other than the Securities and the shares of Stock
initially issuable upon the conversion thereof) registered
under any registration statement under the Securities Act
(including the registration statement contemplated by the
Registration Rights Agreement);
(ff) The Company (i) is in compliance with any and all
applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"),
(ii) has received all permits, licenses or other approvals
required under applicable Environmental Laws to conduct its
business and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company; and
(gg) The Company is not and has not been at any time
within its previous five tax years, a United States Real
Property Holding Company within the meaning of Section 897 of
the United States Internal Revenue Code of 1986, as amended.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 96.75% of the principal amount thereof, plus accrued interest, if any,
from May 22, 1996 to the First Time of Delivery hereunder, the principal amount
of Firm Securities set forth opposite the name of such Purchaser in Schedule I
hereto, and (b) in the event and to the extent that Goldman, Sachs & Co. on
behalf of the Purchasers shall exercise the election to purchase Optional
Securities as provided below, the Company agrees to issue and sell to each of
the Purchasers, and each of the Purchasers agrees, severally and not jointly, to
purchase from the Company, at the same purchase price set forth in clause (a) of
this Section 2, the aggregate principal amount of the Optional Securities as to
which such election shall have been exercised (to be adjusted by you so as to
eliminate denominations of less than U.S.$1,000) determined by multiplying such
aggregate principal amount of Optional Securities by a fraction, the numerator
of which is the maximum aggregate principal amount of Optional Securities which
such Purchaser is entitled to purchase as set forth opposite the name of such
Purchaser in Schedule I hereto and the denominator of which is the maximum
aggregate principal amount of Optional Securities which all of the Purchasers
are entitled to purchase hereunder.
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<PAGE>
The Company hereby grants to the Purchasers the right to purchase at their
election up to $15,000,000 aggregate principal amount of Optional Securities, at
the purchase price set forth in clause (a) of the first paragraph of this
Section 2, for the sole purpose of covering over-allotments in the sale of Firm
Securities. Any such election to purchase Optional Securities may be exercised
by written notice from you to the Company, given within a period of 30 calendar
days after the date of this Agreement, setting forth the aggregate principal
amount of Optional Securities to be purchased and the date on which such
Optional Securities are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery or, unless you and the Company otherwise
agree in writing earlier than two or later than ten business days after the date
of such notice.
3. The Purchasers propose to offer the Securities for sale upon the terms
and conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A, (ii) institutions which it reasonably believes are "accredited
investors" ("Institutional Accredited Investors") within the meaning of Rule 501
under the Act or, (iii) upon the terms and conditions set forth in Annex I to
this Agreement; provided, however, that offers and sales of Securities pursuant
to clause (iii) of this paragraph may be made by Goldman, Sachs & Co. through
GSI;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Act.
4. (a) Except as set forth in the next paragraph, the Securities to be
purchased by each Purchaser hereunder will be represented (i) in the case of
Securities to be initially resold pursuant to Rule 144A under the Act, by one or
more definitive global Securities in book-entry form which will be deposited by
or on behalf of the Company with The Depository Trust Company ("DTC") or its
designated custodian and (ii) in the case of Securities to be initially resold
pursuant to Regulation S under the Act, by one or more definitive global
Securities in book-entry form which will be deposited by or on behalf of the
Company with DTC or its designated custodian for the benefit of Morgan Guaranty
Trust Company of New York (Brussels office), as operator of the Euroclear
System, or Cedel Bank, Societe Anonyme, or both, for credit to the account of
GSI, unless otherwise directed by GSI. The Company will deliver the Securities
to Goldman, Sachs & Co., for the account of each Purchaser, against payment by
or on behalf of such Purchaser of the purchase price therefor by certified or
official bank check or checks, or by wire transfer, payable to the order of the
Company in Federal (same day) funds, by causing DTC to credit the Securities to
the respective accounts of Goldman, Sachs & Co. and GSI, as the case may be, at
DTC. The Company will cause the certificates representing the Securities to be
made available to Goldman, Sachs & Co. for checking at least twenty-four hours
prior to the Time of Delivery (as defined below) with respect thereto at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of such delivery and payment shall be, with respect to the Firm
Securities, 9:30 a.m., New York City time, on May 22, 1996, or such other time
and date as Goldman, Sachs & Co. and the Company may agree upon in writing and,
with respect to the Optional Securities, 9:30 a.m., New York City time, on the
date specified by Goldman, Sachs & Co. in the written notice given by Goldman,
Sachs & Co. of the Purchasers' election to purchase such Optional Securities, or
such other time and date as Goldman, Sachs & Co. and the Company may agree upon
in writing. Such time and date for delivery of the Firm Securities is herein
called the
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"First Time of Delivery", such time and date for delivery of the Optional
Securities, if not the First Time of Delivery, is herein called the "Second Time
of Delivery", and each such time and date for delivery is herein called a "Time
of Delivery".
Such Securities, if any, as Goldman, Sachs & Co. may request upon at least
forty-eight hours' prior notice to the Company (such request to include the
authorized denominations and the names in which they are to be registered),
shall be delivered in definitive certificated form, by or on behalf of the
Company to Goldman, Sachs & Co. for the account of certain of the Purchasers,
against payment by or on behalf of such Purchaser of the purchase price therefor
by certified or official bank check or checks, or by wire transfer, payable to
the order of the Company in Federal (same day) funds. The Company will cause the
certificates representing the Securities to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery with respect
thereto at the office of Goldman, Sachs & Co., 85 Broad Street, New York, New
York 10004 (the "New York Office").
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7(m) hereof, will be delivered at such time and date at the
offices of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004 (the
"Closing Location"), and the Securities will be delivered at the Designated
Office and, if applicable, the New York Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at 3:00 p.m., New York City time,
on the New York Business Day next preceding each Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; and to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof;
(b) To furnish the Purchasers with four copies of the Offering Circular and
each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report(s) in the Offering Circular,
and any amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and additional
copies thereof in such quantities as you may from time to time reasonably
request, and if, at any time prior to the expiration of nine months after the
date of the Offering Circular, any Purchaser has not resold any of the
Securities purchased by it from the Company hereunder and any event shall have
occurred as a result of which the Offering Circular as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Offering
Circular is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement the
Offering Circular, to notify you and upon your request to prepare and furnish
without charge to each Purchaser and to any dealer in securities as many copies
as you may from time to time reasonably request of an amended Offering Circular
or a supplement to the Offering Circular which will correct such statement or
omission or effect such compliance;
(c) (i) During the period beginning from the date hereof and continuing to
and including the date 90 days after the first Time of Delivery, not to offer,
sell, contract to sell or otherwise
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dispose of, except as provided hereunder, any securities of the Company
substantially similar to the Securities or the Stock, including but not limited
to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities, except (a) pursuant to the Company's stock option or purchase plans
existing as of the date hereof or pursuant to options or warrants outstanding as
of the date hereof or (b) as consideration for acquisitions of businesses,
properties or assets, provided that (except with respect to an aggregate of not
more than 25,000 shares of Common Stock issued in consideration of all such
acquisitions) the offerees, purchasers or other transferees of any such shares
shall agree in writing to restrictions substantially identical to those
contained in this subsection;and (ii) that it will use reasonable efforts to
cause each person who has entered into a Lock-up Agreement to comply therewith,
will not grant any waivers or consents to non-compliance therewith and will
enforce its rights under each such agreement; in each case, unless and to the
extent that it shall have obtained your prior written consent;
(d) To use its best efforts to have the shares of Stock issuable upon
conversion of the Securities listed on the Nasdaq National Market and to use its
best efforts to maintain such listing so long as any of the Securities, and the
shares of Stock issuable upon conversion thereof, are outstanding;
(e) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Offering Circular
under the caption "Use of Proceeds";
(f) Not to be or become, at any time prior to the expiration of three years
after the Time of Delivery, an open-end investment company, unit investment
trust, closed-end investment company or face-amount certificate company that is
or is required to be registered under Section 8 of the Investment Company Act;
(g) At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, for the benefit of holders from time to time of Securities and
the Stock issuable upon conversion thereof, to furnish at its expense, upon
request, to holders of Securities and the Stock issuable upon conversion thereof
and prospective purchasers thereof information satisfying the requirements of
subsection (d)(4)(i) of Rule 144A under the Act;
(h) During the period of three years after the latest Time of Delivery, the
Company will not, and will use its best efforts to not permit any "affiliates"
(as defined in Rule 144 under the Act or any successor provision thereto), to
resell (x) any Securities which constitute "restricted securities" under Rule
144 or (y) any shares of Stock into which the Securities have been converted
under the Indenture which constitute "restricted securities" under Rule 144,
that in either case have been reacquired by any of them;
(i) Promptly from time to time to take such action as you may reasonably
request to qualify such Securities and the Stock issuable upon conversion
thereof for offering and sale under the securities laws of such states,
commonwealths, territories and possessions in the United States as you may
reasonably request and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Securities and the Stock issuable
upon conversion thereof, provided that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(j) To reserve and keep available at all times as a part of its authorized
but unissued capital stock, free of preemptive rights, shares of Stock for the
purpose of enabling the Company to satisfy any obligations to issue shares of
Stock upon conversion of the Securities;
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<PAGE>
(k) Until such time as any Security or any Stock issuable upon conversion
thereof is registered under the Securities Act pursuant to the Registration
Rights Agreement and transferred pursuant to the registration statement
contemplated thereby, to include a legend on the Securities and the Stock
issuable upon the conversion thereof to the effect set forth under "Notice to
Investors" in the Offering Circular;
(l) During a period of five years from the date of the Offering Circular,
to furnish to you, upon request, copies of all reports mailed to stockholders,
together with the exhibits thereto, and copies of any reports filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed, together with the exhibits thereto; and
(m) If any Securities are initially resold pursuant to Regulation D under
the Securities Act and upon written notification thereof to the Company by
Goldman, Sachs & Co., to file with the Commission, not later than 15 days after
the First Time of Delivery, five copies of a notice on Form D (one of which will
be manually signed by a person duly authorized by the Company); to otherwise
comply with the requirements of Rule 503 under the Act; and to furnish promptly
to you evidence of each such required timely filing (including a copy thereof).
6. The Company covenants and agrees with the several Purchasers that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants and all other expenses of
the Company in connection with the issue of the Securities and the issue and
listing of the Stock issuable upon conversion thereof, the preparation and
delivery of the Securities in global and definitive certificated forms,
preparation and delivery of certificates representing shares of Stock issuable
upon the conversion of the Securities, the preparation and printing of the
Offering Circular and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Purchasers and dealers; (ii) the cost of
printing or producing this Agreement, the Indenture, the Registration Rights
Agreement, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee and any such agent in connection with
the Indenture and the Securities; (iv) the fees and expenses of DTC and any
other depositary used in connection with the Securities and of any transfer or
conversion agent or registrar for the Securities or the Stock issuable upon
conversion of the Securities; (vi) all expenses in connection with the
qualification of the Securities for trading in the PORTAL System of the National
Association of Securities Dealers, Inc. and the listing of the Stock issuable
upon conversion of the Securities on the NASDAQ National Market; (vii) fees and
expenses of any paying agent, conversion agent and registrar agent with respect
to the Securities and the shares of Stock issuable upon the conversion thereof,
as the case may be; (viii) fees, if any, charged by securities rating services
for rating the Securities; (ix) all expenses in connection with the
qualification of the Securities and the shares of Stock issuable upon the
conversion of the Securities for offering and sale under state securities laws
as provided in Section 5(i) hereof, including the fees and disbursements of
counsel for the Purchasers in connection with such qualification and in
connection with the Blue Sky and legal investment surveys not to exceed $10,000;
(x) all fees and expenses in connection with the filing and maintenance of
effectiveness of the registration statement to be filed by the Company pursuant
to the Registration Rights Agreement (including the fees and expenses of any
counsel to any holder of Registrable Securities as set forth in the Registration
Rights Agreement); and (xi) all other costs and expenses incident to the
performance of the Company's obligations hereunder which are not otherwise
specifically provided for in this Section including any expenses incurred in
connection with complying with Section 5(g) hereof; and to indemnify and hold
harmless the Purchasers from any documentary stamp or similar issue tax and any
related
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interest or penalties on the issue, sale or delivery of the Securities to the
Purchasers which are or may be due. It is understood, however, that, except as
provided in this Section and Sections 8 and 11 hereof, the Purchasers will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by it, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder at each Time of Delivery
shall be subject, in their discretion, to the condition that all representations
and warranties and other statements of the Company herein are, at and as of such
Time of Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) Sullivan & Cromwell, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated such Time of Delivery, with respect to
the incorporation of the Company, the validity of the Indenture, the Securities,
the shares of Stock issuable upon conversion of the Securities, the Offering
Circular and other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters. In rendering such opinion or
opinions, such counsel may rely as to all matters governed by North Carolina law
upon the opinion referred to in subsection (b) of this Section;
(b) Petree Stockton, L.L.P., counsel for the Company, shall have furnished
to you their written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly organized and is a validly
existing corporation under the laws of Delaware, with full
corporate power and corporate authority to own, lease,
license, and use its properties and assets and to conduct its
business in the manner described in the Offering Circular; and
to the knowledge of such counsel the Company has no
subsidiaries.
(ii) The Company is duly qualified to do business and is
in good standing in each state in which the ownership,
leasing, licensing, or use of property and assets or the
conduct of business makes such qualification necessary and in
which the failure to so qualify, considering all such failures
together, would have a material adverse effect on the
financial condition, results of operations, business,
properties, or assets of the Company.
(iii) The Company has an authorized share capitalization
as set forth in the Offering Circular, and the certificates
for the Stock issuable upon conversion of the Securities
comply in all respects with Delaware law and have been duly
approved by the Board of Directors of the Company. Each
outstanding share of capital stock of the Company is validly
authorized, validly issued, fully paid, and nonassessable, has
been issued in compliance with the registration or
qualification requirements of federal and state securities law
or qualifies for an exemption from such requirements, and has
not been issued and is not owned or held in violation of any
preemptive right of shareholders. The shares of Stock
initially issuable upon conversion of the Securities have been
duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of
the Securities and the Indenture, will be duly and validly
issued and fully paid and non-assessable, and will conform to
the description of the Stock contained in the Offering
Circular. To the knowledge of such counsel, there is no
commitment, plan, or arrangement to issue, and no outstanding
option, warrant, or other right calling for the issuance of,
any share of capital stock of the Company or any security or
other instrument which by its terms is convertible into,
exercisable for, or exchangeable for capital stock of
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the Company, except as properly described in the Offering
Circular and except for options granted since December 31,
1995. To the knowledge of such counsel, there is outstanding
no security or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for capital
stock of the Company, except as properly described in the
Offering Circular.
(iv) To the knowledge of such counsel, there is no
litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending or
threatened with respect to the Company or any of its
operations, businesses, properties or assets, except as
properly described in the Offering Circular or such as
individually or in the aggregate do not now have and are not
reasonably expected in the future to have a material adverse
effect upon the financial condition, results of operations,
business, properties or assets of the Company.
(v) To the knowledge of such counsel, neither the Company
nor any other party is now or is expected by the Company to be
in material violation or breach of, or in default with respect
to, any material provision of any contract, agreement,
instrument, lease, license, arrangement, or understanding
which is material to the Company.
(vi) The Company is not in violation or breach of, or in
default with respect to, any term of its Certificate of
Incorporation or bylaws.
(vii) The Company has all requisite corporate power and
corporate authority to execute, deliver and perform this
Agreement. All necessary corporate proceedings of the Company
have been taken to authorize the execution, delivery, and
performance of this Agreement by the Company. This Agreement
has been duly authorized, executed, and delivered by the
Company. No consent, authorization, approval, order, license,
certificate, or permit of or firm, or declaration or filing
with, any federal, state, local, or other governmental
authority or any court or other tribunal is required by the
Company for the execution, delivery, or performance of this
Agreement by the Company, except such as may be required under
the Act in connection with the shares of Stock issuable upon
conversion of the Securities. Such opinion may state that
counsel is not representing the Company in respect of "blue
sky" matters. No consent of any party to any material
contract, agreement, instrument, lease, license, arrangement,
or understanding, known to such counsel, to which the Company
is a party or to which any of its properties or assets are
subject, is required for the execution, delivery, or
performance of this Agreement; and the execution and delivery
of this Agreement will not, and this Agreement may be
performed in a manner that does not, violate, result in a
breach of, conflict with, or (with or without the giving of
notice or the passage of time or both) entitle any party to
terminate or call a default under any such contract,
agreement, instrument, lease, license, arrangement, or
understanding known to such counsel, or violate or result in a
breach of any term of the Certificate of Incorporation or
bylaws of the Company, or to the knowledge of such counsel
violate, result in a breach of, or conflict with any law,
rule, regulation (except for such law, rule, or regulation,
the violation of which would not have a material adverse
effect on the Company), order, judgment, or decree binding on
the Company or to which any of its operations, businesses,
properties, or assets are subject.
(viii) All of the Securities issued at each Time of
Delivery have been duly authorized, executed, issued and
delivered and constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the
Indenture and the Securities and the Indenture conform in all
material respects to the descriptions thereof in the Offering
Circular.
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(ix) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally
binding obligation of the Company, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights and to general equity principles; and the Registration
Rights Agreement has been duly authorized, executed and
delivered by the Company.
(x) Insofar as statements in the Offering Circular purport
to summarize the provisions of laws, rules, regulations,
orders, judgments, decrees, contracts, agreements,
instruments, leases, or licenses (other than the statements
under the captions "Risk Factors--Lack of Protection from
Proprietary Rights," "Business--Patents and Protection of
Other Proprietary Information," "Risk Factors--Regulatory
Matters," "Business--Recent Developments--Telecommunications
Reform Act," "Business--Regulations" and other statements in
the Offering Circular concerning telecommunications matters)
such statements have been prepared or reviewed by such counsel
and, to such counsel's knowledge, accurately reflect the
provisions purported to be summarized and are correct in all
material respects.
(xi) To the knowledge of such counsel, except as described
in the Offering Circular, the Company possesses all authority,
material certificates, and material permits issued by the
appropriate state, federal, and foreign regulatory agencies or
bodies necessary to conduct its business, in the manner
described in the Offering Circular, and to the knowledge of
such counsel, the Company has not received any notice of any
proceeding relating to the revocation or modification of any
such authority, material certificate, or material permit
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would have a
material adverse effect on the financial condition, results of
operations, business, properties, or assets of the Company.
(xii) On the basis of the participation of such counsel in
conferences with officers and other representatives of the
Company, representatives of, and counsel for, the Purchasers,
and representatives of the independent public accountants for
the Company, at which the contents of the Offering Circular
and related matters were discussed, but without independent
verification by such counsel of the accuracy, completeness, or
fairness of the statements contained in the Offering Circular,
or any amendment or supplement thereto, such counsel shall
state that nothing has come to the attention of such counsel
that leads them to believe that (except for financial
statements and numbers derived from the financial statements
as to which such counsel need not express belief) the Offering
Circular, as amended or supplemented, if applicable, contained
as of its date or contains as of such Time of Delivery any
untrue statement of a material fact or omitted or omits, as
the case may be, 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.
(xiii) To the best of such counsel's knowledge, no holders
of Common Stock or other securities of the Company have any
registration rights with respect to Common Stock except as
properly described in the Offering Circular.
(xiv) The Exchange Act Reports (other than the financial
statements and related schedules therein and numbers derived
from such financial statements and schedules, as to which such
counsel need express no opinion), when they were filed with
the Commission, complied as to form in all material respects
with the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder; and such
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counsel has no reason to believe that any of such documents,
when they were so filed, contained 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 when such documents
were so filed, not misleading.
(xv) No registration of the Securities under the Act, and
no qualification of an indenture under the United States Trust
Indenture Act of 1939 with respect thereto, is required for
the offer, sale and initial resale of the Securities by the
Purchasers in the manner contemplated by this Agreement.
(xvi) The Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act.
(c) Special patent counsel for the Company shall have furnished to you a
written opinion, dated such Time of Delivery, in form and scope satisfactory to
you, to the effect that:
(i) U.S. Patent Nos. 4910586 and 5,150,237 and 5,457,560
(the "U.S. Patents") have been duly issued to the Company and
are presumed by law to be valid and enforceable and to comply
with the necessary requirements of United States patent law
and rules. Such counsel has no knowledge of any facts that it
believes would overcome that presumption or would render such
patents unenforceable.
(ii) Assignments to the Company of the full and exclusive
right, title, and interest in and to the U.S. Patents and the
inventions disclosed and claimed therein have been recorded in
the United States Patent and Trademark Office, and the U.S.
Patents have issued in the name of the Company. Such counsel
has no knowledge of any adverse claim or encumbrance that has
been asserted against the Company with respect to right,
title, and interest in and to the U.S. Patents.
(iii) Nothing has come to the attention of such counsel
that leads them to believe that the Offering Circular, as
amended or supplemented, if applicable (but only under the
captions "Risk Factors--Lack of Protection from Proprietary
Rights" and "Business--Patents and Protection of Other
Proprietary Information"), contained as of its date or
contains as of such Time of Delivery any untrue statement of a
material fact or omitted or omits, as the case may be, to
state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(d) Halprin, Temple & Goodman, special counsel for the Company, shall have
furnished you their written opinion, dated such Time of Delivery, in form and
scope satisfactory to you, to the effect that:
(i) Nothing has come to the attention of such counsel that
leads them to believe that the Offering Circular, as amended
or supplemented, if applicable (but only under the captions
"Risk Factors--Regulatory Matters," "Business--Recent
Developments--Telecommunications Reform Act," "--Regulations"
and other references in the Offering Circular to
telecommunications matters), contained as of its date or
contains as of such Time of Delivery any untrue statement of a
material fact or omitted or omits, as the case may be, to
state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(ii) Insofar as statements in the Offering Circular
purport to summarize the provisions of laws, rules,
regulations, orders, judgments or decrees, such statements
have been prepared or reviewed by such counsel and, to such
counsel's knowledge, accurately reflect the provisions
purported to be summarized and are correct in all material
respects.
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(e) At a time prior to the execution of this Agreement and also at each
Time of Delivery, Ernst & Young LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex II hereto;
(f) (i) The Company shall not have sustained since the date of the latest
audited financial statements included in the Offering Circular any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular, and (ii) since the respective dates as of
which information is given in the Offering Circular there shall not have been
any change in the capital stock or long-term debt of the Company or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in the
Offering Circular, the effect of which, in any such case described in Clause (i)
or (ii), is in your judgment so material and adverse as to make it impracticable
or inadvisable to proceed with the offering or the delivery of the Securities on
the terms and in the manner contemplated in this Agreement and in the Offering
Circular;
(g) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; or on the Nasdaq National Market; (ii)
a suspension or material limitation in trading in the Company's securities on
the Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this Clause (iv) in your judgment makes it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in the Offering Circular;
(i) The Securities have been designated for trading on PORTAL;
(j) The Lock-up Agreements shall be in full force and effect; and
(k) The Company shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of the Company satisfactory to you
as to the accuracy of the representations and warranties of the Company herein
at and as of such Time of Delivery, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsection (f) of this Section and as
to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser against
any losses, claims, damages or liabilities, joint or several, to which such
Purchaser may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Offering Circular, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein not
misleading, and will reimburse each Purchaser for any legal or other expenses
reasonably incurred by such Purchaser in connection
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with investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Offering Circular or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by any Purchaser through Goldman, Sachs & Co. expressly for use
therein.
(b) Each Purchaser will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Offering Circular, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Offering Circular or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Purchaser through Goldman, Sachs &
Co. expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action 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.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Purchasers on the other from the offering
of the Securities. If, however, the
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allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Purchasers on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Purchasers, in each case as set forth
in the Offering Circular. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities were offered to investors exceeds the amount
of any damages which such Purchaser has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. The
Purchasers' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Act; and the obligations of the Purchasers
under this Section 8 shall be in addition to any liability which the respective
Purchaser may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement
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shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Securities .
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities , then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Purchasers, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof or
if the Company fails to deliver the Securities as a result of the inaccuracy of
a representation or warranty of the Purchasers contained in Annex I hereto, the
Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, Goldman, Sachs & Co. shall act on behalf of
each of the Purchasers, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Purchaser made
or given by Goldman, Sachs & Co. All statements, requests, notices and
agreements hereunder shall be in writing, and if to the Purchasers shall be
delivered or sent by mail, telex or facsimile transmission to you in care of
Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, Attention:
Registration Department; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Offering Circular, Attention: Secretary. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
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13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Company and each person who controls
the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Purchasers and the Company. It is understood that your acceptance of
this letter on behalf of each of the Purchasers is pursuant to the authority set
forth in a form of Agreement among Purchasers, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
Broadband Technologies, Inc.
By: ________________________
Name: Salim A. Bhatia
Title: Chief Executive Officer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
By: ____________________________
(Goldman, Sachs & Co.)
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SCHEDULE I
Purchaser Principal Amount Aggregate
of Firm Securities Principal Amount
to be Purchased of Optional
Securities to be
Purchased if
Maximum
Option Exercised
Goldman, Sachs & Co. $ 80,000,000 $12,000,000
Bear, Stearns & Co. Inc. 20,000,000 3,000,000
---------- ---------
Total $100,000,000 $15,000,000
============ ===========
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SCHEDULE II
PARTIES TO LOCK-UP AGREEMENTS
To include all directors and officers of the Company holding
or vested or unvested options exercisable for such Common Stock. Such persons
are:
Salim A. L. Bhatia
Fredrick Boswell
Richard Clark
John H. Gorman
Robert W. Henry
John R. Hutchins, III
J. Richard Jones
Charles Lee
Wayne C. Machon
Lawrence McLernon
Richard L. Popp
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ANNEX I
(1) The Securities and the Stock issuable upon the conversion thereof
have not been and will not be registered under the 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 Act or pursuant to an
exemption from the registration requirements of the Act. Each Purchaser
represents it has offered and sold, and will offer and sell, the Securities and
the Stock issuable upon the conversion thereof (i) as part of its distribution
at any time and (ii) otherwise until 40 days after the later of the commencement
of the offering and the latest Time of Delivery, only in accordance with Rule
903 of Regulation S, Rule 144A or Regulation D under the Act. Accordingly, each
Purchaser agrees that neither it, its affiliates nor any persons acting on its
or their behalf has engaged or will engage in any directed selling efforts with
respect to the Securities or the Stock issuable upon conversion thereof. Each
Purchaser agrees that, at or prior to confirmation of sale of Securities (other
than a sale pursuant to Rule 144A or Regulation D under the Act), it will have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the restricted
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby and the Stock issuable upon the
conversion thereof have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering, the original
issue date of the Securities and the issue date with respect
to the additional Securities, if any, issued to cover
over-allotments, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meaning given to them by
Regulation S under the Securities Act."
Terms used in this paragraph have the meanings given to them by Regulation S
under the Act.
Each Purchaser further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution of the
Securities, except with its affiliates or with the prior written consent of the
Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons in a manner designed to be exempt from the registration provisions of
the Securities Act and the rules and regulations thereunder and without delivery
of the written statement required by paragraph (1) above. In connection
therewith, each Purchaser represents and warrants to, and agrees with, the
Company that:
(a) It has offered and sold, and will offer and sell,
Securities and the Stock issuable upon conversion thereof only
to persons that it reasonably believes are (i) qualified
institutional buyers within the meaning of Rule 144A under the
Act in transactions meeting the requirements of such Rule
144A, or (ii) institutions that are "accredited investors"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Act; and
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(b) It has offered the Securities to not more than 50
institutional accredited investors; each institutional
accredited investor that purchases Securities from it shall
(i) purchase not less than U.S.$250,000 principal amount of
Securities, and (ii) execute and deliver a purchaser's letter
substantially in the form of Annex A to the Offering Circular;
and
(c) It has not offered or sold, and will not offer or sell,
Securities or the Stock issuable upon the conversion thereof
by any form of general solicitation or general advertising,
including but not limited to the methods described in Rule
502(c) under the Securities Act.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold, and will not offer or sell, in the United Kingdom by means of
any document, any Securities other than to persons whose ordinary business it is
to buy or sell debentures, whether as principal or as agent, or in circumstances
which do not constitute an offer to the public within the meaning of the
Companies Act 1985 of Great Britain, (ii) it has complied, and will comply, with
all applicable provisions of the Financial Services Act 1986 of Great Britain
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom, any document received
by it in connection with the issuance of the Securities to a person who is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995 of Great Britain or is a person to whom
the document may otherwise lawfully be issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except at its own risk and
expense.
-43-
<PAGE>
Pursuant to Section 7(d) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and
financial statement schedules audited by them and included in
the Offering Circular comply as to form in all material
respects with the applicable requirements of the Exchange Act
and the related published rules and regulations;
(iii) The unaudited selected financial information with
respect to the results of operations and financial position of
the Company for the five most recent fiscal years included in
the Offering Circular agrees with the corresponding amounts
(after restatements where applicable) in the audited financial
statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting
an audit in accordance with generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading
of the latest available interim financial statements of the
Company, inspection of the minute books of the Company since
the date of the latest audited financial statements included
in the Offering Circular, inquiries of officials of the
Company responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited statements of operations,
balance sheets and statements of cash flows
included in the Offering Circular are not in
conformity with generally accepted
accounting principles applied on the basis
substantially consistent with the basis for
the audited statements of income, balance
sheets and statements of cash flows included
in the Offering Circular;
(B) any other unaudited statement of operations
data and balance sheet items included in the
Offering Circular do not agree with the
corresponding items in the unaudited
financial statements from which such data
and items were derived, and any such
unaudited data and items were not determined
on a basis substantially consistent with the
basis for the corresponding amounts in the
audited financial statements included in the
Offering Circular;
(C) the unaudited financial statements which
were not included in the Offering Circular
but from which were derived any unaudited
financial statements referred to in Clause
(A) and any unaudited statement of
operations data and balance sheet items
included in the Offering Circular and
referred to in Clause (B) were not
-44-
<PAGE>
determined on a basis substantially
consistent with the basis for the audited
financial statements included in the
Offering Circular;
(D) any unaudited pro forma condensed financial
statements included in the Offering Circular
do not comply as to form in all material
respects with the applicable accounting
requirements or the pro forma adjustments
have not been properly applied to the
historical amounts in the compilation of
those statements;
(E) as of a specified date not more than five
days prior to the date of such letter, there
have been any changes in the capital stock
(other than issuances of capital stock upon
exercise of options and stock appreciation
rights and upon earn-outs of performance
shares, in each case which were outstanding
on the date of the latest financial
statements included in the Offering
Circular) or any increase in the long-term
debt of the Company, or any decreases in net
current assets or stockholders' equity or
other items specified by the Purchasers, or
any increases in any items specified by the
Purchasers, in each case as compared with
amounts shown in the latest balance sheet
included in the Offering Circular except in
each case for changes, increases or
decreases which the Offering Circular
discloses have occurred or may occur or
which are described in such letter; and
(F) for the period from the date of the latest
financial statements included in the
Offering Circular to the specified date
referred to in Clause (E) there were any
decreases in net revenues or operating
profit or the total or per share amounts of
net income or other items specified by the
Purchasers, or any increases in any items
specified by the Purchasers, in each case as
compared with the comparable period of the
preceding year and with any other period of
corresponding length specified by the
Purchasers, except in each case for
decreases or increases which the Offering
Circular discloses have occurred or may
occur or which are described in such letter;
and
(v) In addition to the examination referred to in their
report(s) included in the Offering Circular and the limited
procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (iv) above,
they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts,
percentages and financial information specified by the
Purchasers, which are derived from the general accounting
records of the Company, which appear in the Offering Circular,
and have compared certain of such amounts, percentages and
financial information with the accounting records of the
Company and have found them to be in agreement.
-45-
<PAGE>
EXHIBIT B
FORM OF LOCK-UP AGREEMENT
Dated as of
May 16, 1996
BroadBand Technologies, Inc.,
4024 Stirrup Creek Dr.,
Durham, North Carolina 27703.
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167.
Ladies and Gentlemen:
The undersigned understands that BroadBand Technologies, Inc.
(the "Company") proposes to issue and sell (the "Offering") Convertible
Subordinated Notes (the "Securities"), convertible into shares of the Company's
Common Stock, par value $0.01 per share (the "Stock").
In connection with the Offering, the Company will enter into a
purchase agreement with Goldman, Sachs & Co. and Bear, Stearns & Co. Inc. (the
"Purchasers"). The form, terms and conditions of this agreement, including the
amount of Securities to be sold in the Offering, the amount of Securities to be
purchased by the Purchasers and the Purchasers' purchase price and the initial
offering price, are to be determined by the Company and the Purchasers at a
later date, and references herein to the "Purchase Agreement" mean such document
in the form in which it will eventually be executed and delivered by the parties
thereto.
The undersigned, to facilitate the marketing of the Securities
and in consideration of the Company and the Purchasers entering into the
Purchase Agreement, hereby irrevocably confirms and agrees for the benefit of
the Company and the Purchasers as follows:
-46-
<PAGE>
During the period beginning on and including the date hereof
and continuing to and including the date 90 days after the first original issue
date of the Securities, the undersigned will not, without the prior written
consent of the Purchasers, directly or indirectly, offer, sell, contract to
sell, or otherwise dispose of any Stock, any securities which are substantially
similar to the Securities or the Stock and any securities convertible into or
exchangeable or exercisable for Stock or substantially similar securities, which
Stock and other securities are, on the date hereof, or become, at any time
hereafter, registered in the name of, or beneficially owned or controlled by,
the undersigned; provided, however, that the undersigned may transfer to any
person up to an aggregate of _______ shares of Stock [number to represent 10% of
Stock, including vested and unvested options, beneficially owned by the
signatory, the aggregate for all such signatories not to exceed 95,930 shares of
Stock].
Very truly yours,
--------------------------------------
Signature
--------------------------------------
Print Name
Accepted as of the date hereof:
BroadBand Technologies, Inc.
By:____________________________
Name:
Title:
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
By:____________________________
(Goldman, Sachs & Co.)
-47-
BROADBAND TECHNOLOGIES, INC.
ISSUER
TO
MARINE MIDLAND BANK
TRUSTEE
----------------
INDENTURE
Dated as of May 22, 1996
----------------
U.S.$115,000,000
5% CONVERTIBLE SUBORDINATED NOTES
DUE MAY 15, 2001
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<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
-----------
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS OF THE COMPANY ................................................................................................ 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION ............................................. 2
SECTION 1.1 Definitions................................................................................................ 2
Act .................................................................................................. 2
Affiliate ............................................................................................ 2
Agent Member ......................................................................................... 2
Applicable Procedures ................................................................................ 2
Authenticating Agent ................................................................................. 2
Board of Directors ................................................................................... 3
Board Resolution ..................................................................................... 3
Business Day ......................................................................................... 3
CEDEL ................................................................................................ 3
Change in Control .................................................................................... 3
Closing Price Per Share .............................................................................. 3
Code ................................................................................................. 3
Commission ........................................................................................... 3
Common Stock ......................................................................................... 3
common stock ......................................................................................... 4
Company .............................................................................................. 4
Company Notice ....................................................................................... 4
Company Request or Company Order ..................................................................... 4
Constituent Person ................................................................................... 4
Conversion Agent ..................................................................................... 4
Conversion Rate ...................................................................................... 4
Corporate Trust Office ............................................................................... 4
corporation .......................................................................................... 4
Defaulted Interest ................................................................................... 4
Depositary ........................................................................................... 4
Dollar or U.S.$ ...................................................................................... 5
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<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
DTC .................................................................................................. 5
EUROCLEAR ............................................................................................ 5
Event of Default ..................................................................................... 5
Exchange Act ......................................................................................... 5
Exchange Date ........................................................................................ 5
Global Security ...................................................................................... 5
Holder ............................................................................................... 5
Indenture ............................................................................................ 5
Initial Purchasers ................................................................................... 5
Interest Payment Date ................................................................................ 5
Liquidated Damages ................................................................................... 5
Maturity ............................................................................................. 5
Non-electing Share ................................................................................... 5
Officers' Certificate ................................................................................ 5
Opinion of Counsel ................................................................................... 6
Outstanding .......................................................................................... 6
Paying Agent ......................................................................................... 6
Person ............................................................................................... 7
Place of Conversion .................................................................................. 7
Place of Payment ..................................................................................... 7
Predecessor Security ................................................................................. 7
Purchase Agreement ................................................................................... 7
Record Date .......................................................................................... 7
Record Date Period ................................................................................... 7
Redemption Date ...................................................................................... 7
Redemption Price ..................................................................................... 7
Registrable Securities ............................................................................... 7
Registration Default ................................................................................. 7
Registration Rights Agreement ........................................................................ 7
Regular Record Date .................................................................................. 7
Regulation D Securities .............................................................................. 8
Regulation S ......................................................................................... 8
Regulation S Certificate ............................................................................. 8
Regulation S Global Security ......................................................................... 8
Regulation S Legend .................................................................................. 8
Regulation S Securities .............................................................................. 8
Repurchase Date ...................................................................................... 8
Repurchase Price ..................................................................................... 8
Responsible Officer .................................................................................. 8
Restricted Global Security ........................................................................... 8
-50-
<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
Restricted Period .................................................................................... 8
Restricted Securities ................................................................................ 8
Restricted Securities Certificate .................................................................... 9
Restricted Securities Legend ......................................................................... 9
Rule 144A ............................................................................................ 9
Rule 144A Information ................................................................................ 9
Rule 144A Securities ................................................................................. 9
Securities ........................................................................................... 9
Securities Act ....................................................................................... 9
Securities Act Legend ................................................................................ 9
Security Register" and "Security Registrar ........................................................... 9
Senior Debt .......................................................................................... 9
Shelf Registration Statement ......................................................................... 10
Special Record Date .................................................................................. 10
Stated Maturity ...................................................................................... 10
Subsidiary ........................................................................................... 10
Successor Security ................................................................................... 10
Surrender Certificate ................................................................................ 10
Trading Days ......................................................................................... 10
Transfer Agent ....................................................................................... 11
Trust Indenture Act .................................................................................. 11
Trustee .............................................................................................. 11
United States ........................................................................................ 11
Unrestricted Securities Certificate .................................................................. 11
Vice President ....................................................................................... 11
SECTION 1.2 Compli11ce Certificates and Opinions..................................................... 11
SECTION 1.3 Form of Documents Delivered to the Trustee .............................................. 12
SECTION 1.4 Acts of Holders of Securities ........................................................... 13
SECTION 1.5 Notices, Etc., to Trustee and Company ................................................... 15
SECTION 1.6 Notice to Holders of Securities; Waiver ................................................. 15
SECTION 1.7 Effect of Headings and Table of Contents ................................................ 16
SECTION 1.8 Successors and Assigns .................................................................. 16
SECTION 1.9 Separability Clause ..................................................................... 16
SECTION 1.10 Benefits of Indenture ................................................................... 16
SECTION 1.11 Governing Law ........................................................................... 16
SECTION 1.12 Legal Holidays .......................................................................... 16
SECTION 1.13 Conflict with Trust Indenture Act ....................................................... 17
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<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
ARTICLE TWO
SECURITY FORMS ......................................................... 18
SECTION 2.1 Forms Generally ........................................................................ 18
SECTION 2.2 Forms of Securities .................................................................... 19
SECTION 2.3 Form of Certificate of Authentication .................................................. 34
SECTION 2.4 Form of Conversion Notice .............................................................. 35
ARTICLE THREE
THE SECURITIES ......................................................... 37
SECTION 3.1 Title and Terms ........................................................................ 37
SECTION 3.2 Denominations .......................................................................... 38
SECTION 3.3 Execution, Authentication, Delivery and Dating ......................................... 38
SECTION 3.4 Global Securities; Non-Global Securities ............................................... 38
SECTION 3.5 Registration, Registration of Transfer and Exchange; Restrictions on Transfer .......... 40
SECTION 3.6 Mutilated, Destroyed, Lost or Stolen Securities ........................................ 46
SECTION 3.7 Payment of Interest; Interest Rights Preserved ......................................... 47
SECTION 3.8 Cancellation ........................................................................... 48
SECTION 3.9 Computation of Interest ................................................................ 48
SECTION 3.10 CUSIP and ISIN Numbers ................................................................. 48
-52-
<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
ARTICLE FOUR
SATISFACTION AND DISCHARGE ............................................. 49
SECTION 4.1 Satisfaction and Discharge of Indenture ................................................ 49
SECTION 4.2 Application of Trust Money ............................................................. 50
ARTICLE FIVE
REMEDIES ............................................................... 51
SECTION 5.1 Events of Default ...................................................................... 51
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment ..................................... 52
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee ........................ 53
SECTION 5.4 Trustee May File Proofs of Claim ....................................................... 54
SECTION 5.5 Trustee May Enforce Claims Without Possession of Securities ............................ 55
SECTION 5.6 Application of Money Collected ......................................................... 55
SECTION 5.7 Limitation on Suits .................................................................... 56
SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert 56
SECTION 5.9 Restoration of Rights and Remedies ..................................................... 57
SECTION 5.10 Rights and Remedies Cumulative ......................................................... 57
SECTION 5.11 Delay or Omission Not Waiver ........................................................... 57
SECTION 5.12 Control by Holders of Securities ....................................................... 57
SECTION 5.13 Waiver of Past Defaults ................................................................ 58
SECTION 5.14 Undertaking for Costs .................................................................. 58
SECTION 5.15 Waiver of Stay, Usury or Extension Laws ................................................ 58
ARTICLE SIX
THE TRUSTEE ............................................................ 59
SECTION 6.1 Certain Duties and Responsibilities .................................................... 59
SECTION 6.2 Notice of Defaults ..................................................................... 60
SECTION 6.3 Certain Rights of Trustee .............................................................. 60
SECTION 6.4 Not Responsible for Recitals or Issuance of Securities ................................. 61
SECTION 6.5 May Hold Securities, Act as Trustee Under Other Indentures ............................. 62
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<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
SECTION 6.6 Money Held in Trust .................................................................... 62
SECTION 6.7 Compensation and Reimbursement ......................................................... 62
SECTION 6.8 Corporate Trustee Required; Eligibility ................................................ 63
SECTION 6.9 Resignation and Removal; Appointment of Successor ...................................... 63
SECTION 6.10 Acceptance of Appointment by Successor ................................................. 65
SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business ............................ 65
SECTION 6.12 Authenticating Agents .................................................................. 65
SECTION 6.13 Disqualification; Conflicting Interests ................................................ 67
SECTION 6.14 Preferential Collection of Claims Against Company ...................................... 67
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..................... 68
SECTION 7.1 Company May Consolidate, Etc., Only on Certain Terms ................................... 68
SECTION 7.2 Successor Substituted .................................................................. 69
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES.................................................. 70
SECTION 8.1. Supplemental Indentures Without Consent of Holders of Securities........................ 70
SECTION 8.2. Supplemental Indentures with Consent of Holders of Securities........................... 71
SECTION 8.3. Execution of Supplemental Indentures.................................................... 72
SECTION 8.4. Effect of Supplemental Indentures....................................................... 72
SECTION 8.5. Reference in Securities to Supplemental Indentures...................................... 72
SECTION 8.6. Notice of Supplemental Indentures....................................................... 73
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES...................................... 74
SECTION 9.1 Purposes for Which Meetings May Be Called ............................................. 74
SECTION 9.2 Call, Notice and Place of Meetings .................................................... 74
SECTION 9.3 Persons Entitled to Vote at Meetings .................................................. 74
SECTION 9.4 Quorum; Action ........................................................................ 75
SECTION 9.5 Determination of Voting Rights; Conduct and Adjournment of Meetings.................... 75
-54-
<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
SECTION 9.6 Counting Votes and Recording Action of Meetings ....................................... 76
ARTICLE TEN
COVENANTS ............................................................. 77
SECTION 10.1 Payment of Principal, Premium and Interest ........................................... 77
SECTION 10.2 Maintenance of Offices or Agencies ................................................... 77
SECTION 10.3 Money for Security Payments to Be Held in Trust ...................................... 78
SECTION 10.4 Existence ............................................................................ 79
SECTION 10.5 Maintenance of Properties ............................................................ 79
SECTION 10.6 Payment of Taxes and Other Claims .................................................... 79
SECTION 10.7 Registration and Listing ............................................................. 80
SECTION 10.8 Statement by Officers as to Default .................................................. 80
SECTION 10.9 Delivery of Certain Information ...................................................... 81
SECTION 10.10 Resale of Certain Securities; Reporting Issuer ....................................... 81
SECTION 10.11 Registration Rights .................................................................. 81
SECTION 10.12 Waiver of Certain Covenants .......................................................... 83
ARTICLE ELEVEN
REDEMPTION OF SECURITIES............................................... 84
SECTION 11.1 Right of Redemption ................................................................... 84
SECTION 11.2 Applicability of Article .............................................................. 84
SECTION 11.3 Election to Redeem; Notice to Trustee ................................................. 84
SECTION 11.4 Selection by Trustee of Securities to Be Redeemed...................................... 84
SECTION 11.5 Notice of Redemption .................................................................. 85
SECTION 11.6 Deposit of Redemption Price ........................................................... 86
SECTION 11.7 Securities Payable on Redemption Date ................................................. 86
SECTION 11.8 Securities Redeemed in Part ........................................................... 87
ARTICLE TWELVE
CONVERSION OF SECURITIES............................................... 88
SECTION 12.1 Conversion Privilege and Conversion Rate .............................................. 88
SECTION 12.2 Exercise of Conversion Privilege ...................................................... 88
SECTION 12.3 Fractions of Shares ................................................................... 90
SECTION 12.4 Adjustment of Conversion Rate ......................................................... 90
-55-
<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
SECTION 12.5 Notice of Adjustments of Conversion Rate .............................................. 94
SECTION 12.6 Notice of Certain Corporate Action .................................................... 95
SECTION 12.7 Company to Reserve Common Stock ....................................................... 96
SECTION 12.8 Taxes on Conversions .................................................................. 96
SECTION 12.9 Covenant as to Common Stock ........................................................... 97
SECTION 12.10 Cancellation of Converted Securities .................................................. 97
SECTION 12.11 Provision in Case of Consolidation, Merger or Sale of Assets........................... 97
SECTION 12.12 Responsibility of Trustee for Conversion Provisions ................................... 98
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES........................................... 99
SECTION 13.1. Securities Subordinate to Senior Debt............................................ 99
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc................................... 99
SECTION 13.3. No Payment When Senior Debt in Default........................................... 100
SECTION 13.4. Payment Permitted If No Default.................................................. 101
SECTION 13.5. Subrogation to Rights of Holders of Senior Debt.................................. 101
SECTION 13.6. Provisions Solely to Define Relative Rights...................................... 101
SECTION 13.7. Trustee to Effectuate Subordination.............................................. 102
SECTION 13.8. No Waiver of Subordination Provisions............................................ 102
SECTION 13.9. Notice to Trustee ............................................................... 102
SECTION 13.10. Reliance on Judicial Order or Certificate of Liquidating Agent................... 103
SECTION 13.11. Trustee Not Fiduciary for Holders of Senior Debt................................. 103
SECTION 13.12. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights..... 104
SECTION 13.13. Article Applicable to Paying Agents.............................................. 104
SECTION 13.14. Certain Conversions and Repurchases Deemed Payment............................... 104
SECTION 13.15. Rescission ...................................................................... 105
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL................................ 106
SECTION 14.1. Right to Require Repurchase...................................................... 106
SECTION 14.2. Conditions to the Company's Election to Pay the Repurchase Price in Common Stock. 106
-56-
<PAGE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
SECTION 14.3. Notices; Method of Exercising Repurchase Right, Etc.............................. 107
SECTION 14.4. Certain Definitions.............................................................. 111
ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY...................... 113
SECTION 15.1. Company to Furnish Trustee Names and Addresses of Holders........................ 113
SECTION 15.2. Preservation of Information; Communications to Holders........................... 113
ANNEX A.............................................................................................................. A-1
ANNEX B.............................................................................................................. B-1
ANNEX C.............................................................................................................. C-1
ANNEX D.............................................................................................................. D-1
</TABLE>
-57-
<PAGE>
INDENTURE, dated as of May 22, 1996, between BroadBand Technologies, Inc.,
a corporation duly organized and existing under the laws of the State of
Delaware, having its principal executive office at 4024 Stirrup Creek Drive,
Durham, North Carolina 27703 (herein called the "Company"), and Marine Midland
Bank, a New York banking corporation and trust company, as Trustee hereunder
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5%
Convertible Subordinated Notes due May 15, 2001 in registered form only (herein
called the "Securities") of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done. Further, all
things necessary to duly authorize the issuance of the Common Stock of the
Company issuable upon the conversion of the Securities, and to duly reserve for
issuance the number of shares of Common Stock issuable upon such conversion,
have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
-58-
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as
well as the singular;
(2) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally
accepted accounting principles in the United States, and,
except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of
such computation; and
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has the meaning
specified in Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct 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.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of EUROCLEAR and CEDEL, and of the Depositary for such Security, in
each case to the extent applicable to such transaction and as in effect from
time to time.
-59-
<PAGE>
"Authenticating Agent" means any Person authorized pursuant to Section 6.12
to act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, shall have been
delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, Place of
Conversion or any other place, as the case may be, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in such Place of Payment, Place of Conversion or other place, as the case may
be, are authorized or obligated by law or executive order to close; provided,
however, that a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close shall not be a
Business Day for purposes of Sections 10.1, 10.3, 11.6 or 13.9.
"CEDEL" means Cedel Bank, S.A. (or any successor securities clearing
agency).
"Change in Control" has the meaning specified in Section 14.4.
"Closing Price Per Share" means, with respect to the Common Stock of the
Company, for any day, the reported last bid price per share on the Nasdaq
National Market or, if the Common Stock is not quoted on the Nasdaq National
Market, on the principal national securities exchange on which the Common Stock
is listed or admitted to trading, or if not quoted on the Nasdaq National Market
or listed or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose.
"Code" has the meaning specified in Section 2.1.
"Commission" means the United States Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" means the Common Stock, par value $0.01 per share, of the
Company authorized at the date of this instrument as originally executed.
Subject to the provisions
-60-
<PAGE>
of Section 12.11, shares issuable on conversion or repurchase of Securities
shall include only shares of Common Stock or shares of any class or classes of
common stock resulting from any reclassification or reclassifications thereof;
provided, however, that if at any time there shall be more than one such
resulting class, the shares so issuable on conversion of Securities shall
include shares of all such classes, and 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.
"common stock" includes any stock of any class of capital stock 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 issuer
thereof and which is not subject to redemption by the issuer thereof.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Notice" has the meaning specified in Section 14.3.
"Company Request" means a written request or order signed in the name of
the Company by its Chairman of the Board, its Vice Chairman of the Board, its
Chief Executive Officer, its President or a Vice President, and by its principal
financial officer, Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Constituent Person" has the meaning specified in Section 12.11.
"Conversion Agent" means any Person authorized by the Company to convert
Securities in accordance with Article Twelve. The Company has initially
appointed the Trustee as its Conversion Agent in the Borough of Manhattan, The
City of New York.
"Conversion Rate" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at 140 Broadway,
12th Floor, New York, New York 10005).
"corporation" means a corporation, company, association, joint-stock
company or business trust.
"Defaulted Interest" has the meaning specified in Section 3.7.
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"Depositary" means, with respect to any Security, a clearing agency that is
registered as such under the Exchange Act and is designated by the Company to
act as Depositary for such Security (or any successor securities clearing agency
so registered).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"EUROCLEAR" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange Act of 1934 (or
any successor statute), as amended from time to time.
"Exchange Date" means the date and day on which the Restricted Period
expires.
"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or a nominee thereof.
"Holder", when used with respect to any Security, means the Person in whose
name the Security is registered in the Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
"Initial Purchasers" means Goldman, Sachs & Co. and Bear, Stearns & Co.
Inc.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Liquidated Damages" has the meaning specified in Section 10.11.
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"Maturity", when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, exercise of the repurchase right set forth in Article Fourteen
or otherwise.
"Non-electing Share" has the meaning specified in Section 12.11.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President and by the principal financial officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company and who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which
money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company)
in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the
Holders of such Securities, provided that if such Securities
are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section
3.6 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
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Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company and, except
as otherwise specifically set forth herein, such term shall include the Company
if it shall act as its own Paying Agent. The Company has initially appointed the
Trustee as its Paying Agent in the Borough of Manhattan, The City of New York.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 3.1.
"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated as of May 17,
1996, between the Company and the Initial Purchasers, as such agreement may be
amended from time to time.
"Record Date" means any Regular Record Date or Special Record Date.
"Record Date Period" means the period from the close of business of any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date.
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"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registrable Securities" has the meaning specified in Section 10.11.
"Registration Default" has the meaning specified in Section 10.11.
"Registration Rights Agreement" has the meaning specified in Section 10.11.
"Regular Record Date" for interest payable in respect of any Security on
any Interest Payment Date means the May 1 or November 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
"Regulation D Securities" means the Securities sold by the Initial
Purchasers in the initial offering contemplated by the Purchase Agreement in
reliance on an exemption from the registration requirements of the Securities
Act other than Rule 144A or Regulation S.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate substantially in the form
set forth in Annex A.
"Regulation S Global Security" has the meaning specified in Section
2.1.
"Regulation S Legend" means a legend substantially in the form of the
legend required in the form of Security set forth in Section 2.2 to be placed
upon a Regulation S Global Security.
"Regulation S Securities" means all Securities required pursuant to Section
3.5(c) to bear a Regulation S Legend. Such term includes the Regulation S Global
Security.
"Repurchase Date" has the meaning specified in Section 14.1.
"Repurchase Price" has the meaning specified in Section 14.1.
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"Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee including without
limitation any vice president, assistant vice president, assistant treasurer,
assistant secretary, corporate trust officer, assistant corporate trust officer
or other employee of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge and familiarity with the particular
subject.
"Restricted Global Security" has the meaning specified in Section 2.1.
"Restricted Period" means the period of 41 consecutive days beginning on
and including the later of (i) the day on which Securities are first offered to
persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the last original issuance date of the Securities.
"Restricted Securities" means all Securities required pursuant to Section
3.5(c) to bear any Restricted Securities Legend. Such term includes the
Restricted Global Security.
"Restricted Securities Certificate" means a certificate substantially in
the form set forth in Annex B.
"Restricted Securities Legend" means, collectively, the legends
substantially in the forms of the legends required in the form of Security set
forth in Section 2.2(b) to be placed upon each Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section 10.9.
"Rule 144A Securities" means the Securities purchased by the Initial
Purchasers from the Company pursuant to the Purchase Agreement and resold by the
Initial Purchasers, other than the Regulation D Securities and the Regulation S
Securities.
"Securities" has the meaning ascribed to it in the first paragraph under
the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933 (or any
successor statute), as amended from time to time.
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"Securities Act Legend" means a Restricted Securities Legend or a
Regulation S Legend.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on, and all fees and
other amounts (including, without limitation, collection expenses, attorneys'
fees and late charges owing) with respect to, the following, whether direct or
indirect, absolute or contingent, secured or unsecured, due or to become due,
outstanding on the date of the Indenture or thereafter created, incurred or
assumed: (a) indebtedness of the Company other than the Securities, whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed, which is (i) for money borrowed or (ii) evidenced by a note or similar
instrument given in connection with the acquisition of any businesses,
properties or assets of any kind, including securities, (b) indebtedness of the
Company to banks, insurance companies or other financial institutions evidenced
by notes or other written obligations (including bank overdrafts), (c)
indebtedness of the Company evidenced by notes, debentures, bonds or other
securities issued under the provisions of an indenture or similar instrument,
(d) indebtedness of others of the kinds described in the preceding clauses (a),
(b) and (c) that the Company has assumed, guaranteed or otherwise assured the
payment thereof, directly or indirectly, (e) obligations of the Company as
lessee under leases required to be capitalized on the balance sheet of the
lessee under United States generally accepted accounting principles, (f)
obligations of the Company under interest rate and currency swaps, caps, floors,
collars or similar agreements or arrangements intended to protect the Company
against fluctuations in interest or currency exchange rates and (g) deferrals,
renewals, extensions and refundings of, or bonds, debentures, notes or other
evidences of indebtedness issued in exchange for, or amendments, modifications
or supplements to, or covenants and other obligations of the Company in
connection with, the indebtedness described in the preceding clauses (a) through
(g) of this paragraph; whether or not there is any notice to or consent of the
Holders of Securities; except (I) indebtedness and advances among the Company
and its direct and indirect Subsidiaries, and (II) any particular indebtedness,
deferral, renewal, extension or refunding, if it is expressly stated in the
governing terms or in the assumption thereof that the indebtedness involved is
not Senior Debt.
"Shelf Registration Statement" has the meaning specified in Section
10.11.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Company pursuant to Section 3.7.
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"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock or other similar
interests in the corporation which ordinarily has or have voting power for the
election of directors, or persons performing similar functions, whether at all
times or only so long as no senior class of stock or other interests has or have
such voting power by reason of any contingency.
"Successor Security" of any particular Security means every Security issued
after, and evidencing all or a portion of the same debt as that evidenced by,
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Surrender Certificate" means a certificate substantially in the form set
forth in Annex D.
"Trading Days" means (i) if the Common Stock is quoted on the Nasdaq
National Market or any other system of automated dissemination of quotations of
securities prices, days on which trades may be effected through such system;
(ii) if the Common Stock is listed or admitted for trading on any national
securities exchange, days on which such national securities exchange is open for
business; or (iii) if the Common Stock is not listed or admitted for trading on
any national securities exchange or quoted on the Nasdaq National Market or any
other system of automated dissemination of quotation of securities prices, days
on which the Common Stock is traded regular way in the over-the-counter market
and for which a closing bid and a closing asked price for the Common Stock are
available.
"Transfer Agent" has the meaning specified in Section 2.2. The Company has
initially appointed the Trustee as its Transfer Agent in the Borough of
Manhattan, The City of New York.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
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"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (its "possessions" including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
"Unrestricted Securities Certificate" means a certificate substantially in
the form set forth in Annex C.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision 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, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (including certificates provided for in
Section 10.8) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual,
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
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(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to the Trustee
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 1.4. Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities may be embodied in and evidenced by (1) one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent or proxy duly appointed in writing by such Holders or (2) the record
of Holders of Securities voting in favor thereof, either in person or by proxies
duly appointed in writing, at any meeting of Holders of Securities duly called
and held in accordance with the provisions of Article Nine. Such action shall
become effective when such instrument or instruments or record is delivered to
the Trustee and, where it is hereby expressly required, to the Company. The
Trustee shall promptly deliver to the Company copies of all such instruments and
records delivered to the Trustee. Such instrument or instruments and record (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders of Securities signing such instrument or
instruments and so voting at such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent or proxy, or of the holding
by any Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 9.6.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgements of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The principal amount and serial number of any Security held by any
Person, and the date of his holding the same, shall be proved by the Security
Register.
(d) The fact and date of execution of any such instrument or writing and
the authority of the Person executing the same may also be proved in any other
manner which the Trustee deems sufficient; and the Trustee may in any instance
require further proof with respect to any of the matters referred to in this
Section 1.4.
(e) The Company may set any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted by this Indenture to be given or taken by
Holders. Promptly and in any case not later than ten days after setting a
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record date, the Company shall notify the Trustee and the Holders of such record
date. If not set by the Company prior to the first solicitation of a Holder made
by any Person in respect of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 15.1) prior to such first solicitation or vote,
as the case may be. With regard to any record date, the Holders on such date (or
their duly appointed agents or proxies), and only such Persons, shall be
entitled to give or take, or vote on, the relevant action, whether or not such
Holders remain Holders after such record date. Notwithstanding the foregoing,
the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any notice, declaration or direction
referred to in the next paragraph.
Upon receipt by the Trustee from any Holder of (i) any notice of default or
breach referred to in Section 5.1(4), if such default or breach has occurred and
is continuing and the Trustee shall not have given such a notice to the Company,
(ii) any declaration of acceleration referred to in Section 5.2, if an Event of
Default has occurred and is continuing and the Trustee shall not have given such
a declaration to the Company, or (iii) any direction referred to in Section
5.12, if the Trustee shall not have taken the action specified in such
direction, then a record date shall automatically and without any action by the
Company or the Trustee be set for determining the Holders entitled to join in
such notice, declaration or direction, which record date shall be the close of
business on the tenth day (or, if such day is not a Business Day, the first
Business Day thereafter) following the day on which the Trustee receives such
notice, declaration or direction. Promptly after such receipt by the Trustee,
and as soon as practicable thereafter, the Trustee shall notify the Company and
the Holders of any such record date so fixed. The Holders on such record date
(or their duly appointed agents or proxies), and only such Persons, shall be
entitled to join in such notice, declaration or direction, whether or not such
Holders remain Holders after such record date; provided that, unless such
notice, declaration or direction shall have become effective by virtue of
Holders of the requisite principal amount of Securities on such record date (or
their duly appointed agents or proxies) having joined therein on or prior to the
90th day after such record date, such notice, declaration or direction shall
automatically and without any action by any Person be cancelled and of no
further effect. Nothing in this paragraph shall be construed to prevent a Holder
(or a duly appointed agent or proxy thereof) from giving, before or after the
expiration of such 90-day period, a notice, declaration or direction contrary to
or different from, or, after the expiration of such period, identical to, the
notice, declaration or direction to which such record date relates, in which
event a new record date in respect thereof shall be set pursuant to this
paragraph. In addition, nothing in this paragraph shall be construed to render
ineffective any notice, declaration or direction of the type referred to in this
paragraph given at any time to the Trustee and the Company by Holders (or their
duly appointed agents or proxies) of the requisite principal amount of
Securities on the date such notice, declaration or direction is so given.
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(f) Except as provided in Sections 5.12 and 5.13, any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
(g) The provisions of this Section 1.4 are subject to the provisions of
Section 9.5.
SECTION 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, election,
waiver or other Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee by any Holder of Securities or by the
Company shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the
Trustee and received at its Corporate Trust Office, Attention:
Corporate Trust Services--BroadBand Technologies, Inc., or
(2) the Company by the Trustee or by any Holder of
Securities shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing,
mailed, first-class postage prepaid, or telecopied and
confirmed by mail, first-class postage prepaid, or delivered
by hand or overnight courier, addressed to the Company at 4024
Stirrup Creek Drive, Durham, North Carolina 27703, telecopy
no.: (919) 361-2059, Attention: Chief Financial Officer, or at
any other address previously furnished in writing to the
Trustee by the Company.
Any request, demand, authorization, direction, notice, consent, election or
waiver required or permitted under this Indenture shall be in the English
language.
SECTION 1.6. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the
Security Register, not earlier than the earliest date and not later than the
latest date prescribed for the giving of such notice.
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In any case where notice is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. In case by
reason of the suspension of regular mail service or by reason of any other cause
it shall be impracticable to give such notice by mail, then such notification as
shall be made with the approval of the Trustee, which approval shall not be
unreasonably withheld, shall constitute a sufficient notification to such
Holders for every purpose hereunder.
Such notice shall be deemed to have been given when such notice is mailed.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.8. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.9. Separability Clause.
In case any provision in this Indenture or the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.10. Benefits of Indenture.
Except as provided in the next sentence, nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors and assigns hereunder and the Holders of
Securities, any benefit or legal or equitable right, remedy or claim under this
Indenture. The provisions of Article Thirteen are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior Debt.
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SECTION 1.11. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA.
SECTION 1.12. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repurchase
Date or Stated Maturity of any Security or the last day on which a Holder of a
Security has a right to convert his Security shall not be a Business Day at a
Place of Payment or Place of Conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal of, premium, if any, or interest on, or the payment of the
Repurchase Price (whether the same is payable in cash or in shares of Common
Stock) with respect to, or delivery for conversion of, such Security need not be
made at such Place of Payment or Place of Conversion, as the case may be, on or
by such day, but may be made on or by the next succeeding Business Day at such
Place of Payment or Place of Conversion, as the case may be, with the same force
and effect as if made on the Interest Payment Date, Redemption Date or
Repurchase Date, or at the Stated Maturity or by such last day for conversion;
provided, however, that in the case that payment is made on such succeeding
Business Day, no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date, Repurchase Date,
Stated Maturity or last day for conversion, as the case may be to such
succeeding Business Day.
SECTION 1.13. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision of the Trust Indenture Act shall be deemed to apply to this Indenture
as so modified or to be excluded, as the case may be. Until such time as this
Indenture shall be qualified under the Trust Indenture Act, this Indenture, the
Company and the Trustee shall be deemed for all purposes hereof to be subject to
and governed by the Trust Indenture Act to the same extent as would be the case
if this Indenture were so qualified on the date hereof.
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ARTICLE TWO
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities shall be in substantially the forms set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange, the Internal Revenue Code of 1986, as amended, and
regulations thereunder (the "Code"), or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof.
The Trustee's certificates of authentication shall be in substantially the
form set forth in Section 2.3.
Conversion notices shall be in substantially the form set forth in Section
2.4.
Repurchase notices shall be substantially in the form set forth in Section
2.2.
The Securities shall be printed, lithographed or engraved or produced by
any combination of these methods on steel engraved borders or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution thereof. The format and spacing of
the text of a Security may be varied to facilitate such production.
Upon their original issuance, Rule 144A Securities shall be issued in the
form of a Global Security registered in the name of DTC, as Depositary, or its
nominee and deposited with the Trustee, as custodian for DTC, for credit by DTC
to the respective accounts of beneficial owners of the Securities represented
thereby (or such other accounts as they may direct). Such Global Security,
together with its Successor Securities which are Global Securities other than
the Regulation S Global Security, are collectively herein called the "Restricted
Global Security".
Upon their original issuance, Regulation D Securities shall not be issued
as Securities in the form of a Global Security or in any other form intended to
facilitate book-entry trading in beneficial interests in such Securities.
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Upon their original issuance, Regulation S Securities shall be issued in
the form of a Global Security registered in the name of DTC, as depositary, or
its nominee and deposited with the Trustee, as custodian for DTC, for credit to
the respective accounts of the depositaries for Morgan Guaranty Trust Company of
New York, Brussels office, as operator of EUROCLEAR, or CEDEL. Such Global
Security, together with its Successor Securities which are Global Securities,
are collectively herein called the "Regulation S Global Security".
SECTION 2.2. Forms of Securities.
[FORM OF FACE]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED SECURITY
OTHER THAN ANY GLOBAL RESTRICTED SECURITY:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY SHARES OF COMMON STOCK
ISSUABLE UPON ITS CONVERSION MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THIS SECURITY
MAY ONLY BE SOLD IN ACCORDANCE WITH THE INDENTURE, COPIES OF WHICH ARE AVAILABLE
FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE. EACH PURCHASER OF
THIS SECURITY WHICH IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF BROADBAND
TECHNOLOGIES, INC. (THE "COMPANY") THAT (A) THIS SECURITY AND ANY SHARES OF
COMMON STOCK ISSUABLE UPON ITS CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE
TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (III) IN THE CASE OF ANY PURCHASER, OTHER THAN A PURCHASER WHO
HAS OTHERWISE AGREED WITH THE COMPANY IN WRITING, TO AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS OF THE UNITED
STATES, AND THAT (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER OF THIS
SECURITY OR ANY SHARES OF COMMON STOCK
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ISSUABLE UPON ITS CONVERSION IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY AND ANY COMMON STOCK ISSUABLE UPON ITS CONVERSION FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND
ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF
THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS
SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY
AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED GLOBAL
SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY (OR ITS PREDECESSOR) WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH
SECURITIES AND ANY SHARES OF COMMON STOCK ISSUABLE UPON THEIR CONVERSION MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. SUCH SECURITIES MAY ONLY BE SOLD IN ACCORDANCE
WITH THE INDENTURE, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE
CORPORATE TRUST OFFICE OF THE TRUSTEE. EACH PURCHASER OF ANY BENEFICIAL INTEREST
IN THE SECURITIES WHICH IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IS HEREBY NOTIFIED THAT THE SELLER OF SUCH
BENEFICIAL INTEREST IN THE SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED BY
THIS GLOBAL SECURITY (INCLUDING ANY PARTICIPANT IN THE DEPOSITARY HOLDING THE
GLOBAL SECURITY THAT IS SHOWN AS HOLDING SUCH AN INTEREST ON THE RECORDS OF SUCH
DEPOSITARY AND EACH BENEFICIAL OWNER THAT HOLDS THROUGH ANY SUCH PARTICIPANT)
AGREES FOR THE BENEFIT OF BROADBAND TECHNOLOGIES, INC. (THE "COMPANY") THAT (A)
ANY BENEFICIAL INTEREST IN THE SECURITIES AND ANY SHARES OF COMMON STOCK
ISSUABLE UPON THEIR CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE
TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (III) IN THE CASE OF ANY PURCHASER, OTHER THAN A PURCHASER WHO
HAS OTHERWISE AGREED WITH THE COMPANY IN WRITING, TO AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE
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SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (V) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN EACH OF
CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE
STATES AND OTHER JURISDICTIONS OF THE UNITED STATES, AND THAT (B) THE BENEFICIAL
OWNER WILL, AND EACH SUBSEQUENT BENEFICIAL OWNER OF THIS SECURITY OR ANY SHARES
OF COMMON STOCK ISSUABLE UPON ITS CONVERSION IS REQUIRED TO, NOTIFY ANY
PURCHASER OF ANY BENEFICIAL INTEREST IN THE SECURITIES AND ANY COMMON STOCK
ISSUABLE UPON ITS CONVERSION FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE.
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND
ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF
THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER AND BENEFICIAL
OWNERS OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY
AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS GLOBAL SECURITY
AND THE BENEFICIAL INTERESTS THEREIN AND ANY SUCH SHARES TO HAVE AGREED TO ANY
SUCH AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND
ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY FOR WHICH
THE DEPOSITORY TRUST COMPANY IS TO BE THE DEPOSITARY:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES
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REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH REGULATION S SECURITY
OTHER THAN ANY REGULATION S GLOBAL SECURITY:
THIS SECURITY (OR ITS PREDECESSOR) AND THE COMMON STOCK ISSUABLE UPON ITS
CONVERSION HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (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 UNLESS
THIS SECURITY IS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE. TERMS USED ABOVE
HAVE THE MEANINGS GIVEN THEM IN REGULATION S UNDER THE SECURITIES ACT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH REGULATION S GLOBAL
SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY (OR ITS PREDECESSOR) AND
THE COMMON STOCK ISSUABLE UPON THEIR CONVERSION HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (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 UNLESS THESE SECURITIES ARE REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT IS AVAILABLE. TERMS USED ABOVE HAVE THE MEANINGS GIVEN THEM IN
REGULATION S UNDER THE SECURITIES ACT.]
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BROADBAND TECHNOLOGIES
5% CONVERTIBLE SUBORDINATED NOTE
DUE MAY 15, 2001
No. _____________ U.S.$_____
[IF RESTRICTED GLOBAL SECURITY - CUSIP NO. 111309AA8]
[IF ANY REGULATION S SECURITY - CUSIP NO. U11080AA3]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. - USU11080AA35]
[IF REGULATION D SECURITY - CUSIP NO. - 111309AB6]
BROADBAND TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to _______________, or
registered assigns, the principal sum of _____________ United States Dollars
(U.S.$ _____) [if this Security is a Global Security, then insert -- (which
principal amount may from time to time be increased or decreased to such other
principal amounts (which, taken together with the principal amounts of all other
Outstanding Securities, shall not exceed $115,000,000 in the aggregate at any
time) by adjustments made on the records of the Trustee hereinafter referred to
in accordance with the Indenture)] on May 15, 2001 and to pay interest thereon,
from May 22, 1996, or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, semi-annually in
arrears on May 15 and November 15 in each year (each, an "Interest Payment
Date"), commencing November 15, 1996, at the rate of 5% per annum, until the
principal hereof is due, and at the rate of 5% per annum on any overdue
principal and premium, if any, and, to the extent permitted by law, on any
overdue interest. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest, which shall be the May 1 or November 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Except as
otherwise provided in the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Company, notice whereof shall be given to Holders of Securities
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Payments of principal shall
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be made upon the surrender of this Security at the option of the Holder at
the Corporate Trust Office of the Trustee, or at such other office or agency of
the Company as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, or at such other offices or agencies as the Company
may designate, by United States Dollar check drawn on a bank in the Borough of
Manhattan, The City of New York or by transfer to a United States Dollar account
(such a transfer to be made only to a Holder of an aggregate principal amount of
Securities in excess of U.S. $2,000,000, and only if such Holder shall have
furnished wire instructions in writing to the Trustee no later than 15 days
prior to the relevant payment date) maintained by the payee with a bank in the
Borough of Manhattan, The City of New York. Payment of interest, including
payment of any Liquidated Damages (as defined on the reverse hereof) on this
Security may be made by United States Dollar check drawn on a bank in the
Borough of Manhattan, The City of New York mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register, or, upon
written application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Record Date, by transfer to a United
States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of U.S.$2,000,000) maintained
by the payee with a bank in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal.
Dated: May 22, 1996
BROADBAND TECHNOLOGIES, INC.
[Corporate Seal]
By:_____________________________
Name:
Title:
Attest:
- ------------------------
Name:
Title:
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[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "5% Convertible Subordinated Notes due May 15, 2001"
(herein called the "Securities"), limited in aggregate principal amount to
U.S.$115,000,000, issued and to be issued under an Indenture, dated as of May
22, 1996 (herein called the "Indenture"), between the Company and Marine Midland
Bank, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the holders of Senior Debt and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
The Securities are issuable in registered form, without coupons, in
denominations of U.S.$1,000 and integral multiples of U.S.$1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities are exchangeable for a like aggregate principal amount of
Securities of any authorized denominations as requested by the Holder
surrendering the same upon surrender of the Security or Securities to be
exchanged, at the Corporate Trust Office of the Trustee or at such other office
or agency of the Company as may be designated by it for such purpose in the
Borough of Manhattan, The City of New York or at such other offices or agencies
as the Company may designate (each a "Transfer Agent"). The Transfer Agent (if
other than the Trustee) will then forward such surrendered Securities (together
with any payment surrendered therewith) to the Trustee. The Trustee upon such
surrender by the Holder or receipt from the Transfer Agent will issue the new
Securities in the requested denominations.
No sinking fund is provided for the Securities. The Securities are subject
to redemption at the option of the Company at any time on or after the close of
business on May 15, 1999, in whole or in part, upon not less than 30 nor more
than 60 days' notice to the Holders prior to the Redemption Date at the
Redemption Prices set forth below, together with accrued interest to the
Redemption Date; provided, that interest installments on Securities whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.
The Redemption Prices (expressed as a percentage of principal amount) are
as follows for the 12-month period beginning on May 15 of the following years:
Redemption
Year Price
1999 102.00
2000 101.00
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and thereafter at a Redemption Price equal to 100% of the principal amount, in
each case together with accrued interest to the Redemption Date.
In the event of a redemption of less than all of the Securities, the
Company will not be required (a) to register the transfer or exchange of
Securities for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Securities called for such
redemption or (b) to register the transfer or exchange of any Security, or
portion thereof, called for redemption.
Notice of redemption will be given by mail to Holders of Securities. Notice
to the Holders will be given not less than 30 nor more than 60 days prior to the
Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the principal of,
premium, if any, or interest, including any Liquidated Damages, on any Security
or the last day on which a Holder of a Security has a right to convert his
Security shall be, at any Place of Payment or Place of Conversion, as the case
may be, a day on which banking institutions at such Place of Payment or Place of
Conversion are authorized or obligated by law or executive order to close, then
payment of principal, premium, if any, or interest, including any Liquidated
Damages, or delivery for conversion of such Security need not be made on or by
such date at such place but may be made on or by the next succeeding day at such
place which is not a day on which banking institutions are authorized or
obligated by law or executive order to close, with the same force and effect as
if made on the date for such payment or the date fixed for redemption or
repurchase, or by such last day for conversion, and no interest shall accrue on
the amount so payable for the period after such date.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time on or after
August 20, 1996, and on or before the close of business on May 15, 2001, or in
case this Security or a portion hereof is called for redemption or the Holder
hereof has exercised his right to require the Company to repurchase this
Security or such portion hereof, then in respect of this Security until and
including, but (unless the Company defaults in making the payment due upon
redemption or repurchase, as the case may be) not after, the close of business
on the Redemption Date or the Repurchase Date, as the case may be, to convert
this Security (or any portion of the principal amount hereof that is an integral
multiple of U.S.$1,000, provided that the unconverted portion of such principal
amount is U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof)
into fully paid and nonassessable shares of Common Stock of the Company at an
initial Conversion Rate of 24.1080 for each share of Common Stock (or at the
current adjusted Conversion Rate if an adjustment has been made as provided in
the Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank and, in case such surrender shall be made during the period
from the close of business on any Regular
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Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date (except if this Security has been called
for redemption on a Redemption Date or is repurchasable on a Repurchase Date
occurring, in either case, during such period and is surrendered for such
conversion during such period), also accompanied by payment in New York Clearing
House or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of this
Security then being converted and also the conversion notice hereon duly
executed, to the Company at the Corporate Trust Office of the Trustee, or at
such other office or agency of the Company, subject to any laws or regulations
applicable thereto and subject to the right of the Company to terminate the
appointment of any Conversion Agent (as defined below) as may be designated by
it for such purpose in the Borough of Manhattan, The City of New York, or at
such other offices or agencies as the Company may designate (each a "Conversion
Agent"), provided further, that if this Security or portion hereof has been
called for redemption on a Redemption Date or is repurchasable on a Repurchase
Date occurring, in either case, during the period from the close of business on
any Regular Record Date next preceding any Interest Payment Date to the opening
of business on such succeeding Interest Payment Date and is surrendered for
conversion during such period, then the Holder of this Security who converts
this Security or a portion hereof during such period will be entitled to receive
the interest accruing hereon from the Interest Payment Date next preceding the
date of such conversion to such succeeding Interest Payment Date and shall not
be required to pay such interest upon surrender of this Security for conversion.
Subject to the provisions of the preceding sentence and, in the case of a
conversion after the close of business on the Regular Record Date next preceding
any Interest Payment Date and or before the close of business on such Interest
Payment Date, to the right of the Holder of this Security (or any Predecessor
Security of record as of such Regular Record Date) to receive the related
installment of interest to the extent and under the circumstances provided in
the Indenture, no cash payment or adjustment is to be made on conversion for
interest accrued hereon from the Interest Payment Date next preceding the day of
conversion, or for dividends on the Common Stock issued on conversion hereof.
The Company shall thereafter deliver to the Holder the fixed number of shares of
Common Stock (together with any cash adjustment, as provided in the Indenture)
into which this Security is convertible and such delivery will be deemed to
satisfy the Company's obligation to pay the principal amount of this Security.
No fractions of shares or scrip representing fractions of shares will be issued
on conversion, but instead of any fractional interest (calculated to the nearest
1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture or, alternatively, the Company shall round up to the next higher whole
share. The Conversion Rate is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the conveyance,
transfer, sale or lease of all or substantially all of the property and assets
of the Company, the Indenture shall be amended, without the consent of any
Holders of Securities, so that this Security, if then Outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, transfer,
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<PAGE>
sale or lease by a holder of the number of shares of Common Stock of the
Company into which this Security could have been converted immediately prior to
such consolidation, merger, conveyance, transfer, sale or lease (assuming such
holder of Common Stock is not a Constituent Person, failed to exercise any
rights of election and received per share the kind and amount received per share
by a plurality of Non-electing Shares and further assuming, if such
consolidation, merger, conveyance, transfer, sale or lease occurs prior to the
end of the Restricted Period, that the Security was convertible at the time of
such occurrence at the Conversion Rate specified above as adjusted from the
issue date of such Security to such time as provided in the Indenture). No
adjustment in the Conversion Rate will be made until such adjustment would
require an increase or decrease of at least one percent of such rate, provided
that any adjustment that would otherwise be made will be carried forward and
taken into account in the computation of any subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of shares of Common Stock issued upon conversion thereof,
the Company will promptly furnish or cause to be furnished Rule 144A Information
(as defined below) to such Holder of Restricted Securities or such holder of
shares of Common Stock issued upon conversion of Restricted Securities, or to a
prospective purchaser of any such security designated by any such Holder or
holder, as the case may be, to the extent required to permit compliance by any
such Holder or holder with Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision
thereto).
If this Security is a Registrable Security, then the Holder of this
Security [IF THIS Security is a Global Security, then insert-- (including any
Person that has a beneficial interest in this Security)] and the Common Stock
issuable upon conversion thereof is entitled to the benefits of a Registration
Rights Agreement, dated as of May 17, 1996 (the "Registration Rights
Agreement"), executed by the Company. Pursuant to the Registration Rights
Agreement, the Company has agreed for the benefit of the Holders from time to
time of Registrable Securities, at the Company's expense, (a) to file within 90
days after the first date of original issuance of the Securities, a shelf
registration statement (the "Shelf Registration Statement") with the Commission
with respect to resales of the Registrable Securities (b) within 180 days after
the date of original issuance of the Securities to use its best efforts to cause
such Shelf Registration Statement to be declared effective by the Commission as
promptly as practicable, and (c) to use its best efforts to maintain such Shelf
Registration Statement continuously effective under the Securities Act for a
period of three years from the date the Shelf Registration Statement is declared
effective or, if earlier, (i) until there are no outstanding Registrable
Securities or (ii) until, in the written opinion of independent counsel to the
Company, all outstanding Registrable Securities held by persons that are not
affiliates of the
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<PAGE>
Company may be resold without registration under the Securities Act
pursuant to Rule 144(k) under the Securities Act or any successor provision
thereof.
If (i) on or prior to 90 days following the first date of original issuance
of the Securities, a Shelf Registration Statement has not been filed with the
Commission, or (ii) on or prior to the 180th day following the first date of
original issuance of the Securities, such Shelf Registration Statement is not
declared effective (each, a "Registration Default"), additional interest
("Liquidated Damages") will accrue on this Security from and including the day
following such Registration Default to but excluding the day on which such
Registration Default has been cured. Liquidated Damages will be paid
semi-annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date in respect of the Securities following the date on which
such Liquidated Damages begin to accrue, and will accrue at a rate per annum
equal to an additional one-quarter of one percent (0.25%) of the principal
amount of the Securities to and including the 90th day following such
Registration Default and at a rate per annum equal to one-half of one percent
(0.50%) thereof from and after the 91st day following such Registration Default.
In the event that the Shelf Registration Statement ceases to be effective prior
to the third annual anniversary of the initial effective date of the Shelf
Registration Statement or such earlier date as is provided in the Registration
Rights Agreement for a period in excess of 60 days, whether or not consecutive,
during any 12-month period, then the interest rate borne by the Securities shall
increase by an additional one-half of one percent (0.50%) per annum from the
61st day of the applicable 12-month period such Shelf Registration Statement
ceases to be effective to but excluding the day on which the Shelf Registration
Statement again becomes effective.
Whenever in this Security there is a reference, in any context, to the
payment of the principal of, premium, if any, or interest on, or in respect of,
any Security such mention shall be deemed to include mention of the payment of
Liquidated Damages payable as described in the preceding paragraph to the extent
that, in such context, Liquidated Damages are, were or would be payable in
respect of such Security and express mention of the payment of Liquidated
Damages (if applicable) in any provisions of this Security shall not be
construed as excluding Liquidated Damages in those provisions of this Security
where such express mention is not made.
If this Security is a Registrable Security and the Holder of this Security
[IF THIS SECURITY IS A GLOBAL SECURITY, THEN INSERT-- (including any Person that
has a beneficial interest in this Security)] elects to sell this Security
pursuant to the Shelf Registration Statement then, by such election, such Holder
of this Security agrees to be bound by the terms of the Registration Rights
Agreement relating to the Registrable Securities which are the subject of such
election.
If a Change in Control occurs, the Holder of this Security, at the Holder's
option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is an integral multiple of
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$1,000, provided that the portion of the principal amount of this Security
to be Outstanding after such repurchase is at least equal to U.S.$1,000) for
cash at a Repurchase Price equal to 100% of the principal amount thereof plus
interest accrued to the Repurchase Date. At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the conditions provided in
the Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. For purposes of this paragraph, the fair market
value of shares of Common Stock shall be determined by the Company and shall be
equal to 95% of the average of the Closing Prices Per Share for the five
consecutive Trading Days ending on and including the third Trading Day
immediately preceding the Repurchase Date. Whenever in this Security there is a
reference, in any context, to the principal of any Security as of any time, such
reference shall be deemed to include reference to the Repurchase Price payable
in respect of such Security 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 Security shall not be construed as excluding the
Repurchase Price so payable in those provisions of this Security when such
express mention is not made; provided, however, that for the purposes of the
third succeeding paragraph, such reference shall be deemed to include reference
to the Repurchase Price only if the Repurchase Price is payable in cash.
[THE FOLLOWING PARAGRAPH SHALL APPEAR IN EACH SECURITY THAT IS NOT A GLOBAL
SECURITY:
In the event of redemption, repurchase or conversion of this Security in
part only, a new Security or Securities for the unredeemed, unrepurchased or
unconverted portion hereof will be issued in the name of the Holder hereof.]
[THE FOLLOWING PARAGRAPH SHALL APPEAR IN EACH GLOBAL SECURITY:
In the event of a deposit or withdrawal of an interest in this Security,
including an exchange, transfer, redemption, repurchase or conversion of this
Security in part only, the Trustee, as custodian of the Depositary, shall make
an adjustment on its records to reflect such deposit or withdrawal in accordance
with the Applicable Procedures.]
The indebtedness evidenced by this Security is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Debt of the Company, and this Security
is issued subject to such provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.
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<PAGE>
If an Event of Default shall occur and be continuing, the principal of all
the Securities, together with accrued interest to the date of declaration, may
be declared due and payable in the manner and with the effect provided in the
Indenture. Upon payment (i) of the amount of principal so declared due and
payable, together with accrued interest to the date of declaration, and (ii) of
interest on any overdue principal and overdue interest, all of the Company's
obligations in respect of the payment of the principal of and interest on the
Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with either (a) the written consent of
the Holders of a majority in principal amount of the Securities at the time
Outstanding, or (b) by the adoption of a resolution, at a meeting of Holders of
the Outstanding Securities at which a quorum is present, by the Holders of
66-2/3% in principal amount of the Outstanding Securities represented and
entitled to vote at such meeting. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security or such other
Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default, the Holders of not less
than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity and the
Trustee shall not have received from the Holders of a majority in principal
amount of the Securities Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof, premium, if any, or interest hereon
(including any Liquidated Damages) on or after the respective due dates
expressed herein or for the enforcement of the right to convert this Security as
provided in the Indenture.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on (including Liquidated Damages) this
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<PAGE>
Security at the times, places and rate, and in the coin or currency, herein
prescribed or to convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of Securities is registrable on the Security Register upon
surrender of a Security for registration of transfer at the Corporate Trust
Office of the Trustee or at such other office or agency of the Company as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York, or at such other offices or agencies as the Company may designate, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder thereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees by
the Registrar. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
recover any tax or other governmental charge payable in connection therewith.
Prior to due presentation of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered, as the owner thereof for all
purposes, whether or not such Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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<PAGE>
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned hereby elects
to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to pay it or
__________________ an amount in cash or, at the Company's election, Common Stock
valued as set forth in the Indenture, equal to 100% of the principal amount to
be repurchased (as set forth below), plus interest accrued to the Repurchase
Date, as provided in the Indenture.
Dated: _______________________
-----------------------
Signature
-----------------------
Signature Guaranteed
Principal amount to be repurchased
(an integral multiple of U.S.$1,000): ______________________
Remaining principal amount following such repurchase
(not less than U.S.$1,000): ______________________
NOTICE: The signature to the foregoing Election must correspond to the Name
as written upon the face of this Security in every particular, without
alteration or any change whatsoever.
SECTION 2.3. Form of Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
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This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: _______________
MARINE MIDLAND BANK,
as Trustee
By:___________________________
Authorized Signatory
SECTION 2.4. Form of Conversion Notice.
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably exercises the
option to convert this Security, or any portion of the principal amount hereof
(which is an integral multiple of U.S.$1,000, provided that the unconverted
portion of such principal amount is U.S.$1,000 or any integral multiple of
U.S.$1,000 in excess thereof) below designated, into shares of Common Stock in
accordance with the terms of the Indenture referred to in this Security, and
directs that such shares, together with a check in payment for any fractional
share and any Securities representing any unconverted principal amount hereof,
be delivered to and be registered in the name of the undersigned unless a
different name has been indicated below. If shares of Common Stock or Securities
are to be registered in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.
Dated: _____________________
--------------------
Signature
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<PAGE>
If shares or Securities are to be If only a portion of the Securities is
registered in the name of a Person to be converted, please indicate:
other than the Holder, please print
such Person's name and address:
1. Principal amount to be converted:
_________________________ U.S.$___________
Name
2. Principal amount and denomination of
Securities representing unconverted
principal amount to be issued:
- -------------------------
Address Amount: U.S.$________
Denominations:
U.S.$______
_________________________ (any integral multiple of U.S.$1,000,
Social Security or other Taxpayer provided that the unconverted portion of
Identification Number, if any such principal amount is Social Security
or other Taxpayer Identification Number,
if any U.S.$1,000 or any integral
multiple of U.S.$1,000 in excess
thereof)
___________________________ [Signature Guaranteed]
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<PAGE>
ARTICLE THREE
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to U.S.$115,000,000, except for
Securities authenticated and delivered in exchange for, or in lieu of, other
Securities pursuant to Section 3.4, 3.5, 3.6, 8.5, 11.8, 12.2 or 14.3(e).
The Securities shall be known and designated as the "5% Convertible
Subordinated Notes due May 15, 2001" of the Company. Their Stated Maturity shall
be May 15, 2001 and they shall bear interest on their principal amount from May
22, 1996, payable semi-annually in arrears on May 15 and November 15 in each
year, commencing November 15, 1996, at the rate of 5% per annum until the
principal thereof is due and at the rate of 5% per annum on any overdue
principal and, to the extent permitted by law, on any overdue interest;
provided, however, that payments shall only be made on Business Days as provided
in Section 1.12.
The principal of, premium, if any, and interest on the Securities shall be
payable as provided in the forms of Securities set forth in Section 2.2, and the
Repurchase Price, whether payable in cash or in shares of Common Stock, shall be
payable at such places as are identified in the Company Notice given pursuant to
Section 14.3 (any city in which any Paying Agent is located being herein called
a "Place of Payment").
The Securities are entitled to the benefits of a Registration Rights
Agreement as provided by Sections 2.2 and 10.11. The Securities are entitled to
the payment of additional interest as provided by Section 10.11.
The Securities shall be redeemable at the option of the Company at any time
on or after May 15, 1999, in whole or in part, and at the Company's option in
the event of certain developments, as provided in Article Eleven and in the
forms of Securities set forth in Section 2.2.
The Securities shall be convertible as provided in Article Twelve (any city
in which any Conversion Agent is located being herein called a "Place of
Conversion").
The Securities shall be subordinated in right of payment to Senior Debt of
the Company as provided in Article Thirteen.
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<PAGE>
The Securities shall be subject to repurchase by the Company at the option
of the Holders as provided in Article Fourteen.
SECTION 3.2. Denominations.
The Securities shall be issuable only in registered form, without coupons,
in denominations of U.S.$1,000 and integral multiples of U.S.$1,000 in excess
thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its
President or one of its Vice Presidents, under a facsimile of its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee or to its order for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee or an
Authenticating Agent in accordance with such Company Order shall authenticate
and make available for delivery such Securities as in this Indenture provided
and not otherwise. In connection with any Company Order for authentication with
respect to the initial issuance of the Securities, an Opinion of Counsel
pursuant to Section 1.2 shall not be required.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or an Authenticating Agent by manual signature of an
authorized signatory, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder.
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<PAGE>
SECTION 3.4. Global Securities; Non-Global Securities.
(A) Global Securities
(a) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act or
announces an intention permanently to cease business or does in fact do so, (ii)
there shall have occurred and be continuing an Event of Default with respect to
such Global Security, or (iii) pursuant to the following sentence. After the
expiration of the Restricted Period (but not earlier, unless any of the events
specified in clauses (i) or (ii) of this paragraph shall have then occurred),
all or any portion of a Regulation S Global Security may be exchanged for a
Security that has a like aggregate principal amount and is not a Global
Security, upon timely request made by the Depositary or its authorized
representative to the Trustee.
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Trustee, as Security Registrar, for exchange or cancellation
as provided in this Article Three. If any Global Security is to be exchanged for
other Securities or cancelled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, in each
case, as provided in Section 3.5, then either (i) such Global Security shall be
so surrendered for exchange or cancellation as provided in this Article Three or
(ii) the principal amount thereof shall be reduced or increased by an amount
equal to the portion thereof to be so exchanged or cancelled, or equal to the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Trustee, as Security Registrar, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security, the Trustee shall,
subject to Section 3.6(c) and as otherwise provided in this Article Three,
authenticate and deliver any Securities issuable in exchange for such Global
Security (or any portion thereof) to or upon the order of, and registered in
such names as may be directed by, the Depositary or its authorized
representative.
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<PAGE>
Upon the request of the Trustee in connection with the occurrence of any of
the events specified in the preceding paragraph, the Company shall promptly make
available to the Trustee a reasonable supply of Securities that are not in the
form of Global Securities. The Trustee shall be entitled to rely upon any order,
direction or request of the Depositary or its authorized representative which is
given or made pursuant to this Article Three if such order, direction or request
is given or made in accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof, in which case such
Security shall be authenticated and delivered in definitive, fully registered
form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Securities, and owners of beneficial interests in a Global
Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners or holders thereof.
(B) Non-Global Securities
Regulation D Securities shall be initially issued as Securities in
definitive, fully registered form, without interest coupons, shall initially be
registered in such names and be in such authorized denominations as the Initial
Purchasers shall designate and shall bear the legends required hereunder. The
Company will make available to the Trustee a reasonable supply of Securities in
definitive form.
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary
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<PAGE>
Securities shall be exchangeable for definitive Securities upon surrender
of the temporary Securities at any office or agency of the Company designated
pursuant to Section 10.2, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities the Company shall execute
and the Trustee shall authenticate and make available for delivery in exchange
therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 3.5. Registration, Registration of Transfer and Exchange; Restrictions
on Transfer.
(a) The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 10.2 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers and exchanges of Securities as herein provided.
Subject to the other provisions of this Indenture regarding restrictions on
transfer, upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 10.2 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, and subject to the other provisions of this
Section 3.5, Securities may be exchanged for other Securities of any authorized
denomination and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at any such office or agency. Whenever any Securities
are so surrendered for exchange, and subject to the other provisions of this
Section 3.5, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive. Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and subject to the other provisions of this Section 3.5, entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
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<PAGE>
No service charge shall be made for any registration of transfer or
exchange of Securities except as provided in Section 3.6, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 3.4, 8.5, 11.8,
12.2 or 14.3 (other than, in the case of the exchange of Securities, where the
shares of Common Stock are to be issued or delivered in a name other than that
of the Holder of the Security) not involving any transfer and other than any
stamp and other duties, if any, which may be imposed in connection with any such
transfer or exchange by the United States or the United Kingdom or any political
subdivision thereof or therein, which shall be paid by the Company.
In the event of a redemption of the Securities in part, the Company will
not be required (a) to register the transfer of or exchange Securities for a
period of 15 days immediately preceding the date notice is given identifying the
serial numbers of the Securities called for such redemption or (b) to register
the transfer of or exchange any Security, or portion thereof, called for
redemption.
(b) Certain Transfers and Exchanges. Notwithstanding any other provision of
this Indenture or the Securities, transfers and exchanges of Securities and
beneficial interests in a Global Security of the kinds specified in this Section
3.5(b) shall be made only in accordance with this Section 3.5(b).
(i) Restricted Global Security to Regulation S Global
Security. If the owner of a beneficial interest in the
Restricted Global Security wishes at any time to transfer such
interest to a Person who wishes to acquire the same in the
form of a beneficial interest in the Regulation S Global
Security, such transfer may be effected only in accordance
with the provisions of this Clause (b)(i) and Clause (b)(vii)
below and subject to the Applicable Procedures. Upon receipt
by the Trustee, as Security Registrar, of (A) an order given
by the Depositary or its authorized representative directing
that a beneficial interest in the Regulation S Global Security
in a specified principal amount be credited to a specified
Agent Member's account and that a beneficial interest in the
Restricted Global Security in an equal principal amount be
debited from another specified Agent Member's account and (B)
a Regulation S Certificate, satisfactory to the Trustee and
duly executed by the owner of such beneficial interest in the
Restricted Global Security or his attorney duly authorized in
writing, then the Trustee, as Security Registrar but subject
to Clause (b)(vii) below, shall reduce the principal amount of
the Restricted Global Security and increase the principal
amount of the Regulation S Global Security by such specified
principal amount as provided in Section 3.4(A)(c).
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(ii) Regulation S Global Security to
Restricted Global Security. If the owner of a beneficial
interest in the Regulation S Global Security wishes at any
time to transfer such interest to a Person who wishes to
acquire the same in the form of a beneficial interest in the
Restricted Global Security, such transfer may be effected only
in accordance with this Clause (b)(ii) and subject to the
Applicable Procedures. Upon receipt by the Trustee, as
Security Registrar, of (A) an order given by the Depositary or
its authorized representative directing that a beneficial
interest in the Restricted Global Security in a specified
principal amount be credited to a specified Agent Member's
account and that a beneficial interest in the Regulation S
Global Security in an equal principal amount be debited from
another specified Agent Member's account and (B) if such
transfer is to occur during the Restricted Period, a
Restricted Securities Certificate, satisfactory to the Trustee
and duly executed by the owner of such beneficial interest in
the Regulation S Global Security or his attorney duly
authorized in writing, then the Trustee, as Security
Registrar, shall reduce the principal amount of the Regulation
S Global Security and increase the principal amount of the
Restricted Global Security by such specified principal amount
as provided in Section 3.4(A)(c).
(iii) Restricted Non-Global Security to
Restricted Global Security or Regulation S Global Security. If
the Holder of a Restricted Security (other than a Global
Security) wishes at any time to transfer all or any portion of
such Restricted Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the
Restricted Global Security or the Regulation S Global
Security, such transfer may be effected only in accordance
with the provisions of this Clause (b)(iii) and Clause
(b)(vii) below and subject to the Applicable Procedures. Upon
receipt by the Trustee, as Security Registrar, of (A) such
Restricted Security as provided in Section 3.5(a) and
instructions satisfactory to the Trustee directing that a
beneficial interest in the Restricted Global Security or
Regulation S Global Security in a specified principal amount
not greater than the principal amount of such Security be
credited to a specified Agent Member's account and (B) a
Restricted Securities Certificate, if the specified account is
to be credited with a beneficial interest in the Restricted
Global Security, or a Regulation S Certificate, if the
specified account is to be credited with a beneficial interest
in the Regulation S Global Security, in either case
satisfactory to the Trustee and duly executed by such Holder
or his attorney duly authorized in writing, then the Trustee,
as Security Registrar but subject to Clause (b)(vii) below,
shall cancel such Restricted Security (and issue a new
Restricted Security in respect of any untransferred portion
thereof) as provided in Section 3.5(a) and increase the
principal amount of the Restricted Global Security or the
Regulation S Global Security, as the case may be, by the
specified principal amount as provided in Section 3.4(A)(c).
(iv) Regulation S Non-Global Security to
Restricted Global Security or Regulation S Global Security. If
the Holder of a Regulation S Security (other than a Global
Security)
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wishes at any time to transfer all or any portion of such
Regulation S Security to a Person who wishes to acquire the
same in the form of a beneficial interest in the Restricted
Global Security or the Regulation S Global Security, such
transfer may be effected only in accordance with this Clause
(b)(iv) and Clause (b)(vii) below and subject to the
Applicable Procedures. Upon receipt by the Trustee, as
Security Registrar, of (A) such Regulation S Security as
provided in Section 3.5(a) and instructions satisfactory to
the Trustee directing that a beneficial interest in the
Restricted Global Security or Regulation S Global Security in
a specified principal amount not greater than the principal
amount of such Security be credited to a specified Agent
Member's account and (B) if the transfer is to occur during
the Restricted Period and the specified account is to be
credited with a beneficial interest in the Restricted Global
Security, a Restricted Securities Certificate satisfactory to
the Trustee and duly executed by such Holder or his attorney
duly authorized in writing, then the Trustee, as Security
Registrar but subject to Clause (b)(vii) below, shall cancel
such Regulation S Security (and issue a new Regulation S
Security in respect of any untransferred portion thereof) as
provided in Section 3.5(a) and increase the principal amount
of the Restricted Global Security or the Regulation S Global
Security, as the case may be, by the specified principal
amount as provided in Section 3.4(B).
(v) Non-Global Security to Non-Global
Security. A Security that is not a Global Security may be
transferred, in whole or in part, to a Person who takes
delivery in the form of another Security that is not a Global
Security as provided in Section 3.5(a), provided that, if the
Security to be transferred in whole or in part is a (y)
Restricted Security, or is a Regulation S Security and the
transfer is to occur during the Restricted Period, then the
Trustee shall have received (A) a Restricted Securities
Certificate, satisfactory to the Trustee and duly executed by
the transferor Holder or his attorney duly authorized in
writing, in which case the transferee Holder shall take
delivery in the form of a Restricted Security, or (B) a
Regulation S Certificate, satisfactory to the Trustee and duly
executed by the transferor Holder or his attorney duly
authorized in writing, in which case the transferee Holder
shall take delivery in the form of a Regulation S Security, or
(z) a Restricted Security and the transfer is to occur after
the expiration of the Restricted Period, then the Trustee
shall have received a Regulation S Certificate, satisfactory
to the Trustee and duly executed by the transferor Holder or
his attorney duly authorized in writing, in which case the
transferee Holder shall take delivery in the form of a
Regulation S Security (subject in every case to Section
3.5(c)).
(vi) Exchanges between Global Security and
Non-Global Security. A beneficial interest in a Global
Security may be exchanged for a Security that is not a Global
Security as provided in Section 3.4, provided that, if such
interest is a beneficial interest in the Restricted Global
Security, or if such interest is a beneficial interest in the
Regulation S Global Security and such exchange is to occur
during the Restricted Period, then such interest
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shall be exchanged for a Restricted Security (subject in each
case to Section 3.5(c)). A Security that is not a Global
Security may be exchanged for a beneficial interest in a
Global Security only if (A) such exchange occurs in connection
with a transfer effected in accordance with Clause (b)(iii) or
(iv) above or (B) such Security is a Regulation S Security and
such exchange occurs after the Restricted Period.
(vii) Regulation S Global Security to be
Held Through EUROCLEAR or CEDEL during Restricted Period. The
Company shall use its best efforts to cause the Depositary to
ensure that, until the expiration of the Restricted Period,
beneficial interests in the Regulation S Global Security may
be held only in or through accounts maintained at the
Depositary by EUROCLEAR or CEDEL (or by Agent Members acting
for the account thereof), and no person shall be entitled to
effect any transfer or exchange that would result in any such
interest being held otherwise than in or through such an
account; provided that this Clause (b)(vii) shall not prohibit
any transfer or exchange of such an interest in accordance
with Clause (b)(ii) or (vi) above.
(c) Securities Act Legends. Rule 144A Securities, Regulation D Securities
and their respective Successor Securities shall bear the applicable Restricted
Securities Legend, and the Regulation S Securities and their Successor
Securities shall bear a Regulation S Legend, subject to the following:
(i) subject to the following Clauses of this
Section 3.5(c), a Security or any portion thereof which is
exchanged, upon transfer or otherwise, for a Global Security
or any portion thereof shall bear the Securities Act Legend
borne by such Global Security while represented thereby;
(ii) subject to the following Clauses of
this Section 3.5(c), a new Security which is not a Global
Security and is issued in exchange for another Security
(including a Global Security) or any portion thereof, upon
transfer or otherwise, shall bear the Securities Act Legend
borne by such other Security, provided that, if such new
Security is required pursuant to Section 3.5(b)(v) or (vi) to
be issued in the form of a Restricted Security, it shall bear
a Restricted Securities Legend and, if such new Security is so
required to be issued in the form of a Regulation S Security,
it shall bear a Regulation S Legend;
(iii) Any Securities which are sold or
otherwise disposed of pursuant to an effective registration
statement under the Securities Act (including the Shelf
Registration Statement), together with their Successor
Securities shall not bear a Securities Act Legend; the Company
shall inform the Trustee in writing of the effective date of
any such registration statement registering the Securities
under the Securities Act and shall notify the Trustee at any
time when prospectuses may not be delivered with respect to
Securities to be sold pursuant to
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such registration statement. The Trustee shall not be liable
for any action taken or omitted to be taken by it in good
faith in accordance with the aforementioned registration
statement;
(iv) at any time after the Securities may be
freely transferred without registration under the Securities
Act or without being subject to transfer restrictions pursuant
to the Securities Act, a new Security which does not bear a
Securities Act Legend may be issued in exchange for or in lieu
of a Security (other than a Global Security) or any portion
thereof which bears such a legend if the Trustee has received
an Unrestricted Securities Certificate, satisfactory to the
Trustee and duly executed by the Holder of such legended
Security or his attorney duly authorized in writing, and after
such date and receipt of such certificate, the Trustee shall
authenticate and deliver such a new Security in exchange for
or in lieu of such other Security as provided in this Article
Three;
(v) a new Security which does not bear a
Securities Act Legend may be issued in exchange for or in lieu
of a Security (other than a Global Security) or any portion
thereof which bears such a legend if, in the Company's
judgment, placing such a legend upon such new Security is not
necessary to ensure compliance with the registration
requirements of the Securities Act, and the Trustee, at the
direction of the Company, shall authenticate and deliver such
a new Security as provided in this Article Three; and
(vi) notwithstanding the foregoing
provisions of this Section 3.5(c), a Successor Security of a
Security that does not bear a particular form of Securities
Act Legend shall not bear such form of legend unless the
Company has reasonable cause to believe that such Successor
Security is a "restricted security" within the meaning of Rule
144, in which case the Trustee, at the direction of the
Company, shall authenticate and deliver a new Security bearing
a Restricted Securities Legend in exchange for such Successor
Security as provided in this Article Three.
(d) Neither the Trustee, the Paying Agent nor any of their agents
shall (1) have any duty to monitor compliance with or with respect to
any federal or state or other securities or tax laws or (2) have any
duty to obtain documentation on any transfers or exchanges other than as
specifically required hereunder.
SECTION 3.6.Mutilated, Destroyed, Lost or Stolen Securities.
If any mutilated Security is surrendered to the Trustee or to a
Transfer Agent outside the United States, the Company shall execute, the
Trustee or an Authenticating Agent shall authenticate and the Trustee or
Transfer Agent shall deliver in exchange therefor a new Security of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
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If there be delivered to the Company and either to the Trustee or
to a Transfer Agent outside the United States:
(1) evidence to their satisfaction of the
destruction, loss or theft of any Security, and
(2) such security or indemnity as may be
satisfactory to the Company and the Trustee and
such Transfer Agent to save each of them and any
agent of either of them harmless,
then, in the absence of actual notice to the Company, the Trustee or the
Transfer Agent that such Security has been acquired by a bona fide purchaser,
the Company shall execute, the Trustee or an Authenticating Agent shall
authenticate and the Trustee or Transfer Agent shall deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its
discretion, but subject to any conversion rights, may, instead of
issuing a new Security, pay such Security, upon satisfaction of the
conditions set forth in the preceding paragraph.
Upon the issuance of any new Security under this Section 3.6, 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 (other
than any stamp and other duties, if any, which may be imposed in
connection therewith by the United States or the United Kingdom or any
political subdivision thereof or therein, which shall be paid by the
Company) and any other expenses (including the fees and expenses of the
Trustee, the Paying Agent and the Transfer Agent) connected therewith.
Every new Security issued pursuant to this Section 3.6 in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and such new Security, shall be entitled to
all the benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies of any
Holder with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 3.7.Payment of Interest; Interest Rights Preserved.
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Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable
to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities (or their respective Predecessor
Securities) are registered at the close of business on
a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee
in writing of the amount of Defaulted Interest
proposed to be paid on each Security, the date of the
proposed payment and the Special Record Date, and at
the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this
Clause provided. The Special Record Date for the
payment of such Defaulted Interest shall be not more
than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the
proposed payment. The Trustee, 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 Holder of Securities at such
Holder's address as it appears in the Security
Register, not less than 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 Securities (or their respective Predecessor
Securities) are registered at the close of business on
such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any
Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and
upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such
manner of payment shall be deemed practicable by the
Trustee.
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Subject to the foregoing provisions of this Section and Section
3.5, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall
carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Security.
Interest on any Security which is converted in accordance with
Section 12.2 during a Record Date Period shall be payable in accordance
with the provisions of Section 12.2.
SECTION 3.8.Cancellation.
All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee. All
Securities so delivered to the Trustee shall be canceled promptly by the
Trustee. No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section 3.8. The Trustee
shall destroy all canceled Securities in accordance with applicable law
and its customary practices in effect from time to time.
SECTION 3.9.Computation of Interest.
Interest on the Securities (including any additional interest)
shall be computed on the basis of a 360-day year of twelve 30-day
months.
SECTION 3.10.CUSIP and ISIN Numbers.
The Company in issuing Securities may use "CUSIP" and "ISIN"
numbers (if then generally in use) in addition to serial numbers; if so,
the Trustee shall use such "CUSIP" and "ISIN" numbers in addition to
serial numbers in notices of redemption and repurchase as a convenience
to Holders; provided that any such notice may state that no
representation is made as to the correctness of such CUSIP and ISIN
numbers either as printed on the Securities or as contained in any
notice of a redemption or repurchase and that reliance may be placed
only on the serial or other identification numbers printed on the
Securities, and any such redemption or repurchase shall not be affected
by any defect in or omission of such CUSIP and ISIN numbers.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1.Satisfaction and Discharge of Indenture
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, or registration
of transfer or exchange, or replacement of Securities herein expressly
provided for, the Company's obligations to the Trustee pursuant to
Section 6.7 and any right to receive the payment of principal of, or
interest on, such Securities or Liquidated Damages under the ninth
paragraph on the reverse of the form of Securities set forth in Section
2.2), and the Trustee, at the expense of the Company, shall execute
proper instruments in form and substance satisfactory to the Trustee
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore
authenticated and delivered (other
than (i) Securities which have been
destroyed, lost or stolen and which
have been replaced or paid as
provided in Section 3.6 and (ii)
Securities for whose payment money
has theretofore been deposited in
trust or segregated and held in
trust by the Company and thereafter
repaid to the Company or discharged
from such trust, as provided in
Section 10.3) have been delivered to
the Trustee for cancellation; or
(B) all such Securities not
theretofore delivered to the Trustee
or the Paying Agent or its agent for
cancellation (other than Securities
referred to in clauses (i) through
(iii) of clause (1)(A) above)
(i) have become due and
payable, or
(ii) will have become due and
payable at their Stated Maturity
within one year, or
(iii) are to be called for
redemption within one year under
arrangements satisfactory to the
Trustee for the giving of notice of
redemption by the Trustee in the
name, and at the expense, of the
Company,
and the Company, in the case of clause (i),
(ii) or (iii) above, has deposited or caused
to be deposited with the Trustee as trust
funds (immediately available to the Holders
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in the case of clause (i)) in trust for the
purpose an amount sufficient to pay and
discharge the entire indebtedness on such
Securities not theretofore delivered to the
Trustee for cancellation, for principal,
premium, if any, and interest to the date of
such deposit (in the case of Securities
which have become due and payable) or to the
Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid
all other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein
provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.7, the
obligations of the Company to any Authenticating Agent under Section
6.12, and, if money shall have been deposited with the Trustee pursuant
to clause (1)(B) of this Section 4.1, the obligations of the Trustee
under Section 4.2 and the last paragraph of Section 10.3 shall survive.
Funds held in trust pursuant to this Section are not subject to the
provisions of Article Thirteen.
SECTION 4.2.Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3,
all money deposited with the Trustee pursuant to Section 4.1 shall be
held in trust and applied by it, in accordance with the provisions of
the Securities and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying
Agent), to the Persons entitled thereto, of the principal, premium, if
any, and interest for whose payment such money has been deposited with
the Trustee.
All moneys deposited with the Trustee pursuant to Section 4.1 (and
held by it or any Paying Agent) for the payment of Securities
subsequently converted shall be returned to the Company upon Company
Request.
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ARTICLE FIVE
REMEDIES
SECTION 5.1.Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and
whether it shall be occasioned by the provisions of Article Thirteen or
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):
(1) default in the payment of the principal of
or premium, if any, on any Security at its Maturity;
or
(2) default in the payment of any interest
(including Liquidated Damages) upon any Security when
it becomes due and payable, and continuance of such
default for a period of 30 days; or
(3) failure by the Company to give the Company
Notice in accordance with Section 14.3; or
(4) default in the performance, or breach, of
any covenant or warranty of the Company in this
Indenture (other than a covenant or warranty a default
in the performance or breach of which is specifically
dealt with elsewhere in this Section), and continuance
of such default or breach for a period of 60 days
after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a
written notice specifying such default or breach and
requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) a default under any bond, debenture, note or
other evidence of indebtedness for money borrowed by
the Company or under any mortgage, indenture or
instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for
money borrowed by the Company with a principal amount
then outstanding in excess of U.S.$5,000,000, whether
such indebtedness now exists or shall hereafter be
created, which default shall have resulted in such
indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise
have become due and payable, without such indebtedness
having been discharged, or such acceleration having
been rescinded or annulled,
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and within a period of 30 days after there shall have been
given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Outstanding
Securities a written notice specifying such default and
requiring the Company to cause such indebtedness to be
discharged or cause such default to be cured or waived or such
acceleration to be rescinded or annulled and stating that such
notice is a "Notice of Default" hereunder; or
(6) the entry by a court having jurisdiction in
the premises of (A) a decree or order for relief in
respect of the Company in an involuntary case or
proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or
State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial
part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other
decree or order unstayed and in effect for a period of
60 consecutive days; or
(7) the commencement by the Company of a
voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company
in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization
or similar relief under any applicable Federal or
State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or
the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its
inability to pay its debts generally as they become
due, or the taking of corporate action by the Company
in furtherance of any such action.
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SECTION 5.2.Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified
in Section 5.1(1), 5.1(2), 5.1(6) or 5.1(7)) occurs and is continuing,
then in every such case the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Outstanding Securities may declare
the principal of all the Securities to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by
the Holders), and upon any such declaration such principal and all
accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Sections 5.1(1) or 5.1(2) occurs and is
continuing, a Holder may, by notice in writing to the Company (with a
copy to the Trustee), declare the principal of such Security and any
accrued interest and Liquidated Damages thereon immediately due and
payable. If an Event of Default specified in Section 5.1(6) or 5.1(7)
occurs and is continuing, the principal of, and accrued interest on
(together with any Liquidated Damages), all the Securities shall ipso
facto become immediately due and payable without any declaration or
other Act of the Holders or any act on the part of the Trustee.
At any time after such declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article Five provided,
the Holders of a majority in principal amount of the Outstanding
Securities, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue interest and
Liquidated Damages on all
Securities,
(B) the principal of and
premium, if any, on any Securities
which have become due otherwise than
by such declaration of acceleration
and any interest thereon at the rate
borne by the Securities,
(C) interest upon overdue
interest at a rate of 5% per annum,
and
(D) all sums paid or advanced
by the Trustee hereunder and the
reasonable compensation, expenses,
disbursements and advances of the
Trustee, its agents and counsel;
and
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(2) all Events of Default, other than the
nonpayment of the principal of, and any premium and
interest on, Securities which have become due solely
by such declaration of acceleration, have been cured
or waived as provided in Section 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3.Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any
interest on any Security when it becomes due and
payable and such default continues for a period of 30
days, or
(2) default is made in the payment of the
principal of or premium, if any, on any Security at
the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and interest on any overdue principal and
premium, if any, and on any overdue interest, at a rate of 5% per annum, and in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor
upon the Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company
or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
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SECTION 5.4.Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any
other obligor upon the Securities or the property of the Company or of
such other obligor or the creditors of either, the Trustee (irrespective
of whether the principal of, and any interest on, the Securities 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 on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(1) to file and prove a claim for the whole
amount of principal, premium, if any, and interest
owing and unpaid in respect of the Securities and take
such other actions, including participating as a
member, voting or otherwise, of any official committee
of creditors appointed in such matter, and to file
such other papers or documents, in each of the
foregoing cases, as may be necessary or advisable in
order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel) and of the Holders of Securities allowed
in such judicial proceeding, and
(2) to collect and receive any moneys or other
property payable or deliverable on any such claim and
to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities 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
Holders of Securities, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder of
a Security any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof
or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security in any such proceeding; provided, however, that the
Trustee may, on behalf of such Holders, vote for the election of a
trustee in bankruptcy or similar official.
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SECTION 5.5.Trustee May Enforce Claims Without Possession
of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such 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 Securities in respect of which judgment has been
recovered.
SECTION 5.6.Application of Money Collected.
Subject to Article Thirteen, any money collected by the Trustee
pursuant to this Article Five shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal, premium, if any, or
interest, upon presentation of the Securities, or both, as the case may
be, and the notation thereon of 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 6.7;
SECOND: To the payment of the amounts then due
and unpaid for principal of, premium, if any, or
interest (including any Liquidated Damages) on, the
Securities in respect of which or for the benefit of
which such money has been collected, ratably, without
preference or priority of any kind, according to the
amounts due and payable on such Securities for
principal, premium, if any, and interest,
respectively; and
THIRD: Any remaining amounts shall be repaid to
the Company.
SECTION 5.7.Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or
for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written
notice to the Trustee of a continuing Event of
Default;
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(2) the Holders of not less than 25% in
principal amount of the Outstanding Securities shall
have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance
with such request;
(4) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed
to institute any such proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such
60-day period by the Holders of a majority in
principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders 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 of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.8.Unconditional Right of Holders to Receive Principal, Premium
and Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of, premium, if any,
and (subject to Section 3.7) interest on such Security or payment on the
respective Stated Maturities expressed in such Security (or, in the case
of redemption or repurchase, on the Redemption Date or Repurchase Date,
as the case may be), and to convert such Security in accordance with
Article Twelve, and to institute suit for the enforcement of any such
payment and right to convert, and such rights shall not be impaired
without the consent of such Holder.
SECTION 5.9.Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders of Securities shall be restored
severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and such Holders shall
continue as though no such proceeding had been instituted.
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SECTION 5.10.Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities is intended to
be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.11.Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or any acquiescence therein. Every right and
remedy given by this Article Five or by law to the Trustee or to the
Holders of Securities may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or (subject to the
limitations contained in this Indenture) by the Holders of Securities,
as the case may be.
SECTION 5.12.Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities 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 that
(1) such direction shall not be in conflict with
any rule of law or with this Indenture, and
(2) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with
such direction.
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SECTION 5.13.Waiver of Past Defaults.
The Holders, either (a) through the written consent of not less
than a majority in principal amount of the Outstanding Securities, or
(b) by the adoption of a resolution, at a meeting of Holders of the
Outstanding Securities at which a quorum is present, by the Holders of
at least 66-2/3% in principal amount of the Outstanding Securities
represented at such meeting, may on behalf of the Holders of all the
Securities waive any past default hereunder and its consequences, except
a default (1) in the payment of the principal of, premium, if any, or
interest on any Security, or (2) in respect of a covenant or provision
hereof which under Article Eight cannot be modified or amended without
the consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.
SECTION 5.14.Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security 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, suffered 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; but the
provisions of this Section 5.14 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities, or to
any suit instituted by any Holder of any Security for the enforcement of
the payment of the principal of, premium, if any, or interest on any
Security or the payment on or after the respective Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption or
repurchase, on or after the Redemption Date or Repurchase Date, as the
case may be) or for the enforcement of the right to convert any Security
in accordance with Article Twelve.
SECTION 5.15.Waiver of Stay, Usury or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, usury or
extension law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that
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it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not 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 had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 6.1.Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such
duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against
the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any
such certificates or opinions which by any provision
hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they
conform to the requirements of this Indenture, but not
to verify the contents thereof.
(b) In case an Event of Default has occurred and is continuing, 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.
(c) 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
(1) this paragraph (c) shall not be construed to
limit the effect of paragraph (a) of this Section;
(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(3) 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 a majority in principal amount of the
Outstanding Securities relating to the time, method
and place of
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conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture; and
(4) no provision of this Indenture shall require
the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(d) Whether or not therein expressly so 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.
SECTION 6.2.Notice of Defaults.
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has received written notice, the Trustee shall give to
all Holders of Securities, in the manner provided in Section 1.6, notice
of such default, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment
of the principal of, premium, if any, or interest on any Security, the
Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders;
and provided, further, that in the case of any default of the character
specified in Section 5.1(4), no such notice to Holders of Securities
shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which
is, or after notice or lapse of time or both would become, an Event of
Default.
SECTION 6.3.Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected
in acting or refraining from acting upon any
resolution, Officers' Certificate, other certificate,
statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by a
Company Request or Company Order and any resolution of
the Board of Directors shall be sufficiently evidenced
by a Board Resolution;
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(3) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking,
suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its
selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete
authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(5) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of
the Holders of Securities pursuant to this Indenture,
unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) 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, note, other evidence of
indebtedness or other paper or document, but the
Trustee 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;
(7) 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 with due care by it hereunder;
(8) the permissive right of the Trustee to take or
refrain from taking any actions enumerated in this
Indenture shall not be construed as a duty and the
Trustee shall not be answerable in any such actions
other than for its own negligence or willful
misconduct; and
(9) the Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good
faith and reasonably believed by it to be authorized
or within the discretion or rights and powers
conferred upon it by the Indenture.
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SECTION 6.4.Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture, of the Securities, or of the
Common Stock issuable upon the conversion of the Securities. The Trustee
shall not be accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 6.5.May Hold Securities, Act as Trustee Under Other Indentures.
The Trustee, any Authenticating Agent, any Paying Agent, any
Conversion Agent or any other agent of the Company or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Conversion Agent or such other agent.
The Trustee may become and act as trustee under other indentures
under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding in the
same manner as if it were not Trustee hereunder.
SECTION 6.6.Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall
be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
SECTION 6.7.Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from
time to time agree in writing for all services
rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any
provision of this Indenture (including
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the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee (and its directors,
officers, employees and agents) for, and to hold it
harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of this trust, including the costs,
expenses and reasonable attorneys' fees of defending
itself against any claim or liability in connection
with the exercise or performance of any of its powers
or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(6) or Section 5.1(7),
the expenses (including the reasonable charges of its counsel) and the
compensation for the services are intended to constitute expenses of the
administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of
this Indenture or the earlier resignation or removal of the Trustee.
SECTION 6.8.Corporate Trustee Required; Eligibility.
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, having a combined capital and surplus of at least U.S.$50,000,000,
subject to supervision or examination by federal or state authority, in
good standing and having an established place of business in the Borough
of Manhattan, The City of New York. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. 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 and a
successor shall be appointed pursuant to Section 6.9.
SECTION 6.9.Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.10.
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(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.10 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and the Company. If the instrument of
acceptance by a successor Trustee required by Section 6.10 shall not
have been delivered to the Trustee within 30 days after the giving of
such notice of removal, the removed Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with
Section 6.8 after written request therefor by the
Company or by any Holder of a Security who has been a
bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under
Section 6.8 and shall fail to resign after written
request therefor by the Company or any such Holder, 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 (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security 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.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any
cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee and shall comply with the applicable requirements of
this Section and Section 6.10. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy,
a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to
the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 6.10, become the successor
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Trustee and supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders of
Securities and accepted appointment in the manner required by this Section and
Section 6.10, any Holder of a Security who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to
all Holders of Securities in the manner provided in Section 1.6. Each
notice shall include the name of the successor Trustee and the address
of its Corporate Trust Office.
SECTION 6.10.Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor
Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be eligible under
this Article.
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SECTION 6.11.Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise eligible
under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 6.12.Authenticating Agents.
The Trustee may, with the consent of the Company, appoint an
additional Authenticating Agent or Agents acceptable to the Company with
respect to the Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities issued upon exchange or
substitution pursuant to this Indenture.
Securities authenticated by an Authenticating Agent shall be
entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee
hereunder, and every reference in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate
of authentication shall be deemed to include authentication and delivery
on behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be subject to acceptance by the
Company and shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State
thereof, or the District of Columbia, and authorized under such laws to
act as Authenticating Agent and subject to supervision or examination by
government or other fiscal authority. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of
this Section 6.12, such Authenticating Agent shall resign immediately in
the manner and with the effect specified in this Section 6.12.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to
the corporate agency or corporate trust business of an Authenticating
Agent, shall continue to be an Authenticating Agent, provided such
corporation shall be otherwise eligible under this Section 6.12,
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without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written
notice thereof 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 such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.12, the Trustee may
appoint a successor Authenticating Agent which shall be subject to
acceptance by the Company. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect
as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.12.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.12.
If an Authenticating Agent is appointed with respect to the
Securities pursuant to this Section 6.12, the Securities may have
endorsed thereon, in addition to or in lieu of the Trustee's
certification of authentication, an alternative certificate of
authentication in the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: MARINE MIDLAND BANK
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By ___________________________
Authorized Signatory
SECTION 6.13.Disqualification; Conflicting Interests.
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.
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SECTION 6.14.Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any such other obligor).
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ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1.Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate or merge with or into any other
Person or, directly or indirectly, convey, transfer, sell, lease or
otherwise dispose of all or substantially all of its properties and
assets to any Person (other than a wholly-owned subsidiary), and the
Company may not permit any Person (other than a wholly-owned subsidiary)
to consolidate with or merge into the Company or convey, transfer, sell,
lease or otherwise dispose of all or substantially all of its properties
and assets to the Company, unless:
(1) in case the Company shall consolidate or
merge with or into any other Person or, directly or
indirectly, convey, transfer, sell, lease or otherwise
dispose of all or substantially all of its properties
and assets to any Person, the Person formed by such
consolidation or into or with which the Company is
merged or the Person which acquires by conveyance,
transfer, sale, or which leases the properties and
assets of the Company, shall be a corporation, limited
liability company, partnership or trust, shall be
organized and validly existing under the laws of the
United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the principal of,
premium, if any, and interest (including Liquidated
Damages payable, if any, pursuant to Section 10.11) on
all of the Securities, as applicable, and the
performance or observance of every covenant of this
Indenture on the part of the Company to be performed
or observed and shall have provided for conversion
rights in accordance with Article Twelve;
(2) immediately after giving effect to such
transaction and treating any indebtedness which
becomes an obligation of the Company as a result of
such transaction as having been incurred by the
Company at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall
have happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such
supplemental indenture comply with this Article and
that all conditions precedent herein provided for
relating to such transaction have been complied with,
together with any documents required under Section
8.3.
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SECTION 7.2.Successor Substituted.
Upon any consolidation or merger of the Company with or into any
other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company in accordance
with Section 7.1, the successor Person formed by such consolidation or
into or with which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the
Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1.Supplemental Indentures Without Consent of Holders of Securities.
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto
for any of the following purposes:
(1) to evidence the succession of another Person
to the Company and the assumption by any such
successor of the covenants and obligations of the
Company herein and in the Securities as permitted by
this Indenture; or
(2) to add to the covenants of the Company for
the benefit of the Holders of Securities, or to
surrender any right or power herein conferred upon the
Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the
conversion rights of Holders of Securities pursuant to
Section 12.11; or
(5) to make any changes or modifications to this
Indenture necessary in connection with the
registration of any Registrable Securities under the
Securities Act as contemplated by Section 10.11,
provided, such action pursuant to this clause (5)
shall not adversely affect the interests of the
Holders of Securities; or
(6) to comply with the requirements of the Trust
Indenture Act or the rules and regulations of the
Commission thereunder in order to effect or maintain
the qualification of this Indenture under the Trust
Indenture Act, as contemplated by this Indenture or
otherwise; or
(7) to cure any ambiguity, to correct or
supplement any provision herein which may be
inconsistent with any other provision herein or which
is otherwise defective, or to make any other
provisions with respect to matters or questions
arising under this Indenture as the Company and the
Trustee may deem necessary or desirable.
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Upon Company Request, accompanied by a Board Resolution authorizing
the execution of any such supplemental indenture, and subject to and
upon receipt by the Trustee of the documents described in Section 8.3
hereof, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and
stipulations which may be therein contained.
SECTION 8.2.Supplemental Indentures with Consent of Holders of Securities.
With either (a) the written consent of the Holders of not less than
a majority in principal amount of the Outstanding Securities, by the Act
of said Holders delivered to the Company and the Trustee, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of 66-2/3% in
principal amount of the Outstanding Securities represented at such
meeting, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of the Holders of Securities under this Indenture;
provided, however, that no such supplemental indenture shall, without
the consent or affirmative vote of the Holder of each Outstanding
Security affected thereby,
(1) change the Stated Maturity of the principal
of, or any installment of interest on, any Security or
reduce the principal amount or the rate of interest
payable thereon or any premium payable upon redemption
or mandatory repurchase thereof, or change the coin or
currency in which any Security or the interest or any
premium thereon or any other amount in respect thereof
is payable, or impair the right to institute suit for
the enforcement of any payment in respect of any
Security on or after the Stated Maturity thereof (or,
in the case of redemption or any repurchase, on or
after the Redemption Date or Repurchase Date, as the
case may be) or, except as permitted by Section 12.11,
adversely affect the right to convert any Security as
provided in Article Twelve, or modify the provisions
of this Indenture with respect to the subordination of
the Securities in a manner adverse to the Holders of
Securities, or
(2) reduce the requirements of Section 9.4 for
quorum or voting, or reduce the percentage in
principal amount of the Outstanding Securities the
consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders
is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this
Indenture, or
(3) modify the obligation of the Company to
maintain an office or agency in the Borough of
Manhattan, The City of New York pursuant to Section
10.2, or
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(4) modify any of the provisions of this Section
or Section 5.13 or 10.12, except to increase any
percentage contained herein or therein or to provide
that certain other provisions of this Indenture cannot
be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby;
or
(5) modify the provisions of Article Fourteen in
a manner adverse to the Holders; or
(6) modify any of the provisions of Section 10.9
or 10.10.
It shall not be necessary for any Act of Holders of Securities
under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
SECTION 8.3.Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Sections 6.1 and 6.3) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by
this Indenture, and that such supplemental indenture has been duly
authorized, executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company enforceable against
the Company in accordance with its terms. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 8.4.Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
SECTION 8.5.Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee
as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities so modified as to conform, in
the opinion of the Company and the Trustee, to any such supplemental
indenture may be prepared and executed by the Company and authenticated
and delivered by the Trustee in exchange for Outstanding Securities.
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SECTION 8.6.Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the
Company shall give notice to all Holders of Securities of such fact,
setting forth in general terms the substance of such supplemental
indenture, in the manner provided in Section 1.6. Any failure of the
Company to give such notice, or any defect therein, shall not in any way
impair or affect the validity of any such supplemental indenture.
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ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 9.1. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities may be called at any time and
from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or taken by
Holders of Securities.
SECTION 9.2.Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 9.1, to be held at such
time and at such place in the Borough of Manhattan, The City of New
York, as the Trustee shall determine. Notice of every meeting of Holders
of Securities, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting, shall
be given, in the manner provided in Section 1.6, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities shall have requested the Trustee to call a
meeting of the Holders of Securities for any purpose specified in
Section 9.1, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not
have made the first publication of the notice of such meeting within 21
days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the
Holders of Securities in the amount specified, as the case may be, may
determine the time and the place in the Borough of Manhattan, The City
of New York, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in paragraph (a) of this
Section.
SECTION 9.3.Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities, a
Person shall be (a) a Holder of one or more Outstanding Securities, or
(b) a Person appointed by an instrument in writing as proxy for a Holder
or Holders of one or more Outstanding Securities by such Holder or
Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and
its counsel and any representatives of the Company and its counsel.
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SECTION 9.4.Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities shall constitute a quorum. In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities, be
dissolved. In any other case, the meeting may be adjourned for a period
of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further
adjourned for a period not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned
meeting (subject to repeated applications of this sentence). Notice of
the reconvening of any adjourned meeting shall be given as provided in
Section 9.2(a), except that such notice need be given only once not less
than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall
state expressly the percentage of the principal amount of the
Outstanding Securities which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting
adjourned for a lack of a quorum, the Persons entitled to vote 25% in
principal amount of the Outstanding Securities at the time shall
constitute a quorum for the taking of any action set forth in the notice
of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (except
as limited by the proviso to Section 8.2) shall be effectively passed
and decided if passed or decided by the Persons entitled to vote not
less than 66-2/3% in principal amount of Outstanding Securities
represented and entitled to vote at such meeting.
Any resolution passed or decisions taken at any meeting of Holders
of Securities duly held in accordance with this Section shall be binding
on all the Holders of Securities, whether or not present or represented
at the meeting. The Trustee shall, in the name and at the expense of the
Company, notify all the Holders of Securities of any such resolutions or
decisions pursuant to Section 1.6.
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SECTION 9.5.Determination of Voting Rights; Conduct and Adjournment of Meetings.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable
for any meeting of Holders of Securities in regard to proof of the
holding of Securities 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 deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the
manner specified in Section 1.4 and the appointment of any proxy shall
be proved in the manner specified in Section 1.4 or by having the
signature of the Person executing the proxy.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the
meeting shall have been called by the Company or by Holders of
Securities as provided in Section 9.2(b), in which case the Company or
the Holders of Securities calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in principal amount of the
Outstanding Securities represented at the meeting.
(c) At any meeting, each Holder of a Security or proxy shall be
entitled to one vote for each U.S.$1,000 principal amount of Securities
held or represented by him; provided, however, that no vote shall be
cast or counted at any meeting in respect of any Security 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,
except as a Holder of a Security or proxy.
(d) Any meeting of Holders of Securities duly called pursuant to
Section 9.2 at which a quorum is present may be adjourned from time to
time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities represented at the meeting, and the meeting may
be held as so adjourned without further notice.
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SECTION 9.6.Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by
proxy and the principal amounts at Stated Maturity and serial numbers of
the Outstanding Securities 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,
at least in duplicate, of the proceedings of each meeting of Holders of
Securities 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 given as provided
in Section 9.2 and, if applicable, Section 9.4. Each copy shall be
signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to the
Company and another 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.
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ARTICLE TEN
COVENANTS
SECTION 10.1.Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually
pay the principal of and premium, if any, and interest on the Securities
in accordance with the terms of the Securities and this Indenture. The
Company will deposit or cause to be deposited with the Trustee, one
Business Day prior to the Stated Maturity of any Security or one
Business Day prior to the due date for any installment of interest, all
payments so due, which payments shall be in immediately available funds
on the date of such Stated Maturity or due date, as the case may be.
SECTION 10.2.Maintenance of Offices or Agencies.
The Company hereby appoints the Corporate Trust Office of the
Trustee as its agent in the Borough of Manhattan, The City of New York,
where Securities may be presented or surrendered for payment, where
Registered Securities may be surrendered for registration of transfer or
exchange, where Registered Securities may be surrendered for conversion
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served.
The Company may at any time and from time to time vary or terminate
the appointment of any such agent or appoint any additional agents for
any or all of such purposes; provided, however, that until all of the
Securities have been delivered to the Trustee for cancellation, or
moneys sufficient to pay the principal of, premium, if any, and interest
on the Securities have been made available for payment and either paid
or returned to the Company pursuant to the provisions of Section 10.3,
the Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or
surrendered for payment and conversion, where Securities may be
surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to
the Trustee, and notice to the Holders in accordance with Section 1.6,
of the appointment or termination of any such agents and of the location
and any change in the location of any such office or agency.
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, presentations and surrenders may be made and notices and
demands may be served on the Corporate Trust Office of the Trustee.
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SECTION 10.3.Money for Security Payments to Be Held in Trust.
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
(together with any Liquidated Damages in respect thereof) on any of the
Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any,
or interest (together with any Liquidated Damages in respect thereof) so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and the Company will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
one Business Day prior to each due date of the principal of, premium, if
any, or interest (together with any Liquidated Damages in respect
thereof) on any Securities, deposit with the Trustee a sum sufficient to
pay the principal, premium, if any, or interest (together with any
Liquidated Damages in respect thereof) so becoming due, such sum to be
held for the benefit of the Persons entitled to 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 so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of
the principal of, premium, if any, or interest on
Securities for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by
the Company (or any other obligor upon the Securities)
in the making of any payment of principal, premium, if
any, or interest; and
(3) at any time during the continuance of any
such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held by such
Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such
sums were held by the Company or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
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Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of,
premium, if any, or interest (including Liquidated Damages) on any
Security and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease.
SECTION 10.4.Existence.
Subject to Article Seven, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Holders.
SECTION 10.5.Maintenance of Properties.
The Company will cause all properties used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section
shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material
respect to the Holders.
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SECTION 10.6.Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or
discharged, before the same may become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company
or any Subsidiary or upon the income, profits or property of the Company
or any Subsidiary, (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien or charge upon the
property of the Company or any Subsidiary, and (3) all stamps and other
duties, if any, which may be imposed by the United States or the United
Kingdom or any political subdivision thereof or therein in connection
with the issuance, transfer, exchange or conversion of any Securities or
with respect to this Indenture; provided, however, that, in the case of
clauses (1) and (2), the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 10.7.Registration and Listing.
Within a reasonable time prior to the Exchange Date, the Company
(i) will effect all registrations with, and obtain all approvals by, all
governmental authorities that may be necessary under any United States
Federal or state law (including the Securities Act, the Exchange Act and
state securities and Blue Sky laws) before the shares of Common Stock
issuable upon conversion of Securities may be lawfully issued and
delivered, and thereafter publicly traded (if permissible under the
Securities Act), and qualified or listed as contemplated by clause (ii)
(it being understood that the Company shall not be required to register
the Securities under the Securities Act, except pursuant to the
Registration Rights Agreement referred to in Section 10.11); and (ii)
will qualify the shares of Common Stock required to be issued and
delivered upon conversion of Securities, prior to such issuance or
delivery, for quotation on the Nasdaq National Market or, if the Common
Stock is not then quoted on the Nasdaq National Market, list the Common
Stock on each national securities exchange on which outstanding Common
Stock is listed or quoted at the time of such delivery. Nothing in this
Section 10.7 will limit the application of Section 10.11.
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SECTION 10.8.Statement by Officers as to Default.
The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company an Officers' Certificate stating
that in the course of performance by the signers of their duties as such
officers of the Company they would normally obtain knowledge of whether
any default exists in the performance and observance of any of the
terms, provisions and conditions of this Indenture and whether the
Company has kept, observed, performed and fulfilled its obligations
under this Indenture. Such Certificate shall further state, as to each
such officer signing such Certificate, to the best of the knowledge of
such officer, as of the date of such Officers' Certificate, (a) whether
any such default exists, (b) whether the Company during the preceding
fiscal year kept, observed, performed and fulfilled each and every
covenant and obligation of the Company under this Indenture and (c)
whether there was any default in the performance and observance of any
of the terms, provisions or conditions of this Indenture during such
preceding fiscal year. If the officers signing the Certificate know of
such a default, whether then existing or occurring during such preceding
fiscal year, the Officers' Certificate shall describe such default and
its status with particularity. The Company shall also promptly notify
the Trustee if the Company's fiscal year is changed so that the end
thereof is on any date other than the then current fiscal year end date.
The Company will deliver to the Trustee, forthwith upon becoming
aware of any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or any Event of
Default, an Officers' Certificate specifying with particularity such
default or Event of Default and further stating what action the Company
has taken, is taking or proposes to take with respect thereto.
Any notice required to be given under this Section 10.8 shall be
delivered to the Trustee at its Corporate Trust Office.
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SECTION 10.9.Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, upon the request of a Holder of a Restricted
Security or the holder of shares of Common Stock issued upon conversion
thereof, the Company will promptly furnish or cause to be furnished Rule
144A Information (as defined below) to such Holder of Restricted
Securities or such holder of shares of Common Stock issued upon
conversion of Restricted Securities, or to a prospective purchaser of
any such security designated by any such Holder or holder, as the case
may be, to the extent required to permit compliance by such Holder or
holder with Rule 144A under the Securities Act (or any successor
provision thereto) in connection with the resale of any such security;
provided, however, that the Company shall not be required to furnish
such information in connection with any request made on or after the
date which is three years from the later of (i) the date such a security
(or any such predecessor security) was last acquired from the Company or
(ii) the date such a security (or any such predecessor security) was
last acquired from an "affiliate" of the Company within the meaning of
Rule 144 under the Securities Act (or any successor provision thereto).
"Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto).
SECTION 10.10.Resale of Certain Securities; Reporting Issuer.
During the period beginning on the last date of original issuance
of the Securities and ending on the date that is three years from such
date, the Company will not, and will use its best efforts not to permit
any of its "affiliates" (as defined under Rule 144 under the Securities
Act or any successor provision thereto) to, resell (x) any Securities
which constitute "restricted securities" under Rule 144 or (y) any
securities into which the Securities have been converted under this
Indenture which constitute "restricted securities" under Rule 144, that
in either case have been reacquired by any of them. The Trustee shall
have no responsibility in respect of the Company's performance of its
agreement in the preceding sentence.
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SECTION 10.11.Registration Rights.
The Company agrees that the Holders from time to time of
Registrable Securities (as defined below) are entitled to the benefits
of a Registration Rights Agreement, dated as of May 17, 1996 (the
"Registration Rights Agreement"), executed by the Company. Pursuant to
the Registration Rights Agreement, the Company has agreed for the
benefit of the Holders from time to time of Registrable Securities, at
the Company's expense, (i) to file within 90 days after the first date
of original issuance of the Securities, a shelf registration statement
(the "Shelf Registration Statement") with the Commission with respect to
resales of the Registrable Securities, (ii) to use its best efforts to
cause such Shelf Registration Statement to be declared effective by the
Commission within the 180 days after such date, and (iii) to use its
best efforts to maintain such Shelf Registration Statement continuously
effective under the Securities Act for a period of three years from the
last date of original issuance of the Securities or, if earlier, (A)
until there are no outstanding Registrable Securities or (B) until, in
the written opinion of independent counsel to the Company, all
outstanding Registrable Securities held by persons that are not
affiliates of the Company may be resold without registration under the
Securities Act pursuant to Rule 144(k) under the Securities Act or any
successor provision thereof.
If (i) on or prior to 90 days following the date of original
issuance of the Securities, a Shelf Registration Statement has not been
filed with the Commission, or (ii) on or prior to the 180th day
following the first date of original issuance of the Securities, such
Shelf Registration Statement is not declared effective (each, a
"Registration Default"), additional interest ("Liquidated Damages") will
accrue on the Securities from and including the day following such
Registration Default to but excluding the day on which such Registration
Default has been cured. Liquidated Damages will be paid semi-annually in
arrears, with the first semi-annual payment due on the first Interest
Payment Date in respect of the Securities following the date on which
such Liquidated Damages begin to accrue, and will accrue at a rate per
annum equal to an additional one-quarter of one percent (0.25%) of the
principal amount of the Securities to and including the 90th day
following such Registration Default and at a rate per annum equal to
one-half of one percent (0.50%) thereof from and after the 91st day
following such Registration Default. In the event that the Shelf
Registration Statement ceases to be effective prior to the third annual
anniversary of the initial effective date of the Shelf Registration
Statement or such earlier date as is provided in the Registration Rights
Agreement for a period in excess of 60 days, whether or not consecutive,
during any 12-month period, then the interest rate borne by the
Securities shall increase by an additional one-half of one percent
(0.50%) per annum on the 61st day of the applicable 12-month period such
Shelf Registration Statement ceases to be effective to but excluding the
day on which the Shelf Registration Statement again becomes effective.
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Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of, premium, if any, or interest on, or in
respect of, any Security, such mention shall be deemed to include
mention of the payment of Liquidated Damages provided for in this
Section to the extent that, in such context, Liquidated Damages are,
were or would be payable in respect thereof pursuant to the provisions
of this Section and express mention of the payment of Liquidated Damages
(if applicable) in any provisions hereof shall not be construed as
excluding Liquidated Damages in those provisions hereof where such
express mention is not made.
For the purposes of the Registration Rights Agreement, "Registrable
Securities" means all or any portion of the Securities issued from time
to time under this Indenture and the shares of Common Stock issuable
upon conversion of such Securities, including any Securities initially
issued in bearer form and later exchanged for Securities; provided;
however, that a Security ceases to be a Registrable Security when it is
no longer a Restricted Registrable Security. For the purposes of the
Registration Rights Agreement, "Restricted Registrable Security" means
any Security or share of Common Stock issuable upon conversion thereof
except any such Security or share of Common Stock which (i) has been
effectively registered under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 or is transferable pursuant to
paragraph (k) of such Rule 144 (or any successor provision thereto),
(iii) has been sold in compliance with Regulation S and does not
constitute the unsold allotment of a distributor within the meaning of
Regulation S, or (iv) has otherwise been transferred and a new Security
or share of Common Stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company in
accordance with Section 3.5(b) of this Indenture.
If a Security is a Registrable Security, and the Holder thereof
elects to sell such Security pursuant to the Shelf Registration
Statement then, by such election, the Holder of such Security will have
agreed to be bound by the terms of the Registration Rights Agreement
relating to the Registrable Securities which are the subject of such
election.
The Company does not grant registration rights under this Section
10.11. This Section 10.11 is qualified in its entirety by the
Registration Rights Agreement (a copy of which is available for
inspection by any Holder of Registrable Securities at the Company's
offices as provided in the Registration Rights Agreement).
For the purposes of the Registration Rights Agreement, other than
the giving of notices pursuant thereto, the term "Holder" includes any
Person that has a beneficial interest in any Global Security.
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SECTION 10.12.Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or conditions set forth in Sections 10.4 to 10.6, inclusive
(other than a covenant or condition which under Article Eight cannot be
modified or amended without the consent of the Holder of each
Outstanding Security affected), if before the time for such compliance
the Holders shall, through the written consent of, or the adoption of a
resolution at a meeting of Holders of the Outstanding Securities at
which a quorum is present by, not less than a majority in principal
amount of the Outstanding Securities, either waive such compliance in
such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the
duties of the Trustee or any Paying or Conversion Agent in respect of
any such covenant or condition shall remain in full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1.Right of Redemption.
The Securities may be redeemed in accordance with the provisions of
the forms of Securities set forth in Section 2.2.
SECTION 11.2.Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of the Securities
or this Indenture, shall be made in accordance with such provision and
this Article Eleven.
SECTION 11.3.Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the
election of the Company of any of the Securities, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless
a shorter notice shall be satisfactory to the Trustee), notify the
Trustee in writing of such Redemption Date. If the Securities are to be
redeemed pursuant to an election of the Company which is subject to a
condition specified in the forms of Securities set forth in Section 2.2,
the Company shall furnish the Trustee with an Officers' Certificate
stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent
to the right of the Company so to redeem have occurred.
SECTION 11.4.Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected by the Trustee within two
Business Days after it receives the notice described in 11.3, from the
Outstanding Securities not previously called for redemption. Partial
redemption must be in an amount not less than U.S.$1,000,000 principal
amount of Securities.
If any Security selected for partial redemption is converted in
part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such
Security shall be deemed (so far as may be) to be the portion selected
for redemption. Securities which have been converted during a selection
of Securities to be redeemed may be treated by the Trustee as
Outstanding for the purpose of such selection.
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The Trustee shall promptly notify the Company and each Security
Registrar in writing of the securities selected for redemption and, in
the case of any Securities selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which
has been or is to be redeemed.
SECTION 11.5.Notice of Redemption.
Notice of redemption shall be given in the manner provided in
Section 1.6 to the Holders of Securities to be redeemed not less than 30
nor more than 60 days prior to the Redemption Date, and such notice
shall be irrevocable.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, and accrued
interest, if any,
(3) if less than all Outstanding Securities are
to be redeemed, the aggregate principal amount of
Securities to be redeemed and the aggregate principal
amount of Securities which will be outstanding after
such partial redemption,
(4) that on the Redemption Date the
Redemption Price, and accrued interest, if any, will
become due and payable upon each such Security to be
redeemed, and that interest thereon shall cease to
accrue on and after said date,
(5) the Conversion Rate, the date on which
the right to convert the Securities to be redeemed
will terminate and the places where such Securities
may be surrendered for conversion, and
(6) the place or places where such Securities,
maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price and
accrued interest, if any.
In case of a partial redemption, the first notice given shall
specify the last date on which exchanges or transfers of Securities may
be made pursuant to Section 3.5 and the second
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notice shall specify the serial and CUSIP or ISIN numbers (if any) and the
portions thereof called for redemption.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name of and at the expense of the
Company. Notice of redemption of Securities to be redeemed at the
election of the Company received by the Trustee shall be given by the
Trustee to each Paying Agent in the name of and at the expense of the
Company.
SECTION 11.6.Deposit of Redemption Price.
Not less than one Business Day prior to any Redemption Date, the
Company shall deposit with the Trustee or with the Paying Agent if so
directed by the Trustee (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an
amount of money (which shall be in immediately available funds on such
Redemption Date) sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date
other than any Securities called for redemption on that date which have
been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and
held in trust for the redemption of such Security shall (subject to any
right of the Holder of such Security, if a Security, or any Predecessor
Security to receive interest as provided in the last paragraph of
Section 3.7) be paid to the Company on Company Request or, if then held
by the Company, shall be discharged from such trust.
SECTION 11.7.Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption
Price, including accrued interest) such Securities shall cease to bear
interest. Upon surrender of any Security for redemption in accordance
with said notice, maturing after the Redemption Date, such Security
shall be paid by the Company at the Redemption Price together with
accrued and unpaid interest to the Redemption Date; provided, however,
that installments of interest on Securities whose Stated Maturity is on
or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on
the relevant Record Date according to their terms and the provisions of
Section 3.7.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of, premium, if
any, and, to the extent permitted by applicable law, accrued interest on
such Security shall, until paid, bear interest from the Redemption Date
at a rate of 5% per annum and such Security shall remain convertible
until the principal of such Security (or portion thereof, as the case
may be) shall have been paid or duly provided for.
SECTION 11.8.Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that
purpose pursuant to Section 10.2 (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 make
available for delivery to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
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ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1.Conversion Privilege and Conversion Rate.
Subject to and upon compliance with the provisions of this Article,
at the option of the Holder thereof, any Security may be converted into
fully paid and nonassessable shares (calculated as to each conversion to
the nearest 1/100th of a share) of Common Stock of the Company at the
Conversion Rate, determined as hereinafter provided, in effect at the
time of conversion. Such conversion right shall commence on August 20,
1996 and expire at the close of business on May 15, 2001, subject, in
the case of conversion of any Global Security, to any Applicable
Procedures. In case a Security or portion thereof is called for
redemption at the election of the Company or the Holder thereof
exercises his right to require the Company to repurchase the Security,
such conversion right in respect of the Security, or portion thereof so
called, shall expire at the close of business on the Redemption Date or
the Repurchase Date, as the case may be, unless the Company defaults in
making the payment due upon redemption or repurchase, as the case may be
(in each case subject as aforesaid to any Applicable Procedures with
respect to any Global Security).
The rate at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Rate") shall be initially
24.1080 shares of Common Stock for each U.S.$1,000 principal amount of
Securities. The Conversion Rate shall be adjusted in certain instances
as provided in this Article Twelve.
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SECTION 12.2.Exercise of Conversion Privilege.
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In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank (in the case of any Security), at
any office or agency of the Company maintained for that purpose pursuant
to Section 10.2, accompanied by a duly signed conversion notice
substantially in the form set forth in Section 2.4 stating that the
Holder elects to convert such Security or, if less than the entire
principal amount thereof is to be converted, the portion thereof to be
converted. Each Security surrendered for conversion (in whole or in
part) during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date shall (except in the case of any Security
or portion thereof which has been called for redemption on a Redemption
Date, or is repurchasable on a Repurchase Date, occurring, in either
case, within such period) 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 of such Security (or part thereof, as the case may be) being
surrendered for conversion. The interest so payable on such Interest
Payment Date with respect to any Security (or portion thereof, if
applicable) which has been called for redemption on a Redemption Date,
or is repurchasable on a Repurchase Date, occurring, in either case,
during the period from the close of business on any Record Date next
preceding any Interest Payment Date to the opening of business on such
Interest Payment Date, which Security (or portion thereof, if
applicable) is surrendered for conversion during such period, shall be
paid to the Holder of such Security being converted in an amount equal
to the interest that would have been payable on such Security if such
Security had been converted as of the close of business on such Interest
Payment Date. The interest so payable on such Interest Payment Date in
respect of any Security (or portion thereof, as the case may be) which
has not been called for redemption on a Redemption Date, or is not
eligible for repurchase on a Repurchase Date, occurring, in either case,
during the period from the close of business on any Record Date next
preceding any Interest Payment Date to the opening of business on such
Interest Payment Date, which Security (or portion thereof, as the case
may be) is surrendered for conversion during such period, shall be paid
to the Holder of such Security as of such Regular Record Date. Interest
payable on any Interest Payment Date in respect of any Security
surrendered for conversion or repurchase on or after an Interest Payment
Date shall be paid to the Holder of such Security as of the next
preceding Regular Record Date, notwithstanding the exercise of the right
of conversion or repurchase. Except as provided in this paragraph and
subject to the last paragraph of Section 3.7, no cash payment or
adjustment shall be made upon any conversion on account of any interest
accrued from the Interest Payment Date next preceding the conversion
date, in respect of any Security (or part thereof, as the case may be)
surrendered for conversion, or on account of any dividends on the Common
Stock issued upon conversion. The Company's delivery to the Holder of
the number of shares of Common Stock (and cash in lieu of fractions
thereof, as provided in this Indenture) into which a Security is
convertible will be deemed to satisfy the Company's obligation to pay
the principal amount of the Security.
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Securities shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time
the rights of the Holders of such Securities as Holders shall cease, and
the Person or Persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as practicable on
or after the conversion date, the Company shall issue and deliver to the
Trustee, for delivery to the Holder, a certificate or certificates for
the number of full shares of Common Stock issuable upon conversion,
together with payment in lieu of any fraction of a share, as provided in
Section 12.3.
All shares of Common Stock delivered upon such conversion of
Restricted Securities shall rank PARI PASSU with other shares of Common
Stock of the Company and shall bear restrictive legends substantially in
the form of the legends required to be set forth on the Restricted
Securities pursuant to Section 3.5 and shall be subject to the
restrictions on transfer provided in such legends. Neither the Trustee
nor any agent maintained for the purpose of such conversion shall have
any responsibility for the inclusion or content of any such restrictive
legends on such Common Stock; provided, however, that the Trustee or any
agent maintained for the purpose of such conversion shall have provided,
to the Company or to the Company's transfer agent for such Common Stock,
prior to or concurrently with a request to the Company to deliver such
Common Stock, written notice that the Securities delivered for
conversion are Restricted Securities.
In the case of any Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the
Company, a new Security or Securities of authorized denominations in an
aggregate principal amount equal to the unconverted portion of the
principal amount of such Security. A Security may be converted in part,
but only if the principal amount of such Security to be converted is any
integral multiple of U.S.$1,000 and the principal amount of such
security to remain Outstanding after such conversion is equal to
U.S.$1,000 or any integral multiple of $1,000 in excess thereof.
If shares of Common Stock to be issued upon conversion of a
Restricted Security, or Securities to be issued upon conversion of a
Restricted Security in part only, are to be registered in a name other
than that of the beneficial owner of such Restricted Security, then such
Holder must deliver to the Conversion Agent a Surrender Certificate,
dated the date of surrender of such Restricted Security and signed by
such beneficial owner, as to compliance with the restrictions on
transfer applicable to such Restricted Security. Neither the Trustee nor
any Conversion Agent, Registrar or Transfer Agent shall be required to
register in a name other than that of the beneficial owner, shares of
Common Stock or Securities issued upon conversion of any such Restricted
Security not so accompanied by a properly completed Surrender
Certificate.
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SECTION 12.3.Fractions of Shares.
No fractional shares of Common Stock shall be issued upon
conversion of any Security or Securities. If more than one Security
shall be surrendered for conversion at one time by the same Holder, the
number of full shares which shall be issuable upon conversion thereof
shall be computed on the basis of the aggregate principal amount of the
Securities (or specified portions thereof) so surrendered. Instead of
any fractional share of Common Stock which would otherwise be issuable
upon conversion of any Security or Securities (or specified portions
thereof), the Company shall calculate and pay a cash adjustment in
respect of such fraction (calculated to the nearest 1/100th of a share)
in an amount equal to the same fraction of the Closing Price Per Share
at the close of business on the day of conversion or, alternatively, the
Company shall round up to the next higher whole share.
SECTION 12.4.Adjustment of Conversion Rate.
The Conversion Rate shall be subject to adjustments from time to
time as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution
shall be increased by dividing such Conversion Rate 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 increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (1), 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.
(2) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the
current market price per share (determined as provided in paragraph (8)
of this Section 12.4) of the Common Stock on the date fixed for the
determination of shareholders entitled to receive such rights, options
or warrants, the Conversion Rate in effect at the opening of business on
the day following the date fixed for such determination shall be
increased by dividing such Conversion Rate 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 plus the
number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at such current market price and
the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number
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of shares of Common Stock so offered for subscription or purchase, such increase
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
paragraph (2), 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 issue any rights, options or
warrants in respect of shares of Common Stock held in the treasury of the
Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately
increased, and, conversely, in case outstanding shares of Common Stock
shall each be combined into a smaller number of shares of Common Stock,
the Conversion Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, 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.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness, shares
of any class of capital stock, or other property (including securities,
but excluding (i) any rights, options or warrants referred to in
paragraph (2) of this Section, (ii) any dividend or distribution paid
exclusively in cash, (iii) any dividend or distribution referred to in
paragraph (1) of this Section and (iv) any merger or consolidation to
which Section 12.11 applies), the Conversion Rate shall be adjusted so
that the same shall equal the rate determined by dividing the Conversion
Rate in effect immediately prior to the close of business on the date
fixed for the determination of shareholders entitled to receive such
distribution by a fraction of which the numerator shall be the current
market price per share (determined as provided in paragraph (8) of this
Section 12.4) of the Common Stock on the date fixed for such
determination less the then fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a Board Resolution filed with the Trustee) of the portion
of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such adjustment
to become effective immediately prior to the opening of business on the
day following the date fixed for the determination of shareholders
entitled to receive such distribution.
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(5) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 12.11
applies or as part of a distribution referred to in paragraph (4) of
this Section) in an aggregate amount that, combined together with (I)
the aggregate amount of any other cash distributions to all holders of
its Common Stock made exclusively in cash within the 12 months preceding
the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (5) has been made and (II) the
aggregate of any cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) of consideration payable in respect of
any tender offer by the Company or any of its subsidiaries for all or
any portion of the Common Stock concluded within the 12 months preceding
the date of payment of such distribution and in respect of which no
adjustment pursuant to paragraph (6) of this Section 12.4 has been made
(the "combined cash and tender amount") exceeds 12.5% of the product of
the current market price per share (determined as provided in paragraph
(8) of this Section 12.4) of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive
such distribution times the number of shares of Common Stock outstanding
on such date (the "aggregate current market price"), then, and in each
such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Conversion Rate in
effect immediately prior to the close of business on the date fixed for
determination of the shareholders entitled to receive such distribution
by a fraction (i) the numerator of which shall be equal to the current
market price per share (determined as provided in paragraph (8) of this
Section) of the Common Stock on the date fixed for such determination
less an amount equal to the quotient of (x) the excess of such combined
cash and tender amount over such aggregate current market price divided
by (y) the number of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8)
of this Section 12.4) of the Common Stock on such date for
determination.
(6) In case a tender offer made by the Company or any Subsidiary
for all or any portion of the Common Stock shall expire and such tender
offer (as amended upon the expiration thereof) shall require the payment
to shareholders (based on the acceptance (up to any maximum specified in
the terms of the tender offer) of Purchased Shares (as defined below))
of an aggregate consideration having a fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) that combined together with (I) the
aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), as of the expiration of such tender
offer, of consideration payable in respect of any other tender offer by
the Company or any Subsidiary for all or any portion of the Common Stock
expiring within the 12 months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to this paragraph
(6) has been made and (II) the aggregate amount of any cash
distributions to all holders of the
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Company's Common Stock within 12 months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to paragraph (5) of this
Section has been made (the "combined tender and cash amount") exceeds 10% of the
product of the current market price per share of the Common Stock (determined as
provided in paragraph (8) of this Section 12.4) as of the last time (the
"Expiration Time") tenders could have been made pursuant to such tender offer
(as it may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time, then, and in each
such case, immediately prior to the opening of business on the day after the
date of the Expiration Time, the Conversion Rate shall be adjusted so that the
same shall equal the rate determined by dividing the Conversion Rate immediately
prior to close of business on the date of the Expiration Time by a fraction (i)
the numerator of which shall be equal to (A) the product of (I) the current
market price per share of the Common Stock (determined as provided in paragraph
(8) of this Section 12.4) on the date of the Expiration Time multiplied by (II)
the number of shares of Common Stock outstanding (including any tendered shares)
on the Expiration Time less (B) the combined tender and cash amount, and (ii)
the denominator of which shall be equal to the product of (A) the current market
price per share of the Common Stock (determined as provided in paragraph (8) of
this Section 12.4) as of the Expiration Time multiplied by (B) the number of
shares of Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered 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").
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or
merger to which Section 12.11 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders
of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of shareholders
entitled to receive such distribution" and "the date fixed for such
determination" within the meaning of paragraph (4) of this Section), and
(b) a subdivision or combination, as the case may be, of the number of
shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision becomes
effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (3) of
this Section 12.4).
(8) For the purpose of any computation under paragraphs (2), (4),
(5) or (6) of this Section 12.4, the current market price per share of
Common Stock on any date shall be calculated by the Company and be
deemed to be the average of the daily Closing Prices Per Share for the
five consecutive Trading Days selected by the Company commencing not
more than 10 Trading Days before, and ending not later than, the earlier
of the day in question and the day before the "ex" date with respect to
the issuance or distribution requiring such computation. For purposes of
this
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paragraph, the term "`ex' date", when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of
this paragraph (9)) would require an increase or decrease of at least
one percent in such rate; provided, however, that any adjustments which
by reason of this paragraph (9) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
(10) The Company may make such increases in the Conversion Rate,
for the remaining term of the Securities or any shorter term, in
addition to those required by paragraphs (1), (2), (3), (4), (5) and (6)
of this Section 12.4, as it considers to be advisable in order to avoid
or diminish any income tax to any holders of shares of Common Stock
resulting from any dividend or distribution of stock or issuance of
rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes. The Company shall have the
power to resolve any ambiguity or correct any error in this paragraph
(10) and its actions in so doing shall, absent manifest error, be final
and conclusive.
SECTION 12.5.Notice of Adjustments of Conversion Rate.
Whenever the Conversion Rate is adjusted as herein provided:
(1) the Company shall compute the adjusted
Conversion Rate in accordance with Section 12.4 and
shall prepare a certificate signed by the Chief
Financial Officer of the Company setting forth the
adjusted Conversion Rate and showing in reasonable
detail the facts upon which such adjustment is based,
and such certificate shall promptly be filed with the
Trustee and with each Conversion Agent; and
(2) a notice stating that the Conversion Rate
has been adjusted and setting forth the adjusted
Conversion Rate shall forthwith be prepared, and as
soon as practicable after it is prepared, such notice
shall be provided by the Company to all Holders in
accordance with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.
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SECTION 12.6.Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable (i)
otherwise than exclusively in cash or (ii) exclusively
in cash in an amount that would require any adjustment
pursuant to Section 12.4; or
(b) the Company shall authorize the granting to
the holders of its Common Stock of rights, options or
warrants to subscribe for or purchase any shares of
capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock
of the Company, or of any consolidation, merger or
share exchange to which the Company is a party and for
which approval of any shareholders of the Company is
required, or of the conveyance, sale, transfer or
lease 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; or
(e) the Company or any Subsidiary shall commence
a tender offer for all or a portion of the Company's
outstanding shares of Common Stock (or shall amend any
such tender offer);
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.2, and shall
cause to be provided to all Holders in accordance with Section 1.6, at least 20
days (or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record, expiration or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights, options or warrants, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined, (y) the date on which the right to make tenders under such tender
offer expires or (z) the date on which such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up. Neither the failure to give such notice
or the notice referred to in the following paragraph nor any
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defect therein shall affect the legality or validity of the proceedings
described in clauses (a) through (e) of this Section 12.6. If at the time the
Trustee shall not be the conversion agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
The preceding paragraph to the contrary notwithstanding, the
Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.2, and
shall cause to be provided to all Holders in accordance with Section
1.6, notice of any tender offer by the Company or any Subsidiary for all
or any portion of the Common Stock at or about the time that such notice
of tender offer is provided to the public generally.
SECTION 12.7.Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock,
for the purpose of effecting the conversion of Securities, the full
number of shares of Common Stock then issuable upon the conversion of
all Outstanding Securities.
SECTION 12.8.Taxes on Conversions.
Except as provided in the next sentence, the Company will pay any
and all taxes and duties that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Securities pursuant
hereto. The Company shall not, however, be required to pay any tax or
duty which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock in a name other than that
of the Holder of the Security or Securities to be converted, and no such
issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax or duty,
or has established to the satisfaction of the Company that such tax or
duty has been paid.
SECTION 12.9.Covenant as to Common Stock.
The Company agrees that all shares of Common Stock which may be
delivered upon conversion of Securities, upon such delivery, will have
been duly authorized and validly issued and will be fully paid and
nonassessable and, except as provided in Section 12.8, the Company will
pay all taxes, liens and charges with respect to the issue thereof.
SECTION 12.10.Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee or the Paying Agent or its agent to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in
Section 3.8.
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SECTION 12.11.Provision in Case of Consolidation, Merger or Sale of Assets.
In case of any consolidation or merger of the Company with or into
any other Person, any merger of another Person with or into the Company
(other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common
Stock of the Company) or any conveyance, sale, transfer or lease of all
or substantially all of the assets of the Company, the Person formed by
such consolidation or resulting from such merger or which acquires such
assets, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
Outstanding shall have the right thereafter, during the period such
Security shall be convertible as specified in Section 12.1, to convert
such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance,
sale, transfer or lease by a holder of the number of shares of Common
Stock of the Company into which such Security might have been converted
immediately prior to such consolidation, merger, conveyance, sale,
transfer or lease, assuming such holder of Common Stock of the Company
(i) is not a Person with which the Company consolidated or merged with
or into or which merged into or with the Company or to which such
conveyance, sale, transfer or lease was made, as the case may be
("Constituent Person"), or an Affiliate of a Constituent Person and (ii)
failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease (provided
that if the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, sale, transfer,
or lease is not the same for each share of Common Stock of the Company
held immediately prior to such consolidation, merger, conveyance, sale,
transfer or lease by others than a Constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have
been exercised ("Non-electing Share"), then for the purpose of this
Section 12.11 the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, sale, transfer
or lease by the holders of 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, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section 12.11 shall similarly apply to successive
consolidations, mergers, conveyances, sales, transfers or leases. Notice
of the execution of such a supplemental indenture shall be given by the
Company to the Holder of each Security as provided in Section 1.6
promptly upon such execution.
Neither the Trustee, any Paying Agent nor any Conversion Agent
shall be under any responsibility to determine the correctness of any
provisions contained in any such supplemental indenture relating either
to the kind or amount of shares of stock or other securities or property
or cash receivable by Holders of Securities upon the conversion of their
Securities after any such
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consolidation, merger, conveyance, transfer, sale or lease or to any such
adjustment, but may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, an Opinion of Counsel with
respect thereto, which the Company shall cause to be furnished to the Trustee
upon request.
SECTION 12.12.Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 6.1, and any
Conversion Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Rate, or
with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same, or whether a
supplemental indenture need be entered into. Neither the Trustee,
subject to the provisions of Section 6.1, nor any Conversion Agent shall
be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or
cash, which may at any time be issued or delivered upon the conversion
of any Security; and it or they do not make any representation with
respect thereto. Neither the Trustee, subject to the provisions of
Section 6.1, nor any Conversion Agent shall be responsible for any
failure of the Company to make or calculate any cash payment or to
issue, transfer or deliver any shares of Common Stock or share
certificates or other securities or property or cash upon the surrender
of any Security for the purpose of conversion; and the Trustee, subject
to the provisions of Section 6.1, and any Conversion Agent shall not be
responsible for any failure of the Company to comply with any of the
covenants of the Company contained in this Article.
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ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1.Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article (subject
to the provisions of Article Four), the indebtedness represented by the
Securities and the payment of the principal of (and premium, if any) and
interest on (including Liquidation Damages), and any payment of the
Repurchase Price with respect to, each and all of the Securities are
hereby expressly made subordinate and subject in right of payment to the
prior payment in full of all Senior Debt.
SECTION 13.2.Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding in connection therewith, relative to the
Company or to its creditors, as such, or to its assets, or (b) any
liquidation, dissolution or other winding up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or any
other marshalling of assets and liabilities of the Company, then and in
any such event the holders of Senior Debt shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of
all Senior Debt in cash before the Holders of the Securities are
entitled to receive any payment on account of principal of (or premium,
if any) or interest on the Securities or on account of the purchase,
redemption or other acquisition of Securities, and to that end the
holders of Senior Debt shall be entitled to receive, for application to
the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, which may be payable
or deliverable in respect of the Securities in any such case,
proceeding, dissolution, liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received
any payment or distribution of assets of the Company of any kind or
character, whether in cash, securities or other property, before all
Senior Debt is paid in full, and if such fact shall, at or prior to the
time of such payment or distribution, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such
payment or distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets
of the Company for application to the payment of all Senior Debt
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remaining unpaid, to the extent necessary to pay all Senior Debt in full, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt.
For purposes of this Article only, the words "cash, securities or
other property" 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 which shares of stock are subordinated in right of payment
to all then outstanding Senior Debt to substantially the same extent as,
or to a greater extent than, the Securities are so subordinated as
provided in this Article. The consolidation of the Company with, or the
merger of the Company into, another Person or the liquidation or
dissolution of the Company following the conveyance or transfer of its
properties and assets substantially as an entirety to another Person
upon the terms and conditions set forth in Article Seven shall not be
deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshalling of assets and
liabilities of the Company for the purposes of this Section if the
Person formed by such consolidation or into which the Company is merged
or which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article Seven.
SECTION 13.3.No Payment When Senior Debt in Default.
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on (including a
default under any redemption or repurchase obligation with respect to)
any Senior Debt beyond any applicable grace period with respect thereto
or in the event that any other event of default with respect to any
Senior Debt shall have occurred and be continuing which would then
permit the holders of such Senior Debt to declare such Senior Debt due
and payable prior to the date on which it would otherwise have become
due and payable, unless and until such event of default shall have been
cured or waived or shall have ceased to exist after written notice to
the Company and the Trustee by any holder of such Senior Debt, or (b) in
the event any judicial proceeding shall be pending with respect to any
such default in payment or event of default, then no payment shall be
made by the Company on account of principal of (or premium, if any) or
interest on the Securities or on account of the purchase, redemption or
other acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at
or prior to the time of such payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Company, in
the case of the Trustee, or the Trustee, in the case of such Holder.
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The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.4.Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Securities shall prevent (a) the Company, at any time
except during the pendency of any case, proceeding, dissolution,
liquidation or other winding up, assignment for the benefit of creditors
or other marshalling of assets and liabilities of the Company referred
to in Section 13.2 or under the conditions described in Section 13.3,
from making payments at any time of principal of (and premium, if any)
or interest on the Securities, or (b) the application by the Trustee of
any money deposited with it hereunder to the payment of or on account of
the principal of (and premium, if any) or interest on the Securities or
the retention of such payment by the Holders, if, at the time of such
application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
SECTION 13.5.Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt, the Holders of
the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Debt pursuant to the
provisions of this Article to the rights of the holders of such Senior
Debt to receive payments and distributions of cash, property and
securities applicable to the Senior Debt until the principal of (and
premium, if any) and interest on the Securities shall be paid in full.
For purposes of such subrogation, no payments or distributions to the
holders of the Senior Debt of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except
for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Senior Debt by Holders of
the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to
or on account of the Senior Debt.
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SECTION 13.6.Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities
on the one hand and the holders of Senior Debt on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall (a) impair, as among the Company,
its creditors other than holders of Senior Debt and the Holders of the
Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of
(and premium, if any) and interest on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b)
affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior
Debt; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Debt to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such
Holder.
SECTION 13.7.Trustee to Effectuate Subordination.
Each holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee his attorney-in-fact for any and
all such purposes.
SECTION 13.8.No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt 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 of any Senior Debt, or by any non-compliance by the Company with
the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of
the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided
in this Article or the obligations hereunder of the Holders of the
Securities to the holders of Senior Debt, do any one or more of the
following: (i) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, Senior Debt, or otherwise
amend or supplement in any manner Senior Debt or any instrument
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evidencing the same or any agreement under which Senior Debt is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt; (iii) release any Person liable in
any manner for the collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 13.9.Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment
to or by the Trustee in respect of the Securities. Notwithstanding the
provisions of this Article 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 to or by the
Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of
Senior Debt or from any trustee therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of
Section 6.1, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least two Business
Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the
payment of the principal of (and premium, if any) or interest on any
Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such
money was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to
such date.
Subject to the provisions of Section 6.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee
therefor) to establish that such notice has been given by a holder of
Senior Debt (or a trustee therefor). 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 Debt to participate in
any payment or distribution pursuant to this Article, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction
of the Trustee as to the amount of Senior Debt 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, 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 13.10.Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section
6.1, and the Holders of the Securities shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to
the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
SECTION 13.11.Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Debt shall be entitled by
virtue of this Article or otherwise.
SECTION 13.12.Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of
Senior Debt, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7.
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SECTION 13.13.Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the
term "Trustee" as used in this Article shall in such case (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 Section 13.12
shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as Paying Agent.
SECTION 13.14.Certain Conversions and Repurchases Deemed Payment.
For the purposes of this Article only, (1) the issuance and
delivery of junior securities upon conversion of Securities in
accordance with Article Twelve or upon the repurchase of Securities in
accordance with Article Fourteen shall not be deemed to constitute a
payment or distribution on account of the principal of or premium or
interest on Securities or on account of the purchase or other
acquisition of Securities, and (2) the payment, issuance or delivery of
cash, property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on
account of the principal of such Security. For the purposes of this
Section, the term "junior securities" means (a) shares of any stock of
any class of the Company and any cash, property or securities into which
the Securities are convertible pursuant to Article Twelve and (b)
securities of the Company which are subordinated in right of payment to
all Senior Debt 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 Securities are so subordinated as provided in
this Article. Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors other than holders of Senior Debt and the
Holders of the Securities, the right, which is absolute and
unconditional, of the Holder of any Security to convert such Security in
accordance with Article Twelve or to exchange such Security for Common
Stock in accordance with Article Fourteen if the Company elects to
satisfy the obligations under Article Fourteen by the delivery of Common
Stock.
SECTION 13.15.Rescission
The provisions of this Article Thirteen shall continue to be
effective or be reinstated, as the case may be, if at any time any
payment in respect of any of the Senior Debt is rescinded or must
otherwise be returned by the holder thereof upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, all as though
such payment had not been made.
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ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 14.1.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, but subject to the provisions of Section 14.2, to require the
Company to repurchase, and upon the exercise of such right the Company
shall repurchase, all of such Holder's Securities, or any portion of the
principal amount thereof that is equal to U.S.$1,000 or any integral
multiple of U.S.$1,000 in excess thereof (provided that no single
Security may be repurchased in part unless the portion of the principal
amount of such Security to be Outstanding after such repurchase is equal
to U.S.$1,000 or integral multiples of U.S.$1,000 in excess thereof), on
the date (the "Repurchase Date") that is 45 days after the date of the
Company Notice (as defined in Section 14.3) at a purchase price equal to
100% of the principal amount of the Securities to be repurchased plus
interest accrued to the Repurchase Date (the "Repurchase Price");
provided, however, that installments of interest on Securities whose
Stated Maturity is on or prior to the Repurchase Date shall be payable
to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date according to
their terms and the provisions of Section 3.7. Such right to require the
repurchase of the Securities shall not continue after a discharge of the
Company from its obligations with respect to the Securities in
accordance with Article Four, unless a Change in Control shall have
occurred prior to such discharge. At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the fulfillment by
the Company of the conditions set forth Section 14.2, by delivery of
shares of Common Stock having a fair market value equal to the
Repurchase Price as described in Section 14.2(a). Whenever in this
Indenture (including Sections 2.2, 3.1, 5.1(2) and 5.8) there is a
reference, in any context, to the principal of any Security as of any
time, such reference shall be deemed to include reference to the
Repurchase Price payable in respect of such Security 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; provided, however, that for the purposes of Article Thirteen, such
reference shall be deemed to include reference to the Repurchase Price
only if the Repurchase Price is payable in cash.
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SECTION 14.2.Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock.
The Company may elect to pay the Repurchase Price by delivery of
shares of Common Stock pursuant to Section 14.1 if and only if the
following conditions have been satisfied:
(a) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the Repurchase
Date of not less than the Repurchase Price. For purposes of this Section
14.2, the fair market value of shares of common stock shall be
determined by the Company and shall be equal to 95% of the average of
the Closing Prices Per Share for the five consecutive Trading Days
ending on and including the third Trading Day immediately preceding the
Repurchase Date;
(b) In the event any shares of Common Stock to be issued upon
repurchase of Securities hereunder require registration under any
Federal securities law before such shares may be freely transferrable
without being subject to any transfer restrictions under the Securities
Act upon repurchase, such registration shall have been completed and
shall have become effective prior to the Repurchase Date;
(c) In the event any shares of Common Stock to be issued upon
repurchase of Securities hereunder require registration with or approval
of any governmental authority under any State law or any other Federal
law before such shares may be validly issued or delivered upon
repurchase, such registration shall have been completed, have become
effective and such approval shall have been obtained, in each case,
prior to the Repurchase Date;
(d) The Shares of common stock deliverable in payment of the
Repurchase Price is or shall have been quoted on the Nasdaq National
Market or listed on a national securities exchange, in either case,
prior to the Repurchase Date; and
(e) All shares of Common Stock deliverable in payment of the
Repurchase Price shall be issued out of the Company's authorized but
unissued Common Stock and, will upon issue, be duly and validly issued
and fully paid and non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 14.2 are not
satisfied in accordance with the terms thereof, the Repurchase Price
shall be paid by the Company only in cash.
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SECTION 14.3.Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption
all of the Outstanding Securities, on or before the 30th day after the
occurrence of a Change of Control, the Company or, at the request and
expense of the Company on or before the 15th day after such occurrence,
the Trustee, shall give to all Holders of Securities, in the manner
provided in Section 1.6, notice (the "Company Notice") of the occurrence
of the Change of 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:
(1) the Repurchase Date,
(2) the date by which the repurchase right
must be exercised,
(3) the Repurchase Price, and whether the
Repurchase Price shall be paid by the Company in cash or by
delivery of shares of Common Stock,
(4) a description of the procedure which a
Holder must follow to exercise a repurchase right, and the
place or places where such Securities, maturing after the
Repurchase Date, are to be surrendered for payment of the
Repurchase Price and accrued interest, if any,
(5) that on the Repurchase Date the
Repurchase Price, and accrued interest, if any, will become
due and payable upon each such Security designated by the
Holder to be repurchased, and that interest thereon shall
cease to accrue on and after said date,
(6) the Conversion Rate then in effect, the
date on which the right to convert the principal amount of the
Securities to be repurchased will terminate and the place or
places where such Securities may be surrendered for
conversion, and
(7) the place or places that the certificate
required by Section 2.2 shall be delivered, and the form of
such certificate and the place or places that the Surrender
Certificate required by Section 14.3(j) shall be delivered.
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 Securities.
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If any of the foregoing provisions or other provisions of this
Article Fourteen 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 Securities to be repurchased (and, if any
Security is to be 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, in the event
that the Repurchase Price shall be paid in shares of Common Stock, the
name or names (with addresses) in which the certificate or certificates
for shares of Common Stock shall be issued, and (ii) the Securities with
respect to which the repurchase right is being exercised maturing after
the Repurchase Date. Such written notice shall be irrevocable, except
that the right of the Holder to convert the Securities with respect to
which the repurchase right is being exercised shall continue until the
close of business on the Repurchase Date.
(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 the Repurchase Price in cash or shares of Common
Stock, as provided above, for payment to the Holder on the Repurchase
Date or, if shares of Common Stock are to be paid, as promptly after the
Repurchase Date as practicable, together with accrued and unpaid
interest to the Repurchase Date payable with respect to the Securities
as to which the purchase right has been exercised; provided, however,
that installments of interest that mature on or prior to the Repurchase
Date shall be payable in cash, to the Holders of the Securities, or one
or more Predecessor Securities, registered as such at the close of
business on the relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of
such Security (or portion thereof, as the case may be) shall, until
paid, bear interest to the extent permitted by applicable law from the
Repurchase Date at the rate of 5% per annum, and each Security shall
remain convertible into Common Stock until the principal of such
Security (or portion thereof, as the case may be) shall have been paid
or duly provided for.
(e) Any Security 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 make
available for delivery to the Holder of such Security without
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service charge, a new Security or Securities, containing identical terms and
conditions, each in an authorized denomination in aggregate principal amount
equal to and in exchange for the unrepurchased portion of the principal of the
Security so surrendered.
(f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior
to the close of business on the Repurchase Date and the Person or
Persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such repurchase shall be
deemed to have become on the Repurchase Date the holder or holders of
record of the shares represented thereby; provided, however, that any
surrender for repurchase on a date when the stock transfer books of the
Company shall be closed shall constitute the Person or Persons in whose
name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued upon repurchase of
any Security declared prior to the Repurchase Date.
(g) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same
Holder and the Repurchase Price shall be payable in shares of Common
Stock, the number of full shares which shall be issuable upon such
repurchase shall be computed on the basis of the aggregate principal
amount of the Securities so repurchased. Instead of any fractional share
of Common Stock which would otherwise be issuable on the repurchase of
any Security or Securities, the Company will deliver to the applicable
Holder its check for the current market value of such fractional share.
The current market value of a fraction of a share is determined by
multiplying the current market price of a full share by the fraction,
and rounding the result to the nearest cent. For purposes of this
Section, the current market price of a share of Common Stock is the
Closing Price Per Share of the Common Stock on the Trading Day
immediately preceding the Repurchase Date.
(h) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the
Holder of Securities being repurchased for such certificates or for any
tax or duty in respect of the issuance or delivery of such certificates
or the securities represented thereby; provided, however, that the
Company shall not be required to pay any tax or duty which may be
payable in respect of (i) income of the Holder or (ii) any transfer
involved in the issuance or delivery of certificates for shares of
Common Stock in a name other than that of the Holder of the Securities
being repurchased, and no such issuance or delivery shall be made unless
and until the Person requesting such issuance or delivery has paid to
the Company the amount of any such tax or duty or has established, to
the satisfaction of the Company, that such tax or duty has been paid.
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(i) All shares of Common Stock delivered upon repurchase of
Restricted Securities shall bear restrictive legends substantially in
the form of the legends required to be set forth on the Restricted
Securities pursuant to Section 3.5 and shall be subject to the
restrictions on transfer provided in such legends. Neither the Trustee,
the Paying Agent nor any other agents maintained for the purpose of such
repurchase (as shall be set forth in the Company Notice) shall have any
responsibility for the inclusion or content of any such restrictive
legends on such Common Stock; provided, however, that the Trustee or any
agent maintained for the purpose of such repurchase shall have provided,
to the Company or to the Company's transfer agent for such Common Stock,
prior to or concurrently with a request to the Company to deliver such
Common Stock, written notice that the Securities delivered for
repurchase are Restricted Securities.
(j) If shares of Common Stock to be delivered upon repurchase of a
Restricted Security are to be registered in a name other than that of
the beneficial owner of such Restricted Security, then such Holder must
deliver to the Trustee, the Paying Agent or any other agent maintained
for the purpose of such repurchase (as shall be set forth in the Company
Notice) a Surrender Certificate, dated the date of surrender of such
Restricted Security and signed by such beneficial owner, as to
compliance with the restrictions on transfer applicable to such
Restricted Security. Neither the Trustee nor any Paying Agent, Registrar
or Transfer Agent or other agents shall be required to register in a
name other than that of the beneficial owner shares of Common Stock
issued upon repurchase of any such Restricted Security not so
accompanied by a properly completed Surrender Certificate.
(k) All Securities delivered for repurchase shall be delivered to
the Trustee, the Paying Agent or any other agents (as shall be set forth
in the Company Notice) to be canceled at the direction of the Trustee,
which shall dispose of the same as provided in Section 3.8.
SECTION 14.4.Certain Definitions.
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3, as in effect on the date of the original execution of
this Indenture, promulgated by the Commission pursuant to the Exchange
Act;
(b) a "Change in Control" shall be deemed to have occurred at the
time, after the original issuance of the Securities, of:
(i) the acquisition by any person of
beneficial ownership, directly or
indirectly, through a purchase,
merger or other acquisition transaction
or series of transactions, of shares of
capital stock of the Company entitling
such person to
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exercise 50% or more of the total voting
power of all shares of capital stock of
the Company entitled to vote generally
in the elections of directors (any
shares of voting stock of which such
person or group is the beneficial owner
that are not then outstanding being
deemed outstanding for purposes of
calculating such percentage), other than
any such acquisition by the Company, any
Subsidiary of the Company or any
employee benefit plan of the Company
existing on the date of this Indenture;
or
(ii) any consolidation or merger of the
Company with or into, any other person,
any merger of another person with or
into the Company, or any conveyance,
sale, transfer or lease of all or
substantially all of the assets of the
Company to another person (other than
(a) any such transaction (x) which does
not result in any reclassification,
conversion, exchange or cancellation of
outstanding shares of Common Stock and
(y) pursuant to which holders of Common
Stock immediately prior to such
transaction have the entitlement to
exercise, directly or indirectly, 50% or
more of the total voting power of all
shares of capital stock entitled to vote
generally in the election of directors
of the continuing or surviving person
immediately after such transaction and
(b) any merger 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 into solely shares of common
stock);
provided, however, that a Change in Control shall not be deemed to have occurred
if the Closing Price Per Share on any five Trading Days within the period of 10
consecutive Trading Days ending immediately after the later of the date of the
Change in Control or the date of the public announcement of the Change in
Control (in the case of a Change in Control under Clause (i) above) or the
period of 10 consecutive Trading Days ending immediately prior to the date of
the Change in Control (in the case of a Change in Control under Clause (ii)
above) shall equal or exceed 105% of the Conversion Price;
(c) the term "Conversion Price" shall equal U.S.$1,000 divided by
the Conversion Rate; and
(d) 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, as in effect on the date of the original execution of this
Indenture.
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ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 15.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after
the Regular Record Date, a list, in such form as the
Trustee may reasonably require, of the names and
addresses of the Holders of Securities as of such
Regular Record Date, and
(b) at such other times as the Trustee may
reasonably request in writing, within 30 days after
the receipt by the Company of any such request, a list
of similar form and content as of a date not more than
15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 15.2.Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 15.1 and the
names and addresses of Holders received by the Trustee in its capacity
as Security Registrar. The Trustee may destroy any list furnished to it
as provided in Section 15.1 upon receipt of a new list so furnished.
---------------------
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
BROADBAND TECHNOLOGIES, INC.
By_______________________________
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
MARINE MIDLAND BANK, Trustee
By______________________________
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
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STATE OF )
) : ss.:
COUNTY OF )
On the 22nd day of May, 1996, before me personally came
_______________________, to me known, who, being by me duly sworn, did
depose and say that he is ________________ of BroadBand Technologies,
Inc., one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was
so affixed by authority of the Board of Directors of said corporation;
and that he signed his name thereto by like authority.
------------------------------
Notary Public
STATE OF NEW YORK )
) : ss.:
COUNTY OF NEW YORK )
On the 22nd day of May, 1996, before me personally came
__________________________, to me known, who, being by me duly sworn,
did depose and say that he is ____________________ of _______________,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so
affixed pursuant to the bylaws of said corporation; and that he signed
his name thereto by like authority.
------------------------------------------
Notary Public
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ANNEX A--Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to ss. 3.5(b)(i), (iii) and (v)
of the Indenture)
Marine Midland Bank,
as Trustee
140 Broadway, 12th Floor
New York, New York 10005
Re: 5% Convertible Subordinated due May 15, 2001
of BroadBand Technologies, Inc. (the "Securities)
Reference is made to the Indenture, dated as of May 22, 1996 (the
"Indenture"), from BroadBand Technologies, Inc. (the "Company") to
Marine Midland Bank, as Trustee. Terms used herein and defined in the
Indenture or in - Regulation S or Rule 144 under the U.S. Securities Act
of 1933 (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the
form of a Regulation S Security. In connection with such transfer, the
Owner hereby certifies that, unless such transfer is being effected
pursuant to an effective registration statement under the Securities
Act, it is being effected in accordance with Rule 904 or Rule 144 under
the Securities Act and with all applicable securities laws of the states
of
A-1
<PAGE>
the United States and other jurisdictions. Accordingly, the Owner hereby further
certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the
Securities, an affiliate of the Company or any such
distributor or a person acting on behalf of any of the
foregoing;
(B) the offer of the Specified Securities
was not made to a person in the United States;
(C) either:
(i) at the time the buy order was
originated, the Transferee was outside the
United States or the Owner and any person
acting on its behalf reasonably believed that
the Transferee was outside the United States,
or
(ii) the transaction is being executed in,
on or through the facilities of the Eurobond
market, as regulated by the Association of
International Bond Dealers, or another
designated offshore securities market and
neither the Owner nor any person acting on its
behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made
in the United States by or on behalf of the Owner or
any affiliate thereof;
(E) if the Owner is a dealer in securities or
has received a selling concession, fee or other
remuneration in respect of the Specified Securities,
and the transfer is to occur during the Restricted
Period, then the requirements of Rule 904(c)(1) have
been satisfied; and
(F) the transaction is not part of a plan or
scheme to evade the registration requirements of the
Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding
period of at least two years (computed in accordance
with paragraph (d) of Rule 144) has elapsed, since the
Specified Securities were acquired from the Company or
from an affiliate (as such term is defined in Rule
144) of the Company, whichever is later, and is being
effected in accordance with the applicable
A-2
<PAGE>
amount, manner of sale and notice requirements of paragraphs
(e), (f) and (h) of Rule 144; or
(B) the transfer is occurring after a holding
period of at least three years has elapsed since the
date Specified Securities were acquired from the
Company or from an affiliate (as such term is defined
in Rule 144) of the Company, whichever is later, and
the Owner is not, and during the preceding three
months has not been, an affiliate of the Company.
A-3
<PAGE>
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.
Dated: _________________________
(Print the name of the Undersigned, as such term is defined in the second
paragraph of this certificate.)
By: __________________________________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
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<PAGE>
ANNEX B--Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to ss. 3.5(b)(ii), (iii), (iv) and (v)
of the Indenture)
Marine Midland Bank,
as Trustee
140 Broadway, 12th Floor
New York, New York 10005
Re: 5% Convertible Subordinated due May 15, 2001
of BroadBand Technologies, Inc. (the "Securities")
Reference is made to the Indenture, dated as of May 22, 1996 (the
"Indenture"), from BroadBand Technologies, Inc. (the "Company") to
Marine Midland Bank, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act
of 1933 (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the
form of a Restricted Security. In connection with such
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transfer, the Owner hereby certifies that, unless such transfer is being
effected pursuant to an effective registration statement under the Securities
Act, it is being effected in accordance with Rule 144A or Rule 144 under the
Securities Act and all applicable securities laws of the states of the United
States and other jurisdictions. Accordingly, the Owner hereby further certifies
as:
(1) Rule 144A Transfers. If the transfer is
being effected in accordance with Rule 144A:
(A) the Specified Securities are being
transferred to a person that the Owner and any person
acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of
Rule 144A, acquiring for its own account or for the
account of a qualified institutional buyer; and
(B) the Owner and any person acting on its
behalf have taken reasonable steps to ensure that the
Transferee is aware that the Owner may be relying on Rule 144A
in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is
being effected pursuant to Rule 144:
(A) the transfer is occurring after a holding
period of at least two years (computed in accordance
with paragraph (d) of Rule 144) has elapsed, since the
Specified Securities were acquired from the Company or
from an affiliate (as such term is defined in Rule
144) of the Company, whichever is later, and is being
effected in accordance with the applicable amount,
manner of sale and notice requirements of paragraphs
(e), (f) and (h) of Rule 144; or
(B) the transfer is occurring after a holding
period of at least three years has elapsed since the
date Specified Securities were acquired from the
Company or from an affiliate (as such term is defined
in Rule 144) of the Company, whichever is later, and
the Owner is not, and during the preceding three
months has not been, an affiliate of the Company.
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This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.
Dated: _____________________________________________
(Print the name of the Undersigned, as such term is defined in the second
paragraph of this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
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ANNEX C--Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to ss. 3.5(c))
Marine Midland Bank,
as Trustee
140 Broadway, 12th Floor
New York, New York 10005
Re: 5% Convertible Subordinated due May 15, 2001
of BroadBand Technologies, Inc. (the "Securities")
Reference is made to the Indenture, dated as of May 22, 1996 (the
"Indenture"), from BroadBand Technologies, Inc. (the "Company") to
Marine Midland Bank, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act
of 1933 (the "Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged
for Securities bearing no Securities Act Legend pursuant to Section
3.5(c) of the Indenture. In connection with such exchange, the Owner
hereby certifies that the exchange is occurring after a holding period
of at least
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three years has elapsed since the date Specified Securities were acquired from
the Company or from an affiliate (as such term is defined in Rule 144) of the
Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.
Dated: ____________________________________________
(Print the name of the Undersigned, as such term is defined in the second
paragraph of this Certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
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ANNEX D--Form of
Surrender Certificate
In connection with the certification contemplated by Section 12.2
or 14.3(j) relating to compliance with certain restrictions relating to
transfers of Restricted Securities, such certification shall be provided
substantially in the form of the following certificate, with only such
changes thereto as shall be approved by the Company and Goldman Sachs
International:
"CERTIFICATE
BROADBAND TECHNOLOGIES, INC.
5% CONVERTIBLE NOTES DUE MAY 15, 2001
This is to certify that as of the date hereof with respect to
U.S.$________ principal amount (as defined in the Indenture) of the
above-captioned securities surrendered on the date hereof (the
"Surrendered Securities") for registration of transfer, or for
conversion or repurchase where the securities issuable upon such
conversion or repurchase are to be registered in a name other than that
of the undersigned Holder (each such transaction being a "transfer"),
the undersigned Holder (as defined in the Indenture) certifies that the
transfer of Surrendered Securities associated with such transfer
complies with the restrictive legend set forth on the face of the
Surrendered Securities for the reason checked below:
_______ The transfer of the Surrendered Securities complies with Rule 144
under the United States Securities Act of 1933, as amended (the
"Securities Act"); or
_______ The transfer of the Surrendered Securities complies with Rule 144A
under the Securities Act; or
_______ The transfer of the Surrendered Securities complies with Rule 904
under the Securities Act; or
_______ The transfer of the Surrendered Securities has been made to an
institution that is an "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act in a
transaction exempt from the registration requirements of the
Securities Act.
[Name of Holder]
--------------------
Dated: ____________, ____*"
* To be dated the date
of surrender.
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