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EXHIBIT 2.3
DRAFT
EXHBIT 2.3
TO FORM 8-A
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SCI SYSTEMS, INC.
__ % Convertible Subordinated Notes Due 2007
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SUPPLEMENTAL INDENTURE NO. 1
TO THE SUBORDINATED INDENTURE DATED AS OF THE DATE HEREOF AND
BETWEEN THE PARTIES HERETO
Dated as of March __, 2000
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BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
TRUSTEE
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SCI SYSTEMS, INC.
__ % CONVERTIBLE SUBORDINATED NOTES DUE 2007
SUPPLEMENTAL INDENTURE NO. 1
SUPPLEMENTAL INDENTURE No. 1 (the "Supplemental Indenture"), dated as
of March __, 2000, between SCI Systems, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), and Bank One
Trust Company, National Association, a ___________ duly organized and existing
under the laws of _____________, as Trustee (the "Trustee").
RECITALS
The Company and the Trustee have heretofore executed a Subordinated
Indenture (the "Base Indenture" and, together with this Supplemental Indenture,
the "Indenture"), dated as of March __, 2000, providing for the issuance from
time to time of series of the Company's Securities to be issued in one or more
series as therein provided.
Sections 201 and 301 of the Base Indenture provide for various matters
with respect to any series of Securities issued under the Base Indenture to be
established in an indenture supplemental to the Base Indenture.
Section 901 of the Base Indenture provides for the Company and the
Trustee to enter into an indenture supplemental to the Base Indenture to
establish the form or terms of Securities of any series as provided by Sections
201 and 301 of the Base Indenture.
For and in consideration of the premises and the issuance of the Notes
provided for herein, it is mutually covenanted and agreed, for the equal and
proportionate benefit of the Holders of the Notes, as follows:
Article 1
RELATION TO BASE INDENTURE; DEFINITIONS
Section 1.1. Relation to Base Indenture. This Supplemental Indenture
constitutes an integral part of the Indenture. In the event of inconsistencies
between the Base Indenture and this Supplemental Indenture, the terms hereof
shall govern.
Section 1.2. Certain Definitions. For all purposes of this
Supplemental Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(1) capitalized terms used herein without definition have the
meanings specified in the Base Indenture;
(2) all other terms used herein without definition which are
defined in the TIA, either directly or by reference therein, have the
meanings assigned to them therein;
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(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder means such accounting principles as are
generally accepted in the United States of America;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Supplemental Indenture;
(5) the words "herein", "hereof', "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(6) the following terms have the meanings assigned to them in
this Article and include the plural as well as the singular:
"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" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities or by agreement or otherwise.
"Board of Directors" means, with respect to any Person, either the
board of directors of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy
of a resolution certified by the secretary or an assistant secretary of such
Person to have been duly adopted by the Board of Directors of such Person and
to be in full force and effect on the date of such certification, and delivered
to the Trustee.
"Business Day" means, each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law, regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, partnership interests, participation rights in or other equivalents
(however designated) of such Person's equity (however designated) whether now
outstanding or issued after the date of this Indenture.
"Change of Control" means any event where: (i) any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares representing more than 50% of the combined voting power
of the then outstanding securities entitled to vote generally in elections of
directors of the Company ("Voting Stock"), (ii) the Company consolidates with
or merges into any other Person, or any other Person merges into the
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Company, and, in the case of any such transaction, the outstanding Common Stock
is reclassified into or exchanged for any other property or securities, unless
the stockholders of the Company immediately before such transaction own,
directly or indirectly immediately following such transaction, at least a
majority of the combined voting power of the then outstanding voting securities
entitled to vote generally in elections of directors of the corporation
resulting from such transaction in substantially the same respective
proportions as their ownership of the Voting Stock immediately before such
transaction, (iii) the Company or the Company and its Subsidiaries, taken as a
whole, sells, assigns, conveys, transfers or leases all or substantially all
the assets of the Company or of the Company and its Subsidiaries, taken as a
whole, as applicable, (other than to one or more wholly-owned Subsidiaries of
the Company) or (iv) any time the Continuing Directors do not constitute a
majority of the Board of Directors of the Company (or, if applicable, a
successor corporation to the Company); provided, however, that (a) a Change of
Control under clause (i), (ii) or (iii) above shall not be deemed to have
occurred if the Daily Market Price per share of Common Stock for any five
Trading Days within the period of 10 consecutive Trading Days ending
immediately after the later of the Change of Control or the public announcement
of the Change of Control (in the case of a Change of Control under clause (i)
above) or the period of 10 consecutive Trading Days ending immediately before
the Change of Control (in the case of a Change of Control under clause (ii) or
(iii) above) shall equal or exceed 105% of the Conversion Price of the Notes in
effect on the date of such Change of Control or the public announcement of such
Change of Control, as applicable, or (b) a Change of Control under clause (i),
(ii) or (iii) above shall not be deemed to have occurred if at least 90% of the
consideration in the Change of Control transaction consists of shares of
capital stock traded on a U.S. national securities exchange or quoted on the
NASDAQ National Market (the "NNM") or other established automated
over-the-counter trading market in the United States, and as a result of such
transaction, the Notes become convertible solely into such capital stock.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body
performing such duties at such time.
"Common Stock" means the Company's common stock, $0.10 par value per
share.
"Company" means the Person named as the "Company" in the first
paragraph of this Supplemental Indenture, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board of Directors at the
time of such nomination or election.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way of the Common Stock
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as reported on the New York Stock Exchange (the "NYSE"), or if the Common Stock
is not then listed on the NYSE, as reported on the principal national
securities exchange upon which the Common Stock is listed, or (b) if there is
no such reported sale on the day in question, on the basis of the average of
the closing bid and asked quotations regular way as so reported, or (c) if the
Common Stock is not listed on the NYSE or on any national securities exchange,
on the basis of the average of the high bid and low asked quotations regular
way on the day in question in the over-the-counter market as reported by the
National Association of Securities Dealers Automated Quotation System, or if
not so quoted, as reported by National Quotation Bureau, Incorporated, or a
similar organization.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two officers of the Company, one of whom must be principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company that meets the requirements set forth in
Section 102 of the Base Indenture.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee. Each such
opinion shall include the statements provided for in TIA Section 314(e) to the
extent applicable.
"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 or any other entity.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" of a Person means 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 that Person or one or more of
the other Subsidiaries of that Person or a combination thereof.
"Termination of Trading" means an event where the Common Stock (or
other securities into which the Notes are then convertible) is neither listed
for trading on a United States national securities exchange nor approved for
trading on the NNM or other established automated over-the-counter trading
market in the United States.
"Trading Day" means (A) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or such other
national securities exchange is open for business, (B) if the applicable
security is quoted on the NNM, a day on which trades may be made thereon or (C)
if the applicable security is not so listed, admitted for trading or quoted,
any day other than a Saturday or Sunday or a day on which banking institutions
in the State of New York are authorized or obligated by law or execute order to
close.
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"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the persons who at the time shall be such officers, respectively,
and who shall have direct responsibility for the administration of this
Indenture or to whom any corporate trust matter is referred because of such
person's knowledge of and familiarity with the particular subject.
Section 1.3. Other Definitions.
Defined in
Term Section
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Base Indenture...............................................................Recitals
Commencement Date............................................................4.4
Conversion Shares............................................................5.8
Current Market Price.........................................................5.8
Default......................................................................Base Indenture
Designated Event Offer.......................................................4.8
Designated Event Payment.....................................................4.8
Designated Event Payment Date ..............................................4.9
Depositary...................................................................Base Indenture
Distribution Date............................................................5.8
Distribution Record Date.....................................................5.8
Event of Default.............................................................Base Indenture
Excess Payment ..............................................................5.6
Global Securities............................................................Base Indenture
Indenture....................................................................Recitals
Interest Payment Date........................................................Base Indenture
Notes........................................................................2.1
Purchase Date................................................................5.8
Paying Agent.................................................................2.4
Registrar....................................................................2.4
Regular Record Date..........................................................Base Indenture
Rights.......................................................................5.8
Senior Indebtedness..........................................................Base Indenture
Supplemental Indenture.......................................................Recitals
Tender Period................................................................4.9
TIA..........................................................................Base Indenture
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Article 2
THE NOTES
Section 2.1. Title of the Securities. There shall be a series of
Securities designated the "__ % Convertible Subordinated Notes due 2007" (the
"Notes").
Section 2.2. Limitation on Aggregate Principal Amount of the Notes.
The aggregate principal amount of the Notes shall be limited to $400,000,000.
Section 2.3. Form, Dating and Denomination of the Notes. The Notes and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit A, which is a part of this Indenture. The Notes 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. The Notes shall be dated the
date of their authentication. The Notes shall be issued in fully registered
form, without coupons, in denominations of $1,000 of principal amount and
integral multiples of $1,000.
Section 2.4. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Notes may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Notes may be presented for purchase or payment ("Paying Agent") and an
office or agency where Notes may be presented for conversion ("Conversion
Agent"). The Registrar shall keep a register of the Notes 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. The Registrar shall be a "Securities
Registrar" under the Base Indenture and the Paying Agent shall be a "Paying
Agent" under the Base Indenture.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (provided, however,
that a separate agreement shall not be necessary in the case of the Trustee
serving in any such capacity). The agreement shall implement the provisions of
this Indenture that relate to such agent. The Company shall notify the Trustee
in writing 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 from the Company
therefor.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Notes, and the Trustee accepts
such appointment. In acquiring such appointments, the Trustee shall, to the
extent serving in any such capacity, be entitled to each of the immunities,
benefits, indemnifications and rights of reimbursement provided to it under the
Indenture as Trustee.
Section 2.5. Paying Agent to Hold Money and Notes in Trust. Except as
otherwise provided herein, on or prior to each due date of payments in respect
of any Note, the Company shall deposit with the Paying Agent a sum of money (in
immediately available funds if
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deposited on the due date) or Common Stock sufficient to make such payments
when so becoming due. The Company shall require each Paying Agent (other than
the Trustee) to agree in writing that the Paying Agent shall hold in trust for
the benefit of Holders of the Notes or the Trustee all money and Common Stock
held by the Paying Agent for the making of payments in respect of the Notes 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 Common Stock so held in trust. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money and Common Stock held by it as Paying Agent and hold it as
a separate trust fund. The Company at any time may require a Paying Agent to
pay all money and Common Stock held by it to the Trustee and to account for any
funds and Common Stock disbursed by it. Upon doing so, the Paying Agent shall
have no further liability for the money or Common Stock.
ARTICLE 3
INTEREST
SECTION 3.1. Payment of Interest. Interest shall accrue on the Notes
at a rate of __% per annum from March __, 2000. The Interest Payment Dates in
respect of the Notes shall be _______ __ and _______ __ of each year,
commencing _______ __, 2000. The Regular Record Dates in respect of such
Interest Payment Dates shall be _______ __ and _______ __ of each year,
respectively, commencing _______ __, 2000. The Depositary for the Notes shall
be the Depositary Trust Company and so long as the Notes are Global Securities,
the interest payable on the Notes will be paid to Cede & Co., the nominee of
the Depositary, or its registered assigns as the registered owner of such
Global Securities. Subject to the provisions of Section 308 of the Base
Indenture, each Note delivered under this Indenture upon registration of
transfer of, or in exchange for, or in lieu of, or in substitution for, any
other Note, shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Note.
SECTION 3.2. Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year consisting of twelve 30-day months. In
the event that any principal of or premium, if any, or interest on the Notes is
not paid when due, then except to the extent permitted by law, such overdue
principal, premium, if any and interest shall bear interest until paid at the
rate of interest set forth in Section 3.1, compounded semi-annually.
ARTICLE 4
REDEMPTION
SECTION 4.1. Optional Redemption. The Company may redeem all or any
portion of the Notes, at the times, upon the terms and at the redemption prices
set forth in each of the Notes. Any redemption pursuant to this Section 4.1
shall be made pursuant to the provisions of Article 11 of the Base Indenture.
SECTION 4.2. Selection of Notes to be Redeemed. If less than all the
Notes are to be redeemed, the Trustee shall select the Notes to be redeemed by
a method that complies
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with the requirements of the principal national securities exchange, if any, on
which the Notes are listed, or, if the Notes are not so listed, on a pro rata
basis, by lot or by such other method as the Trustee considers fair and
appropriate. The Trustee shall make the selection not more than 60 days and not
less than 30 days before the redemption date from Notes outstanding not
previously called for redemption. The Trustee may select for redemption
portions of the principal of Notes that have denominations larger than $1,000.
Notes and portions of them it selects shall be in principal amounts of $1,000
or integral multiples of $1,000. Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption. The Trustee shall notify the Company promptly of the Notes or
portions of Notes to be called for redemption.
If any Note selected for partial redemption is converted in part after
such selection, the converted portion of such Note shall be deemed (so far as
may be) to be the portion to be selected for redemption. The Notes (or portions
thereof) so selected shall be deemed duly selected for redemption for all
purposes hereof, notwithstanding that any such Note is converted in whole or in
part before the mailing of the notice of redemption. Upon any redemption of
less than all the Notes, the Company and the Trustee may treat as outstanding
any Notes surrendered for conversion during the period 15 days next preceding
the mailing of a notice of redemption and need not treat as outstanding any
Note authenticated and delivered during such period in exchange for the
unconverted portion of any Note converted in part during such period.
Section 4.3. Designated Event Offer. Upon the occurrence of a
Designated Event, each holder of Notes shall have the right, in accordance with
this Section 4.3 and Section 4.4 hereof, to require the Company to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of such
holder's Notes pursuant to the terms of an offer made as provided in Section
4.4 (the "Designated Event Offer") at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Additional
Amounts, if any, thereon to the Designated Event Payment Date (the "Designated
Event Payment").
Section 4.4. Designated Event Procedures. In the event that, pursuant
to Section 4.3 hereof, the Company shall commence a Designated Event Offer, the
Company shall follow the procedures in this Section 4.4.
The Designated Event Offer shall remain open for a period specified by
the Company which shall be no less than 30 days and no more than 60 days from
and including the date of the mailing of notice provided for below (the
"Commencement Date"), except to the extent that a longer period is required by
applicable law (the "Tender Period"). On the day (the "Designated Event Payment
Date") immediately following the last day of the Tender Period, the Company
shall purchase the principal amount of Notes duly surrendered for repurchase
and not withdrawn.
If a Designated Event Payment Date is after a record date and before
the related interest payment date, accrued interest to the related interest
payment date will be paid to the Persons in whose names the Notes (or one or
more predecessor Notes) are registered at the close of business on such record
date, notwithstanding the repurchase of any such Notes on such Designated Event
Payment Date, and no additional interest will be payable to Noteholders who
tender Notes for purchase on such Designated Event Payment Date.
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The Company shall provide the Trustee with written notice of the
Designated Event Offer at least 10 Business Days before the Commencement Date.
Within 30 days following any Designated Event, unless the Company is
entitled to and has previously elected to redeem all of the outstanding Notes
at its option and has previously given holders notice of its intention to
redeem all of the outstanding Notes in accordance with Section 4.1 of this
Indenture, the Company or the Trustee (at the request and expense of the
Company) shall send, by first class mail, a notice to each of the Noteholders,
which shall govern the terms of the Designated Event Offer and shall state:
(a) that the Designated Event Offer is being made pursuant to this
Section 4.4 and that all Notes validly tendered will be accepted for
payment;
(b) the purchase price (as determined in accordance with Section
4.4 hereof), the length of time the Designated Event Offer will remain open
and the Designated Event Payment Date;
(c) that any Note or portion thereof not validly tendered or
accepted for payment will continue to accrue interest and will continue to
have conversion rights;
(d) that, unless the Company defaults in the payment of the
Designated Event Payment, any Note or portion thereof accepted for payment
pursuant to the Designated Event Offer shall cease to accrue interest from
and after the Designated Event Payment Date and will cease to have
conversion rights after the Designated Event Payment Date;
(e) that Noteholders electing to have a Note or portion thereof
purchased pursuant to any Designated Event Offer will be required to
surrender the Note, with the form entitled "Option of Noteholder To Elect
Purchase", that is set forth in Exhibit A hereto, on the reverse of the
Note completed, to a Paying Agent at the address specified in the notice
(which shall include an address in the Borough of Manhattan, The City of
New York) prior to the close of business on the third Business Day
preceding the Designated Event Payment Date;
(f) that Noteholders will be entitled to withdraw their election
if a Paying Agent receives, not later than the close of business on the
second Business Day preceding the Designated Event Payment Date, a letter
or facsimile transmission setting forth the name of the Noteholder, the
principal amount of the Notes or portion thereof delivered for purchase and
a statement that such Noteholder is withdrawing his election to have such
Notes or portions thereof purchased; and
(g) that Noteholders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof.
In addition, the notice shall contain all instructions, other
information and materials that the Company shall reasonably deem necessary to
enable such Noteholders to tender Notes pursuant to the Designated Event Offer
or to withdraw tendered Notes. If the
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Company is not required to mail such notice because, as provided above, it has
previously given notice of its intention to redeem the Notes in whole but the
Company thereafter defaults in the payment of the redemption price (including
accrued interest) on any of the Notes on the relevant redemption date, then the
Company shall be required to give notice pursuant to this Section 4.4 no later
than the second Business Day following such redemption date, in which case the
Tender Period shall be 30 days except to the extent that a longer period is
required by applicable law. In the event that the Company is required by
applicable law to extend the Tender Period beyond the Designated Event Payment
Date set forth in such notice, the Company will, as promptly as possible, issue
a press release and send notice to holders announcing such extension and the
new Designated Event Payment Date, which press release and notice shall state
the new deadlines for surrendering and withdrawing Notes.
Prior to 10:00 A.M. (New York City Time) on the Designated Event
Payment Date, the Company shall irrevocably deposit with the Trustee or the
Paying Agent in immediately available funds an amount equal to the Designated
Event Payment in respect of all Notes or portions thereof validly tendered and
not withdrawn, such funds to be held for payment in accordance with the terms
of this Section 4.4. On the Designated Event Payment Date, the Company shall,
to the extent lawful, (i) accept for payment the Notes or portions thereof
validly tendered pursuant to the Designated Event Offer, (ii) deliver or cause
to be delivered to the Trustee the Notes so accepted and (iii) deliver to the
Trustee an Officers' Certificate identifying the Notes or portions thereof
tendered and not withdrawn to the Company and stating that such Notes have been
accepted for payment by the Company in accordance with the terms of this
Section 4.4. The Paying Agent shall promptly (but in any case not later than
five calendar days after the Designated Event Payment Date) mail or deliver to
each holder of Notes so accepted for payment an amount equal to the Designated
Event Payment for such Notes, and the Trustee shall promptly authenticate and
mail or otherwise deliver to each such Noteholder a new Note equal in principal
amount to any unpurchased portion of the Note surrendered; provided that each
new Note shall be in a principal amount of $1,000 or an integral multiple
thereof. Any Notes not so accepted shall be promptly mailed or otherwise
delivered by or on behalf of the Company to the holders thereof. The Company
will publicly announce the results of the Designated Event Offer on, or as soon
as practicable after, the Designated Event Payment Date.
The Designated Event Offer shall be made by the Company in compliance
with all applicable provisions of the Exchange Act and any other securities
laws and regulations (including, without limitation, Rules 13e-4 and 14e-1
under the Exchange Act) to the extent such laws and regulations are applicable
in connection with the repurchase of the Notes in connection with a Designated
Event.
ARTICLE 5
CONVERSION
SECTION 5.1. Conversion Privilege. A holder of any Note may convert
the principal amount thereof (or any portion thereof that is an integral
multiple of $1,000) into fully paid and nonassessable shares of Common Stock at
any time after 90 days following the Issuance Date and prior to the close of
business on the Business Day immediately preceding the final maturity date of
the Note at the Conversion Price then in effect, except that, with respect to
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any Note called for redemption, such conversion right shall terminate at the
close of business on the Business Day immediately preceding the redemption date
(unless the Company shall default in making the redemption payment when it
becomes due, in which case the conversion right shall terminate at the close of
business on the date on which such default is cured). The number of shares of
Common Stock issuable upon conversion of a Note is determined by dividing the
principal amount of the Note converted by the Conversion Price in effect on the
Conversion Date.
"Conversion Price" means $_____, as the same may be adjusted from time
to time as provided in this Article V.
Provisions of this Indenture that apply to conversion of all of a Note
also apply to conversion of a portion of it. A holder of Notes is not entitled
to any rights of a holder of Common Stock until such holder of Notes has
converted such Notes into Common Stock, and only to the extent that such Notes
are deemed to have been converted into Common Stock under this Article V.
SECTION 5.2. Conversion Procedure. To convert a Note, a holder must
satisfy the requirements in paragraph 10 of the Notes. The date on which the
holder satisfies all of those requirements is the conversion date (the
"Conversion Date"). As promptly as practicable on or after the Conversion Date,
the Company shall issue and deliver to the Trustee a certificate or
certificates for the number of whole shares of Common Stock issuable upon the
conversion and a check or other payment for any fractional share in an amount
determined pursuant to Section 5.3. Such certificate or certificates will be
sent by the Trustee to the Conversion Agent for delivery to the holder. The
Person in whose name the certificate is registered shall become the stockholder
of record on the Conversion Date and, as of such date, such Person's rights as
a Noteholder with respect to the converted Note shall cease; provided, however,
that, except as otherwise provided in this Section 5.2, no surrender of a Note
on any date when the stock transfer books of the Company shall be closed shall
be effective to constitute the Person entitled to receive the shares of Common
Stock upon such conversion as the stockholder of record of such shares of
Common Stock on such date, but such surrender shall be effective to constitute
the Person entitled to receive such shares of Common Stock as the stockholder
of record thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; provided, further,
however, that such conversion shall be at the Conversion Price in effect on the
date that such Note shall have been surrendered for conversion, as if the stock
transfer books of the Company had not been closed.
No payment or adjustment will be made for accrued and unpaid interest
on a converted Note or for dividends or distributions on, attributable to,
shares of Common Stock issued upon conversion of a Note, except that, if any
holder surrenders a Note for conversion after the close of business on any
record date for the payment of an installment of interest and prior to the
opening of business on the next succeeding interest payment date, then,
notwithstanding such conversion, accrued and unpaid interest payable on such
Note on such interest payment date shall be paid on such interest payment date
to the Person who was the holder of such Note (or one or more predecessor
Notes) at the close of business on such record date. In the case of any Note
surrendered for conversion after the close of business on a record date for the
payment of an installment of interest and prior to the opening of business on
the next
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succeeding interest payment date, then, unless such Note has been called for
redemption on a redemption date or is to be repurchased on a Designated Event
Payment Date after such record date and prior to such interest payment date,
such Note, when surrendered for conversion, must be accompanied by payment in
an amount equal to the interest payable on such interest payment date on the
principal amount of such Note so converted. Holders of Common Stock issued upon
conversion will not be entitled to receive any dividends payable to holders of
Common Stock as of any record time before the close of business on the
Conversion Date.
If a holder converts more than one Note at the same time, the number
of whole shares of Common Stock issuable upon the conversion shall be based on
the total principal amount of Notes converted.
Upon surrender of a Note that is converted in part, the Trustee shall
authenticate for the holder a new Note equal in principal amount to the
unconverted portion of the Note surrendered.
SECTION 5.3. Fractional Shares. The Company will not issue fractional
shares of Common Stock upon conversion of a Note. In lieu thereof, the Company
will pay an amount in cash based upon the Daily Market Price of the Common
Stock on the Trading Day prior to the Conversion Date.
SECTION 5.4. Taxes on Conversion. The issuance of certificates for
shares of Common Stock upon the conversion of any Note shall be made without
charge to the converting Noteholder for such certificates or for any tax in
respect of the issuance of such certificates, and such certificates shall be
issued in the respective names of, or in such names as may be directed by, the
holder or holders of the converted Note; provided, however, that in the event
that certificates for shares of Common Stock are to be issued in a name other
than the name of the holder of the Note converted, such Note, when surrendered
for conversion, shall be accompanied by an instrument of assignment or
transfer, in form satisfactory to the Company, duly executed by the registered
holder thereof or his duly authorized attorney; and provided, further, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificates in a name other than that of the holder of the converted Note, and
the Company shall not be required to issue or deliver such certificates unless
or until the Person or Persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid or is not applicable.
SECTION 5.5. Company to Provide Stock. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock, solely for the purpose of issuance upon conversion
of Notes as herein provided, a sufficient number of shares of Common Stock to
permit the conversion of all outstanding Notes for shares of Common Stock.
All shares of Common Stock which may be issued upon conversion of the
Notes shall be duly authorized, validly issued, fully paid and nonassessable
when so issued. The Company shall take such action from time to time as shall
be necessary so that par value of the Common Stock shall at all times be equal
to or less than the Conversion Price then in effect.
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The Company shall from time to time take all action necessary so that
the Common Stock which may be issued upon conversion of Notes, immediately upon
their issuance will be listed on the principal securities exchanges,
interdealer quotation systems (including the NNM) and markets, if any, on which
other shares of Common Stock are then listed or quoted.
SECTION 5.6. Adjustment of Conversion Price. The Conversion Price
shall be subject to adjustment from time to time as follows:
(a) In case the Company shall (1) pay a dividend in shares of Common
Stock to holders of Common Stock, (2) make a distribution in shares of Common
Stock to holders of Common Stock, (3) subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock or (4) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Conversion Price in effect immediately prior to such action shall be
adjusted so that the holder of any Note thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock which he
would have owned immediately following such action had such Notes been
converted immediately prior thereto. Any adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision or combination. In the event
such dividend or distribution is not paid or made, or such subdivision or
combination is not effected, the Conversion Price shall be adjusted immediately
to be the Conversion Price which would then be in effect if such dividend,
distribution, subdivision or combination had not occurred.
(b) In case the Company shall issue rights or warrants to all holders
of Common Stock entitling them to subscribe for or purchase shares of Common
Stock (or securities convertible into Common Stock) at a price per share (or
having a conversion price per share) less than the Current Market Price per
share (as determined pursuant to subsection (f) below) of the Common Stock on
the record date for determining the holders of the Common Stock entitled to
receive such rights or warrants, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price
in effect immediately prior to such record date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding as of the
close of business on such record date plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common
Stock so offered for subscription or purchase (or the aggregate conversion
price of the convertible securities so offered) would purchase at such Current
Market Price, and of which the denominator shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock so offered for subscription or purchase (or into which
the convertible securities so offered are convertible). Such adjustments shall
become effective immediately after such record date. For the purposes of this
subsection (b), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of such Common Stock. The Company shall not issue any rights, options or
warrants in respect of shares of Common Stock held in the treasury of the
Company.
(c) In case the Company shall distribute to all holders of Common
Stock shares of Capital Stock of the Company (other than Common Stock),
evidences of indebtedness,
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cash, rights or warrants entitling the holders thereof to subscribe for or
purchase securities (other than rights or warrants described in subsection (b)
above) or other assets (including securities of Persons other than the Company
but excluding (i) dividends or distributions paid exclusively in cash, (ii)
dividends and distributions described in subsection (b) above and (iii)
distributions in connection with the consolidation, merger or transfer of
assets covered by Section 5.13), then in each such case the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the record date
for the determination of the holders of Common Stock entitled to receive such
distribution by a fraction of which the numerator shall be the Current Market
Price (determined as provided in subsection (f) below) of the Common Stock on
the record date mentioned below less the fair market value on such record date
(as determined by the Board of Directors, whose determination shall be
conclusive evidence of such fair market value and described in a Board
Resolution delivered to the Trustee) of the portion of the evidences of
indebtedness, shares of Capital Stock, cash, rights, warrants or other assets
so distributed applicable to one share of Common Stock (determined on the basis
of the number of shares of the Common Stock outstanding on the record date),
and of which the denominator shall be such Current Market Price of the Common
Stock. Such adjustment shall become effective immediately after the record date
for the determination of the holders of Common Stock entitled to receive such
distribution. In the event such distribution is not paid or made, the
Conversion Price shall be adjusted immediately to be the Conversion Price which
would then be in effect if such distribution had not occurred. Notwithstanding
the foregoing, in case the Company shall distribute rights or warrants to
subscribe for additional shares of the Company's Capital Stock (other than
rights or warrants referred to in subsection (b) above) ("Rights") to all
holders of Common Stock, the Company may, in lieu of making any adjustment
pursuant to the foregoing provisions of this Section 5.6(c), make proper
provision so that each holder of a Note who converts such Note (or any portion
thereof) after the record date for such distribution and prior to the
expiration or redemption of the Rights shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion (the "Conversion Shares"), a number of Rights to be determined as
follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates evidencing such
Rights (the "Distribution Date"), the same number of Rights to which a holder
of a number of shares of Common Stock equal to the number of Conversion Shares
is entitled at the time of such conversion in accordance with the terms and
provisions of the Rights; and (ii) if such conversion occurs after the
Distribution Date, the same number of Rights to which a holder of the number of
shares of Common Stock into which the principal amount of the Note so converted
was convertible immediately prior to the Distribution Date would have been
entitled on the Distribution Date in accordance with the terms and provisions
of the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time
make a distribution to all holders of its Common Stock exclusively in cash
(including any distributions of cash out of current or retained earnings of the
Company but excluding any cash that is distributed as part of a distribution
requiring a Conversion Price adjustment pursuant to paragraph (c) of this
Section) in an aggregate amount that, together with the sum of (x) the
aggregate amount of any other distributions made exclusively in cash to all
holders of Common Stock within the 12 months preceding the date fixed for
determining the stockholders entitled to such distribution (the "Distribution
Record Date") and in respect of which no Conversion Price adjustment pursuant
to paragraph (c) or (e) of this Section or this paragraph (d) has been made
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plus (y) the aggregate amount of all Excess Payments in respect of any tender
offers or other negotiated transactions by the Company or any of its
Subsidiaries for Common Stock concluded within the 12 months preceding the
Distribution Record Date and in respect of which no Conversion Price adjustment
pursuant to paragraphs (c) or (e) of this Section or this paragraph (d) has
been made, exceeds 15% of the product of the Current Market Price per share
(determined as provided in paragraph (f) of this Section) of the Common Stock
on the Distribution Record Date multiplied by the number of shares of Common
Stock outstanding on the Distribution Record Date (excluding shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying such Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this paragraph (d) by a fraction of which the numerator shall
be the Current Market Price per share (determined as provided in paragraph (f)
of this Section) of the Common Stock on the Distribution Record Date less the
sum of the aggregate amount of cash and the aggregate Excess Payments so
distributed or paid within such 12 month period (including, without limitation,
the distribution in respect of which such adjustment is being made) applicable
to one share of Common Stock (which shall be determined by dividing the sum of
the aggregate amount of cash and the aggregate Excess Payments so distributed
or paid within such 12 months (including, without limitation, the distribution
in respect of which such adjustment is being made) by the number of shares of
Common Stock outstanding on the Distribution Record Date) and the denominator
shall be such Current Market Price per share (determined as provided in
paragraph (f) of this Section) of the Common Stock on the Distribution Record
Date, such reduction to become effective immediately prior to the opening of
business on the day following the Distribution Record Date. In the event such
distribution is not paid or made, the Conversion Price shall be adjusted
immediately to be the Conversion Price which would then be in effect if such
distribution had not occurred.
(e) In case a tender offer or other negotiated transaction made by the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock shall be consummated, if an Excess Payment is made in respect of such
tender offer or other negotiated transaction and the aggregate amount of such
Excess Payment, together with the sum of (x) the aggregate amount of any
distributions, by dividend or otherwise, to all holders of the Common Stock
made in cash (including any distributions of cash out of current or retained
earnings of the Company, but excluding any cash that is distributed as part of
a distribution requiring a Conversion Price adjustment pursuant to paragraph
(c) of this Section) within the 12 months preceding the date of payment of such
current negotiated transaction consideration or expiration of such current
tender offer, as the case may be (the "Purchase Date"), and as to which no
adjustment in the Conversion Price pursuant to paragraph (c) or paragraph (d)
of this Section or this paragraph (e) has been made plus (y) the aggregate
amount of all Excess Payments in respect of any other tender offers or other
negotiated transactions by the Company or any of its Subsidiaries for Common
Stock concluded within the 12 months preceding the Purchase Date and in respect
of which no adjustment in the Conversion Price pursuant to paragraph (c) or (d)
of this Section or this paragraph (e) has been made, exceeds 15% of the
product of the Current Market Price per share (determined as provided in
paragraph (f) of this Section) of the Common Stock on the Purchase Date
multiplied by the number of shares of Common Stock outstanding on the Purchase
Date (including any tendered shares but excluding any shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying such Conversion Price in
effect immediately prior to the effectiveness
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of the Conversion Price reduction contemplated by this paragraph (e) by a
fraction of which the numerator shall be the Current Market Price per share
(determined as provided in paragraph (f) of this Section) of the Common Stock
on the Purchase Date less the sum of the aggregate amount of cash and the
aggregate Excess Payments so distributed or paid within such 12 month period
(including, without limitation, the Excess Payment in respect of which such
adjustment is being made) applicable to one share of Common Stock (which shall
be determined by dividing the sum of the aggregate amount of cash and the
aggregate Excess Payments so distributed or paid within such 12 months
(including, without limitation, the Excess Payment in respect of which such
adjustment is being made) by the number of shares of Common Stock outstanding
on the Purchase Date and the denominator shall be such Current Market Price per
share (determined as provided in paragraph (f) of this Section) of the Common
Stock on the Purchase Date, such reduction to become effective immediately
prior to the opening of business on the day following the Purchase Date.
(f) The "Current Market Price" per share of Common Stock on any date
shall be deemed to be the average of the Daily Market Prices for the shorter of
(i) 30 consecutive Business Days ending on the last full Trading Day on the
exchange or market referred to in determining such Daily Market Prices prior to
the time of determination or (ii) the period commencing on the date next
succeeding the first public announcement of the issuance of such rights or such
warrants or such other distribution or such tender offer or other negotiated
transaction through such last full Trading Day on the exchange or market
referred to in determining such Daily Market Prices prior to the time of
determination.
"Excess Payment" means the excess of (A) the aggregate of the cash and
fair market value (as determined by the Board of Directors of the Company,
whose determination shall be conclusive evidence of such fair market value and
described in a Board Resolution delivered to the Trustee) of other
consideration paid by the Company or any of its Subsidiaries with respect to
the shares of Common Stock acquired in a tender offer or other negotiated
transaction over (B) the Daily Market Price on the Trading Day immediately
following the completion of the tender offer or other negotiated transaction
multiplied by the number of acquired shares of Common Stock.
In any case in which this Section 5.6 shall require that an adjustment
be made immediately following a record date for an event, the Company may elect
to defer, until such event, issuing to the holder of any Note converted after
such record date the shares of Common Stock and other Capital Stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other Capital Stock of the Company issuable upon such conversion on the
basis of the Conversion Price prior to adjustment; and, in lieu of the shares
the issuance of which is so deferred, the Company shall issue or cause its
transfer agents to issue due bills or other appropriate evidence of the right
to receive such shares.
SECTION 5.7. No Adjustment. No adjustment in the Conversion Price
shall be required until cumulative adjustments amount to 1% or more of the
Conversion Price as last adjusted; provided, however, that any adjustments
which by reason of this Section 5.7 are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article V shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be. No adjustment need be
made for rights to
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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.
SECTION 5.8. Other Adjustments. In the event that, as a result of an
adjustment made pursuant to Section 5.6 above, the holder of any Note
thereafter surrendered for conversion shall become entitled to receive any
shares of Capital Stock of the Company other than shares of its Common Stock,
thereafter the Conversion Price of such other shares so receivable upon
conversion of any Notes shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in this Article V.
In the event that any shares of Common Stock (or securities
convertible into Common Stock) issuable upon exercise of any of the rights,
options or warrants referred to in Section 5.6(b) and Section 5.6(c) hereof are
not delivered prior to the expiration of such rights, options, or warrants, the
Conversion Price shall be readjusted to the Conversion Price which would
otherwise have been in effect had the adjustment made upon the issuance of such
rights, options or warrants been made on the basis of delivery of only the
number of such rights, options and warrants which were actually exercised.
SECTION 5.9. Adjustments for Tax Purposes. The Company may, at its
option, make such reductions in the Conversion Price, in addition to those
required by Section 5.6 above, as the Board of Directors deems advisable to
avoid or diminish any income tax to holders of Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for federal income tax purposes.
SECTION 5.10. Adjustments by the Company. The Company from time to
time may, to the extent permitted by law, reduce the Conversion Price by any
amount for any period of at least 20 days, in which case the Company shall give
at least 15 days' notice of such reduction in accordance with Section 5.11, if
the Board of Directors has made a determination that such reduction would be in
the best interests of the Company, which determination shall be conclusive.
SECTION 5.11. Notice of Adjustment. Whenever the Conversion Price is
adjusted, the Company shall promptly mail to Noteholders at the addresses
appearing on the Registrar's books a notice of the adjustment and file with the
Trustee an Officers' Certificate briefly stating the facts requiring the
adjustment and the manner of computing it.
SECTION 5.12. Notice of Certain Transactions. In the event that:
(a) the Company takes any action which would require an adjustment in
the Conversion Price;
(b) the Company takes any action that would require a supplemental
indenture pursuant to Section 5.13; or
(c) there is a dissolution or liquidation of the Company;
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the Company shall mail to Noteholders at the addresses appearing on the
Registrar's books and the Trustee a notice stating the proposed record or
effective date, as the case may be. The Company shall mail the notice at least
15 days before such date; however, failure to mail such notice or any defect
therein shall not affect the validity of any transaction referred to in clause
(a), (b) or (c) of this Section 5.12.
SECTION 5.13. Effect of Reclassifications, Consolidations, Mergers,
Continuances or Sales on Conversion Privilege. If any of the following shall
occur, namely: (i) any reclassification or change of outstanding shares of
Common Stock issuable upon conversion of Notes (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 or merger
to which the Company is a party other than a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change (other than a change in name, or 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) in, outstanding shares of Common Stock, (iii) any continuance in a
new jurisdiction which results in a reclassification of, or change (other than
a change in name, or par value, or from par value to no par value, or from no
par value to par value) in, outstanding shares of Common Stock, or (iv) any
sale or conveyance of all or substantially all of the property of the Company
(determined on a consolidated basis), then the Company, or such successor or
purchasing corporation, as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, merger, continuance, sale or
conveyance, execute and deliver to the Trustee a supplemental indenture in form
reasonably satisfactory to the Trustee providing that the holder of each Note
then outstanding shall have the right to convert such Note into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, consolidation, merger,
continuance, sale or conveyance by a holder of the number of shares of Common
Stock deliverable upon conversion of such Note immediately prior to such
reclassification, change, consolidation, merger, continuance, sale or
conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article V. The
foregoing, however, shall not in any way affect the right a holder of a Note
may otherwise have, pursuant to clause (ii) of the last sentence of subsection
(c) of Section 5.6, to receive Rights upon conversion of a Note. If, in the
case of any such consolidation, merger, continuance, sale or conveyance, the
stock or other securities and property (including cash) receivable thereupon by
a holder of Common Stock includes shares of stock or other securities and
property of a corporation or other business entity other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger,
continuance, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation or other business entity and shall contain
such additional provisions to protect the interests of the holders of the Notes
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provision of this Section 5.13 shall similarly
apply to successive consolidations, mergers, continuances, sales or
conveyances.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 5.13, the Company shall promptly file with the Trustee
(x) an Officers' Certificate briefly stating the reasons therefor, the kind or
amount of shares of stock or securities or property (including cash) receivable
by holders of the Notes upon the conversion of their Notes after any
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such reclassification, change, consolidation, merger, continuance, sale or
conveyance and any adjustment to be made with respect thereto and (y) an
Opinion of Counsel stating that all conditions precedent relating to such
transaction have been complied with, and shall promptly mail notice thereof to
all holders.
SECTION 5.14. Trustee's Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article V should be made, how it should
be made or what such adjustment should be or whether a supplemental indenture
is required by this Article V, but may accept as conclusive evidence of the
correctness of any such adjustment, and shall be protected in relying upon, the
Officers' Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 5.11. The Trustee makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Notes, and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article V.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 5.13, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with
the Trustee pursuant to Section 5.13.
SECTION 5.15. Cancellation of Converted Notes. All Notes delivered for
conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in
Section 2.11.
SECTION 5.16. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to Noteholders a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default relating
to the failure to pay any principal of or premium, if any, interest on any
Note, 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 Noteholders.
SECTION 5.17. Reports by Trustee to Noteholders. Within 60 days after
the reporting date stated in Section 12.10, the Trustee shall mail to
Noteholders a brief report dated as of such reporting date that complies with
TIA Section 313(a) if and to the extent required by such Section 313(a). The
Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the Commission and each stock exchange on which the Notes are
listed. The Company shall notify the Trustee when the Notes are listed on any
stock exchange and of any delisting thereof.
SECTION 5.18. Additional Covenant of the Company. All shares of Common
Stock delivered upon conversion of the Notes shall be newly issued shares or
treasury shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any lien or
adverse claim and shall be listed or quoted on each
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national securities exchange or over-the-counter or other domestic market on
which the Common Stock is then listed or quoted.
ARTICLE 6
SUBORDINATION
SECTION 6.1. Notes Subordinate to Senior Debt. The Company covenants
and agrees, and each Holder of a Note, by such Holder's acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner set forth
in Article __ of the Base Indenture the indebtedness represented by the Notes
is hereby expressly made subordinate and subject in right of payment to all
Senior Indebtedness.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. 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 guaranteed overnight
courier) to the following facsimile numbers:
if to the Company:
SCI Systems, Inc.
0000 Xxxx Xxxxxxx xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone No.
Facsimile No.
Attention: Chief Financial Officer
with a copy to:
Attention: General Counsel
if to the Trustee:
Bank One Trust Company, National Association
Telephone No.
Facsimile No.
Attention: Corporate Trust Department
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The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Holder of the Notes shall be
mailed to the Holder of the Notes, by first-class mail, postage prepaid, at the
Holder'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 Holder of the Notes or
any defect in it shall not affect its sufficiency with respect to other Holders
of the Notes. 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 of the
Notes, it shall mail a copy to the Trustee and each Registrar, Paying Agent,
Conversion Agent or co-registrar.
SECTION 7.2. Communication by Holders with Other Holders. Holders of
the Notes may communicate pursuant to TIA Section 312(b) with other Holders of
the Notes with respect to their rights under this Indenture or the Notes. 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 7.3. Separability Clause. In case any provision in this
Indenture or in the Notes 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 7.4. Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Holders of the Notes. The Registrar, Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
SECTION 7.5. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 7.6. 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 Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder of the Notes shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Notes.
SECTION 7.7. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
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SECTION 7.8. Multiple Originals. The parties may sign any number of
copies of this Supplemental 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 Supplemental Indenture.
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IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Supplemental Indenture on behalf of the respective parties hereto
as of the date first above written.
SCI SYSTEMS, INC.
By
-------------------------------
Name:
Title:
Attest:
-------------------------------
Name:
Title:
[SEAL]
BANK ONE TRUST COMPANY
By
-------------------------------
Name:
Title:
Attest:
-------------------------------
Title:
[SEAL]
23
25
EXHIBIT A
[FORM OF FACE OF GLOBAL NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SCI SYSTEMS, INC.
__ % Convertible Subordinated Note due 2007
No. R- CUSIP:
Issue Date: March __, 0000 Xxxxxxxxx Principal Amount $
SCI SYSTEMS, INC., a Delaware corporation, promises to pay to or
registered assigns, the principal amount of ________ Dollars ($_________) on
_______ __, 2007.
Interest Payment Dates: ______ __ and ______ __, commencing ______ __, 2000.
Record Dates: ______ __ and ______ __.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
[Signature Page Follows]
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26
IN WITNESS WHEREOF, SCI Systems, Inc. has caused this Note to be
signed manually or by facsimile by its duly authorized officers and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon.
Dated: SCI SYSTEMS, INC.
[SEAL] By
-------------------------------
Title:
Attest:
-------------------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Notes referred to
in the within-mentioned Indenture.
BANK ONE TRUST COMPANY,
as Trustee
By
-----------------------------------
Authorized Signatory
Dated:
-------------------------------
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[FORM OF REVERSE SIDE OF NOTES]
__ % Convertible Subordinated Note Due 2007
1. Interest. SCI Systems, Inc., a Delaware corporation (the
"Company"), is the issuer of the __% Convertible Subordinated Notes due 2007
(the "Notes"), of which this Note is a part. The Company promises to pay
interest on the Notes in cash semiannually on each ______ __ and ______ __,
commencing on ______ __, 2000, to holders of record at the close of business on
the immediately preceding ______ __ or ______ __, as the case may be.
Interest on the Notes will accrue from the most recent date to which
interest has been paid, or if no interest has been paid, from _______ __, 2000.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal of and premium, if any, interest, on the Notes (in each case without
regard to any applicable grace period) at the rate set forth on the face
hereof, compounded semi-annually.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered holders of the
Notes at the close of business on the record date for the applicable interest
payment date even though Notes are canceled after the record date and on or
before the interest payment date. The Noteholder hereof must surrender Notes to
a Paying Agent to collect principal payments. The Company will pay principal,
premium, if any, interest 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 pay interest by check payable in such money. It may mail an
interest check to a holder's registered address.
3. Paying Agent and Registrar. The Trustee will act as Paying Agent,
Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar, or Conversion Agent without prior notice.
4. Indenture. The Company issued the Notes under an Indenture dated as
of March __, 2000 (the "Base Indenture"), between the Company and the Trustee
and the Supplemental Indenture No. 1 thereto dated as of March __, 2000 (the
"Supplemental Indenture" and, together with the Base Indenture, the
"Indenture"), between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the TIA. Capitalized terms used herein and not defined herein have
the meanings ascribed thereto in the Indenture. The Notes are subject to all
such terms, and Holders of the Notes are referred to the Indenture and the TIA
for a statement of those terms.
The Notes are subordinated and unsecured obligations of the Company
limited to $400,000,000 aggregate principal amount.
The defeasance provisions described in Article IV of the Base
Indenture will not apply to the Notes.
5. Optional Redemption. The Notes are not redeemable at the Company's
option prior to _______ __, 2003. On such date and thereafter, the Notes will
be subject to redemption at the option of the Company, in whole or from time to
time in part (in any integral
R-1
28
multiple of $1,000), at the following redemption prices (expressed as
percentages of the principal amount), if redeemed during the 12-month period
beginning ______ __ of the years indicated (or ________ __ in the case of
2003):
Year Redemption Price
2003 _____%
2004 _____%
2005 _____%
2006 _____%
in each case together with accrued interest to (but excluding) the redemption
date (subject to the right of holders of record on the relevant record date to
receive interest due on the corresponding interest payment date). On or after
the redemption date, interest will cease to accrue on the Notes, or portions
thereof, called for redemption unless the Company shall default in the payment
of the redemption price and accrued interest payable on the redemption date on
the Notes to be redeemed.
6. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each holder of
the Notes to be redeemed at his address of record. Notes in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000. In the event of a redemption of less than all of the Notes, the Notes
will be chosen for redemption by the Trustee in accordance with the Indenture.
Unless the Company defaults in making such redemption payment (including
accrued interest), or a Paying Agent is prohibited from making such payment
pursuant to the Indenture, by law or otherwise, interest cease to accrue on the
Notes or portions of them called for redemption on and after the redemption
date.
If this Note is redeemed subsequent to a record date with respect to
any interest payment date specified above and on or prior to such interest
payment date, then any accrued interest will be paid to the Person in whose
name this Note is registered at the close of business on such record date.
7. Mandatory Redemption. The provisions of Article 12 of the Base
Indenture regarding mandatory redemption pursuant to a sinking fund will not
apply to the Notes.
8. Repurchase at Option of Holder. If there is a Designated Event, the
Company shall be required to offer to purchase on the Designated Event Payment
Date all outstanding Notes at a purchase price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest to the Designated Event
Payment Date; provided that, on the terms and subject to the conditions set
forth in the Indenture, the Company shall not be required to offer to purchase
the Notes as aforesaid if the Company has given notice of redemption of all of
the outstanding Notes to holders in accordance with the Indenture. If there is
a Designated Event, the Company shall mail a Designated Event Offer to Holder
of Notes prior to any related
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29
Designated Event Payment Date. Holders of Notes that are subject to an offer to
purchase may elect to have such Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Noteholder
To Elect Purchase" appearing below. Noteholders have the right to withdraw
their election by delivering a written notice of withdrawal to the Company or
the Paying Agent in accordance with the terms of the Indenture.
9. Subordination. The payment of the principal of, premium, if any,
on, interest on and any other amounts due on the Notes is subordinated in right
of payment to all existing and future Senior Debt of the Company, as described
in the Indenture. Each Noteholder, by accepting a Note, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.
10. Conversion. The holder of any Note has the right, exercisable at
any time prior to the close of business on the Business Day immediately
preceding the final maturity date of the Note, to convert the principal amount
thereof (or any portion thereof that is an integral multiple of $1,000) into
shares of Common Stock at the initial Conversion Price of $_____ per share,
subject to adjustment under certain circumstances as provided in the Indenture,
except that if a Note is called for redemption, the conversion right will
terminate at the close of business on the Business Day immediately preceding
the date fixed for redemption (unless the Company shall default in making the
redemption payment, including interest when it becomes due, in which case the
conversion right shall terminate at the close of business on the date on which
such default is cured).
Beneficial owners of interests in the Global Securities may exercise
their right of conversion by delivering to the Depositary the appropriate
instructions for conversion pursuant to the Depositary's procedures. Upon
conversion, no adjustment or payment will be made for accrued and unpaid
interest on the Notes so converted or for dividends or distributions on,
attributable to, any Common Stock issued on conversion of the Notes, except
that, if any Noteholder surrenders a Note for conversion after the close of
business on a record date for the payment of interest and prior to the opening
of business on the next interest payment date, then, notwithstanding such
conversion, the interest payable on such interest payment date will be paid on
such interest payment date to the Person who was the registered holder of such
Note on such record date. Any Notes surrendered for conversion during the
period after the close of business on any record date for the payment of
interest and before the opening of business on the next succeeding interest
payment date (except Notes called for redemption on a redemption date or to be
repurchased on a Designated Event Payment Date during such period) must be
accompanied by payment in an amount equal to the interest payable on such
interest payment date on the principal amount of Notes so converted. The number
of shares of Common Stock issuable upon conversion of a Note is determined by
dividing the principal amount of the Note converted by the Conversion Price in
effect on the Conversion Date. No fractional shares will be issued upon
conversion but a cash adjustment will be made for any fractional interest.
A Note in respect of which a holder has delivered an "Option of
Noteholder to Elect Purchase" form appearing below exercising the option of
such holder to require the Company to purchase such Note may be converted only
if the notice of exercise is withdrawn as provided above and in accordance with
the terms of the Indenture. The above description of
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30
conversion of the Notes is qualified by reference to, and is subject in its
entirety to, the more complete description thereof contained in the Indenture.
11. Denominations, Transfer, Exchange and Replacement. The Notes are
in registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered, and Notes may be
exchanged, as provided in the Indenture. The Registrar may require a
Noteholder, 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 exchange or register the transfer of
any Note or portion of a Note selected for redemption (except the unredeemed
portion of any Note being redeemed in part). Also, it need not exchange or
register the transfer of any Note for a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of Notes
and ending at the close of business on the day of such mailing. Replacement
Notes for lost, stolen or mutilated Notes may be issued in accordance with the
terms of the Indenture.
12. Persons Deemed Owners. The registered Noteholder of a Note may be
treated as its owner for all purposes.
13. Unclaimed Money. If money for the payment of principal of or
premium, if any, interest on Notes remains unclaimed for two years, the Trustee
and the Paying Agent shall pay the money back to the Company at its written
request. After that, Noteholders of Notes entitled to the money must look to
the Company for payment, unless an abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
14. Defaults and Remedies. The Notes shall have the Events of Default
as set forth in Section 8.1 of the Base Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee, by notice to the Company, or the Noteholders of at least 25% in
aggregate principal amount of the then outstanding Notes, by notice to the
Company and the Trustee, may declare all the Notes to be due and payable
immediately, except that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all unpaid principal, premium, if
any, and accrued and unpaid interest on the Notes shall become due and payable
immediately without further action or notice. Upon acceleration as described in
either of the preceding sentences, the subordination provisions of the
Indenture preclude any payment being made to Noteholders for at least 5
Business Days except as otherwise provided in the Indenture.
The Noteholders of a majority in principal amount of the Notes then
outstanding by written notice to the Trustee 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 principal, premium, if any, and interest that has become due
solely because of the acceleration. Noteholders may not enforce the Indenture
or the Notes except as provided in the Indenture. Subject to certain
limitations, Noteholders of a majority in principal amount of the then
outstanding Notes issued under the Indenture may direct the Trustee in its
exercise of any trust or power. The Company must furnish compliance
certificates to the Trustee annually. The above description of Events of
Default and remedies is
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qualified by reference to, and subject in its entirety to, the more complete
description thereof contained in the Indenture.
15. Amendments, Supplements and Waivers. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Noteholders of at least a majority in principal amount of the
then outstanding Notes (including consents obtained in connection with a tender
offer or exchange offer for Notes), and any existing default may be waived with
the consent of the Noteholders of a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a tender
offer or exchange offer for Notes). Without the consent of any Noteholder, the
Indenture or the Notes may be amended, among other things, to cure any
ambiguity, defect or inconsistency, to provide for assumption by a successor of
the Company's obligations to Noteholders, to make any change that does not
adversely affect the rights of any Noteholder, to qualify the Indenture under
the TIA, or to comply with the requirements of the Commission in order to
maintain the qualification of the Indenture under the TIA.
16. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity, may become the owner or pledgee of the Notes and may
otherwise deal with the Company or an Affiliate of the Company with the same
rights it would have, as if it were not Trustee, subject to certain limitations
provided for in the Indenture and in the TIA. Any Paying agent, Transfer Agent
or Conversion Agent may do the same with like rights.
17. 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 Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Noteholder, by accepting a Note, waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the
Notes.
18. Governing Law; Indenture to Control. THE INTERNAL LAWS OF THE
STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD,
TO THE EXTENT PERMITTED BY LAW, TO CONFLICT OF LAW PROVISIONS THEREOF. IN THE
EVENT OF ANY CONFLICT BETWEEN THE PROVISIONS OF THIS SECURITY ON THE ONE HAND
AND THE INDENTURE, ON THE OTHER HAND, THE PROVISIONS OF THE INDENTURE SHALL
CONTROL.
19. Authentication. The Notes shall not be valid until authenticated
by the manual signature of an authorized signatory of the Trustee or an
authenticating agent.
20. Abbreviations. Customary abbreviations may be used in the name of
a Noteholder or an assignee, such as: TEN COM (for tenants in common), TEN ENT
(for tenants by the entireties), JT TEN (for joint tenants with right of
survivorship and not as tenants in common), CUST (for Custodian), and U/G/M/A
(for Uniform Gifts to Minors Act).
21. Definitions. Capitalized terms not defined in this Note have the
meanings given to them in the Indenture.
The Company will furnish to any Noteholder of the Notes upon written
request and without charge a copy of the Indenture. Request may be made to:
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SCI Systems, Inc.
Attention:
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33
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Note, fill form below: To convert this Note into the Common Stock of the
Company, check the box:
I or we assign and transfer this Note to: ----
: :
---------------------------------- ----
: :
---------------------------------- To convert only part of this Note, state the principal
amount to be converted (which must be $1,000 or an
(Insert assignee's Soc. Sec. or tax ID no.) integral multiple of $1,000):
--------------------------------- --------------------------------
:$ :
--------------------------------- --------------------------------
---------------------------------
If you want the stock certificate made out in another
_________________________________ person's name, fill in the form below:
(Print or type assignee's
Name, address and zip code and soc. sec. Or tax ID no.) --------------------------------
: :
irrevocably appoint --------------------------------
_____________________ agent
to transfer this Note on the books
of the Company.
The agent may substitute another to act for him.
--------------------------
--------------------------
--------------------------
--------------------------
(Print or type other person's name, address and
zip code)
----------------------------------------------------------------------------------------------------------------------
Date: ___________________
Your signature:
------------------------
----------------------------------------------------------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
