6.0% CONVERTIBLE JUNIOR SUBORDINATED PROMISSORY NOTE
[$300,000,000] NEW YORK, NEW YORK
APRIL__, 2000
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS AND MAY NOT BE OFFERED
OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS
NOTE IS ALSO SUBJECT TO RESTRICTIONS ON
TRANSFER SET FORTH IN THE SECURITYHOLDERS
AGREEMENT DATED APRIL __, 2000, AS SUCH
AGREEMENT MAY BE AMENDED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME.
FOR VALUE RECEIVED, the undersigned, GARTNER GROUP, INC., a Delaware
corporation (the "COMPANY"), promises to pay to [Silver Lake Partners L.P]
[Silver Lake Investors L.P.] [Silverlake Technology Investors, L.L.C.] [Integral
Capital Partners IV, L.P.] [Integral Capital Partners IV MS Side Fund, L.P.]
(the "INVESTOR") in lawful money of the United States and in immediately
available funds, the principal amount of [$300,000,000] (together with increases
to such amount pursuant to Section 1 below, the "FACE AMOUNT") together with
interest thereon calculated from the date hereof in accordance with the
provisions of this Note.
This Note was issued pursuant to the Securities Purchase Agreement,
dated as of March 21, 2000 (the "AGREEMENT"), among Silver Lake Partners L.P.,
Silver Lake Investors L.P., Silver Lake Technology Investors, L.L.C. and the
other parties thereto. Unless the context otherwise requires, as used herein,
"NOTE" means any of the 6.0% Convertible Junior Subordinated Promissory Notes
issued pursuant to the Agreement and any other similar Convertible Junior
Subordinated Promissory Notes issued by the Company in exchange for, or to
effect a transfer of, any Note and "NOTES" means all such Notes in the
aggregate.
1. ACCRUAL OF INTEREST. Except as otherwise expressly provided in
Section 5 hereof, interest shall accrue, on a semi-annual basis, at the rate of
six percent (6.0%) per annum (based on a year of 360 days) on the Face Amount
and shall result, on each Interest Payment Date (as hereinafter defined), in a
corresponding increase in the then outstanding Face Amount of the Notes.
2. PAYMENT OF PRINCIPAL AND INTEREST ON NOTE.
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(a) SCHEDULED PAYMENT OF PRINCIPAL. The Company shall pay the Face
Amount, together with all accrued and unpaid interest thereon, if any, in cash
to the holder of this Note on April__, 2005.
(b) PAYMENT OF INTEREST. The Company shall pay interest on this
Note semi-annually in arrears on March 15 and September 15 of each year, or if
any such day is not a business day, on the next succeeding business day (each an
"INTEREST PAYMENT DATE") to holders of record on the immediately preceding March
1 and September 1, respectively. Any interest payable on this Note shall be paid
by adding an amount equal to the interest payable on such Interest Payment Date
to the then outstanding Face Amount of this Note on such Interest Payment Date.
Immediately following each Interest Payment Date, the Company shall deliver a
written notice to the holder of this Note specifying (a) the amount of the
increase to the Face Amount of this Note as a result of the interest payment on
the immediately preceding Interest Payment Date and (b) the aggregate Face
Amount of this Note immediately following such Interest Payment Date.
(c) PRO RATA PAYMENT. The Company agrees that any payments to the
holders of the Notes (including, without limitation, upon acceleration pursuant
to Section 6) (whether for principal, interest or otherwise) shall be made PRO
RATA among all such holders based upon the aggregate unpaid principal amount of
the Notes held by each such holder. If any holder of a Note obtains any payment
(whether voluntary, involuntary, by application of offset or otherwise) of
principal or interest on such Note in excess of such holder's PRO RATA share of
payments obtained by all holders of the Notes, such holder shall make payments
to the other holders of the Notes such participation in the Notes held by them
as is necessary to cause such holders to share the excess payment ratably among
each of them as provided in this Section.
3. OPTIONAL REDEMPTION.
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(a) OPTIONAL REDEMPTION. From and after April_, 2003, the Company,
at its option, may redeem the Notes, in whole but not in part, to the extent it
has funds legally available therefor and such redemption is not prohibited by
the terms of its outstanding indebtedness, at the redemption price of 100% of
the Face Amount thereof, plus an amount equal to the accrued and unpaid interest
thereon, if any, to the redemption date; PROVIDED (i) the Current Market Price
of the A Common Stock (as defined below) on the date of the notice of redemption
(described below) equals or exceeds 150% of the Conversion Price (as adjusted);
PROVIDED that the Closing Price of the A Common Stock on the trading day
immediately preceding the date of such notice of redemption equals or exceeds
150% of the Conversion Price (as adjusted); (ii) the Company is permitted
(without the necessity of any further approvals or action) by law and under the
rules of any securities exchange on which the A Common Stock is traded to
convert all the Notes into Shares of A Common Stock and the Company intends and
has the financial resources and ability to repurchase all of the outstanding
Notes; and (iii) the Company has agreed not to exercise its Cash Out Right (as
defined below). As used herein, the "Current Market Price" for a given date
shall mean the average Closing Price of the A Common Stock as reported in THE
WALL STREET JOURNAL or, at the election of the Company, other reputable
financial news source, for the 20 consecutive trading days immediately preceding
the date the redemption notice is given. As used herein, the "Closing Price" of
any security on any day means the last reported sale price regular way on such
day or, in the case no such sale takes place on such day, the average of the
reported closing bid and asked prices regular way of the Common Stock, in each
case on the NYSE or, if not listed or admitted to trading on such exchange, as
quoted on AMEX or Nasdaq.
(b) PAYMENT OF REDEMPTION PRICE.
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(i) The amount of the redemption price on the Notes redeemed, on
any redemption set forth herein, shall be paid to the holders of the Notes in
cash (to the extent funds are legally available therefor and such redemption is
not prohibited by the terms of its outstanding indebtedness).
(ii) Not less than 15 days nor more than 45 days (such date as
fixed by the board of directors of the Company is referred to herein as the
"REDEMPTION RECORD DATE") prior to the date fixed for any redemption of the
Notes pursuant to this Section 3, a notice specifying the time and place of the
redemption of the Notes shall be given by first class mail, postage prepaid, to
the holders of record on the Redemption Record Date of the Notes to be redeemed
at their respective addresses as the same shall appear on the books of the
Company, calling upon each holder of record to surrender to the Company on the
redemption date at the place designated in the notice the Notes owned by such
holder. Neither failure to mail such notice, nor any defect therein or in the
mailing thereof, to any particular holder shall affect the sufficiency of the
notice or the validity of the proceedings for redemption with respect to the
other holders. On or after the redemption date, each holder of Notes to be
redeemed shall present and surrender such holder's Notes to the Company at the
place designated in the redemption notice and thereupon the redemption price of
the Notes, and any unpaid interest thereon to the redemption date, shall be paid
to or on the order of the person whose name appears in the Note Register (as
herein defined) as the owner thereof, and each surrendered Note shall be
canceled by the Company.
(iii) If a notice of redemption has been given pursuant to this
Section 3 and if, on or before the redemption date, the funds necessary for such
redemption (including all interest on the Notes to be redeemed that will accrue
to the redemption date) shall have been set aside by the Company, separate and
apart from its other funds, in trust for the benefit of the holders of all the
Notes, then, notwithstanding that any Notes have not been surrendered for
cancellation, on the redemption date interest shall cease to accrue on the Notes
to be redeemed, and at the close of business on the date on which such funds
have been segregated and set aside by the Company as provided in this Subsection
3(b)(iii), the holders of the Notes shall have no rights with respect thereto,
except the conversion rights provided in subsection (iv) of this Section 3(b)
and Section 4 below and the right to receive the moneys payable upon such
redemption, without interest thereon, upon surrender of their Notes.
(iv) If a notice of redemption has been given pursuant to this
Section 3 and any holder of Notes shall, prior to the close of business on the
business day immediately preceding the redemption date, give written notice to
the Company pursuant to Section 4 below of the conversion of any or all of the
Notes to be redeemed held by the holder (accompanied by the Note or Notes), then
such redemption shall not become effective as to such Notes to be converted and
such conversion shall become effective as provided in Section 4 below, whereupon
any funds deposited by the Company for the redemption of such notes shall
(subject to any right of the holder of such Notes to receive the interest
payable thereon as provided in Section 4 below) immediately upon such conversion
be returned to the Company or, if then held in trust by the
Company, shall automatically and without further corporate action or notice be
discharged from the trust.
4. CONVERSION RIGHTS.
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The holders of the Notes shall have conversion rights as follows
(the "CONVERSION RIGHTS"):
(a) RIGHT TO CONVERT.
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(i) Following April__, 2003 and provided that all filings made
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act of 1976, as amended, as
required by Section 6.1 of the Securityholders Agreement dated the date hereof
(as such agreement may be amended, supplemented or otherwise modified from time
to time, the "SECURITYHOLDERS Agreement") have been made and all related waiting
periods have expired or have been terminated early, the Face Amount of this Note
plus all accrued and unpaid interest thereon shall be convertible, in whole or
in part, at the option of the holder thereof, at any time and from time to time,
subject to compliance with this Section 4, into fully paid and nonassessable
shares of the Company's Class A Common Stock, par value $.005 per share (the "A
COMMON STOCK"; and together with Company's Class B Common Stock, par value $.005
per share, the "COMMON STOCK") at the then effective Conversion Rate (as defined
below) (each such conversion, an "OPTIONAL CONVERSION").
The Conversion Rate, as of any date of determination, shall equal an
amount determined by dividing (i) the Face Amount outstanding on such date, plus
any accrued and unpaid interest on such Notes, by (ii) the Conversion Price (as
defined below) in effect as of any date of determination. The Conversion Price
at which shares of Common Stock shall be deliverable upon conversion of the
Notes without the payment of additional consideration by the holder thereof (the
"CONVERSION PRICE") shall initially be $15.87. Such initial Conversion Price and
the rate at which the Notes may be converted into shares of A Common Stock,
shall be subject to adjustment as provided below.
(ii) Notwithstanding a holder's request to convert all or part of
his or her Notes into A Common Stock, the Company shall, except following the
Company's exercise of its option pursuant Section 3, have the right (the "CASH
OUT RIGHT") after such request to redeem all, but not part of, such Notes for
cash in an amount equal to the product of (x) the quotient of (i) the Face
Amount of the Notes to be converted and (ii) the Conversion Price and (y) the
Closing Price on the day the holder delivered written notice to the Company of
its election to convert all or part of such holder's Notes into A Common Stock.
(b) FRACTIONAL SHARES. No fractional shares of A Common Stock
shall be issued upon conversion of the Notes. In lieu of fractional shares, the
Company shall pay cash equal to such fraction multiplied by the Closing Price
for shares of A Common Stock on the trading date immediately preceding the
related Conversion Date.
(c) MECHANICS OF CONVERSION.
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(i) In order to convert Notes into shares of A Common Stock, the
holder shall deliver written notice to the Company that such holder elects to
convert all or part of the Face Amount represented by such Note or Notes. Such
notice shall state the Face Amount of Notes which the holder seeks to convert.
The date of receipt of the Note or Notes by the Company shall be the conversion
date ("CONVERSION DATE"). As soon as practicable (but no later than two days)
after the Conversion Date, the Company shall promptly issue and deliver at such
office to such holder a certificate or certificates for the number of shares of
A Common Stock to which such holder is entitled and, in the case where only part
of a Note is converted, the Company shall execute and deliver (at its own
expense) a new Note of any authorized denomination as requested by a holder in
an aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal amount of the Note so surrendered. Such conversion
shall be deemed to have been made at the close of business on the date of such
surrender of the Notes to be converted, and the holder entitled to receive the
shares of A Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder of such shares of A Common Stock on such date.
(ii) The Company shall at all times during which the Notes shall be
outstanding, reserve and keep available out of its authorized but unissued
stock, for the purpose of effecting the conversion of the Notes, such number of
its duly authorized shares of A Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Notes. In addition, the
Company shall at all times during which the Notes shall be outstanding, reserve
and keep available out of its authorized but unissued stock, for the purpose of
effecting the conversion of the Notes, such number of its duly authorized shares
of preferred stock as shall from time to time be sufficient to effect the
conversion of all outstanding Notes into Preferred Stock, if necessary. Before
taking any action which would cause an adjustment reducing the Conversion Price
below the then par value of the shares of A Common Stock issuable upon
conversion of the Notes, the Company will take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock at
such adjusted Conversion Price.
(iii) All Notes which shall have been surrendered for conversion as
herein provided shall no longer be deemed to be outstanding and all rights with
respect to such Notes, including the rights, if any, to receive interest,
notices and consent rights shall immediately cease and terminate on the
Conversion Date, except only the right of the holders thereof to receive shares
of A Common Stock, cash or Preferred Stock, as the case may be, in exchange
therefor, and, if applicable, cash for any fractional shares of A Common Stock.
Any Notes so converted shall be retired and canceled.
(iv) If the conversion is in connection with an underwritten
offering of securities registered pursuant to the Securities Act of 1933, as
amended, the conversion may, at the option of any holder tendering Notes for
conversion, be conditioned upon the closing with the underwriter of the sale of
securities pursuant to such offering, in which event the holders entitled to
receive the A Common Stock issuable upon such conversion of the Notes shall not
be deemed to have converted such Notes until immediately prior to the closing of
the sale of securities.
(d) ADJUSTMENTS TO CONVERSION PRICE FOR DILUTING ISSUES.
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(i) SPECIAL DEFINITIONS. For purposes of this Subsection 4(d), the
following definitions shall apply:
(A) "Option" shall mean Rights, options or warrants to subscribe
for, purchase or otherwise acquire Common Stock or
Convertible Securities, other than such Rights, options or
warrants granted to employees, directors or consultants of
the Company pursuant to plans or arrangements approved by
the Company's board of directors.
(B) "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or
indirectly convertible into or exchangeable for Common
Stock.
(C) "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to Subsection 4(d)(ii)
below, deemed to be issued) by the Company after April__,
2000 (the "Issue Date").
(D) "Rights to Acquire Common Stock" (or "RIGHTS") shall mean
all rights issued by the Company to acquire Common Stock
whether by exercise of a warrant, option or similar call, or
conversion of any existing instruments, in either case for
consideration fixed, in amount or by formula, as of the date
of issuance.
(ii) ISSUE OF SECURITIES DEEMED ISSUE OF ADDITIONAL SHARES OF
COMMON STOCK. If the Company at any time or from time to time after the Issue
Date issues any Options or Convertible Securities or Rights to Acquire Common
Stock, then the maximum number of shares of Common Stock (as set forth in the
instrument relating thereto without regard to any provision contained therein
for a subsequent adjustment of such number) issuable upon the exercise of such
Options, Rights to Acquire Common Stock or, in the case of Convertible
Securities, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue; provided, however, that in any such case:
(A) No further adjustment in the Conversion Price shall be made
upon the subsequent issue of shares of Common Stock upon the
exercise of such Options, Rights or conversion or exchange
of such Convertible Securities;
(B) Upon the expiration or termination of any unexercised
Option, Right or Convertible Security, the Conversion Price
shall be adjusted immediately to reflect the applicable
Conversion Price which would have been in effect had such
Option, Right or Convertible Security (to the extent
outstanding immediately prior to such expiration or
termination) never been issued; and
(C) In the event of any change in the number of shares of Common
Stock issuable upon the exercise, conversion or exchange of
any Option, Right or Convertible Security, including, but
not limited to, a change resulting from the anti-dilution
provisions thereof, the Conversion Price then in effect
shall forthwith be readjusted to such Conversion Price as
would have obtained had the Conversion Price adjustment that
was originally made upon the issuance of such Option, Right
or Convertible Security which were not exercised or
converted prior to such change been made upon the basis of
such change, but no further adjustment shall be made for the
actual issuance of Common Stock upon the exercise or
conversion of any such Option, Right or Convertible
Security.
(iii) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF ADDITIONAL
SHARES OF COMMON STOCK.
(a) If the Company shall at any time after the Issue Date issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Subsection 4(d)(ii), but excluding shares issued
as a dividend or distribution as provided in subsection 4(f) or upon a stock
split or combination as provided in subsection 4(e)), without consideration, or
for a consideration per share less than the Fair Market Value per share of
Common Stock on the date of and immediately prior to such issue, then and in
such event, the Conversion Price shall be reduced, concurrently with such
issuance, to a price (calculated to the nearest cent) determined by multiplying
such Conversion Price by a fraction, the numerator of which shall be the sum of
(A) the number of shares of Common Stock outstanding, on a fully diluted basis,
immediately prior to such issuance plus (B) the number of shares of Common Stock
which the aggregate consideration received by the Company for the total number
of Additional Shares of Common Stock so issued would purchase at the Fair Market
Value per share of Common Stock and the denominator of which shall be the sum of
(1) the number of shares of Common Stock outstanding immediately prior to such
issuance plus (2) the number of such Additional Shares of Common Stock so
issued.
(b) If the Company shall at any time after the Issue Date issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Subsection 4(d)(ii), but excluding shares issued
as a dividend or distribution as provided in subsection 4(f) or upon a stock
split or combination as provided in subsection 4(e)) for a consideration per
share less than the Conversion Price (as adjusted) on the date of and
immediately prior to such issue, then and in such event, the Conversion Price
shall be reduced, concurrently with such issuance, to a price (calculated to the
nearest cent) determined by multiplying such Conversion Price by a fraction, the
numerator of which shall be the sum of (A) the number of shares of Common Stock
outstanding, on a fully diluted basis, immediately prior to such issuance plus
(B) the number of shares of Common Stock which the aggregate consideration
received by the Company for the total number of Additional Shares of Common
Stock so issued would purchase if the amount paid for such shares was equal to
the Conversion Price and the denominator of which shall be the sum of (1) the
number of shares of Common Stock outstanding
immediately prior to such issuance plus (2) the number of such Additional Shares
of Common Stock so issued.
(c) If the Company shall at any time after the Issue Date issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Subsection 4(d)(ii), but excluding shares issued
as a dividend or distribution as provided in subsection 4(f) or upon a stock
split or combination as provided in subsection 4(e)) for a consideration per
share that is less than the Fair Market Value and less than the Conversion Price
(as adjusted), in each case on the date of and immediately prior to such issue,
then and in such event, the Conversion Price shall be reduced, to equal the
lesser of (a) the Conversion Price as adjusted pursuant to Section 4(d)(iii)(a)
or (b) the Conversion Price as adjusted pursuant to Section 4(d)(iii)(b).
Notwithstanding the foregoing, the applicable Conversion Price shall
not be reduced if the amount of such reduction would be an amount less than
$.01, but any such amount shall be carried forward and reduction with respect
thereto made at the time of and together with any subsequent reduction which,
together with such amount and any other amount or amounts so carried forward,
shall aggregate $.01 or more.
(iv) DETERMINATION OF CONSIDERATION. For purposes of this
Subsection 4(d), "Fair Market Value" of the consideration received by the
Company for the issue of any Additional Shares of Common Stock shall be computed
as follows:
(A) CASH AND PROPERTY. Such consideration shall:
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(1) insofar as it consists of cash, be computed at the
aggregate of cash received by the Company, excluding
amounts paid or payable for accrued interest or accrued
dividends;
(2) insofar as it consists of property other than cash, be
computed at the Fair Market Value thereof at the time
of such issue, as determined in good faith by the Board
(absent manifest error); and
(3) in the event Additional Shares of Common Stock are
issued together with other shares or securities or
other assets of the Company for consideration which
covers both, be the proportion of such consideration so
received, computed as provided in clauses (1) and (2)
above, as determined in good faith by the Board (absent
manifest error).
(B) OPTIONS, RIGHTS AND CONVERTIBLE SECURITIES. The consideration
per share received by the Company for Additional Shares of
Common Stock deemed to have been issued pursuant to
subsection 4(d)(ii), relating to Options, Rights and
Convertible Securities, shall be determined by dividing
(1) the total amount, if any, received or receivable by the
Company as consideration for the issue of such Options,
Rights or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set
forth in the instruments relating thereto, without
regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to
the Company upon the exercise of such Options, Rights
or the conversion or exchange of such Convertible
Securities, by
(2) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without
regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the
exercise of such Options, Rights or the conversion or
exchange of such Convertible Securities.
(e) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company
shall at any time or from time to time after the Issue Date effect a subdivision
of the outstanding Common Stock, the Conversion Price then in effect immediately
before that subdivision shall be proportionately decreased. If the Company shall
at any time or from time to time after the Issue Date combine the outstanding
shares of Common Stock, the Conversion Price then in effect immediately before
the combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(f) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the
event the Company at any time or from time to time after the Issue Date shall
make or issue a dividend or other distribution payable in Additional Shares of
Common Stock, then and in each such event the Conversion Price shall be
decreased as of the time of such issuance, by multiplying such Conversion Price
by a fraction, the numerator of which shall be the total number of shares of
Common Stock outstanding, on a fully diluted basis, immediately prior to such
issuance and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such issuance plus the number of
such Additional Shares of Common Stock issuable in payment of such dividend or
distribution.
(g) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the
event the Company at any time, or from time to time after the Issue Date shall
make or issue, a dividend or other distribution payable in securities of the
Company (other than shares of Common Stock) or other assets or properties, then
and in each such event provision shall be made so that the holders of the Notes
shall receive in addition to the number of shares of A Common Stock receivable
upon conversion of the Notes, the amount of securities of the Company or other
assets or properties that they would have received had their Notes been
converted into A Common Stock on the date of such event and had thereafter,
during the period from the date of such event to and including the Conversion
Date, retained such securities or other assets or properties receivable by them
as aforesaid during such period giving application to all adjustments called for
during such period, under this paragraph with respect to the rights of the
holders of the Notes; provided that,
in the event rights or benefits under such securities, assets or properties
shall terminate prior to the time that the holder of this Note may elect to
convert this Note into shares of A Common Stock, such amount of securities,
assets or properties that the holder would have received had such holder
converted his or her notes immediately prior to the distribution shall be
distributed to the holder of this Note on the date the securities, assets or
properties are distributed to the holders of Common Stock.
(h) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. If
the A Common Stock issuable upon the conversion of the Notes shall be changed
into the same or a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares, stock dividend or reorganization,
reclassification, merger, consolidation or asset sale provided for elsewhere in
this Section 4), then and in each such event the holder of each Note (whether
then outstanding or thereafter issued) shall have the right thereafter to
convert such Note into the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification,
or other change, by holders of the number of shares of A Common Stock into which
all such Notes might have been converted immediately prior to such
reorganization, reclassification, or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof.
(i) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR ASSET SALES. If at
any time after the Issue Date there is a merger, consolidation,
recapitalization, sale of all or substantially all of the Company's assets or
reorganization involving the A Common Stock (collectively, a "CAPITAL
REORGANIZATION") (other than a merger, consolidation, sale of assets,
recapitalization, subdivision, combination, reclassification, exchange or
substitution of shares provided for elsewhere in this Section 4), as part of
such Capital Reorganization, provision shall be made so that the holders of
Notes (whether then outstanding or thereafter issued) will thereafter be
entitled to receive upon conversion of the Notes the number of shares of stock
or other securities or property of the Company to which a holder of the number
of shares of A Common Stock deliverable upon conversion would have been entitled
on such Capital Reorganization, subject to adjustment in respect to such stock
or securities by the terms thereof. In any such case, appropriate adjustment
will be made in the application of the provisions of this Section 4 with respect
to the rights of the holders of Notes after the Capital Reorganization to the
end that the provisions of this Section 4 (including adjustment of the
Conversion Price then in effect and the number of shares issuable upon
conversion of the Notes) will be applicable after that event and be as nearly
equivalent as practicable. In the event that the Company is not the surviving
entity of any such Capital Reorganization, each Note shall become Notes of such
surviving entity, with the same powers, rights and preferences as provided
herein.
(j) FIRST ANNIVERSARY CONVERSION PRICE RESET. If the average
Closing Price of the A Common Stock for the 30 trading days immediately
preceding the first anniversary of the Issue Date (the "30-DAY AVERAGE") is
below 90.91% of the Conversion Price then in effect, the Conversion Price shall
be reset to a lower amount that represents a 10.00% premium to the 30-Day
Average (the "FIRST ANNIVERSARY RESET"). In the event that the Conversion Price
is subject to downward adjustment due to the First Anniversary Reset, the
Company shall have the option to
redeem the Notes in whole, but not in part (except as provided in the following
sentence), for such consideration equal to 125% of the then outstanding Face
Amount of this Note (the "REFINANCING RIGHT"); PROVIDED HOWEVER, prior to the
Company's exercise of the Refinancing Right, the holders of the Notes shall
receive reasonable notice from the Company of its election to exercise its
Refinancing Right and each holder shall have the right for a period of ten
business days to waive in writing the First Anniversary Reset and to continue to
hold the Notes with the Conversion Price then in effect. The Company shall have
a refinancing right with respect to each Note the holder of which does not agree
to waive the First Anniversary Reset, and in the event that holders of a
majority of the aggregate principal amount of outstanding Notes elect to have
the Conversion Price adjusted to the First Anniversary Reset amount, the Company
shall have the right to repurchase all of the outstanding Notes at 125% of the
then outstanding Face Amount of the Notes. If the Company exercises the
Refinancing Right, and the holders of the Notes elect not to waive the First
Anniversary Reset, the Company must complete the redemption of the Notes within
twenty business days from the date the Company's notice was given; PROVIDED
FURTHER, if the Company fails to complete the redemption as described above, the
Conversion Price shall be immediately adjusted downward as provided for the
First Anniversary Reset.
(k) NO IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the holders of the
Notes against impairment to the extent required hereunder. Nothing in this
Section 4 shall affect the continued accrual of interest on the Notes in
accordance with the terms of this Note.
(l) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder, if
any, of Notes outstanding a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based and shall file a copy of such certificate with its
corporate records. The Company shall, upon the reasonable written request of any
holder of Notes, furnish or cause to be furnished to such holder a similar
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price then in effect, and (iii) the number of shares of A Common
Stock and the amount, if any, of other property which then would be received
upon the conversion of Notes. Despite such adjustment or readjustment, the form
of each or all Notes, if the same shall reflect the initial or any subsequent
Conversion Price, need not be changed in order for the adjustments or
readjustments to be valid in accordance with the provisions of this Note, which
shall control.
(m) NOTICE OF RECORD DATE. In the event
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(i) that the Company declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or other
securities of the Company;
(ii) that the Company subdivides or combines its outstanding shares
of Common Stock;
(iii) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of
Common Stock or a stock dividend or stock distribution thereon);
(iv) of any Capital Reorganization; or
(v) of the involuntary or voluntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed at its principal office,
and shall cause to be mailed to the holders of the Notes at their last addresses
as shown on the records of the Company, at least 10 days prior to the record
date specified in (A) below or 20 days prior to the date specified in (B) below,
a notice stating
(A) the record date of such dividend, distribution, subdivision
or combination, 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, subdivision or
combination are to be determined, or
(B) the date on which such reclassification, Capital
Reorganization, 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 or other property deliverable upon such
reclassification, Capital Reorganization, dissolution or
winding up.
5. REPURCHASE RIGHT UPON A CHANGE OF CONTROL.
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(a) In the event that a Change in Control (as herein defined)
shall occur, then each holder shall have the right (the "REPURCHASE RIGHT"), at
the holder's option to require the Company to repurchase, and upon the exercise
of such right the Company shall repurchase, all of such holder's Notes, or any
portion of the principal amount thereof that is equal to $1,000 or any integral
multiple thereof, on the date (the "Repurchase Date") that is 30 days after the
date of the Company Notice (as defined in subsection (b) of this Section 5) at a
purchase price equal to 101% of the Face Amount to be repurchased plus accrued
and unpaid interest thereon, if any, to the Repurchase Date (the "REPURCHASE
Price"). "CHANGE IN CONTROL" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of Rule 13d-5 under the Securities Exchange Act of 1934 as in effect on
the date hereof) of shares representing more than 35% of the aggregate ordinary
voting power represented by the issued and outstanding Common Stock; (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Company by Persons who were neither (i) nominated by the board
of directors of the Company nor (ii) appointed by directors so nominated;
or (c) the hiring or firing of the Company's chief executive officer without the
prior approval of holders representing a majority of the outstanding Face Amount
of the Notes. "PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, governmental
authority or other entity.
(b) On or before the 20th day after the occurrence of a Change in
Control, the Company shall give to all holders of Notes notice (the "Company
Notice"), of the occurrence of the Change in Control and of the Repurchase Right
set forth herein arising as a result thereof. Each notice of a repurchase right
shall be mailed to the holders of the Notes at their last address as shown on
the records of the Company and shall state:
(i) the Repurchase Date;
(ii) the date by which the repurchase right must exercised;
(iii) the Repurchase Price;
(iv) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where such Notes, are
to be surrendered for payment of the Repurchase Price;
(v) that on the Repurchase Date the Repurchase Price will become
due and payable upon each such Note designated by the Holder to be
repurchased, and that interest thereon shall cease to accrue on and after
said date;
(vi) the Conversion Rate then in effect, the date on which the
right to convert the principal amount of the Notes to be repurchased will
terminate and the place where such Notes may be surrendered for conversion;
and
(vii) the place or places that the Notes with the option to elect
repayment upon a change of control 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.
If any of the foregoing provisions or other provisions of this
Section 5 are inconsistent with applicable law, such law shall govern.
(c) To exercise a Repurchase Right, a holder shall deliver to the
Company on or before the 30th day after the date of the Company Notice (i)
written notice of the holder's exercise of such right, which notice shall set
forth the name of the holder, the principal amount of the Notes to be
repurchased (and, if any Note is to be repurchased in part, the serial number
thereof, the portion of the principal amount thereof to be repurchased is to be
registered) and a statement that an election to exercise the Repurchase Right is
being made thereby, and (ii) the
Notes with respect to which the Repurchase Right is being exercised. Such
written notice shall be irrevocable, except that the right of the Holder to
convert the Notes with respect to which the Repurchase Right is being exercised
shall continue until the close of business on the business day immediately
preceding the Repurchase Date.
(d) 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 holders of Notes the Repurchase Price in cash as promptly after the
Repurchase Date as practicable, together with accrued and unpaid interest to the
Repurchase Date payable with respect to the Notes as to which the repurchase
right has been exercised.
(e) If any Note (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such Note
(or portion thereof, as the case may be) shall, until paid, bear interest to the
extent permitted by applicable law from the Repurchase Date at the rate of 9%
per annum, and each Note shall remain convertible into Common Stock until the
principal of such Note (or portion thereof, as the case may be) shall have been
paid or duly provided for.
(f) Any Note which is to be repurchased only in part shall be
surrendered to the Company and the Company shall execute and make available for
delivery to the holder of such Note without service charge, a new Note or Notes,
containing identical terms and conditions, each in an authorized denomination in
aggregate principal amount equal to and in exchange for the unrepurchased
portion of the principal of the Note so surrendered.
6. EVENTS OF DEFAULT.
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(a) DEFINITION. For purposes of this Note, an Event of Default
shall be deemed to have occurred if:
(i) the Company fails to pay when due (whether at maturity or
otherwise) the full amount of interest then accrued hereon or the full
amount of any principal payment hereon;
(ii) (A) the Company or any of its material Subsidiaries makes an
assignment for the benefit of creditors, (B) an order, judgment or decree
is entered adjudicating the Company or any of its material Subsidiaries
bankrupt or insolvent, (C) any order for relief with respect to the Company
or any of its material Subsidiaries is entered under the Bankruptcy Reform
Act, Title 11 of the United States Code, (D) the Company or any of its
material Subsidiaries petitions or applies to any tribunal for the
appointment of a custodian, trustee, receiver or liquidator of the Company
or any of its material
Subsidiaries or of any substantial part of the assets of the Company or any
of its material Subsidiaries, or commences any proceeding relating to the
Company or any of its material Subsidiaries under any bankruptcy
reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation law of any jurisdiction, or (E) any such petition or
application is filed, or any such proceeding is commenced, against the
Company or any of its material Subsidiaries and either (1) the Company or
any of its material Subsidiaries by any act indicates its approval thereof,
consent thereto or acquiescence therein or (2) such petition, application
or proceeding is not dismissed within 60 days;
(iii) a judgment in excess of $30,000,000 is rendered against the
Company and, within 60 days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within 60 days
after the expiration of any such stay, such judgment is not discharged or
paid;
(iv) the Company or any of its material Subsidiaries defaults in
the performance of any indebtedness if the effect of such default is to
cause an amount exceeding $30,000,000 to become due prior to its stated
maturity;
(v) for any reason any Designated Senior Indebtedness (as defined
in Section 11(h), hereof) shall have become due prior to its stated
maturity;
(vi) the failure to comply with the terms of this Note or the
applicable provisions of the Agreement for a period of 30 days following
notice of such failure from holders of the Notes; or
(vii) the failure of the Company's board of directors to consist of
ten directors at least two of whom shall have been recommended by the
Purchasers (as defined in the Agreement), by April 18, 2000.
Notwithstanding the foregoing, no Event of Default under clauses (iii), (iv),
(v) or (vi) above shall occur or shall be deemed to have occurred (unless the
indebtedness under the Credit Agreement (as defined in Section 11(g) hereof)
shall have become due prior to its stated maturity and such acceleration shall
not have been rescinded or annulled within 30 days thereafter) so long as any
Senior Indebtedness (as defined in Section 11(g) hereof) remains outstanding or
the Credit Agreement is otherwise "in effect." Nothing in this Section 6 shall
prevent a holder of Senior Indebtedness (as defined in Section 11(g) hereof)
from exercising its right to enforce the applicable provisions of this Note
against the holder of this Note in any proceeding of a type described in Section
6(a)(ii) above or any similar proceeding.
(b) CONSEQUENCES OF EVENTS OF DEFAULT.
---------------------------------
(i) Subject to the provisions of Section 11 of this Note, if an
Event of Default of the type described in subsections 6(a)(i), (iii), (iv), (v)
and (vi) has occurred and continued for 15 days or any other Event of Default
has occurred, the holder or holders of the Notes representing a majority of the
aggregate principal amount then outstanding of the Notes may declare all or any
portion of the outstanding principal amount of the Notes due and payable and
demand immediate payment of all or any portion of the outstanding principal
amount of the Notes owned by such holder or holders, PROVIDED that in an Event
of Default specified in subsection 6(a)(ii), all of the outstanding principal
amount of the Notes shall automatically and immediately become due and payable.
The Company shall give prompt written notice of any such demand to the other
holders, if any, of any portion of the Notes, each of which may demand immediate
payment of all or any portion of such holder's portion of the Notes. If any
holder or holders of the Notes demand immediate payment of all or any portion of
such holder's portion of the Notes, the Company shall, subject to the other
provisions of this Note (including Section 11), immediately pay in cash to such
holder or holders the principal amount of the Notes requested to be paid plus
accrued interest thereon.
(ii) Subject to the other provisions of this Note (including
Section 11), each holder of any portion of this Note shall also have, upon the
occurrence and continuance of an Event of Default, any other rights which such
holder may have pursuant to applicable law.
7. AMENDMENT AND WAIVER. Except as otherwise expressly provided
herein, the provisions of this Note may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holders of at least a majority of the aggregate principal amount then
outstanding of the Notes; provided that no such action shall change (i) the rate
at which or the manner in which interest accrues on the Notes or is payable or
the times at which such interest becomes payable, or (ii) any provision relating
to the scheduled payment of principal on the Notes without the consent of the
applicable holder if such change is adverse to such holder.
8. PLACE OF PAYMENT. Payments of principal and interest and all
notices and other communications to the Investor hereunder or with respect
hereto are to be delivered to the Investor at the following address:
--------------------
--------------------
Attn: _____________
or to such other address or to the attention of such other person as specified
by prior written notice to the Company, including any transferee of this Note.
9. COSTS OF COLLECTION. In the event that the Company fails to
pay when due (including, without limitation upon acceleration in connection with
an Event of Default) the full amount of principal and/or interest hereunder, the
Company shall indemnify and hold harmless the
holder of any portion of this Note from and against all reasonable costs and
expenses incurred in connection with the enforcement or collection of such
principal and interest, including, without limitation, reasonable attorneys'
fees and expenses.
10. WAIVERS. The Company hereby waives presentment, demand,
notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note.
11. SUBORDINATION. The Company agrees, and by the acceptance
hereof each holder agrees, as follows:
(a) SUBORDINATION OF LIABILITIES. The Company, for itself, its
successors and assigns, covenants and agrees, and each holder of this Note
(together with its successors and assigns, the "holder of this Note") by
its acceptance hereof likewise covenants and agrees, that the payment of
the principal of, interest on, and all other amounts owing in respect of,
this Note (the "SUBORDINATED INDEBTEDNESS") is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, to the
prior payment in full in cash of all Senior Indebtedness. The provisions of
this Section 11, and the provisions of Sections 2 and 6 of this Note, each
shall constitute a continuing offer to all persons or other entities who,
in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are hereby made obligees
hereunder the same as if their names were written herein as such and they
and/or each of them may proceed to enforce such provisions.
(b COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SUBORDINATED
INDEBTEDNESS IN CERTAIN CIRCUMSTANCES. (i) In the event of a Senior Payment
Default (as hereinafter defined), then, upon receipt by the Company and the
holders of Subordinated Indebtedness of written notice of such Senior
Default (a "SENIOR PAYMENT DEFAULT NOTICE") from either (i) the
Administrative Agent (as defined in the Credit Agreement) if such Senior
Payment Default relates to the Credit Agreement or any replacement thereof
or (ii) the holders of at least a majority in principal amount of
outstanding Senior Indebtedness to which such Senior Payment Default
relates or any duly authorized representative of such holders, no payment
(other than a payment in the form of any other indebtedness of the Company
which is subordinated to the payment of the Senior Indebtedness to the same
extent as this Note is subordinated to the Senior Indebtedness or payments
made in equity securities of the Company, including as a result of the
conversion of the Noes into Shares of A Common Stock) shall be made by the
Company on account of principal of (or premium, if any) or interest on the
Subordinated Indebtedness unless and until (i) such Senior Payment Default
shall have been cured or waived or shall have ceased to exist or (ii) all
amounts then due and payable in respect of Senior Indebtedness shall have
been paid in full in cash, or provision shall have been made for such
payment and all commitments to make further loans, advances and other
credit accommodations under the Credit Agreement or such other Senior
Indebtedness have been terminated (such period during which a Senior
Default continues being, a "PAYMENT DEFAULT BLOCKAGE PERIOD").
(ii) In the event that any Senior Nonmonetary Default (as
hereinafter defined) shall have occurred and be continuing, then, upon the
receipt by the Company and the holders of Subordinated Indebtedness of
written notice of such Senior Nonmonetary Default (a "SENIOR NONMONETARY
DEFAULT NOTICE") from either (i) the Administrative Agent if such Senior
Nonmonetary Default relates to the Credit Agreement or any replacement
thereof or (ii) the holders of a majority in principal amount of
outstanding Senior Indebtedness to which such Senior Nonmonetary Default
relates or any duly authorized representative of such holders, no payment
(other than a payment in the form of any other indebtedness of the Company
which is subordinated to the payment of the Senior Indebtedness to the same
extent as the Note is subordinated to the Senior Indebtedness or payments
made in equity interests of the company, including as a result of the
conversion of the Notes into Shares of A Common Stock) shall be made by the
Company on account of principal of (or premium, if any) or interest on the
Subordinated Indebtedness during the period (the "NONMONETARY DEFAULT
BLOCKAGE PERIOD") commencing on the date of receipt of such Senior
Nonmonetary Default Notice and ending on the earlier of (a) the date on
which such Senior Nonmonetary Default shall have been cured or waived or
shall have ceased to exist and any acceleration of Senior Indebtedness
shall have been rescinded or annulled or the Senior Indebtedness to which
such Senior Nonmonetary Default relates shall have been discharged or (b)
the 179th day after the date of receipt of such written notice; PROVIDED,
HOWEVER, that not more than one Senior Nonmonetary Default Notice shall be
given during any period of 360 consecutive days, regardless of the number
of defaults with respect to Senior Indebtedness during such 360-day period.
For all purposes of this Section 11(b)(ii), no event of default which
existed or was continuing on the date of commencement of any Nonmonetary
Default Blockage Period with respect to any Senior Indebtedness shall be,
or be made, the basis for the commencement of a another Nonmonetary Default
Blockage Period by the holders (or any duly authorized agent or other
representative thereof) of such Senior Indebtedness whether or not within a
period of 360 consecutive days, unless such event of default shall have
been cured or waived for a period of not less than 90 consecutive days (it
being acknowledged that any subsequent action, or any breach of any
financial covenants for a period commencing after the date of commencement
of such Nonmonetary Default Blockage Period that, in either case, would
give rise to an event of default pursuant to any provisions under which an
event of default previously existed or was continuing shall constitute a
new event of default for this purpose).
(iii) If an Event of Default shall occur and be continuing at any
time during the continuance of a Payment Default Blockage Period or a
Nonmonetary Default Blockage Period, no holder of Subordinated Indebtedness
shall ask, demand or sue for any payment or distribution or seek any other
remedy in respect of the Subordinated Indebtedness or commence or join in
with any other creditor (other than the agent for the holders of Senior
Indebtedness) in commencing any bankruptcy, insolvency, receivership or
similar proceedings prior to the earliest to occur of (i) acceleration of
any Senior Indebtedness or any other exercise of remedies by the
Administrative Agent or the Lenders (as defined in the Credit Agreement) or
the other holders of Senior Indebtedness, including without
limitation, any realization on collateral or any reduction of commitments
as a result of the occurrence and continuance of any event of default under
the Credit Agreement or any agreement or instrument evidencing Senior
Indebtedness, (ii) the occurrence of an Event of Default specified in
Sections 6(a)(ii) hereof or (iii) the earlier to occur of (x) 179 days
after the commencement of such Payment Blockage Period or Nonmonetary
Blockage Period or (y) the expiration of such Payment Blockage Period or
Nonmonetary Default Blockage Period.
(iv) Except as contemplated by Section 2(b) and Section 4, the
Company may not, directly or indirectly, make any payment of any kind or
character of any Subordinated Indebtedness and may not acquire any
Subordinated Indebtedness for cash or property until all Senior
Indebtedness has been paid in full in cash if such payment is prohibited by
the terms of any Senior Indebtedness or if any default or event of default
under any Senior Indebtedness is then in existence or would result
therefrom.
(v) In the event that, notwithstanding the other provisions of
this Section 11(b), the Company shall make (or any other person or entity
on behalf of the Company shall make) any payment on account of the
Subordinated Indebtedness (other than as contemplated by Section 2(b) and
Section 4) or shall acquire any Subordinated Indebtedness for cash or
property at a time when payment is not permitted by such provisions, such
payment shall be held by the holder of this Note, in trust for the benefit
of, and shall be paid forthwith over and delivered to, the holders of
Senior Indebtedness or their representative, agent or trustee under the
loan agreement, indenture or other agreement pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as
their respective interests may appear, for application PRO RATA to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in cash in accordance with the terms
of such Senior Indebtedness, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness. Without in
any way modifying the provisions of this Section 11 or affecting the
subordination effected hereby, if notice has not been previously given, the
Company shall give the holder of this Note prompt written notice of any
event which would prevent payments under this Section 11(b).
(c) SUBORDINATION TO PRIOR PAYMENT OF ALL SENIOR INDEBTEDNESS ON
DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE COMPANY. Upon any payment
or distribution of assets of the Company of any kind or character (whether
in cash, properties or securities) upon any total or partial dissolution,
winding up, liquidation or reorganization of the Company (whether in
bankruptcy, insolvency, receivership or similar proceedings or upon an
assignment for the benefit of creditors, marshaling of assets of the
Company or otherwise):
(i) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of all Senior
Indebtedness (including, without limitation, post-petition interest
at the rate provided in the documentation with
respect to such Senior Indebtedness, whether or not such post-
petition interest is an allowed claim against the debtor in any
bankruptcy or similar proceeding) before the holder of this Note is
entitled to receive any payment of any kind or character on account
of the Subordinated Indebtedness other than equity securities of the
Company or debt securities that are subordinated to the Senior
Indebtedness to substantially the same extent as, or to a greater
extent than, the Notes are subordinated to Senior Indebtedness;
(ii) any payment or distribution of assets of the Company of
any kind or character (other than equity securities of the Company
or debt securities that are subordinated to the Senior Indebtedness
to substantially the same extent as, or to a greater extent than,
the Notes are subordinated to Senior Indebtedness), whether in cash,
property or securities to which the holder of this Note would be
entitled except for the provisions of this Section 11, shall be paid
by the liquidating trustee or agent or other person making such
payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or other trustee or agent, directly to the
holders of Senior Indebtedness or their representative, agent or
trustee under any loan agreement, indenture or other agreement under
which any instruments evidencing any such Senior Indebtedness may
have been issued, to the extent necessary to make payment in full in
cash of all Senior Indebtedness remaining unpaid, after giving
effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness; and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 11(c), any payment or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities, shall be received in violation hereof by the
holder of this Note on account of Subordinated Indebtedness before
all Senior Indebtedness is paid in full in cash, such payment or
distribution shall be received and held in trust for and shall be
paid over to the holders of the Senior Indebtedness remaining unpaid
or their representative, agent or trustee under any loan agreement,
indenture or other agreement under which any instruments evidencing
any of such Senior Indebtedness may have been issued, for
application to the payment of such Senior Indebtedness until all
such Senior Indebtedness shall have been paid in full in cash after
giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness.
To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar person, the Senior Indebtedness or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment has not occurred. If the holder of this Note does not file a proper
claim or proof of debt in the form required in any bankruptcy, insolvency,
receivership, reorganization or similar proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then any of the holders of
the Senior Indebtedness or their representative, agent or trustee is hereby
authorized to file an appropriate claim for and on behalf of the holder of this
Note.
(d) SUBROGATION. Subject to the prior payment in full in cash of
all Senior Indebtedness, the holder of this Note shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on this Note shall be paid in full, and for the purpose
of such subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the holder of
this Note by virtue of this Section 11 which otherwise would have been made to
the holder of this Note shall, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holder of this Note, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Section 11 are and are intended solely
for the purpose of defining the relative rights of the holder of this Note, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
(e) OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing contained in
this Section 11 or in this Note is intended to or shall impair, as between the
Company and the holder of this Note, the obligation of the Company, which is
absolute and unconditional, to pay to the holder of this Note the principal of
and interest on this Note as and when the same shall become due and payable in
accordance with its terms, or is intended to or shall affect the relative rights
of the holder of this Note and creditors of the Company other than the holders
of the Senior Indebtedness, nor shall anything herein or therein prevent the
holder of this Note from exercising all remedies otherwise permitted by
applicable law upon an event of default under this Note, subject to the
provisions of this Section 11 and Section 6 of this Note, including the rights
of the holders of Senior Indebtedness in respect of assets of the Company
received upon the exercise of any such remedy. Upon any distribution of assets
of the Company referred to in this Section 11, the holder of this Note shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the holder of this
Note, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Section 11.
(f) SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS. No right of any present or future
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act by any such
holder, or by any noncompliance by the Company with the terms and provisions of
this Note, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of the Senior Indebtedness may, without
in any way affecting the obligations of the holder of this Note with respect
hereto, at any time or from time to time and in their absolute discretion,
change the manner, place or terms of payment of, change or
extend the time of payment of, or renew, alter or increase, any Senior
Indebtedness or amend, modify or supplement any agreement or instrument
governing or evidencing such Senior Indebtedness or any other document referred
to therein, or exercise or refrain from exercising any other of their rights
under the Senior Indebtedness including, without limitation, the waiver of
default thereunder and the release or impairment of any collateral securing such
Senior Indebtedness, all without notice to or assent from the holder of the
Note.
(g) SENIOR INDEBTEDNESS. The term "SENIOR INDEBTEDNESS" shall mean
all Obligations (i) of the Company under, or in respect of, the Credit Agreement
(as amended, modified, supplemented, extended, restated, refinanced, replaced or
refunded from time to time, the "CREDIT AGREEMENT"), dated as of July 16, 1999,
among the Company and the other parties thereto, and (ii) of the Company under,
or in respect of, any other indebtedness, whether outstanding on the date hereof
or hereafter created, incurred or assumed, which the Company specifically
designates in writing as "Senior Indebtedness" for purposes of this Note;
provided, however, that no such other Senior Indebtedness described in this
clause (ii) shall by its terms prohibit the repayment of the principal amount
outstanding under this Note and accrued interest thereon at maturity unless an
event of default has occurred and is continuing thereunder. As used herein, the
term "OBLIGATION" shall mean any principal, interest, premium, penalties, fees,
expenses, indemnities, reimbursements and other liabilities and obligations
(including any guaranties of the foregoing liabilities and obligations) payable
under the documentation governing any indebtedness (including interest after the
commencement of any bankruptcy, insolvency, receivership or similar proceeding
at the rate provided for in the respective issue of Senior Indebtedness, whether
or not such interest is an allowed claim against the debtor in any such
proceeding).
(h) DESIGNATED SENIOR INDEBTEDNESS. The term Designated Senior
Indebtedness means any Senior Indebtedness which, at the date of determination,
has an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least $10
million.
(i) OTHER DEFINED TERMS. The term "Senior Payment Default" shall
mean any default in the payment of principal or (or premium, if any) or interest
on, or other amount payable in respect of, any Senior Indebtedness when due
that, by the terms of any instrument pursuant to which any Senior Indebtedness
is outstanding, permits one or more holders of such Senior Indebtedness (or a
trustee or agent or behalf of the holders thereof) to declare such Senior
Indebtedness due and payable prior to the date on which it would otherwise
become due and payable, other than a Senior Nonmonetary Default. The term
"Senior Nonmonetary Default" shall mean the occurrence or existence of any
event, circumstance, condition or state of facts that, by the terms of any
instrument pursuant to which any Senior Indebtedness is outstanding, permits one
or more holders of such Indebtedness (or a trustee or agent on behalf of the
holders thereof) to declare such Senior Indebtedness due and payable prior to
the date on which it would otherwise become due and payable, other than a Senior
Payment Default.
12. BENEFITS OF THE AGREEMENT. The Investor and all transferees
(to the extent permitted in the Agreement) shall be entitled to the rights and
benefits granted to them in the Agreement.
13. REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY.
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(a) REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY.
The Company shall keep at its principal executive offices a register (the
register maintained in such being herein sometimes collectively referred to as
the "Note Register") in which the Company shall provide for the registration of
Notes and of transfers and exchanges of Notes.
Subject to the provisions of the Securityholders Agreement dated
April __, 2000 regarding restrictions on transfer, upon surrender for
registration of transfer of any Note at its principal executive office, the
Company shall execute and deliver, in the name of the designated transferee or
transferees, one or more new Notes in denominations of $1,000 or integral
multiples thereof, of a like aggregate principal amount and bearing such
restrictive legends as may be required by law.
At the option of a holder, Notes may be exchanged for other Notes of
any authorized denominations, of a like aggregate principal amount and bearing
such restrictive legends as may be required by law upon surrender of the Notes
to be exchanged at the Company's principal executive offices. Whenever any Notes
are so surrendered for exchange, the Company shall execute and make available
for delivery the Notes which the holder making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company) be duly endorsed, or be
accompanied by a written instrument of transfer, in form satisfactory to the
Company, duly executed by the holder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Notes.
(b) ▇▇▇▇▇▇▇▇▇, DESTROYED, LOST AND STOLEN NOTES. If any mutilated
Note is surrendered to the Company, the Company shall execute and make available
for delivery in exchange therefor a new Note of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company (i) evidence to its
satisfaction of the destruction, loss or theft of any Note and (ii) such
security or indemnity as may be required by the Company to save itself harmless,
then, in the absence of notice to the Company that such Note has been acquired
by a protected purchaser, the Company shall execute and make available for
delivery, in lieu of any such destroyed, lost or stolen Note, a new Note of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note, subject to the holders' conversion
rights pursuant to Section 4 hereof.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
14. GOVERNING LAW. This Note shall be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Company has executed and delivered this Note
on April __, 2000.
GARTNER GROUP, INC.
By:_____________________________
Name:
Title: