1
================================================================================
EXHIBIT 4.6
Zero Coupon Convertible Subordinated Debentures due 2018
Networks Associates, Inc.
Issuer
------------
INDENTURE
------------
Dated as of February 13, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Bank and Trust Company of California, N.A.,
Trustee
================================================================================
2
CROSS REFERENCE TABLE*
TIA Indenture
Section Section
------- -------
310(a)(1)........................................................ 7.10
(a)(2)..................................................... 7.10
(a)(3)..................................................... N.A.**
(a)(4)..................................................... N.A.
(b)...................................................7.08; 7.10
(c)........................................................ N.A.
3.11(a)........................................................ 7.11
(b)....................................................... 7.11
(c)....................................................... N.A.
3.12(a)....................................................... 2.05
(b).......................................................12.03
(c).......................................................12.03
(d)....................................................... 7.06
3.13(a)....................................................... 7.06
(b)(1).................................................... N.A.
(b)(2).................................................... 7.06
(c).......................................................12.02
(d)....................................................... 7.06
3.14(a)..................................................4.02;12.02
(b)....................................................... N.A.
(c)(1)....................................................12.04
(c)(2)....................................................12.04
(c)(3).................................................... N.A.
(d)....................................................... N.A.
(e).......................................................12.05
(f)....................................................... 4.03
3.15(a)....................................................... 7.01
(b)..................................................7.05;12.02
(c)....................................................... 7.01
(d)....................................................... 7.01
(e)....................................................... 6.11
3.16(a) (last sentence)....................................... 2.08
(a)(1)(A)................................................. 6.05
(a)(1)(B)................................................. 6.04
(a)(2).................................................... N.A.
(b)....................................................... 6.07
3.17(a)(1).................................................... 6.08
(a)(2).................................................... 6.09
(b)....................................................... 2.04
3.18(a). .....................................................12.01
* Note: This Cross Reference Table shall not, for any purpose, be
deemed to be part of the Indenture
** Note: N.A. means Not Applicable
-2-
3
TABLE OF CONTENTS(1)
PAGE
----
ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE.........................1
Section 1.01. Definitions...................................................1
Section 1.02. Other Definitions.............................................8
Section 1.03. Incorporation by Reference of Trust Indenture Act.............9
Section 1.04. Rules of Construction.........................................9
ARTICLE 2 - THE SECURITIES.....................................................9
Section 2.01. Form and Dating...............................................9
Section 2.02. Execution and Authentication.................................10
Section 2.03. Registrar, Paying Agent and Conversion Agent.................10
Section 2.04. Paying Agent to Hold Money and Securities in Trust...........11
Section 2.05. Securityholder Lists.........................................11
Section 2.06. Exchange and Registration of Transfer of Securities;
Restrictions on Transfers; Depositary......................11
Section 2.07. Replacement Securities.......................................18
Section 2.08. Outstanding Securities; Determinations of Holders' Action....18
Section 2.09. Temporary Securities.........................................19
Section 2.10. Cancellation.................................................19
Section 2.11. Persons Deemed Owners........................................20
ARTICLE 3 - REDEMPTION AND PURCHASES..........................................20
Section 3.01. Right to Redeem; Notices to Trustee..........................20
Section 3.02. Selection of Securities to be Redeemed.......................20
Section 3.03. Notice of Redemption.........................................21
Section 3.04. Effect of Notice of Redemption...............................22
Section 3.05. Deposit of Redemption Price..................................22
Section 3.06. Securities Redeemed in Part..................................22
Section 3.07. Conversion Arrangement on Call for Redemption................22
Section 3.08. Purchase of Securities at Option of the Holder...............23
Section 3.09. Redemption at Option of the Holder upon a
Fundamental Change.........................................29
Section 3.10. Effect of Purchase Notice or Fundamental Change
Redemption Notice..........................................30
Section 3.11. Deposit of Purchase Price or Fundamental Change
Redemption Price...........................................31
Section 3.12. Securities Purchased in Part.................................31
Section 3.13. Covenant to Comply with Securities Laws upon
Purchase of Securities.....................................31
Section 3.14. Repayment to the Company.....................................31
--------
(1) This Table of Contents shall not, for any purpose, be deemed to
be part of the Indenture.
-i-
4
TABLE OF CONTENTS
PAGE
----
ARTICLE 4 - COVENANTS...............................................32
Section 4.01. Payment of Securities...............................32
Section 4.02. Financial Information; SEC Reports..................32
Section 4.03. Compliance Certificate..............................33
Section 4.04. Further Instruments and Acts........................33
Section 4.05. Maintenance of Office or Agency.....................33
Section 4.06. Existence...........................................34
Section 4.07. Maintenance of Properties...........................34
Section 4.08. Payment of Taxes and Other Claims...................34
ARTICLE 5 - SUCCESSOR CORPORATION...................................34
Section 5.01. When the Company May Merge or Transfer Assets.......34
ARTICLE 6 - DEFAULTS AND REMEDIES...................................36
Section 6.01. Events of Default...................................36
Section 6.02. Acceleration........................................37
Section 6.03. Other Remedies......................................37
Section 6.04. Waiver of Past Defaults.............................37
Section 6.05. Control by Majority.................................37
Section 6.06. Limitation on Suits.................................38
Section 6.07. Rights of Holders to Receive Payment................38
Section 6.08. Collection Suit by Trustee..........................38
Section 6.09. Trustee May File Proofs of Claim....................38
Section 6.10. Priorities..........................................39
Section 6.11. Undertaking for Costs...............................40
Section 6.12. Waiver of Stay, Extension or Usury Laws.............40
ARTICLE 7 - TRUSTEE.................................................40
Section 7.01. Duties of Trustee...................................40
Section 7.02. Rights of Trustee...................................42
Section 7.03. Individual Rights of Trustee........................42
Section 7.04. Trustee's Disclaimer................................42
Section 7.05. Notice of Defaults..................................42
Section 7.06. Reports.............................................43
Section 7.07. Compensation and Indemnity..........................43
Section 7.08. Replacement of Trustee..............................44
-ii-
5
TABLE OF CONTENTS
PAGE
----
Section 7.09. Successor Trustee by Merger.... .............................44
Section 7.10. Eligibility; Disqualification.......... .....................44
Section 7.11. Preferential Collection of Claims Against Company............45
ARTICLE 8 - DISCHARGE OF INDENTURE............................................45
Section 8.01. Discharge of Liability on Securities.........................45
Section 8.02. Repayment to the Company.....................................45
ARTICLE 9 - AMENDMENTS........................................................45
Section 9.01. Without Consent of Holders...................................45
Section 9.02. With Consent of Holders......................................46
Section 9.03. Compliance with Trust Indenture Act..........................47
Section 9.04. Revocation and Effect of Consents, Waivers and Actions.......47
Section 9.05. Notation on or Exchange of Securities........................47
Section 9.06. Trustee to Sign Supplemental Indentures......................48
Section 9.07. Effect of Supplemental Indentures............................48
ARTICLE 10 - SUBORDINATION....................................................48
Section 10.01. Agreement of Subordination...................................48
Section 10.02. Payments to Holders..........................................48
Section 10.03. Subrogation of Securities....................................51
Section 10.04. Authorization by Holders.....................................52
Section 10.05. Notice to Trustee............................................52
Section 10.06. Trustee's Relation to Senior Indebtedness....................53
Section 10.07. No Impairment of Subordination...............................54
Section 10.08. Reliance by Holders of Senior Indebtedness on
Subordination Provisions...................................54
Section 10.09. Reinstatement of Subordination...............................54
Section 10.10. Permitted Payments...........................................54
Section 10.11. Article Applicable to Paying Agents..........................55
Section 10.12. Treatment of Conversion Payments.............................55
Section 10.13. Reliance on Judicial Order or Certificate of
Liquidating Agent..........................................55
Section 10.14. Holders of Senior Indebtedness May File Proofs of Claim......55
ARTICLE 11 - CONVERSION.......................................................56
Section 11.01. Conversion Privilege.........................................56
Section 11.02. Conversion Procedure.........................................56
Section 11.03. Fractional Shares............................................57
-iii-
6
TABLE OF CONTENTS
PAGE
----
Section 11.04. Taxes on Conversion..........................................57
Section 11.05. Company to Provide Stock.....................................57
Section 11.06. Adjustment for Change in Capital Stock.......................58
Section 11.07. Adjustment for Rights Issue..................................58
Section 11.08. Adjustment for Other Distributions...........................59
Section 11.09. When Adjustment May be Deferred..............................62
Section 11.10. When No Adjustment Required..................................62
Section 11.11. Notice of Adjustment.........................................62
Section 11.12. Voluntary Increase...........................................62
Section 11.13. Notice of Certain Transactions...............................63
Section 11.14. Effect of Reclassification, Consolidation, Merger or Sale....63
Section 11.15. Company Determination Final..................................64
Section 11.16. Trustee's Adjustment Disclaimer..............................64
Section 11.17. Simultaneous Adjustments.....................................64
Section 11.18. Successive Adjustments.......................................64
Section 11.19. Rights Issued in Respect of Common Stock Issued
Upon Conversion............................................64
Section 11.20. General Considerations.......................................65
ARTICLE 12 - MISCELLANEOUS....................................................65
Section 12.01. Trust Indenture Act..........................................65
Section 12.02. Notices......................................................65
Section 12.03. Communication by Holders with other Holders..................66
Section 12.04. Certificate and Opinion as to Conditions Precedent...........66
Section 12.05. Statements Required in Certificate or Opinion................67
Section 12.06. Separability Clause..........................................67
Section 12.07. Rules by Trustee, Paying Agent, Conversion Agent
and Registrar..............................................67
Section 12.08. Governing Law................................................67
Section 12.09. No Recourse Against Others...................................67
Section 12.10. Successors...................................................68
Section 12.11. Multiple Originals...........................................68
EXHIBIT A--Form of Security
-iv-
7
INDENTURE, dated as of February 13, 1998, between Networks
Associates, Inc., a Delaware corporation (the "Company"), and State Street Bank
and Trust Company of California, N.A., a national banking association organized
and existing under the laws of the United States of America (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Zero Coupon
Convertible Subordinated Debentures due 2018:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"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 or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Applicable Price" means (i) in the event of a Fundamental Change in
which the holders of the Common Stock receive only Cash, the amount of Cash
received by the holder of one share of Common Stock and (ii) in the event of any
other Fundamental Change, the average of the last reported sales price for the
Common Stock (determined as set forth in the definition of Current Market Price)
during the ten Trading Days prior to the record date for the determination of
the holders of Common Stock entitled to receive Cash, securities, property or
other assets in connection with such Fundamental Change, or, if there is no such
record date, the date upon which the holders of Common Stock shall have the
right to receive such Cash, securities, property or other assets in connection
with a Fundamental Change.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of such board.
"Business Day" means each day of the year on which banking
institutions are not required or authorized to close in The City of New York or
the city in which the Corporate Trust Office is located.
"Common Stock" means any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 11.14, however, shares issuable upon conversion of the
8
Securities shall include only shares of Common Stock, par value of $.01 per
share, of the Company as it exists on the date of this Indenture or shares of
any class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the party named as the "Company" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice Chairman,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Conversion Rate" shall have the meaning specified in Section 11.01.
"Corporate Trust Office" or other similar term, shall mean the
principal office of the Trustee at which at any particular time its corporate
trust business shall be principally administered, which office is, at the date
as of which this Indenture is dated, located at ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department (Networks
Associates, Inc., Zero Coupon Convertible Subordinated Debentures due 2018).
"Current Market Price" per share of the Common Stock on any date of
determination means the average of the daily closing prices of the Common Stock
on the Nasdaq National Market for the 5 consecutive trading days ending on and
including such date of determination. The last reported sale price for each day
shall be (i) if the Common Stock is listed on the Nasdaq National Market, the
last reported sale price of Common Stock on the Nasdaq National Market, or any
similar system of automated dissemination of quotations of securities prices
then in common use, if so quoted, (ii) if the Common Stock is not listed or
admitted for trading as described in clause (i), the last reported sale price of
the Common Stock on the NYSE or if the Common Stock is listed or admitted for
trading on any other national securities exchange, the last sale price, or the
closing bid price if no sale occurred, of the Common Stock on the principal
securities exchange on which the Common Stock is listed, or (iii) if not quoted
or listed as described in clauses (i) or (ii), the mean between the high bid and
low asked quotations for Common Stock as reported by the National Quotation
Bureau Incorporated if at least two securities dealers have inserted both bid
and asked quotations for the Common Stock on at least 5 of the 10 preceding
Trading Days. If none of the conditions set forth above is met, the last
reported sale price of Common Stock on any day or the average of such last
-2-
9
reported sale prices for any period shall be the fair market value of the Common
Stock as determined by a member firm of the NYSE selected by the Company.
"Custodian" shall mean State Street Bank and Trust Company of
California, N.A., as custodian with respect to the Securities in global form, or
any successor entity thereto.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issuable or issued
in whole or in part in global form, the Person specified in Section 2.06 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Indebtedness" means any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Senior Indebtedness shall be
"Designated Senior Indebtedness" for purposes of this Indenture; provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness. If any payment made to any holder of any
Designated Senior Indebtedness or its Representative with respect to such
Designated Senior Indebtedness is rescinded or must otherwise be returned by
such holder or Representative upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, the reinstated Indebtedness of the Company arising
as a result of such rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such rescission or return.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Fundamental Change" means the occurrence of any transaction or event
in connection with which all or substantially all the Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) consideration which is not all or substantially all common stock
listed (or, upon consummation of such transaction or event, will be listed) on a
United States national securities exchange or approved for quotation in the
Nasdaq National Market or any similar system of automated dissemination of
quotations of securities prices.
"Holder" or "Securityholder" means a Person in whose name a Security
is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency
-3-
10
exchange agreements, interest rate protection agreements, and any loans or
advances from banks, whether or not evidenced by notes or similar instruments)
or evidenced by bonds, debentures, notes or similar instruments (whether or not
the recourse of the lender is to the whole of the assets of such Person or to
only a portion thereof), (b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of credit, bank
guarantees or bankers' acceptances, (c) all obligations and liabilities
(contingent or otherwise) in respect of leases of such Person (i) required, in
conformity with generally accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet of such Person, or (ii)
required, in conformity with generally accepted accounting principles, to be
accounted for as an operating lease, provided either (A) such operating lease
requires, at the end of the term thereof, that such Person make any payment
other than accrued periodic rent in the event that such Person does not acquire
the leased real property and related fixtures subject to such lease, or (B) such
Person has an option to acquire the leased real property and related fixtures,
whether such option is exercisable at any time or under specific circumstances,
(d) all obligations of such Person (contingent or otherwise) with respect to an
interest rate swap, cap or collar agreement or other similar instrument or
agreement, (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d), (f) any indebtedness or
other obligations described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Purchaser" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
"Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"Issue Price" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is
issued as set forth on the face of the Security.
"Legal Holiday" is any day other than a Business Day. If any
specified date (including a date for giving notice) is a Legal Holiday, the
action shall be taken on the next succeeding date that is not a Legal Holiday,
and to the extent applicable no Original Issue Discount or interest, if any,
shall accrue for the intervening period.
"Liquidated Damages" shall have the meaning specified in the
Registration Rights Agreement.
-4-
11
"Nasdaq National Market" means the electronic inter-dealer quotation
system operated by NASDAQ Stock Market, Inc., a subsidiary of the National
Association of Securities Dealers, Inc.
"NYSE" means The New York Stock Exchange, Inc.
"Officer" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer or the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 12.04 and 12.05, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the
information specified in Sections 12.04 and 12.05, from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"Original Issue Discount" of any Security means the difference
between the Issue Price and the Principal Amount of the Security as set forth on
the face of the Security. For purposes of this Indenture and the Securities,
accrual of Original Issue Discount shall be calculated on the basis of a 360 day
year of twelve 30 day months.
"Payment Blockage Notice" has the meaning specified in Section 10.02.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Portal Market" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"Principal" or "Principal Amount" of a Security means the Principal
Amount as set forth on the face of the Security.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Redemption Date" shall mean a date specified for redemption of the
Securities (other than redemption upon a Fundamental Change at the option of the
Securityholder) in accordance with the terms of the Securities and Section 3.01
of this Indenture.
"Redemption Price" shall have the meaning set forth in paragraph 5 of
the Securities.
-5-
12
"Reference Market Price" shall initially mean $38.17 and in the event
of any adjustment to the Conversion Rate pursuant to Article 11, the Reference
Market Price shall be adjusted to equal the initial Reference Market Price
multiplied by a fraction the numerator of which is the Conversion Rate specified
in the form of Security attached hereto as Exhibit A (without regard to any
adjustment thereto), and the denominator of which is the Conversion Rate
following such adjustment.
"Registration Rights Agreement" means that certain Registration
Rights Agreement, dated as of the date hereof, between the Company and the
Initial Purchaser.
"Regulation S" means Regulation S as promulgated under the Securities
Act, or any successor rule.
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required Persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Rule 144A" means Rule 144A as promulgated under the Securities Act,
or any successor rule.
"Rule 144(k)" means Rule 144(k) as promulgated under the Securities
Act, or any successor rule.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Zero Coupon Convertible Subordinated
Debentures due 2018.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Securityholder" or "Holder" means a Person in whose name a Security
is registered on the Registrar's books.
"Senior Indebtedness" means the principal of, premium, if any,
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), original issue
discount, rent and end of term payments payable on or in connection with, and,
to the extent not included in the foregoing, all amounts payable as fees, costs,
expenses, liquidated damages, indemnities, repurchase and other put obligations
and other amounts to the extent accrued or due on or in connection with,
Indebtedness of the Company, whether outstanding on the date of this Indenture
or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments,
-6-
13
modifications or supplements to, the foregoing). Notwithstanding the foregoing,
the term Senior Indebtedness shall not include (i) any Indebtedness of the
Company that is not secured, (ii) Indebtedness evidenced by the Securities,
(iii) Indebtedness of the Company to any subsidiary of the Company, a majority
of the voting stock of which is owned, directly or indirectly, by the Company,
(iv) accounts payable or other indebtedness to trade creditors created or
assumed by the Company in the ordinary course of business and (v) any particular
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness shall
not be senior in right of payment to, or is pari passu with, or is subordinated
or junior to, the Securities. If any payment made to any holder of any Senior
Indebtedness or its Representative with respect to such Senior Indebtedness is
rescinded or must otherwise be returned by such holder or Representative upon
the insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Senior Indebtedness effective as of the date of such
rescission or return.
"Stated Maturity", when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the Principal of such Security is due and payable.
"Significant Subsidiary" means, with respect to any Person, a
Subsidiary of such Person organized under the laws of the United States of
America, any state thereof, or the District of Columbia that would constitute a
"significant subsidiary" as such term is defined under Rule 1-02 of Regulation
S-X of the Securities and Exchange Commission.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such Person or a subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect
on the date of this Indenture, except as provided in Section 9.03.
"Trading Day" means a day during which trading in securities
generally occurs on the Nasdaq National Market or, if the applicable security is
not quoted on the Nasdaq National Market, on the NYSE, or if the applicable
security is not listed on the NYSE, on the principal other national or regional
securities exchange on which the applicable security is then listed or, if the
applicable security is not listed on a national or regional securities exchange,
on the principal other market on which the applicable security is then traded.
-7-
14
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Trustee" means the party named as the "Trustee" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"U.S. Person" shall have the meaning set forth in Regulation S.
"Voting Stock" shall mean stock of any class or classes, however
designated, having ordinary voting power for the election of a majority of the
board of directors of a corporation, other than stock having such power only by
reason of the happening of a contingency.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
------------------------------------------- -----------
"Bankruptcy Law"........................... 6.01
"Cash"..................................... 3.08(b)
"Company Notice"........................... 3.08(e)
"Company Notice Date"...................... 3.08(c)
"Conversion Agent"......................... 2.03
"Expiration Time".......................... 11.08(c)
"Event of Default"......................... 6.01
"Fundamental Change Redemption Date"....... 3.09(a)
"Fundamental Change Redemption Notice"..... 3.09(a)
"Fundamental Change Redemption Price"...... 3.09(a)
"Market Price"............................. 3.08(d)
"Notice of Default"........................ 6.01
"Over-allotment Option".................... 2.02
"Paying Agent"............................. 2.03
"Purchase Date"............................ 3.08(a)
"Purchase Notice".......................... 3.08(a)
"Purchase Price"........................... 3.08(a)
"Purchased Shares"......................... 11.08(c)
"Registrar"................................ 2.03
"Sale Price"............................... 3.08(d)
"Tender Expiration Time"................... 11.08(d)
"Tender Purchased Shares".................. 11.08(d)
-8-
15
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Securityholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rules have
the meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in
the plural include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities and the Trustee's
certificate of authentication for the Securities shall be substantially in the
form of Exhibit A, which is a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or usage
(provided that any such notation, legend or endorsement required by usage is in
a form acceptable to the Company). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated
the date of its authentication.
-9-
16
Any Security in global form shall represent such of the outstanding
Securities as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
transfers or exchanges permitted hereby. Any endorsement of a Security in global
form to reflect the amount of any increase or decrease in the amount of
outstanding Security represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in such manner and upon instructions
given by the Holder of such Security in accordance with this Indenture. Payment
of Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest, if any, on any Security in global form shall be
made to the Holder of such Security.
SECTION 2.02. EXECUTION AND AUTHENTICATION. The Securities shall be
executed on behalf of the Company by its Chairman of the Board, one of its Vice
Chairmen, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon and attested by its Treasurer or Secretary or one of its
Assistant Treasurers or one of its Assistant Secretaries. The signature of any
of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures 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 authentication of such Securities.
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 duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original
issue in an aggregate Principal Amount of up to $885,500,000 upon a Company
Order without any further action by the Company. The aggregate Principal Amount
of Securities outstanding at any time may not exceed the amount set forth in the
foregoing sentence, subject to the proviso set forth therein, except as provided
in Section 2.07.
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for purchase or payment ("Paying Agent") and
an office or agency where Securities may be presented for conversion into Common
Stock ("Conversion Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents. The term Paying Agent includes any additional paying agent.
The term Conversion Agent includes any additional conversion agent, including
any named pursuant to Section 4.05.
-10-
17
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (if not the Trustee or
an Affiliate of the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent and the Security. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar, Paying Agent or Conversion Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07. The Company or an Affiliate of the Company may act as
Paying Agent, Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST.
Except as otherwise provided herein, prior to or on each due date of payments in
respect of any Security, the Company shall deposit with the Paying Agent a sum
of money or securities sufficient to make such payments when such payments are
due. The Company shall require the Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money and securities held by the Paying Agent for the
making of payments in respect of the Securities and shall notify the Trustee of
any default by the Company in making any such payment. At any time during the
continuance of any such default, the Paying Agent shall, upon the written
request of the Trustee, forthwith pay to the Trustee all money and securities so
held in trust. If the Company or an Affiliate of the Company acts as Paying
Agent, it shall segregate the money and securities held by it as Paying Agent
and hold it as a separate trust fund. The Company at any time may require the
Paying Agent to pay all money and securities held by it to the Trustee and to
account for any funds and securities disbursed by it. Upon doing so, the Paying
Agent shall have no further liability for the money or securities.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semiannually on
February 13 and August 13 a listing of Holders dated within 15 days of the date
on which the list is furnished and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders.
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES;
RESTRICTIONS ON TRANSFERS; DEPOSITARY.
(a) Upon surrender for registration of transfer of any Security at
any office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.03 and satisfaction of the requirements for such transfer
set forth in this Section 2.06, 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.
-11-
18
Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations. Securities to be exchanged shall
be surrendered at any office or agency to be maintained by the Company
designated as Registrar or co-registrar pursuant to Section 2.03 and the Company
shall execute and register and the Trustee shall authenticate and deliver in
exchange therefor the Security or Securities which the Securityholder making the
exchange shall be entitled to receive, bearing registration numbers not
contemporaneously outstanding.
All Securities presented for registration of transfer or for exchange
into like Securities, purchase, redemption or conversion into Common Stock or
payment shall (if so required by the Company, the Trustee, the Registrar or any
co-registrar) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee,
duly executed by the Holder or such Holder's attorney duly authorized in
writing.
No service charge shall be charged to the Securityholder for any
exchange for like Securities or registration of transfer of Securities, but the
Company may require payment of a sum sufficient to cover any tax, assessments or
other governmental charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Registrar or any co-registrar
shall be required to exchange for like Securities or register a transfer of (a)
any Securities for a period of 15 days next preceding any selection of
Securities to be redeemed, or (b) any Securities or portions thereof selected or
called for redemption, or (c) any Securities or portion thereof surrendered for
conversion into Common Stock, or (d) any Securities or portion thereof
surrendered for purchase or redemption (and not withdrawn) pursuant to Sections
3.08 or 3.09, respectively.
All Securities issued upon any transfer or exchange for like
Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture as the Securities
surrendered upon such exchange or transfer.
(b) So long as the Securities are eligible for book-entry settlement
with the Depositary (as defined below), or unless otherwise required by law, all
Securities that are so eligible may be represented by a Security in global form
registered in the name of the Depositary or the nominee of the Depositary,
except as otherwise specified below. The transfer and exchange of beneficial
interests in such Security in global form shall be effected through the
Depositary in accordance with this Indenture and the procedures of the
Depositary therefor.
Securities that upon initial issuance are beneficially owned by QIBs
or Persons that are not U.S. Persons will be represented by one or more
Securities in global form. Transfers of interests in a Security in global form
will be made in accordance with the standing instructions and procedures of the
Depository and its participants. The Trustee shall make appropriate endorsements
to reflect increases or decreases in the Principal Amounts of such Securities in
global form as set forth on the face of the Security to reflect any such
transfers.
-12-
19
Except as provided below, beneficial owners of a Security in global
form shall not be entitled to have certificates registered in their names, will
not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered Holders of such Securities in global
form.
(c) So long as the Securities are eligible for book-entry settlement,
or unless otherwise required by law, upon any transfer of a definitive Security
to a QIB in accordance with Rule 144A or to a Person who is not a U.S. Person in
accordance with Regulation S, and upon receipt of the definitive Security or
Securities being so transferred, together with a certification, substantially in
the form of the reverse of the Security, from the transferor that the transfer
is being made in compliance with Rule 144A or Regulation S, as the case may be
(or other evidence satisfactory to the Trustee), the Trustee shall make an
endorsement on the Security in global form to reflect an increase in the
aggregate Principal Amount of the Securities represented by the Security in
global form, the Trustee shall cancel such Security or Securities in
certificated form in accordance with the standing instructions and procedures of
the Depositary and the aggregate principal amount of Securities represented by
the Security in global form to be increased accordingly; provided that no
definitive Security, or portion thereof, in respect of which the Company or an
Affiliate of the Company held any beneficial interest shall be included in such
Security in global form until such definitive Security is freely tradable in
accordance with Rule 144(k); provided further that the Trustee shall issue
Securities in definitive form upon any transfer of a beneficial interest in the
Security in global form to the Company or any Affiliate of the Company.
Any Security in global form may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the Custodian, the
Depositary, by the NYSE or by the National Association of Securities Dealers,
Inc. in order for the Securities to be tradeable on The Portal Market or as may
be required for the Securities to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
any securities exchange upon which the Securities may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Securities are subject.
(d) Every Security that bears or is required under this Section
2.06(d) to bear the legend set forth in this Section 2.06(d) (together with any
Common Stock issued upon conversion of the Securities and required to bear the
legend set forth in Section 2.06(e), collectively, the "Restricted Securities")
shall be subject to the restrictions on transfer set forth in this Section
2.06(d) (including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the holder of each such Restricted Security, by such Securityholder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.06(d) and 2.06(e), the term "transfer" encompasses any sale, pledge,
transfer or other disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any certificate evidencing such Security (and all
-13-
20
securities issued in exchange therefor or substitution thereof, other than
Common Stock, if any, issued upon conversion therefor, which shall bear the
legend set forth in Section 2.06(e), if applicable) shall bear a legend in
substantially the following form, unless such Security has been sold pursuant to
a registration statement that has been declared effective under the Securities
Act (and which continues to be effective at the time of such transfer), or
unless otherwise agreed by the Company in writing, with written notice thereof
to the Trustee:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION;
(2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT (A) TO NETWORKS ASSOCIATES, INC. OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO
BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT
WILL FURNISH TO STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA,
N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY
-14-
21
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE).
IF THE PROPOSED TRANSFEREE IS A PURCHASER WHO IS NOT A U.S. PERSON,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK
AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D)
ABOVE OR UPON ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).
Any Security (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to the conditions for removal of the foregoing
legend set forth therein have been satisfied may, upon surrender of such
Securities for exchange to the Registrar in accordance with the provisions of
this Section 2.06, be exchanged for a new Security or Securities, of like tenor
and aggregate principal amount, which shall not bear the restrictive legend
required by this Section 2.06(d).
Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in this Section 2.06(d)), a Security in global form may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee to a successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Securities in global form. Initially, a
Security in global form shall be issued to the Depositary, registered in the
name of Cede & Co., as the nominee of the Depositary, and deposited with the
Custodian for Cede & Co.
If at any time the Depositary for the Security in global form
notifies the Company that it is unwilling or unable to continue as Depositary
for such Security, the Company may appoint a successor Depositary with respect
to such Security. If a successor Depositary for the Security is
-15-
22
not appointed by the Company within 90 days after the Company receives such
notice, the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate for authentication and delivery of Securities, will authenticate and
deliver, Securities in certificated form, in an aggregate principal amount equal
to the principal amount of the Security in global form, in exchange for such
Security in global form.
Securities in certificated form issued in exchange for all or a part
of a Security in global form pursuant to this Section 2.06 shall be registered
in such names and in such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such Securities in certificated form to the Persons in whose names such
Securities in certificated form are so registered.
At such time as all interests in a Security in global form have been
redeemed, converted, exchanged, repurchased or canceled for Securities in
certificated form, or transferred to a transferee who receives Securities in
certificated form, such Security in global form shall be, upon receipt thereof,
canceled by the Trustee in accordance with standing procedures and instructions
existing between the Custodian and Depositary. At any time prior to such
cancellation, if any interest in a Security in global form is exchanged for
Securities in certificated form, redeemed, converted, exchanged, repurchased by
the Company pursuant to Article 3 or canceled, or transferred for part of a
Security in global form, the principal amount of such Security in global form
shall, in accordance with the standing procedures and instructions existing
between the Custodian and the Depositary, be reduced or increased, as the case
may be, and an endorsement shall be made on such Security in global form, by the
Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
(e) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of a
Security shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or such Common Stock has been issued upon
conversion of Securities that have been transferred pursuant to a registration
statement that has been declared effective under the Securities Act, or unless
otherwise agreed by the Company in writing with written notice thereof to the
transfer agent for the Common Stock:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
STATE SECURITIES LAWS, AND, ACCOR DINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER
HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K)
-16-
23
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL
NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT (A) TO NETWORKS ASSOCIATES, INC. OR ANY
SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH
RULE 144A, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (D) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME
OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(D) ABOVE), IT WILL FURNISH TO BOSTON EQUISERVE,
AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRANSFER AGENT MAY REASONABLE REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
(3) IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(D) ABOVE OR UPON ANY
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION).
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.06(e).
(f) Any Security or Common Stock issued upon the conversion or
exchange of a Security that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Securities or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
-17-
24
SECTION 2.07. REPLACEMENT SECURITIES. If (a) any mutilated Security
is surrendered to the Trustee, or (b) the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and, upon its
written request, the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and Principal Amount, 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, or is about to be purchased or
redeemed by the Company pursuant to Article 3 hereof, the Company in its
discretion may, instead of issuing a new Security, pay, purchase or redeem such
Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.07 in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.07 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 Securities.
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS'
ACTION. Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding. A
Security does not cease to be outstanding because the Company or an Affiliate
thereof holds the Security; provided, however, that in determining whether the
Holders of the requisite Principal Amount of Securities have given or concurred
in any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any Affiliate of the Company shall
be disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Subject to the foregoing,
only Securities outstanding at the time of such determination shall be
considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).
-18-
25
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a
Fundamental Change Redemption Date, or on Stated Maturity, money or securities,
if permitted hereunder, sufficient to pay Securities payable on that date, then
on and after that date such Securities shall cease to be outstanding and
Original Issue Discount and interest, if any, on such Securities shall cease to
accrue; 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.
If a Security is converted in accordance with Article 11, then from
and after such conversion such Security shall cease to be outstanding and
Original Issue Discount and interest, if any, shall cease to accrue on such
Security.
SECTION 2.09. TEMPORARY SECURITIES. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, 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 conclusively 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 Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
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 deliver 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 2.10. CANCELLATION. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange for the Securities shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee and shall be
promptly canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. The Company may not
issue new Securities to replace Securities it has paid for or delivered to the
Trustee for cancellation or that any Holder has converted pursuant to Article
11. No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section 2.10, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be destroyed by the Trustee and, following such
-19-
26
destruction, the Trustee shall deliver a certificate of destruction to the
Company, unless the Company directs by the Company Order that the Trustee
deliver canceled Securities to the Company.
SECTION 2.11. PERSONS DEEMED OWNERS. Prior to due presentment 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 of such Security for the purpose of receiving payment of
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price and interest, if any, in respect thereof, for the purpose of
conversion and for all other purposes whatsoever, whether or not such Security
be overdue, and none of the Company, the Trustee or any agent of the Company or
the Trustee shall be affected by notice to the contrary.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE. The Company, at
its option, may redeem the Securities in accordance with the provisions of
paragraphs 5 and 7 of the Securities. If the Company elects to redeem Securities
pursuant to paragraph 5 of the Securities, it shall notify the Trustee in
writing of the Redemption Date, the Principal Amount of Securities to be
redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 (i) in the case of any redemption of fewer than all of the
Securities, at least 45 days before the Redemption Date and (ii) in the case of
a redemption of all of the Securities, no later than the date that the Company
is required to give notice to the Holders pursuant to Section 3.03, in each case
unless a shorter notice shall be satisfactory to the Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than
all the Securities held in definitive form are to be redeemed, the Trustee shall
select the definitive Securities to be redeemed pro rata or by lot or by a
method the Trustee considers fair and appropriate (as long as such method is not
prohibited by the rules of any stock exchange on which the Securities are then
listed). The Trustee shall make the selection at least 35 days, but not more
than 60 days, before the Redemption Date from outstanding definitive Securities
not previously called for redemption. The Trustee may select for redemption
portions of the Principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
Principal Amounts of $1,000 or a multiple of $1,000. Provisions of this
Indenture that apply to definitive Securities called for redemption also apply
to portions of definitive Securities called for redemption. The Trustee shall
notify the Company promptly of the definitive Securities or portions of
definitive Securities to be redeemed.
-20-
27
Any interest in a Security held in global form by and registered in
the name of the Depositary or its nominee to be redeemed in whole or in part
will be redeemed in accordance with the procedures of the Depositary.
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.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more
than 60 days before a Redemption Date, the Company shall mail a notice of
redemption by first-class mail, postage prepaid, to each Holder of Securities to
be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any
time before the close of business on the last Trading Day prior to the
Redemption Date;
(6) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 9 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Securities are to be redeemed,
the certificate number and Principal Amounts of the particular Securities to be
redeemed;
(9) that Original Issue Discount on Securities called for redemption
will cease to accrue on and after the Redemption Date; and
(10) the CUSIP number or numbers for the Securities.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption
-21-
28
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price stated in the notice except for
Securities which are converted in accordance with the terms of this Indenture.
Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to or on the
Redemption Date, the Company shall deposit with the Paying Agent (or if the
Company or an Affiliate of the Company is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the Redemption Price of all Securities to
be redeemed on that date other than Securities or portions of Securities called
for redemption which prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted for Common Stock, and on or
after the Redemption Date (unless the Company shall default in the payment of
the Securities at the Redemption Price, together with Original Issue Discount
accrued to, but excluding, the Redemption Date), Original Issue Discount on the
Securities or portion of Securities called for redemption shall cease to accrue
and such Securities shall cease after the close of business on the Business Day
immediately preceding the Redemption Date to be convertible into Common Stock
and, except as provided in Section 8.02, to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the Redemption Price
thereof and unpaid interest to, but excluding, the Redemption Date. The Paying
Agent shall as promptly as practicable return to the Company any money, with
interest, if any, thereon not required for that purpose because of conversion of
Securities. If such money is then held by the Company in trust and is not
required for such purpose it shall be discharged from such trust.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount to the unredeemed portion of the Security
surrendered.
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion for Common Stock of any Securities called for redemption
by an agreement with one or more investment bankers or other purchasers to
purchase such Securities by paying to the Paying Agent in trust for the Holders,
on or before the close of business on the Redemption Date, an amount that,
together with any amounts deposited with the Paying Agent by the Company for the
redemption of the Securities, is not less than the Redemption Price, including
interest, if any, to the Redemption
-22-
29
Date, of such Securities. Notwithstanding anything to the contrary contained in
this Article 3, the obligation of the Company to pay the Redemption Price of
such Securities, including all accrued Original Issue Discount, shall be deemed
to be satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, any Securities not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 11) surrendered by such purchasers for conversion, all
immediately prior to the close of business on the Redemption Date, subject to
payment of the above amount as aforesaid. The Paying Agent shall hold and pay to
the Holders whose Securities are selected for redemption any such amount paid to
it in the same manner as it would money deposited with it by the Company for the
redemption of Securities. Without the Paying Agent's prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Paying Agent as set forth
in this Indenture, and the Company agrees to indemnify the Paying Agent from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Paying Agent in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
SECTION 3.08. PURCHASE OF SECURITIES AT OPTION OF THE HOLDER.
(a) General. Securities shall be purchased by the Company pursuant to
paragraph 6 of the Securities as of February 13, 2003, February 13, 2008 and
February 13, 2013 (each, a "Purchase Date"), at the purchase price specified
therein (each, a "Purchase Price") at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent by the Holder of a written notice of
purchase (a "Purchase Notice") at any time from the opening of business on the
date that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date, stating:
(A) the certificate number of the Security which the Holder will
deliver to be purchased;
(B) the portion of the Principal Amount of the Security which
the Holder will deliver to be purchased, which portion must be $1,000 in
Principal Amount or a multiple thereof;
(C) that such Security shall be purchased as of the Purchase
Date pursuant to the terms and conditions specified in paragraph 6 of the
Securities and in this Indenture; and
(D) if the Company elects, pursuant to a Company Notice, to pay
the Purchase Price to be paid as of such Purchase Date, in whole or in part, in
Common Stock but such portion of the Purchase Price shall ultimately be payable
to such Holder in Cash because any of the conditions to the payment of the
Purchase Price in Common Stock are not satisfied prior to or on the Purchase
-23-
30
Date, as set forth in Section 3.08(d), whether such Holder elects (x) to
withdraw such Purchase Notice as to some or all of the Securities to which such
Purchase Notice relates (stating the Principal Amount and certificate numbers of
the Securities as to which such withdrawal shall relate), or (y) to receive Cash
in respect of the entire Purchase Price for all Securities (or portions thereof)
to which such Purchase Notice relates; and
(2) delivery of such Security to the Paying Agent prior to, on or
after the Purchase Date (together with all necessary endorsements) at the
offices of the Paying Agent, such delivery being a condition to receipt by the
Holder of the Purchase Price therefor; provided, however, that such Purchase
Price shall be so paid pursuant to this Section 3.08 only if the Security so
delivered to the Paying Agent shall conform in all respects to the description
thereof in the related Purchase Notice.
If a Holder, in such Holder's Purchase Notice (and in any written
notice of withdrawal of a portion of such Holder's Securities previously
submitted for purchase pursuant to a Purchase Notice, the portion that remains
subject to the Purchase Notice), fails to indicate such Holder's choice with
respect to the election set forth in clause (D) of Section 3.08(a)(1), such
Holder shall be deemed to have elected to receive Cash in respect of the entire
Purchase Price for all Securities subject to such Purchase Notice in the
circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or a multiple of $1,000. Provisions of this Indenture that apply to the
purchase of all of a Security also apply to the purchase of such portion of such
Security.
Any purchase by the Company contemplated pursuant to the provisions
of this Section 3.08 shall be consummated by the delivery of the consideration
to be received by the Holder promptly following the later of the Purchase Date
and the time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice contemplated by this Section
3.08(a) shall have the right at any time prior to the close of business on the
Purchase Date to withdraw such Purchase Notice by delivery of a written notice
of withdrawal to the Paying Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Purchase Notice or written notice of withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of Purchase Price. The
Company may elect with respect to any Purchase Date to pay the Purchase Price in
respect of the Securities to be purchased pursuant to Section 3.08(a) as of such
Purchase Date, in U.S. legal tender ("Cash") or Common Stock, or in any
combination of Cash and Common Stock, subject to the conditions set forth in
Sections 3.08(c) and (d). The Company shall designate, in the Company Notice
delivered pursuant to Section 3.08(e), whether the Company will purchase the
Securities for Cash or Common Stock, or, if a combination thereof, the
percentages of the Purchase Price of Securities in respect of which it will pay
in Cash and/or Common Stock; provided that the Company will pay
-24-
31
Cash for fractional interests in Common Stock. For purposes of determining the
existence of potential fractional interests, all Securities subject to purchase
by the Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented). Each Holder whose Securities are
purchased pursuant to this Section 3.08 shall receive the same percentage of
Cash and/or Common Stock in payment of the Purchase Price for such Securities,
except (i) as provided in Section 3.08(d) with regard to the payment of Cash in
lieu of fractional interests in Common Stock and (ii) in the event that the
Company is unable to purchase the Securities of a Holder or Holders for Common
Stock because any necessary qualifications or registrations of the Common Stock
under applicable federal or state securities laws cannot be obtained, the
Company may purchase the Securities of such Holder or Holders for Cash. The
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid once the Company has
given its Company Notice to Holders except pursuant to this Section 3.08(b) or
Section 3.08(d).
At least two Business Days before the Company Notice Date (as defined
in Section 3.08(c)), the Company shall deliver an Officers' Certificate to the
Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.08(e),
(iii) if the Company elects to pay the Purchase Price, or a
specified percentage thereof, in Common Stock, that the conditions to such
manner of payment set forth in Section 3.08(d) have been or will be complied
with, and
(iv) whether the Company desires the Trustee to give the Company
Notice required by Section 3.08(e).
(c) Purchase with Cash. At the option of the Company, the Purchase
Price of Securities in respect of which a Purchase Notice pursuant to Section
3.08(a) has been given, or a specified percentage thereof, may be paid by the
Company with Cash equal to the aggregate Purchase Price, or such specified
percentage thereof, as the case may be, of such Securities. If the Company
elects to purchase Securities with Cash, a Company Notice as provided in Section
3.08(e) shall be sent to Holders (and to beneficial owners as required by
applicable law) not less than 20 Business Days prior to the Purchase Date (the
"Company Notice Date").
(d) Payment by Issuance of Common Stock. At the option of the
Company, the Purchase Price of Securities in respect of which a Purchase Notice
pursuant to Section 3.08(a) has been given, or a specified percentage thereof,
may be paid by the Company by the issuance of a number of shares of Common Stock
equal to the quotient obtained by dividing (i) the amount of Cash to which the
Holders would have been entitled had the Company elected to pay all or such
specified percentage, as the case may be, of the Purchase Price of such
Securities in Cash by (ii) the Market Price of a share of Common Stock, subject
to the next succeeding paragraph.
-25-
32
The Company will not issue a fractional share of Common Stock in
payment of the Purchase Price. Instead the Company will pay Cash for the current
market value of the fractional share. The current market value of a fraction of
a share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent. It is understood that if a
Holder elects to have more than one Security purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Securities to be
purchased.
If the Company elects to purchase the Securities by the issuance of
shares of Common Stock, a Company Notice as provided in Section 3.08(e) shall be
sent to the Holders (and to beneficial owners as required by applicable law) not
later than the Company Notice Date.
The Company's right to exercise its election to purchase the
Securities pursuant to Section 3.08 through the issuance of shares of Common
Stock shall be conditioned upon:
(i) the Company having given timely Company Notice of election
to purchase all or a specified percentage of the Securities with Common Stock as
provided herein;
(ii) the registration of the shares of Common Stock to be issued
in respect of the payment of the specified percentage of the Purchase Price
under the Securities Act; unless the shares of Common Stock so issued can be
freely resold by the Securityholder (unless such Securityholder is the Company
or an Affiliate of the Company) receiving such shares without registration under
the Securities Act;
(iii) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption from such
qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and
an Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Stock are in conformity with this Indenture and (B) the shares of Common
Stock to be issued by the Company in payment of the specified percentage of the
Purchase Price in respect of Securities have been duly authorized and, when
issued and delivered pursuant to the terms of this Indenture in payment of the
specified percentage of the Purchase Price in respect of Securities, will be
validly issued, fully paid and nonassessable, and, in the case of such Officers'
Certificate, stating that conditions (i), (ii) and (iii) above have been
satisfied and, in the case of such Opinion of Counsel, stating that conditions
(ii) and (iii) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of Common
Stock to be issued for each $1,000 Principal Amount of Securities and the Sale
Price of a share of Common Stock on each Trading Day during the period during
which the Market Price is calculated and ending on the Purchase Date. The
Company may elect to pay the Purchase Price (or any portion thereof) in Common
Stock only if the information necessary to calculate the Market Price is
reported in a daily newspaper of national circulation. If such conditions are
not satisfied with respect to a Holder or Holders prior to or on the Purchase
Date and the Company elected to purchase the Securities to be purchased as of
such Purchase Date pursuant to this Section 3.08 through the
-26-
33
issuance of shares of Common Stock, the Company shall pay the entire Purchase
Price in respect of such Securities of such Holder or Holders in Cash.
The "Market Price" means the average of the Sale Prices of the Common
Stock for the five Trading Day period ending on (if the third Business Day prior
to the applicable Purchase Date is a Trading Day or, if not, then on the last
Trading Day prior to) the third Business Day prior to the applicable Purchase
Date, appropriately adjusted to take into account the occurrence, during the
period commencing on the first of such Trading Days during such five Trading Day
period and ending on such Purchase Date, of any event described in Section
11.06, 11.07 or 11.08; subject, however, to the conditions set forth in Sections
11.09 and 11.10. The "Sale Price" of the Common Stock on any date means the
closing per share sale price (or if no closing sale price is reported the
average of the bid and ask prices or, if more than one, in either case, the
average of the average bid and average ask prices) on such date as reported in
the composite transactions for the principal United States securities exchange
on which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional stock exchange, as reported by the Nasdaq
National Market.
(e) Notice of Election. Company's notices of election to purchase
with Cash or Common Stock, or any combination thereof, shall be sent to the
Holders (and to beneficial owners as required by applicable law) in the manner
provided in Section 12.02 at the time specified in Section 3.08(c) or (d), as
applicable (each, a "Company Notice"). Such Company Notices shall state the
manner of payment elected and shall contain the following information:
In the event the Company has elected to pay a Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive Common Stock with a
Market Price determined as of a specified date prior to the Purchase Date equal
to such specified percentage of the Purchase Price of the Securities held by
such Holder (except any Cash amount to be paid in lieu of fractional share); and
(2) set forth the method of calculating the Market Price and
state that because the Market Price of Common Stock will be determined prior to
the Purchase Date, the Holders will bear the market risk with respect to the
value of the Common Stock to be received from the date such Market Price is
determined to the Purchase Date.
In any case, each Company Notice shall include a form of Purchase
Notice to be completed by a Securityholder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
-27-
34
(iii) that Securities as to which a Purchase Notice has been
given may be converted only if the applicable Purchase Notice has been withdrawn
in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent to
collect payment;
(v) that the Purchase Price for any Security as to which a
Purchase Notice has been given and not withdrawn will be paid promptly following
the later of the Purchase Date and the time of surrender of such Security as
described in (iv);
(vi) the procedures the Holder must follow to exercise rights
under Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Securities; and
(viii) the procedures for withdrawing a Purchase Notice
(including, without limitation, for a conditional withdrawal pursuant to the
terms of Section 3.08 (a) (1) (D) or Section 3.10).
At the Company's request, the Trustee shall give the Company Notice
in the Company's name and at the Company's expense; provided, however, that, in
all cases, the text of the Company Notice shall be prepared by the Company.
(f) Covenants of the Company. All shares of Common Stock delivered
upon conversion or purchase of the Securities shall be newly issued shares or
treasury shares, shall be fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have
quoted all such shares of Common Stock on each United States national securities
exchange or over-the-counter or other domestic market on which the Common Stock
is then listed or quoted.
(g) Procedure upon Purchase. On the Business Day following the
Purchase Date, the Company shall deposit with the Paying Agent Cash (in respect
of a Cash purchase under Section 3.08(c) or for fractional interests, as
applicable), or shares of Common Stock, or a combination thereof, as applicable,
sufficient to pay the aggregate Purchase Price of the Securities to be purchased
pursuant to this Section 3.08. As soon as practicable after the Purchase Date,
the Company shall deliver to each Holder entitled to receive Common Stock,
through the Paying Agent, a certificate for the number of full shares of Common
Stock, as applicable, issuable in payment of such Purchase Price and Cash in
lieu of any fractional interests. The Person in whose name the certificate for
Common Stock is registered shall be treated as a holder of record following the
Purchase Date. Subject to Section 3.08(d), no payment or adjustment will be made
for dividends on the Common Stock the record date for which occurred on or prior
to the Purchase Date.
-28-
35
(h) Taxes. If a Holder is paid in Common Stock, the Company shall pay
any documentary, stamp or similar issue or transfer tax due on such issue of
shares of Common Stock. However, the Holder shall pay any such tax which is due
because the Holder requests the shares of Common Stock to be issued in a name
other than the Holder's name. The Paying Agent may refuse to deliver the
certificates representing the Common Stock being issued in a name other than the
Holder's name until the Paying Agent receives a sum sufficient to pay any tax
which will be due because the shares of Common Stock are to be issued in a name
other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
SECTION 3.09. REDEMPTION AT OPTION OF THE HOLDER UPON A FUNDAMENTAL
CHANGE.
(a) If a Fundamental Change shall occur at any time prior to February
13, 2018, each Holder of Securities shall have the right, at such Holder's
option, to require the Company to redeem such Holder's Securities on the date
(the "Fundamental Change Repurchase Date") (or if such date is not a Business
Day, the next succeeding Business Day) that is 45 days after the date of the
Company's notice of such Fundamental Change. The Securities will be redeemable
in part in multiples of $1,000 of Principal Amount. The Company shall redeem
such Securities at a price (the "Fundamental Change Redemption Price") equal to
the Issue Price plus accrued Original Issue Discount to the date of redemption;
provided that, with respect to a Fundamental Change, if the Applicable Price is
less than the Reference Market Price, the Company shall redeem such Securities
at a price equal to the foregoing Redemption Price multiplied by the fraction
obtained by dividing the Applicable Price by the Reference Market Price. No
Securities may be redeemed at the option of the Holders as a result of a
Fundamental Change if there has occurred and is continuing an Event of Default
(other than a default in the payment of the Fundamental Change Redemption Price
with respect to such Securities).
(b) The Company, or at its request (which must be received by the
Trustee at least three Business Days prior to the date the Trustee is requested
to give such notice as described below) the Trustee in the name of and at the
expense of the Company, shall mail to all Holders of record of the Securities a
notice (a "Fundamental Change Redemption Notice") of the occurrence of a
Fundamental Change and of the redemption right arising as a result thereof on or
before the tenth day after the occurrence of such Fundamental Change. The
Company shall promptly furnish the Trustee a copy of such notice.
(c) For a Security to be so redeemed at the option of the Holder, the
Paying Agent must receive such Security with the form entitled "Option to Elect
Redemption Upon a Fundamental Change" on the reverse thereof duly completed,
together with such Security duly endorsed for transfer, on or before the 30th
day after the date of such notice (or if such 30th day is not a Business Day,
the immediately preceding Business Day). All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Security for
redemption shall be determined by the Company, whose determination shall be
final and binding.
SECTION 3.10. EFFECT OF PURCHASE NOTICE OR FUNDAMENTAL CHANGE
REDEMPTION NOTICE. Upon receipt by the Company of the Purchase Notice or
Fundamental Change Redemption Notice
-29-
36
specified in Section 3.08(a) or Section 3.09(b), as applicable, the Holder of
the Security in respect of which such Purchase Notice or Fundamental Change
Redemption Notice, as the case may be, was given shall (unless such Purchase
Notice or Fundamental Change Redemption Notice is withdrawn as specified in the
following two paragraphs) thereafter be entitled to receive solely the Purchase
Price or Fundamental Change Redemption Price, as the case may be, with respect
to such Security. Such Purchase Price or Fundamental Change Redemption Price
shall be paid to such Holder promptly following the later of (x) the Purchase
Date or the Fundamental Change Redemption Date, as the case may be, with respect
to such Security (provided the conditions in Section 3.08(a) or Section 3.09(c),
as applicable, have been satisfied) and (y) the time of delivery of such
Security to the Paying Agent by the Holder thereof in the manner required by
Section 3.08(a) or Section 3.09(c), as applicable. Securities in respect of
which a Purchase Notice or Fundamental Change Redemption Notice, as the case may
be, has been given by the Holder thereof may not be converted for shares of
Common Stock on or after the date of the delivery of such Purchase Notice (or
Fundamental Change Redemption Notice, as the case may be), unless such Purchase
Notice (or Fundamental Change Redemption Notice, as the case may be) has first
been validly withdrawn as specified in the following two paragraphs.
A Purchase Notice or Fundamental Change Redemption Notice, as the
case may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent at any time prior to the close of
business on the Purchase Date or the Fundamental Change Redemption Date, as the
case may be, to which it relates specifying:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted,
(2) the Principal Amount of the Security with respect to which such
notice of withdrawal is being submitted, and
(3) the Principal Amount, if any, of such Security which remains
subject to the original Purchase Notice or Fundamental Change Redemption Notice,
as the case may be, and which has been or will be delivered for purchase by the
Company.
A written notice of withdrawal of a Purchase Notice may be in the
form of (i) a conditional withdrawal contained in a Purchase Notice pursuant to
the terms of Section 3.08(a)(1)(D) or (ii) a conditional withdrawal containing
the information set forth in Section 3.08(a)(1)(D) and the preceding paragraph
and contained in a written notice of withdrawal delivered to the Paying Agent as
set forth in the preceding paragraph.
There shall be no purchase of any Securities pursuant to Section 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including Cash in lieu of any fractional shares) or redemption pursuant
to Section 3.09 if there has occurred (prior to, on or after, as the case may
be, the giving, by the Holders of such Securities, of the required Purchase
Notice or Fundamental Change Redemption Notice, as the case may be) and is
continuing an Event of
-30-
37
Default (other than a default in the payment of the Purchase Price or
Fundamental Change Redemption Price, as the case may be, with respect to such
Securities).
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE
REDEMPTION PRICE. On or before the Business Day following a Purchase Date or a
Fundamental Change Redemption Date, as the case may be, the Company shall
deposit with the Trustee or with the Paying Agent (or, if the Company or an
Affiliate of the Company is acting as the Paying Agent, shall segregate and hold
in trust as provided in Section 2.04) an amount of money and/or securities, if
permitted hereunder, sufficient to pay the aggregate Purchase Price or
Fundamental Change Redemption Price, as the case may be, of all the Securities
or portions thereof which are to be purchased as of such Purchase Date or
Fundamental Change Redemption Date, as the case may be.
SECTION 3.12. SECURITIES PURCHASED IN PART. Any Security that is to
be purchased, or redeemed upon a Fundamental Change, only in part shall be
surrendered at the office of the Paying Agent (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 such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver 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 portion of the Principal Amount of the
Security so surrendered which is not purchased or redeemed.
SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE
OF SECURITIES. In connection with any purchase or redemption of Securities under
Section 3.08 or 3.09 hereof, the Company shall (i) comply with Rule 13e-4 (which
term, as used herein, includes any successor provision thereto) under the
Exchange Act, if applicable, (ii) file the related Schedule 13E-4 (or any
successor schedule, form or report) under the Exchange Act, if applicable, and
(iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Section 3.08 and 3.09 to be exercised in
the time and in the manner specified in Section 3.08 and 3.09.
SECTION 3.14. REPAYMENT TO THE COMPANY. The Trustee and the Paying
Agent shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in para graph 14 of the Securities, together with interest
or dividends, if any, thereon, held by them for the payment of a Purchase Price
or Fundamental Change Redemption Price, as the case may be; provided, however,
that to the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 3.11 exceeds the aggregate Purchase
Price or Fundamental Change Redemption Price, as the case may be, of the
Securities or portions thereof which the Company is obligated to purchase as of
the Purchase Date or Fundamental Change Redemption Date, as the case may be,
then promptly after the Business Day following the Purchase Date or Fundamental
Change Redemption Date, as the case may be, the Trustee and the Paying Agent
shall return any such excess to the Company together with interest or dividends,
if any, thereon.
-31-
38
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price, Fundamental Change Redemption Price and
interest, if any, shall be considered paid on the applicable date due or, in the
case of a Purchase Price or Fundamental Change Redemption Price, on the Business
Day following the applicable Purchase Date or Fundamental Change Redemption
Date, as the case may be, if on such date the Trustee or the Paying Agent holds,
in accordance with this Indenture, money or securities, if permitted hereunder,
sufficient to pay all such amount then due.
The Company shall pay interest on overdue amounts at the rate set
forth in paragraph 1 of the Securities and it shall pay interest on overdue
interest at the same rate compounded semiannually (to the extent that the
payment of such interest shall be legally enforceable), which interest on
overdue interest shall accrue from the date such amounts became overdue and
shall be in lieu of, and not in addition to, the continued accrual of Original
Issue Discount.
SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS. The Company will
deliver to the Trustee (a) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company (i) a consolidated balance
sheet of the Company and its Subsidiaries as of the end of such fiscal year and
the related consolidated statements of operations, stockholders' equity and cash
flows for such fiscal year, all reported on by an independent public accountant
of nationally recognized standing and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations and
a description of the business and properties of the Company and (b) as soon as
available and in any event within 45 days after the end of each of the first
three quarters of each fiscal year of the Company (i) an unaudited consolidated
financial report for such quarter and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations of
the Company; provided that the foregoing shall not be required for any fiscal
year or quarter, as the case may be, with respect to which the Company files or
expects to file with the Trustee an annual report or quarterly report, as the
case may be, pursuant to the third paragraph of this Section 4.02.
So long as the Securities or the Common Stock issued upon conversion
of the Securities are Restricted Securities, if the Company is not subject to
either Section 13 or 15(d) of the Exchange Act, the Company shall at the request
of any Holder (or holders of Common Stock issued upon conversion of the
Securities) provide to such Holder (or holders of such Common Stock) and any
prospective purchaser designated by such Holders (or holders of such Common
Stock), as the case may be, such information, if any, required by Rule
144A(d)(4) under the Securities Act.
The Company shall file with the Trustee, within 15 days after it
files such annual and quarterly reports, information, documents and other
reports with the SEC, copies of its annual report and of
-32-
39
the information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act.
SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to
the Trustee, within 120 days after the end of each fiscal year of the Company,
an Officers' Certificate in which one of the two Officers signing such
certificate is either the principal executive officer, principal financial
officer or principal accounting officer of the Company, stating whether or not
to the best knowledge of the signers thereof a Default exists (without regard to
any period of grace or requirement of notice provided hereunder) and, if a
Default exists, specifying all such Defaults and the nature and status thereof
of which the signers may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming
aware of any Default 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 4.03 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY. 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, where Securities
may be surrendered for registration of transfer, exchange, purchase, redemption
or conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office or agency of State
Street Bank and Trust Company, N.A., an Affiliate of the Trustee located at ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Trust Window, New York, New York 10006
(Attention: Networks Associates, Inc., Zero Coupon Convertible Subordinated
Debentures due 2018) shall be such office or agency for all of the aforesaid
purposes unless the Company shall maintain some other office or agency for such
purposes and shall give prompt written notice to the Trustee of the location,
and any change in the location, of such other 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, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes.
-33-
40
SECTION 4.06. EXISTENCE. Subject to Article 5, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
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 4.07. MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant 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 4.07
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 Significant
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 4.08. 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, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property, of the Company or any Significant Subsidiary, (ii) all
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 Significant Subsidiary,
and (iii) all stamps and other duties, if any, which may be imposed by the
United States 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 (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company, or
(B) if the amount applicability or validity is being contested in good faith by
appropriate proceedings.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS.
The Company shall not consolidate with or merge with or into any
other Person (other than in a merger or consolidation in which the Company is
the surviving Person) or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
-34-
41
(i) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance, transfer or lease the properties and assets of the Company
substantially as an entirety shall be a corporation, limited liability company,
partnership or trust organized and validly existing under the laws of the United
States or 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 Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest, if any, on the Securities, according to their
tenor, and the due and punctual performance of all of the covenants and
obligations of the Company under the Securities and this Indenture, and shall
have provided for conversion rights in accordance with the Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(iii) the Company shall have 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 5 and that all conditions precedent herein
provided for relating to such transaction have been satisfied.
The successor Person formed by such consolidation or into which the
Company is merged or the successor Person 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 had been named as the Company herein; and thereafter, except in
the case of a lease, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company defaults in the payment of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price or Fundamental Change Redemption Price on
any Security when the same becomes due and payable at its Stated Maturity, upon
redemption, upon declaration, when due for purchase by the Company or otherwise
(provided that in the case of a default in the payment of Liquidated Damages,
such default in payment of Liquidated Damages continues for a period of 30
days), whether or not such payment shall be prohibited by Article 10;
-35-
42
(2) the Company fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those referred to in
clause (1) above) and such failure continues for 60 days after receipt by the
Company of a Notice of Default;
(3) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the Company
under any Bankruptcy Law, and such decree or order shall have continued
undischarged and unstayed for a period of 60 consecutive days; or a decree or
order of a court having jurisdiction in the premises of the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the
Company or of its property, or for the winding-up or liquidation of its affairs,
shall have been entered, and such decree or order shall have remained in force
undischarged and unstayed of a period of 60 consecutive days; or
(4) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization
under any Bankruptcy Law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due.
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
Federal or state law for the relief of debtors.
A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in clause (2) above after
actual receipt of such notice (a "Notice of Default"). Any such notice must
specify the Default, demand that it be remedied and state that such notice is a
Notice of Default.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(3) or (4)) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
aggregate Principal Amount of the Securities at the time outstanding by notice
to the Company and the Trustee, may declare the Issue Price and accrued Original
Issue Discount to the date of declaration on all the Securities to be
immediately due and payable. Upon such a declaration, such Issue Price and
accrued Original Issue Discount shall be due and payable immediately. If an
Event of Default specified in Section 6.01(3) or (4) occurs and is continuing,
the Issue Price and accrued Original Issue Discount on all the Securities shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Company and the Trustee (and without notice to any other Securityholder),
may rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of the Issue Price and accrued Original
Issue Discount that have
-36-
43
become due solely as a result of acceleration and if all amounts due to the
Trustee under Section 7.07 have been paid. No such rescission shall affect any
subsequent Default or Event of Default or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price and accrued Original Issue Discount on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Company and the Trustee (and without notice to any other Securityholder),
may waive an existing Default or Event of Default and its consequences except
(1) an Event of Default described in Section 6.01(l), (2) a Default in respect
of a provision that under Section 9.02 cannot be amended without the consent of
each Securityholder affected or (3) a Default that constitutes a failure to
convert any Security in accordance with the terms of Article 11. When a Default
or Event of Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability unless the Trustee is offered indemnity satisfactory to it.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Company and the Trustee written
notice stating that an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of
the Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense satisfactory to the
Trustee;
-37-
44
(4) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security or indemnity;
and
(5) the Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60 day period.
A Securityholder may not use this Indenture to prejudice the rights
of any other Securityholder or to obtain a preference or priority over any other
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, but subject to Article 10, the right of
any Holder to receive payment of the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest, if any, in respect of the Securities held by such
Holder, on or after the respective due dates expressed in the Securities or any
Redemption Date and to convert the Securities in accordance with Article 11, or
to bring suit for the enforcement of any such payment on or after such
respective dates or the right to convert, shall not be impaired or affected
adversely without the consent of each such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
described in Section 6.01(1) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Securities and the amounts
provided for in Section 7.07.
SECTION 6.09. 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 their creditors, the
Trustee (irrespective of whether the Principal Amount, Issue Price, accrued
Original Issue Discount, accrued Liquidated Damages, if any, Redemption Price,
Purchase Price, Fundamental Change Redemption Price or interest, if any, in
respect of 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 any such amount) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, and to file such other papers or documents 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 allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
-38-
45
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder 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, to pay the
Trustee any amount due 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 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder 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 claims of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required by
Article 10;
Third: to Holders for amounts due and unpaid on the Securities for
the Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest, if any, as the case may be, ratably, without
preference or priority of any kind, according to such amounts due and payable on
the Securities; and
Fourth: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such record date,
the Company shall mail to each Securityholder and the Trustee a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, any suit by a Holder for the enforcement of the
payment of the Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Fundamental Change Redemption Price or
interest, if any, on or after the due date expressed in such Security or to any
suit for the enforcement of the right to convert the security pursuant to
Article 11, or a suit by Holders of more than 10% in aggregate Principal Amount
of the Securities at the time outstanding.
-39-
46
SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY 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 or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price or Fundamental Change Redemption Price in
respect of Securities, or any interest on any such amounts, as contemplated
herein, or which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such laws 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.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; 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. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.01;
-40-
47
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
Subparagraphs (c)(1),(2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require a Company Order, an Officers' Certificate or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on a Company Order, Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) Subject to the provisions of Section 7.01(c), the Trustee
shall not be liable for any action it takes or omits to take in good faith which
it believes to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel selected by it and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel.
-41-
48
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture, unless the Holders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion
Agent or co-registrar may do the same with the like rights. However, the Trustee
must comply with Section 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, it shall not be responsible for any statement in the
offering memorandum for the Securities or in this Indenture or the Securities
(other than its certificate of authentication), the acts of a prior Trustee
hereunder, or the determination as to which beneficial owners are entitled to
receive any notices hereunder.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall give to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default described in Section 6.01(1), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders. The
second sentence of this Section 7.05 shall be in lieu of the proviso to Section
315(b) of the TIA and such provision is hereby expressly excluded from this
Indenture, as permitted by the TIA. The Trustee shall not give notice of a
Default pursuant to Section 6.01(2) until at least sixty days have passed since
its occurrence.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after
each May 1, beginning with the May 1 following the date of this Indenture, the
Trustee shall mail to each Holder a brief report dated as of such May 1 that
complies with TIA Section 313(a), if required by such Section 313(a). The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each securities exchange on which the Securities are
listed. The Company agrees to notify the Trustee whenever the Securities become
listed on any securities exchange and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company agrees:
(a) to pay to the Trustee from time to time reasonable
compensation 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);
(b) 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
-42-
49
(including the reasonable compensation and the expense, advances 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
(c) to indemnify the Trustee 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 and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, as the case may be, on particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(3) or (4), the expenses
are intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign by so
notifying the Company; provided, however, that no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.08. The Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding may remove the Trustee by so notifying
the Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with, or ceases to be eligible
under, Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to
-43-
50
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
7.07.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trustee business (including the trust created by this
Indenture) or assets to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee
shall have a combined capital and surplus of at least $50,000,000 (or if the
Trustee is a member of a bank holding company system, its bank holding company
shall have a combined capital and surplus of $50,000,000) as set forth in its
most recent published annual report of conditions. Nothing herein contained
shall prevent the Trustee from filing with the SEC the application referred to
in the penultimate paragraph of TIA Section 310(b). If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.10, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article 7.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES. When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits with
the Trustee Cash and/or securities, as permitted by the terms hereof, sufficient
to pay at Stated Maturity the Principal Amount of all outstanding Securities
(other than Securities replaced pursuant to Section 2.07), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 7.07, cease to be of further effect. The
Trustee shall join in the execution of a document prepared by the Company
-44-
51
acknowledging satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and Opinion of Counsel and at
the cost and expense of the Company.
SECTION 8.02. REPAYMENT TO THE COMPANY. The Trustee and the Paying
Agent shall return to the Company upon written request any money or securities
held by them for the payment of any amount with respect to the Securities that
remains unclaimed for two years, provided, however, that the Trustee or such
Paying Agent, before being required to make any such return, shall, in the event
that the Securities are no longer held in global form, at the expense of the
Company cause to be published once in a newspaper of general circulation in The
City of New York or mail to each such Holder notice that such money or
securities remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication or mailing, any
unclaimed money or securities then remaining will be returned to the Company.
After return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture and the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture which shall not materially adversely
affect the interests of the Holders of the Securities;
(2) to comply with Article 5 or Section 11.14;
(3) to provide for uncertificated Securities in addition to
certificated Securities so long as such uncertificated Securities are in
registered form for purposes of the Internal Revenue Code of 1986, as amended;
(4) to make any change that does not adversely affect the right
of any Securityholder; or
(5) to make any change to comply with the TIA, or any amendment
thereto, or to comply with any requirement of the SEC in connection with the
qualification, if any, of the Indenture under the TIA.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee,
with the written consent of the Holders of at least a majority in aggregate
Principal Amount of the Securities at the
-45-
52
time outstanding, may amend this Indenture or the Securities. However, without
the consent of each Securityholder affected, an amendment or supplement to this
Indenture or the Securities may not:
(1) make any change to the Principal Amount of Securities whose
Holders must consent to an amendment;
(2) make any change to the manner or rate of accrual in
connection with Original Issue Discount or interest, if any, reduce the rate of
interest referred to in paragraph 1 of the Securities or extend the time for
payment of Original Issue Discount or interest, if any, on any Security;
(3) reduce the Principal Amount or the Issue Price of or extend
the Stated Maturity of any Security;
(4) reduce the Redemption Price, Purchase Price or Fundamental
Change Redemption Price of any Security;
(5) make any Security payable in money or securities other than
that stated in the Security;
(6) make any change in Article 10 that adversely affects the
rights of any Securityholder in any material respect;
(7) make any change in Section 6.04, Section 6.07 or this
Section 9.02, except to increase any such percentage;
(8) make any change that adversely affects the right to convert
any Security; or
(9) make any change that adversely affects the right to require
the Company to purchase the Securities, or the right to require the Company to
redeem the Securities upon a Fundamental Change, in accordance with the terms
thereof and this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section 9.02 or Section 9.01 may not make any
change that adversely affects the rights under Article 10 of any holder of
Senior Indebtedness then outstanding unless the requisite holders of such Senior
Indebtedness consent to such change pursuant to the terms of such Senior
Indebtedness.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
-46-
53
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article 9 shall comply with the TIA as then
in effect, if then required to so comply.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment, waiver or other action becomes effective, a consent to it or
any other action by a Holder of a Security is a continuing consent by the Holder
and every subsequent Holder of that Security or portion of the Security that
evidences the same obligation as the consenting Holder's Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action as
to such Holder's Security or portion of the Security if the Trustee receives the
notice or revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall bind
every Securityholder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 9 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 Trustee and the Board of
Directors, 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.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES. The Trustee
shall sign any supplemental indenture authorized pursuant to this Article 9 if
the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign such
supplemental indenture. In signing such amendment the Trustee shall be entitled
to receive, and (subject to the provisions of Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution
of any supplemental indenture under this Article 9, 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.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each Holder of Securities issued hereunder by such Holder's
acceptance thereof likewise covenants and agrees, that all Securities shall be
issued subject to the provisions of this Article 10; and each
-47-
54
Person holding any such Security whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions.
The payment of the Principal Amount, Issue Price, accrued Original
Issue Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase
Price, Fundamental Change Redemption Price and interest, if any, in respect of
all Securities issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full in Cash or other payment satisfactory to the holders of
Senior Indebtedness of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article 10 shall prevent the occurrence of any
Default or Event of Default hereunder.
SECTION 10.02. PAYMENTS TO HOLDERS. No payment shall be made with
respect to the payment of Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price and interest, if any, on the Securities,
except payments and distributions made by the Trustee as permitted by Section
10.05, if:
(i) a default in any payment obligations in respect of
Senior Indebtedness occurs and is continuing, without regard to any applicable
period of grace (whether at maturity or at a date fixed for payment or by
declaration or otherwise); or
(ii) any other default occurs and is continuing with respect
to Designated Senior Indebtedness that permits the holders of such Designated
Senior Indebtedness as to which such default relates to accelerate its maturity
and the Trustee receives a notice of the default (a "Payment Blockage Notice")
from a holder of Designated Senior Indebtedness, a Representative of Designated
Senior Indebtedness or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to
clause (ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 365 days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of not less than 90 days (it being
acknowledged that (x) any action of the Company or any of its Subsidiaries
occurring subsequent to delivery of a Payment Blockage Notice that would give
rise to any event of default pursuant to any provision of Senior Indebtedness
under which an event of default previously existed (or was continuing at the
time of delivery of such Payment Blockage Notice) shall constitute a new event
of default for this purpose and (y) any breach of a financial covenant giving
rise to a nonpayment default for a period ending subsequent to the date of
delivery of the respective Payment Blockage Notice shall constitute a new event
of default for this purpose.)
-48-
55
The Company may and shall resume payments on and distributions
in respect of the Securities upon the earlier of:
(1) in case of a default referred to in clause (i) above, the
date upon which the default is cured or waived in accordance with the terms of
the governing instrument or ceases to exist, or
(2) in the case of a default referred to in clause (ii) above,
the date upon which the default is cured, waived in accordance with the terms of
the governing instrument or ceases to exist or 179 days pass after notice is
received if the maturity of such Designated Senior Indebtedness has not been
accelerated,
unless this Article 10 otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization or
bankruptcy of Company, whether voluntary or involuntary or insolvency,
receivership or similar proceedings relating to the Company or its property, or
an assignment of the benefit of creditors or any marshaling of the Company's
assets or liabilities, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full in Cash or other payment satisfactory
to the holders of such Senior Indebtedness, or provision is made for such
payment in Cash or other payment satisfactory to the holders of Senior
Indebtedness, before any payment is made on account of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price, Fundamental Change Redemption Price or
interest, if any, in respect of the Securities (except payments made pursuant to
Article 8 hereof from monies deposited with the Trustee pursuant thereto prior
to the happening of such dissolution or winding-up or liquidation or
reorganization or bankruptcy of Company, whether voluntary or involuntary or
insolvency, receivership or similar proceedings relating to the Company or its
property, or an assignment of the benefit of creditors or any marshaling of the
Company's assets or liabilities), and upon any such dissolution or winding-up or
liquidation or reorganization or bankruptcy of Company, whether voluntary or
involuntary or insolvency, receivership or similar proceedings relating to the
Company or its property, or an assignment of the benefit of creditors or any
marshaling of the Company's assets or liabilities, any payment by the Company,
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Holders or the Trustee would be
entitled, except for the provisions of this Article 10, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders of the Securities or by the Trustee if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any such Senior Indebtedness may have been issued, as their
respective interests may appear to the extent necessary to pay all such Senior
Indebtedness in full in Cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect
-49-
56
to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holders or to
the Trustee.
In the event that any Securities are declared due and payable before
their Stated Maturity pursuant to Section 6.02, then and in such event the
Company shall promptly notify holders of its Senior Indebtedness of such
acceleration. The Company may not pay the Securities until 120 days have passed
after such acceleration occurs and may thereafter pay the Securities if this
Article 10 permits the payment at that time.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
10.02, shall be received by the Trustee or the Holders of the Securities before
all Senior Indebtedness of the Company is paid in full in Cash or other payment
satisfactory to the holders of such Senior Indebtedness, or provision is made
for such payment in Cash or other payment satisfactory to the holders of such
Senior Indebtedness, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness of the Company or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any such Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Company, for application
to the payment of all such Senior Indebtedness remaining unpaid to the extent
necessary to pay all such Senior Indebtedness in full in Cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article 10, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article 10 with respect
to the Securities to the payment of all Senior Indebtedness of the Company which
may at the time be outstanding; provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
(other than leases that are not assumed by the Company or the new corporation,
as the case may be) are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article 5 hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 10.02 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 5
hereof.
-50-
57
Nothing in this Section 10.02 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.07. This Section 10.02 shall be
subject to the further provisions of Section 10.05.
SECTION 10.03. SUBROGATION OF SECURITIES. Subject to the payment in
full in Cash or other payment satisfactory to the holders of Senior Indebtedness
of all Senior Indebtedness of the Company, the rights of the Holders shall be
subrogated to the rights of the holders of such Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to such Senior Indebtedness until the Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Liquidated Damages, if any, Redemption
Price, Purchase Price, Fundamental Change Redemption Price and interest, if any,
in respect of the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Holders or the
Trustee would be entitled except for the provisions of this Article 10, and no
payment over pursuant to the provisions of this Article 10, to or for the
benefit of the holders of such Senior Indebtedness by Holders or the Trustee,
shall, as between the Company, its creditors other than holders of its Senior
Indebtedness, and the Holders of the Securities be deemed to be a payment by the
Company to or on account of its Senior Indebtedness; and no payments or
distributions of cash, property or securities to or for the benefit of the
Holders pursuant to the subrogation provisions of this Article 10, which would
otherwise have been paid to the holders of Senior Indebtedness shall be deemed
to be a payment by the Company to or for the account of the Securities. It is
understood that the provisions of this Article 10 are and are intended solely
for the purpose of defining the relative rights of the Holders on the one hand,
and the holders of Senior Indebtedness, on the other hand.
Nothing contained in this Article 10 or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of its Senior Indebtedness and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the Principal Amount, Issue Price, accrued Original Issue Discount,
accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price and interest, if any, in respect of the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon an Event of Default, subject to the rights, if any, under
this Article 10 of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee, subject to the provisions of Section 7.01, and
the Holders of the Securities 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 receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee,
to the Holders for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other
-51-
58
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 10.
SECTION 10.04. AUTHORIZATION BY HOLDERS. Each Holder by such Holder's
acceptance thereof authorizes and directs the Trustee in such Holder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 10 and appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
SECTION 10.05. NOTICE TO TRUSTEE. The Company shall give prompt
written notice in a form of an Officers' Certificate to a Trust Officer of any
fact known to the Company which would prohibit the making of any payment of
monies to or by the Trustee or any Paying Agent in respect of the Securities
pursuant to the provisions of this Article 10. Notwithstanding the provisions of
this Article 10 or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article 10, unless and until a
Trust Officer shall have received written notice thereof at the Corporate Trust
Office from the Company (in the form of an Officers' Certificate) or a holder or
holders of Senior Indebtedness or a Representative or from any trustee therefor;
and before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.01, shall be entitled in all respects to assume that no
such facts exist; provided that if on a date not fewer than two Business Days
prior to the date upon which by the terms hereof any such monies may become
payable for any purpose (including, without limitation, the payment of the
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest, if any, in respect of any Security the Trustee
shall not have received, with respect to such monies, the notice provided for in
this Section 10.05, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such prior date.
Notwithstanding anything to the contrary herein set forth, nothing
shall prevent any payment by the Company or the Trustee to the Holders of monies
(A) in connection with a redemption of Securities if (i) notice of such
redemption has been given pursuant to Article 3 or Section 8.01 hereof prior to
the receipt by the Trustee of written notice as aforesaid, and (ii) such notice
of redemption is given not earlier than 60 days before the redemption date; and
(B) in connection with a repayment of a Security pursuant to Section 3.09 if,
prior to the receipt by the Trustee of written notice as aforesaid, the Company
has given notice of a Fundamental Change.
The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder or a Representative of Designated Senior
Indebtedness or a Representative of Senior Indebtedness (or a trustee on behalf
of such holder) to establish that such notice has been given by a holder or a
Representative of Designated Senior Indebtedness or a Representative of such
Senior Indebtedness or a trustee on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that
-52-
59
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 10, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article 10, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 10.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee
in its individual capacity shall be entitled to all the rights set forth in this
Article 10 in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of such Senior Indebtedness, and nothing or
elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 7.01, the Trustee shall not be liable to any holder of
such Senior Indebtedness if it shall pay over or deliver to Holders, the Company
or any other Person money or assets to which any holder of Senior Indebtedness
shall be entitled by virtue of this Article 10 or otherwise.
SECTION 10.07. NO IMPAIRMENT OF SUBORDINATION. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by (i)
any amendment of or addition or supplement to any such Senior Indebtedness or
any instrument or agreement relating thereto (unless otherwise expressly
provided therein), or (ii) any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of the
instrument, regardless of any knowledge thereof which any such holder may have
or otherwise be charged with.
SECTION 10.08. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Holder of Securities by such Holder's acceptance
thereof, acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness, and no amendment or modification of the
provisions contained herein shall diminish the rights of such holder or holders
unless such holder or holders shall have agreed in writing thereto.
-53-
60
SECTION 10.09. REINSTATEMENT OF SUBORDINATION. If, at any time, all
or part of any payment of any Senior Indebtedness theretofore made by the
Company or any other Person is rescinded or must otherwise be returned by the
holders of such Senior Indebtedness for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy or reorganization of the Company
or such other Person), these subordination provisions shall continue to be
effective or be reinstated, as the case may be, all as though such payment had
not been made.
SECTION 10.10. PERMITTED PAYMENTS. Nothing contained in this Article
10 or elsewhere in this Indenture, or in the Securities shall prevent (a) the
Company at any time, except under the conditions described in Section 10.02,
from making payments at any time of Principal Amount, Issue Price, accrued
Original Issue Discount, accrued Liquidated Damages, if any, Redemption Price,
Purchase Price, Fundamental Change Redemption Price or interest, if any, in
respect of the Securities, or from depositing with the Trustee or any Paying
Agent money for such payments, or (b) the application by the Trustee or Paying
Agent of any moneys deposited with it under this Indenture to the payment of or
on account of the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price or interest, if any, in respect of the
Securities to the Holders entitled thereto to the beneficiaries thereof, if such
payment would not have been prohibited by the provisions of Section 10.02.
SECTION 10.11. ARTICLE APPLICABLE TO PAYING AGENTS. If at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article 10
shall (unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article 10 in addition to or
in place of the Trustee; provided, however, that the first paragraph of Section
10.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as Paying Agent.
SECTION 10.12. TREATMENT OF CONVERSION PAYMENTS. Notwithstanding
anything in this Indenture to the contrary, neither the issuance and delivery of
junior securities upon conversion of the Securities in accordance with Article
11 nor the payment of Cash in lieu of fractional shares of Common Stock in
accordance with Article 11 shall be deemed to constitute a payment or
distribution on account of the Principal Amount, Issue Price, accrued Original
Issue Discount, accrued Liquidated Damages, if any, Redemption Price or
Fundamental Change Purchase Price or interest, if any, in respect of the
Securities. For the purposes of this paragraph, the term "junior securities"
means (a) shares of any stock of any class of the Company, (b) securities of the
Company which are subordinated in right of payment to all Senior Indebtedness
which may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article 10, and (c) any securities into
which the Securities become convertible pursuant to Section 11.14 which are
securities of a Person required to enter into a supplemental indenture pursuant
to such section (or Section 5.01) and are either (x) shares of any stock of any
class of such Person, or (y) securities of such Person which are subordinated in
right of payment to all Senior Indebtedness of such Person which may be
outstanding at the time of issuance or delivery of such securities to
substantially the
-54-
61
same extent as, or to a greater extent than, the Securities or, are so
subordinated as provided in this Article 10. Nothing contained in this Article
10 or elsewhere in this Indenture or in the Securities is intended to or shall
impair, as among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the right, which is absolute and unconditional, of
the Holder to convert such Security in accordance with Article 11.
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT. Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders 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, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of 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 Article
10.
SECTION 10.14. HOLDERS OF SENIOR INDEBTEDNESS MAY FILE PROOFS OF
CLAIM. If the Trustee does not file a claim or proof of debt in the form
required in any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding pursuant to Section 6.09 prior to 30 days before the expiration of
the time to file such claims or proofs, then any holder or holders of Senior
Indebtedness or their representative or representatives shall have the right to
demand, ▇▇▇ for, collect, receive and receipt for the payments and distributions
in respect of the Securities which are required to be paid or delivered to the
holders of Senior Indebtedness as provided in this Article 10 and to file and
prove all claims therefor and to take all such other action in the name of the
holders or otherwise, as such holders of Senior Indebtedness or representative
thereof may determine to be necessary or appropriate for the enforcement of the
provisions of this Article 10.
ARTICLE 11
CONVERSION
SECTION 11.01. CONVERSION PRIVILEGE. A Holder of a Security may
convert such Security for Common Stock at any time during the period stated in
paragraph 9 of the Securities. The number of shares of Common Stock issuable
upon conversion of a Security per $1,000 of Principal Amount thereof (the
"Conversion Rate") shall be that set forth in paragraph 9 in the Securities,
subject to adjustment as herein set forth.
A Holder may convert a portion of the Principal Amount of a Security
if the portion is $1,000 or a multiple of $1,000. Provisions of this Indenture
that apply to conversion of all of a Security also apply to conversion of a
portion of a Security.
-55-
62
SECTION 11.02. CONVERSION PROCEDURE. To convert a Security a Holder
must satisfy the requirements in paragraph 9 of the Securities. The date on
which the Holder of Securities satisfies all those requirements is the
conversion date (the "Conversion Date"). As soon as practicable after the
Conversion Date the Company shall deliver to the Holder, through the Conversion
Agent, a certificate for the number of full shares of Common Stock issuable upon
the conversion and Cash in lieu of any fractional share determined pursuant to
Section 11.03. The Person in whose name the certificate is registered shall be
treated as a stockholder of record on and after the Conversion Date; provided,
however, that no surrender of a Security on any date when the stock transfer
books of the Company shall be closed shall be effective to constitute the Person
or Persons entitled to receive the shares of Common Stock upon such conversion
as the record holder or holders of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the Person or Persons entitled
to receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; such conversion shall be at the Conversion
Rate in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of a Security, such Person shall no longer be a Holder of such
Security.
No payment or adjustment will be made for dividends on or other
distribution with respect to any Common Stock except as provided in this Article
11. On conversion of a Security, that portion of accrued Original Issue Discount
attributable to the period from the Issue Date of the Security to the Conversion
Date with respect to the converted Security shall not be canceled, extinguished
or forfeited, but rather shall be deemed to be paid in full to the Holder
thereof through delivery of the Common Stock (together with the Cash payment, if
any, in lieu of fractional shares) in exchange for the Security being converted
pursuant to the provisions hereof.
If a Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the total Principal Amount of the Securities converted.
Upon surrender of a Security that is convert in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that it is not a
Legal Holiday.
SECTION 11.03. FRACTIONAL SHARES. The Company will not issue a
fractional share of Common Stock upon conversion of a Security. Instead the
Company will deliver Cash for the current market value of the fractional share.
The current market value of a fractional share shall be determined to the
nearest 1/10,000th of a share by multiplying the last reported sale price
(determined as set forth in the definition of Current Market Price) on the last
Trading Day prior to
-56-
63
the Conversion Date of a full share by the fractional amount and rounding the
product to the nearest whole cent.
SECTION 11.04. TAXES ON CONVERSION. If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon the conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the shares
are to be issued in a name other than the Holder's name.
Nothing herein shall preclude any tax withholding required by law or
regulations.
SECTION 11.05. COMPANY TO PROVIDE STOCK. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Securities.
All shares of Common Stock delivered upon conversion of the
Securities shall be newly issued shares or treasury shares, shall be duly and
validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and
state securities laws regulating the order and delivery of shares of Common
Stock upon conversion of Securities, if any, and will endeavor promptly, if
permitted by the rules of such exchange, over-the-counter market or other
market, to list or cause to have quoted such shares of Common Stock on each
national securities exchange or in the over-the-counter market or such other
market on which the Common Stock is then listed or quoted.
SECTION 11.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. In case the
Company shall (i) pay a dividend, or make a distribution, in shares of its
Common Stock, on its Common Stock, (ii) subdivide its outstanding Common Stock
into a greater number of shares, or (iii) combine its outstanding Common Stock
into a smaller number of shares, the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock which such Holder would have owned or have been entitled to receive
after the happening of any of the events described above had such Security been
converted immediately prior to the happening of such event. If any dividend or
distribution of the type described in clause (i) above is not so paid or made,
the Conversion Rate shall again be adjusted to the Conversion Rate which would
then be in effect if such dividend or distribution had not been declared. An
adjustment made pursuant to this Section 11.06 shall become effective
immediately after the record date in the case of a dividend and shall become
effective immediately after the effective date in the case of subdivision or
combination.
-57-
64
SECTION 11.07. ADJUSTMENT FOR RIGHTS ISSUE. In case the Company shall
issue rights or warrants to all holders of its Common Stock entitling them (for
a period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Stock at a price per share less than the
Current Market Price per share of Common Stock at the record date for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Rate in effect immediately prior thereto shall be adjusted so that
the same shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Common Stock offered for
subscription or purchase, and of which the denominator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price.
Such adjustment shall be made successively whenever any such rights or warrants
are issued, and shall become effective immediately after the opening of business
on the day following the record date for the determination of the stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights or warrants are not so issued, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such record date for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants, the value of such consideration, if other than cash, to be determined
by the Board of Directors.
SECTION 11.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS.
(a) In case the Company shall distribute to all holders of its Common
Stock (excluding any distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary) any
shares of any class of capital stock of the Company (other than Common Stock) or
evidences of its indebtedness or assets (other than cash) or rights or warrants
to subscribe for or purchase any of its securities (excluding those referred to
in Section 11.07 hereof) (any of the foregoing hereinafter in this Section
11.08(a) called the "Distributed Securities"), then, the Conversion Rate shall
be adjusted so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the Current Market
Price per share of the Common Stock on the record date mentioned below, and the
denominator shall be the Current Market Price per share of the Common Stock on
such record date less the fair market value on such record date (as determined
by the Board of Directors of the Company, whose determination shall be
conclusive, and described in a certificate filed with the Trustee) of the
Distributed Securities so distributed applicable to one share of Common Stock.
Such adjustment shall become effective immediately
-58-
65
after the record date for the determination of stockholders entitled to receive
such distribution. Notwithstanding the foregoing, in the event the then fair
market value (as so determined) of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Securityholder shall have the right to receive upon conversion the amount of
Distributed Securities such Holder would have received had such Holder converted
each Security on such record date. In the event that such distribution is not so
paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such distribution had not been declared. If the
Board of Directors determines the fair market value of any distribution for
purposes of this Section 11.08(a) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market Price of
the Common Stock.
Notwithstanding the foregoing provisions of this Section 11.08(a), no
adjustment shall be made thereunder for any distribution of Distributed
Securities if the Company makes proper provision so that each Holder of a
Security who converts such Security (or any portion thereof) after the record
date for such distribution shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion, the amount
and kind of Distributed Securities that such Holder would have been entitled to
receive if such Holder had, immediately prior to such record date, converted
such Security for Common Stock; provided that, with respect to any Distributed
Securities that are convertible, exchangeable or exercisable, the foregoing
provision shall only apply to the extent (and so long as) the Distributed
Securities receivable upon conversion of such Security would be convertible,
exchangeable or exercisable, as applicable, without any loss of rights or
privileges for a period of at least 60 days following conversion of such
Security.
(b) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding (x) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per share
of Common Stock in any fiscal quarter does not exceed the greater of (A) the
amount per share of Common Stock of the next preceding quarterly cash dividend
on the Common Stock to the extent such preceding quarterly dividend did not
require any adjustment of the Conversion Rate pursuant to this Section 11.08(b)
(as adjusted to reflect subdivisions or combinations of the Common Stock), and
(B) 3.75% of the average of the last reported sales prices of the Common Stock
(determined as provided in the definition of Current Market Price) during the
ten Trading Days next preceding the date of declaration of such dividend and (y)
any dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary), then, in such
case, unless the Company elects to reserve such cash for distribution to the
holders of the Securities upon the conversion of the Securities so that any such
holder converting Securities will receive upon such conversion in addition to
the shares of Common Stock to which such holder is entitled, the amount of cash
which such holder would have received if such holder had, immediately prior to
the record date for such distribution of cash, converted its Securities for
Common Stock, the Conversion Rate shall be increased so that the same shall
equal the Conversion Rate determined by multiplying the
-59-
66
Conversion Rate in effect immediately prior to the record date by a fraction of
which the numerator shall be such Current Market Price of the Common Stock and
the denominator shall be the Current Market Price of the Common Stock on the
record date less the amount of cash so distributed (and not excluded as provided
above) applicable to one share of Common Stock, such increase to be effective
immediately prior to the opening of business on the day following the record
date; provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Securityholder shall have the right to receive upon conversion the amount of
cash such Holder would have received had such Holder converted each Security on
the record date. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate which would
then be in effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 11.08(b) as a
result of a distribution that is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 11.08(b) above as
a result of a distribution that is not a quarterly dividend, such adjustment
shall be based upon the full amount of the distribution.
(c) In case a tender or exchange offer made by the Company or any
Subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such Subsidiary of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of such Board of Directors at
the last time (the "Expiration Time") tenders or exchanges may be made pursuant
to such tender or exchange offer (as it shall have been amended)) that exceeds
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, the Conversion Rate shall be increased so that the same
shall equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction of which the
numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, and the denominator shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
on the Expiration Time multiplied by the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, such increase to
become effective immediately prior to the opening of business on the day
following the Expiration Time. In the event that the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
-60-
67
be the Conversion Rate which would then be effect if such tender or exchange
offer had not been made.
(d) In case of a tender or exchange offer by a Person other than the
Company or any Subsidiary for an amount which increases the offeror's ownership
of Common Stock to more than 25% of the Common Stock outstanding and shall
involve the payment by such Person of consideration per share of Common Stock
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board of
Directors at the last time (the "Tender Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have been
amended)) at the Tender Expiration Time that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Tender Expiration Time,
and in which, as of the Tender Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Rate shall be increased so
that the same shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the Tender Expiration Time by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Tender
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Tender Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
an maximum specified in the terms of the tender or exchanged offer) of all
shares validly tendered or exchanged and not withdrawn as of the Tender
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Tender Purchased Shares") and (y) the product of the number
of shares of Common Stock outstanding (less any Tender Purchased Shares) on the
Tender Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Tender Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Tender Expiration Time. In the event that such Person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such Person is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Rate shall again be adjusted to be
the Conversion Rate which would then be in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment described
in this Section 11.08(d) shall not be made if, as of the Tender Expiration Time,
the offering documents with respect to such offer disclose a plan or intention
to cause the Company to engage in any transaction described in Article 5.
SECTION 11.09. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate. Any adjustments that are made
shall be carried forward and taken into account any subsequent adjustment.
All calculations under this Article 11 shall be made to the nearest
cent or to the nearest 1/10,000th of a share, as the case may be.
-61-
68
SECTION 11.10. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be
made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Securities become convertible into cash, assets,
property or securities (other than capital stock of the Company), no adjustment
need be made thereafter as to the cash, assets, property or such securities.
Interest will not accrue on the cash.
SECTION 11.11. NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to Holders a notice of the adjustment.
The Company shall file with the Trustee and the Conversion Agent such notice.
The certificate shall, absent manifest error, be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof.
SECTION 11.12. VOLUNTARY INCREASE. The Company may make such
increases in the Conversion Rate, in addition to those required by Sections
11.06, 11.07 and 11.08, as the Board of Directors considers to be advisable to
avoid or diminish any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes. To the extent permitted by applicable law, the Company may from time
to time increase the Conversion Rate by any amount for any period of time if the
period is at least 20 days, the increase is irrevocable during the period and
the Board of Directors shall have made a determination that such increase would
be in the best interests of the Company, which determination shall be
conclusive. Whenever the Conversion Rate is so increased, the Company shall mail
to Holders and file with the Trustee and the Conversion Agent a notice of such
increase. Such Company shall mail the notice at least 15 days before the date
the increased Conversion Rate takes effect. The notice shall state the increased
Conversion Rate and the period it will be in effect.
SECTION 11.13. NOTICE OF CERTAIN TRANSACTIONS. If:
(1) the Company makes any distribution or dividend that would
require an adjustment in the Conversion Rate pursuant to Section 11.06, 11.07 or
11.08; or
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 11.14; or
(3) there is a liquidation, dissolution or winding up of the
Company;
then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, sale, transfer, dissolution,
-62-
69
liquidation or winding-up. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in it
shall not affect the validity of the transaction.
SECTION 11.14. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any of the following events occur, namely (i) any reclassification or
change of outstanding shares of Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture,
providing that each Security shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Securities immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance. Such supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder at such Holder's address appearing on the
Security register provided for in Section 2.03 of this Indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers, combinations, and sales.
If this Section 11.14 applies, neither Section 11.06, 11.07 nor 11.08
applies.
SECTION 11.15. COMPANY DETERMINATION FINAL. Any determination that
the Company or the Board of Directors must make pursuant to Section 11.03,
11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is conclusive.
SECTION 11.16. TRUSTEE'S ADJUSTMENT DISCLAIMER. The Trustee has no
duty to determine when an adjustment under this Article 11 should be made, how
it should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 11.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 11, and shall not be deemed to have knowledge of any adjustment unless
and until it shall have received a notice of adjustment pursuant to
-63-
70
Section 11.11. Each Conversion Agent shall have the same protection under this
Section 11.16 as the Trustee.
SECTION 11.17. SIMULTANEOUS ADJUSTMENTS. In the event that this
Article 11 requires adjustments to the Conversion Rate under more than one of
Sections 11.06, 11.07, 11.08(a) or 11.08(b), and the record dates for the
distributions giving rise to such adjustments shall occur on the same date, then
such adjustments shall be made by applying, first, the provisions of Section
11.08(a), second, the provisions of Section 11.08(b), third the provisions of
Section 11.06 and, fourth, the provisions of Section 11.07.
SECTION 11.18. SUCCESSIVE ADJUSTMENTS. After an adjustment to the
Conversion Rate under this Article 11, any subsequent event requiring an
adjustment under this Article 11 shall cause an adjustment to the Conversion
Rate as so adjusted.
SECTION 11.19. RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED UPON
CONVERSION. Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"):
(i) are deemed to be transferred with such shares of Common
Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of
Common Stock,
shall not be deemed distributed for purposes of Section 11.08(a) until the
occurrence of the earliest Trigger Event. In addition, in the event of any
distribution of rights or warrants, or any Trigger Event with respect thereto,
that shall have resulted in an adjustment to the Conversion Rate under Section
11.08(a), (1) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as
thought it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of any such rights or warrants all of which
shall have expired without exercise by any holder thereof, the Conversion Rate
shall be readjusted as if such issuance had not occurred.
SECTION 11.20. GENERAL CONSIDERATIONS. Whenever successive
adjustments to the Conversion Rate are called for pursuant to this Article 11,
such adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Article 11 and to avoid unjust
or inequitable results as determined in good faith by the Board of Directors.
-64-
71
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the TIA required to be
part of and to govern indentures qualified under the TIA; provided, however that
this Section 12.01 shall not require this Indenture or the Trustee to be
qualified under the TIA prior to the time such qualification is in fact required
under the terms of the TIA, nor shall it constitute any admission or
acknowledgment by any party that any such qualification is required prior to the
time such qualification is in fact required under the terms of the TIA. If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required to be included in an indenture qualified under the TIA, such
required provision shall control.
SECTION 12.02. NOTICES. Any request, demand, authorization, notice,
waiver, consent or communication shall be in writing and delivered in Person or
mailed by first class mail, postage prepaid, addressed as follows or transmitted
by facsimile transmission (confirmed by overnight courier) to the following
facsimile numbers:
if to the Company:
Networks Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
State Street Bank and Trust Company of California, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Attention: Networks Associates, Inc., Zero Coupon Convertible
Subordinated
Debentures due 2018)
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇ ) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
-65-
72
Any notice or communication given to a Securityholder shall be mailed
to the Securityholder, by first class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Holders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
SECTION 12.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders
may communicate pursuant to TIA Section 312(b) with other Holders with respect
to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar, the Paying Agent, the Conversion Agent and anyone else
shall have the protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that each individual making such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such individual, he
or she has made such examination or investigation as is necessary to enable him
or her to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement that, in the opinion of such individual, such
covenant or condition has been complied with.
-66-
73
SECTION 12.06. SEPARABILITY CLAUSE. In case any provision in this
Indenture or in 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 12.07. RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
SECTION 12.08. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
SECTION 12.09. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 12.10. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 12.11. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
-67-
74
IN WITNESS WHEREOF, the undersigned, being duly authorized, has
executed this Indenture on behalf of the respective parties hereto as of the
date first written above.
Networks Associates, Inc.
By: /s/ signature
---------------------------------------------------
Title:
State Street Bank and Trust Company of California, N.A.
By: /s/ signature
---------------------------------------------------
Authorized Signatory
-68-
75
EXHIBIT A
[FORM OF FACE OF SECURITY]
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS SECURITY BEARS ORIGINAL
ISSUE DISCOUNT. INFORMATION INCLUDING THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY WILL BE MADE AVAILABLE TO
HOLDERS UPON REQUEST TO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CHIEF FINANCIAL OFFICER, AT (408)
988-3832.
[FORM OF LEGEND FOR GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) , ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT
WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT (A) TO
NETWORKS ASSOCIATES, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH TO STATE STREET BANK
AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
76
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE STREET BANK AND
TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFEREE IS A PURCHASER WHO IS NOT A U.S. PERSON,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER
OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION).
A-2
77
NETWORKS ASSOCIATES, INC.
ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE DUE 2018
No.
Issue Date: February 13, 1998 Original Issue Discount: $608.94
Issue Price: $391.06 (for each $1,000 Principal Amount)
(for each $1,000 Principal Amount)
CUSIP: [640938-10-6]
Networks Associates, Inc., a Delaware corporation,
promises to pay to or registered assigns, on
February 13, 2018 [the Principal Amount of Dollars ($ )].(1)
This Security shall not bear interest except as specified on the
other side of this Security. Original Issue Discount will accrue as specified on
the other side of this Security. This Security is convertible as specified on
the other side of this Security.
Additional provisions of this Security are set forth on the other
side of this Security.
IN WITNESS WHEREOF, Networks Associates, Inc. has caused this
instrument to be duly executed under its corporate seal.
NETWORKS ASSOCIATES, INC.
By:___________________________________________
Title:
By:___________________________________________
Title:
[SEAL]
Dated: ________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., as Trustee, certifies
that this is one of the Securities referred to in the within-mentioned
Indenture.
By___________________________________
Authorized Signatory
-------
(1) The global Security will read instead: "The Principal Amount then
shown on Schedule A hereto."
A-3
78
[FORM OF REVERSE SIDE OF SECURITY]
NETWORKS ASSOCIATES, INC.
ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE DUE 2018
1. INTEREST
This Security shall not bear interest, except that if the Principal
hereof or any portion of such Principal is not paid when due (whether upon
acceleration pursuant to Section 6.02 of the Indenture, upon the date set for
payment of the Redemption Price pursuant to paragraph 5 hereof, upon the date
set for payment of a Purchase Price or Fundamental Change Redemption Price
pursuant to paragraph 6 hereof or upon the Stated Maturity of this Security),
then in each such case the overdue amount shall bear interest at the rate of
4.75% per annum, compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest shall accrue from the
date such overdue amount was due to the date payment of such amount, including
interest thereon, has been made or duly provided for. All such interest shall be
payable on demand. The accrual of such interest on overdue amounts shall be in
lieu of, and not in addition to, the continued accrual of Original Issue
Discount.
The Original Issue Discount (the difference between the Issue Price
and the Principal Amount of the Security) in the period during which a Security
remains outstanding, shall accrue at 4.75% per annum, on a semiannual bond
equivalent basis using a 360-day year composed of twelve 30-day months,
commencing on the Issue Date of this Security.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, the Company
will make payments in respect of the Securities to the Persons who are
registered Holders of Securities at the close of business on the Business Day
preceding the Redemption Date or Stated Maturity, as the case may be, or at the
close of business on a Purchase Date or Fundamental Change Redemption Date, as
the case may be. Holders must surrender Securities to the Paying Agent to
collect such payments in respect of the Securities. The Company will pay cash
amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may make
such cash payments by check payable in such money.
3. PAYING AGENT, CONVERSION AGENT AND REGISTRAR
Initially, State Street Bank and Trust Company of California, N.A., a
national banking association organized under the laws of the United States of
America (the "Trustee"), will act as Paying Agent, Conversion Agent and
Registrar. The Company may appoint and change any Paying Agent, Conversion
Agent, Registrar or co-registrar without notice, other than notice to the
Trustee. The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent, ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇-▇▇▇▇▇▇▇▇▇.
▇-▇
▇▇
▇. INDENTURE
The Company issued the Securities under an Indenture (the
"Indenture"), dated as of February 13, 1998, between the Company and the
Trustee. Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Holders are referred to the Indenture for a statement of those terms.
The Securities are general unsecured obligations of the Company
limited to $885,500,000 aggregate Principal Amount (subject to Sections 2.02 and
2.07 of the Indenture). The Indenture does not limit other indebtedness of the
Company, secured or unsecured, including Senior Indebtedness of the Company.
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Redemption Prices set forth below, provided that the
Securities are not redeemable prior to February 13, 2003.
The table below shows Redemption Prices of a Security per $1,000
Principal Amount on the dates shown below and at Stated Maturity, which prices
reflect accrued Original Issue Discount calculated to each such date. The
Redemption Price of a Security redeemed between such dates would include an
additional amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table to the actual Redemption Date.
ACCRUED
ORIGINAL
ISSUE REDEMPTION
SECURITY DISCOUNT PRICE
REDEMPTION DATE ISSUE PRICE AT 4.75% (1) + (2)
--------------------------------- ------------- ----------- ------------
February 13, 2003................ $391.06 $103.46 $494.52
February 13, 2004................ 391.06 127.23 518.29
February 13, 2005................ 391.06 152.14 543.20
February 13, 2006................ 391.06 178.25 569.31
February 13, 2007................ 391.06 205.61 596.67
February 13, 2008................ 391.06 234.29 625.35
February 13, 2009................ 391.06 264.34 655.40
February 13, 2010................ 391.06 295.85 686.91
February 13, 2011................ 391.06 328.86 719.92
February 13, 2012................ 391.06 363.46 754.52
February 13, 2013................ 391.06 399.73 790.79
February 13, 2014................ 391.06 437.74 828.80
February 13, 2015................ 391.06 477.57 868.63
February 13, 2016................ 391.06 519.32 910.38
February 13, 2017................ 391.06 563.08 954.14
At maturity...................... 391.06 608.94 1,000.00
▇-▇
▇▇
▇. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER; REDEMPTION AT
THE OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE
(a) Subject to the terms and conditions of the Indenture,
the Company shall become obligated to purchase, at the option of the Holder, the
Securities held by such Holder on the following Purchase Dates and at the
following Purchase Prices per $1,000 Principal Amount, upon delivery of a
Purchase Notice containing the information set forth in the Indenture, from the
opening of business on the date that is 20 Business Days prior to such Purchase
Date until the close of business on such Purchase Date and upon delivery of the
Securities to the Paying Agent by the Holder as set forth in the Indenture. Such
Purchase Prices may be paid, at the option of the Company, in cash or by the
issuance and delivery of shares of Common Stock of the Company, or in any
combination thereof.
PURCHASE DATE PURCHASE PRICE
------------- --------------
February 13, 2003................ $ 494.52
February 13, 2008 ............... 625.35
February 13, 2013 ............... 790.79
Securities in denominations larger than $1,000 of Principal Amount may be
purchased in part, but only in multiples of $1,000 of Principal Amount.
(b) At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to redeem the
Securities held by such Holder 45 days after the date of the Company's notice of
such Fundamental Change occurring on or prior to February 13, 2018 for a
Fundamental Change Redemption Price equal to the Issue Price plus accrued
Original Issue Discount to the Fundamental Change Redemption Date, which
Fundamental Change Redemption Price shall be paid in Cash. Securities in
denominations larger than $1,000 of Principal Amount may be redeemed in part in
connection with a Fundamental Change, but only in multiples of $1,000 of
Principal Amount.
(c) Holders have the right to withdraw any Purchase Notice
or Fundamental Change Redemption Notice, as the case may be, by delivering to
the Paying Agent a written notice of withdrawal in accordance with the
provisions of the Indenture.
(d) If Cash (and/or securities if permitted under the
Indenture) sufficient to pay a Purchase Price or Fundamental Change Redemption
Price, as the case may be, of all Securities or portions thereof to be purchased
as of the Purchase Date or the Fundamental Change Redemption Date, as the case
may be, is deposited with the Paying Agent on the Business Day following the
Purchase Date or the Fundamental Change Redemption Date, as the case may be,
Original Issue Discount ceases to accrue on such Securities (or portions
thereof) on and after such date, and the Holder thereof shall have no other
rights as such (other than the right to receive the Purchase Price or
Fundamental Change Redemption Price, as the case may be, upon surrender of such
Security).
A-6
81
7. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY
Notice of redemption at the option of the Company will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, on and after such date Original Issue Discount
ceases to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount may be redeemed in part but
only in multiples of $1,000 of Principal Amount.
8. SUBORDINATION
The Securities are subordinated to all existing and future Senior
Indebtedness. To the extent provided in the Indenture, Senior Indebtedness must
be paid before the Securities may be paid. The Indenture does not limit the
present or future amount of Senior Indebtedness that the Company may have. The
Company agrees, and each Securityholder by accepting a Security agrees, to the
subordination and authorizes the Trustee to give it effect and appoints the
Trustee as attorney-in-fact for such purpose.
9. CONVERSION
Subject to the next two succeeding sentences, a Holder of a Security
may convert this Security for Common Stock at any time after 90 days following
the Issue Date of the Securities and before the close of business on February
13, 2018. If this Security is called for redemption, the Holder may convert it
at any time before the close of the last Trading Day prior to the Redemption
Date. A Security in respect of which a Holder has delivered a notice of exercise
of the option to require the Company to purchase such Security or to redeem such
Security in the event of a Fundamental Change may be converted only if the
notice of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 5.692 shares of Common Stock per
$1,000 Principal Amount, subject to adjustment in certain events described in
the Indenture. The Company will deliver Cash or a check in lieu of any
fractional share of Common Stock.
To convert this Security a Holder must (1) complete and manually sign
the conversion notice on the back of this Security (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion
Agent, (2) surrender this Security to the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee and (4) pay any transfer or similar tax, if
required.
A Holder may convert a portion of this Security if the Principal
Amount of such portion is $1,000 or a multiple of $1,000. No payment or
adjustment will be made for dividends on the Common Stock except as provided in
the Indenture. On conversion of this Security, that portion of accrued Original
Issue Discount attributable to the period from the Issue Date to the Conversion
Date with respect to the converted portion of this Security shall not be
canceled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through the delivery of the Common Stock (together
A-7
82
with any cash payment in lieu of fractional shares) in exchange for the portion
of this Security being converted pursuant to the terms hereof.
10. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Securities called for redemption, unless surrendered for
conversion before the close of business on the last Trading Day prior to the
Redemption Date, may be deemed to be purchased from the Holders of such
Securities at an amount not less than the Redemption Price, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders, to convert them for Common Stock and
to make payment for such Securities to the Trustee in trust for such Holders.
11. REGISTRATION RIGHTS
The Holder of this Security and the Common Stock issuable upon
conversion thereof is entitled to the benefits of a Registration Rights
Agreement (subject to the provisions thereof), dated as of February 13, 1998,
between the Company and the Initial Purchaser.
12. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form, without coupons, in
denominations of $1,000 of Principal Amount and multiples of $1,000. A Holder
may transfer or convert Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or Fundamental Change
Redemption Notice has been given and not withdrawn (except, in the case of a
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before a selection of
Securities to be redeemed.
13. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
14. UNCLAIMED MONEY OR SECURITIES
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such return, shall at the expense of the Company cause to be
published once in a newspaper of general circulation in The City of New York or
mail to each Holder notice that such money or securities remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication or mailing, any unclaimed money or securities then
remaining will be returned to the Company. After return to the Company, Holders
entitled to the money
A-8
83
or securities must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another Person.
15. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the Securities
at the time outstanding and (ii) certain Defaults and Events of Defaults may be
waived with the written consent of the Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, or to comply with
Article 5 or Section 11.14 of the Indenture, to provide for uncertificated
Securities in addition to or in place of certificated Securities or to make any
change that does not adversely affect the rights of any Securityholder or to
comply with any requirement of the SEC in connection with the qualification of
the Indenture under the TIA.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default in payment
of the Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price or Fundamental
Change Redemption Price, as the case may be, in respect of the Securities when
the same becomes due and payable, provided that in the case of any failure to
pay Liquidated Damages, such failure to pay continues for a period of 30 days;
(ii) failure by the Company to comply with other agreements in the Indenture or
the Securities, subject to notice and lapse of time; and (iii) certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee, or the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding, may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being declared due and payable
immediately upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders notice of any continuing
Default (except a Default in payment of amounts specified in clause (i) above)
if it determines that withholding notice is in their interests.
17. TRUSTEE DEALINGS WITH THE COMPANY
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with and collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
▇-▇
▇▇
▇▇. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
19. AUTHENTICATION
This Security shall not be valid until an authorized officer of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TENANT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. GOVERNING LAW
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture which has in it the text of this
Security in larger type. Requests may be made to:
Networks Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
A-10
85
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: Networks Associates, Inc.
The undersigned registered holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which is
$1,000 principal amount or a multiple thereof) below designated, for shares of
Common Stock of Networks Associates, Inc. in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Securities representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Security not converted are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
Dated:
_________________________________________
_________________________________________
Signature (s)
Fill in for registration of shares if to be delivered,
and Securities if to be issued other than to and in
the name of the registered holder:
____________________________________
(Name)
____________________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
____________________________________
(City, state and zip code)
Please print name and address
Principal amount to be converted
(if less than all):
$___,000
_________________________________________
Social Security or Other Taxpayer
Identification Number
A-11
86
[FORM OF OPTION TO ELECT REDEMPTION
UPON A FUNDAMENTAL CHANGE]
To: Networks Associates, Inc.
The undersigned registered holder of this Security hereby
acknowledges receipt of a notice from Networks Associates, Inc. (the "Company")
as to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to redeem this Security, or the portion
hereof (which is $1,000 Principal Amount or a multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Security.
Dated:_______________________
_________________________________________
_________________________________________
Signature (s)
Principal amount to be converted
(if less than all):
$_______________
_________________________________________
Social Security or Other Taxpayer
Identification Number
A-12
87
ASSIGNMENT
For value received ___________________ hereby sell(s), assign(s) and transfer(s)
unto __________________ (Please insert social security or other Taxpayer
Identification Number of assignee) the within Security, and hereby irrevocably
constitutes and appoints ________________ attorney to transfer the said Security
on the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Security within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) (other than any transfer pursuant to a registration statement that
has been declared effective under the Securities Act), under the Securities Act
(or any successor provision), the undersigned confirms that such Security is
being transferred:
o To Networks Associates, Inc. or a subsidiary thereof; or
o Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
o Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
o Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that to its
knowledge such Security is not being transferred to an "affiliate" of the
Company as defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate").
o The transferee is an Affiliate of the Company.
Dated:______________________
_________________________________________
_________________________________________
Signature (s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange if
shares of Common Stock are to be issued,
or Securities to be delivered, other than
to or in the name of the registered
holder.
_________________________________________
Signature Guarantee
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Security in every particular without
alteration or enlargement or any change whatever.
A-13
88
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Security
PRINCIPAL AMOUNT OF SECURITIES
BY WHICH THIS GLOBAL SECURITY IS
TO BE REDUCED OR INCREASED, AND
REASON FOR REMAINING PRINCIPAL AMOUNT OF NOTATION
DATE REDUCTION OR INCREASE THIS GLOBAL SECURITY MADE BY
----------- ---------------------------------- ---------------------------- --------
----------- ---------------------------------- ---------------------------- --------
----------- ---------------------------------- ---------------------------- --------
----------- ---------------------------------- ---------------------------- --------
----------- ---------------------------------- ---------------------------- --------
----------- ---------------------------------- ---------------------------- --------
----------- ---------------------------------- ---------------------------- --------
----------- ---------------------------------- ---------------------------- --------
A-14