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EXHIBIT 4.2
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Quantum Corporation
and
LaSalle National Bank
Trustee
Supplemental Trust Indenture
Dated as of August 1, 1997
Supplementing that certain
Indenture
Dated as of August 1, 1997
Authorizing the Issuance and Delivery of
Subordinated Debt Securities
7% Convertible Subordinated Notes due 2004
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TABLE OF CONTENTS
Page
ARTICLE ONE ISSUANCE OF NOTES................................................2
Section 101 Issuance of Notes; Principal Amount; Maturity...............2
Section 102 Interest on the Notes; Payment of Interest..................2
ARTICLE TWO CERTAIN DEFINITIONS..............................................3
Section 201 Certain Definitions.........................................3
ARTICLE THREE CERTAIN COVENANTS..............................................4
Section 301 Registration and Listing....................................4
ARTICLE FOUR REDEMPTION OF ..................................................5
Section 401 Right of Redemption.........................................5
Section 402 Conversion Arrangement on Call for Redemption...............5
ARTICLE FIVE CONVERSION OF ..................................................6
Section 501 Conversion Privilege and Conversion Price...................6
Section 502 Adjustment of Conversion Price..............................6
ARTICLE SIX REDEMPTION AT OPTION OF HOLDERS UPON A FUNDAMENTAL
CHANGE.............................................................15
Section 601 Right to Require Redemption................................15
Section 602 Provision of Company Notice................................16
Section 603 Procedures for Redemption..................................16
Section 604 Deposit of Redemption Price................................17
Section 605 Successive Consolidations, Mergers, Etc....................17
ARTICLE SEVEN MISCELLANEOUS.................................................17
Section 701 Consent of Holders Required................................17
Section 702 Applicability of Certain Indenture Provisions..............18
Section 703 Reference to and Effect on the Indenture...................18
Section 704 Supplemental Indenture May be Executed In Counterparts.....18
Section 705 Effect of Headings.........................................18
Section 706 Separability...............................................18
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This Supplemental Trust Indenture, dated as of August 1, 1997 (the
"Supplemental Indenture"), between Quantum Corporation, a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
and LaSalle National Bank, a national banking association organized and existing
under the laws of the United States of America, as Trustee (the "Trustee"),
supplementing that certain Indenture, dated as of August 1, 1997, between the
Company and the Trustee (such Indenture, as supplemented by this Supplemental
Indenture for this series of Securities, being referred to herein as the
"Indenture").
Recitals
A. The Company has duly authorized the execution and delivery of
the Indenture heretofore executed and delivered to provide for the issuance from
time to time of its unsecured debentures, notes, or other evidences of
indebtedness to be issued in one or more series as provided for in the Indenture
heretofore executed and delivered.
B. The Indenture heretofore executed and delivered provides that
the Securities of each series shall be in substantially the form set forth in
the Indenture heretofore executed and delivered, or in such other form as may be
established by or pursuant to a Board Resolution or in one or more supplemental
indentures thereto, in each case with such appropriate insertions, omissions,
substitutions, and other variations as are required or permitted by the
Indenture, and may have such letters, numbers, or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined to be required by the officers executing such securities, as
evidenced by their execution thereof.
C. The Company and the Trustee have agreed that the Company shall
issue and deliver, and the Trustee shall authenticate, Securities denominated
"7% Convertible Subordinated Notes due 2004" (the "Notes") pursuant to the terms
of this Supplemental Indenture and substantially in the form set forth below, in
each case with such appropriate insertions, omissions, substitutions, and other
variations as are required or permitted by the Indenture heretofore executed and
delivered and this Supplemental Indenture, and with such letters, numbers, or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of such Securities.
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ARTICLE ONE
ISSUANCE OF NOTES
Section 101 Issuance of Notes; Principal Amount; Maturity.
(a) On August 1, 1997, the Company shall issue and deliver to the
Trustee, and the Trustee shall authenticate, Notes substantially in the form set
forth in Annex 1, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Indenture
and this Supplemental Indenture, and with such letters, numbers, or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any Securities exchange or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
(b) There is hereby authorized a series of Securities designated the
7% Convertible Subordinated Notes limited in aggregate principal amount of
$287,500,000. The Notes shall mature on August 1, 2004, which shall be the
Stated Maturity.
Section 102 Interest on the Notes; Payment of Interest.
(a) The Notes shall bear interest at the rate of 7% per annum from
and including August 1, 1997.
(b) The interest so payable, and punctually paid or duty provided
for, on any Interest Payment Date shall, as provided in such Indenture, be paid
to the Person in whose name a Note is registered at the close of business on the
Regular Record Date for such interest, which shall be the January 15 or June 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
(c) Payment of the principal of (and premium, if any) and any
interest on the Notes shall be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
(which shall initially be IBJ Xxxxxxxx Bank & Trust Company, an agent of the
Trustee) or at the Corporate Trust Office of the Trustee in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Security
Register; provided that a Holder with an aggregate principal amount in excess of
$5,000,000 will be paid by wire transfer in immediately available funds at the
election of such Holder.
The Company hereby initially designates the Trustee as Paying Agent,
Security Registrar, Custodian and conversion agent, and each of the Corporate
Trust Office of the Trustee and the office of the Trustee in the Borough of
Manhattan, The City of New York (which shall initially be IBJ Xxxxxxxx & Trust
Company, an agent of the Trustee located at Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, Attn: Reorganization Department), one such office or agency of the
Company for each of the aforesaid purposes.
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ARTICLE TWO
CERTAIN DEFINITIONS
Section 201 Certain Definitions.
The terms defined in this Section 201 (except as herein otherwise
expressly provided or unless the context of this Supplemental Indenture
otherwise requires) for all purposes of this Supplemental Indenture and of any
indenture supplemental hereto have the respective meanings specified in this
Section 201. All other terms used in this Supplemental Indenture that are
defined in the Indenture or the Trust Indenture Act, either directly or by
reference therein (except as herein otherwise expressly provided or unless the
context of this Supplemental Indenture otherwise requires), have the respective
meanings assigned to such terms in the Indenture or the Trust Indenture Act, as
the case may be, as in force at the date of this Supplemental Indenture as
originally executed.
"Applicable Price" shall mean (i) in the event of a Fundamental Change
in which the holders of the Company's 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 arithmetic average of the Closing
Price for the Company's Common Stock (determined as set forth in Section 502(h))
during the ten Trading Days (as defined in Section 502(h)) 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
the Common Stock shall have the right to receive such cash, securities, property
or other assets in connection with the Fundamental Change.
"Closing Price" shall have the meaning specified in Section 502(h)(1).
"Conversion Price" has the meaning specified in Section 501 of this
Supplemental Indenture.
"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 the right to receive
consideration (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) which is not all or substantially all common stock which is (or, upon
consummation of or immediately following 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 United States system of automated
dissemination of quotation of securities prices.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Supplemental
Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Supplemental
Indenture.
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"Repurchase Date" shall have the meaning specified in Section 601.
"Reference Market Price" shall initially mean $18.1667 and in the event
of any adjustment to the Conversion Price pursuant to Sections 502(a), (b), (c),
(d), (e), (f) or (g), the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the Conversion Price after giving
effect to any such adjustment shall always be the same as the ratio of $18.1667
to the initial Conversion Price specified in the form of Note included herein
(without regard to any adjustment thereto).
"Rights Agreement" means that certain Preferred Shares Rights
Agreement, dated as of August 3, 1988, between the Company and Bank of America
National Trust & Savings Association, as amended from time to time.
"'Rights" shall mean "Rights" as such term is defined in the Rights
Agreement.
"Trading Day" shall have the meaning specified in Section 502(h)(5).
"Trigger Event" shall have the meaning specified in Section 502(d).
The definitions of other terms are specified in Articles Five and Six.
ARTICLE THREE
CERTAIN COVENANTS
The following covenant shall be applicable to the Company for so long
as any of the Notes are outstanding.
Section 301 Registration and Listing.
The Company (i) will effect all registrations with, and obtain all
approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) before the shares of Common Stock
issuable upon conversion of Notes may be lawfully issued and delivered, and
thereafter publicly traded, and qualified or listed as contemplated by clause
(ii); and (ii) will list the shares of Common Stock required to be issued and
delivered upon conversion of the Notes prior to such issuance or delivery on the
Nasdaq National Market or such other exchange or automated quotation as the
Common Stock is then listed at such date of conversion. The provisions of
Section 1008 of the Indenture shall not apply to this Section 301.
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ARTICLE FOUR
REDEMPTION OF NOTES
Section 401 Right of Redemption.
The Notes will not be subject to redemption prior to August 1, 1999 and
will be redeemable on and after such date at the option of the Company, in whole
or in part, upon not less than 15 nor more than 60 days' notice to the Holders,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below; provided, however, that the Notes will not be redeemable following
August 1, 1999, and before August 1, 2001, unless the Closing Price of the
Company's Common Stock is at least 125% of the Conversion Price for at least 20
Trading Days within a period of 30 consecutive Trading Days ending within five
Trading Days prior to the notice of redemption.
The Redemption Price (expressed as a percentage of principal amount) is
as follows for the 12-month periods beginning on August 1 of the following
years:
YEAR REDEMPTION PRICE
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1999.............................................. 105%
2000.............................................. 104%
2001.............................................. 103%
2002.............................................. 102%
2003.............................................. 101%
and 100% at August 1, 2004, in each case together with accrued and unpaid
interest to, but excluding, the Redemption Date; provided, however, that
interest installments whose Stated Maturity is on such Redemption Date will be
payable to the Holders of such Notes, or one or more Predecessor Securities, of
record at the close of business on the relevant Record Dates referred to on the
face hereof, all as provided in the Indenture.
The Notes are not subject to redemption through operation of any
sinking fund.
Section 402 Conversion Arrangement on Call for Redemption.
In connection with any redemption of Notes, the Company may arrange for
the purchase and conversion of any Notes by an agreement with one or more
investment bankers or other purchasers to purchase such Notes by paying to the
Trustee in trust for the Holders, on or before the date fixed for redemption, an
amount not less than the applicable Redemption Price, together with interest
accrued to (but excluding) the date fixed for redemption, of such Notes.
Notwithstanding anything to the contrary contained herein, the obligation of the
Company to pay the Redemption Price of such Notes, together with interest
accrued to (but excluding) the Redemption Date, shall be deemed to be satisfied
and discharged to the extent such amount is so paid by such purchasers. If such
an agreement is entered into, a copy of which will be filed with the Trustee
prior to the Redemption Date, any Notes not duly surrendered for conversion by
the Holders thereof may, at the option of the Company, be
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deemed, to the fullest extent permitted by law, acquired by such purchasers from
such Holders and (notwithstanding anything to the contrary contained herein)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the Redemption Date (and the right to convert any such
Notes shall be extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee shall hold and
dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of Notes. Without the
Trustee's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Notes shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Trustee as set forth in this Indenture, and the Company agrees to indemnify
the Trustee from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the purchase and
conversion of any Notes between the Company and such purchasers to which the
Trustee has not consented in writing, including the costs and expenses,
including reasonable legal fees, incurred by the Trustee in the defense of any
claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations under
this Indenture.
ARTICLE FIVE
CONVERSION OF NOTES
Section 501 Conversion Privilege and Conversion Price
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Note may be converted into fully paid and
nonassessable shares of Common Stock of the Company at the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. Such
conversion right shall commence on August 1, 1997 and expire at the close of
business on August 1, 2004, subject, in the case of the conversion of any Global
Security, to any applicable book-entry procedures of the Depositary therefor. In
case a Note is called for redemption at the election of the Company, such
conversion right in respect of the Note shall expire at the close of business on
the Business Day next preceding the Redemption Date. A Note in respect of which
a Holder is exercising its option to require redemption upon a Fundamental
Change may be converted only if such Holder withdraws its election to exercise
its option in accordance with Article Six of this Supplemental Indenture.
The initial Conversion Price of the Notes is $46.325 per share of
Common Stock, and shall be adjusted in certain instances as provided in this
Article Five.
Section 502 Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustment from time to time
as follows:
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(a) In case the Company shall hereafter pay a dividend or
make a distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on the
date following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 502(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to
all holders of its outstanding shares of Common Stock entitling them (for a
period expiring within 45 days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the number of
shares which the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
date fixed for determination of stockholders entitled to receive such rights and
warrants plus the total number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall be successively made whenever
any such rights and warrants are issued, and shall become effective immediately
after the opening of business on the day following the date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
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(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any dividends or distributions to which Section
502(a) applies) or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section 502(b),
and excluding any dividend or distribution (x) paid exclusively in cash or (y)
referred to in Section 502(a) (any of the foregoing hereinafter in this Section
502(d) called the "Distribution Securities")), then, in each such case (unless
the Company elects to reserve such Distribution Securities for distribution to
the Holders upon the conversion of the Notes so that any such Holder converting
Notes will receive upon such conversion, in addition to the shares of Common
Stock to which such Holder is entitled, the amount and kind of such Distribution
Securities which such Holder would have received if such Holder had converted
its Notes into Common Stock immediately prior to the Distribution Record Date
(as defined in Section 502(h) for such distribution of the Distribution
Securities)), the Conversion Price shall be reduced so that the same shall be
equal to the price determined by multiplying the Conversion Price in effect on
the Distribution Record Date with respect to such distribution by a fraction of
which the numerator shall be the Current Market Price per share of the Common
Stock on such Distribution Record Date less the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Distribution Record
Date of the portion of the Securities so distributed applicable to one share of
Common Stock and the denominator shall be the Current Market Price per share of
the Common Stock, such reduction to become effective immediately prior to the
opening of business on the day following such Distribution Record Date;
provided, however, that in the event the then fair market value (as so
determined) of the portion of the Distribution 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 Distribution Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion the amount of Securities such Holder
would have received had such Holder converted each Note on the Distribution
Record Date. In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 502(d) by reference to the actual or
when issued trading market for any securities, it must in doing so consider the
prices in such market over the same period used in computing the Current Market
Price of the Common Stock.
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Each share of Common Stock issued upon conversion of Notes shall be
entitled to receive the appropriate number of Rights, if any, and the
certificates representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as provided by and subject to the terms
of the Rights Agreement as in effect at the time of such conversion. If the
Rights are separated from the Common Stock in accordance with the provisions of
the Rights Agreement such that the Holders would thereafter not be entitled to
receive any such Rights in respect to the Common Stock issuable upon conversion
of such Notes, the Conversion Price will be adjusted as provided in this Section
502(d) on the separation date; provided that if such Rights expire, terminate or
are redeemed by the Company, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such separation had not
occurred. In lieu of any such adjustment, the Company may amend the Rights
Agreement to provide that upon conversion of the Notes the Holders will receive,
in addition to the Common Stock issuable upon such conversion, the Rights which
would have attached to such shares of Common Stock if the Rights had not become
separated from the Common Stock pursuant to the provisions of the Rights
Agreement.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 502 (and no adjustment to the Conversion Price under
this Section 502 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 502(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Supplemental Indenture, are subject to events, upon the occurrence of which
such rights or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
record date with respect to new rights or warrants with such rights (and a
termination or expiration of the existing rights or warrants without exercise by
any of the holders thereof). In addition, in the event of any distribution (or
deemed distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 502 was made, (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 Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase, and (2) in the
case of such rights or warrants which shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
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For purposes of this Section 502(d) and Sections 502(a) and (b), any
dividend or distribution to which this Section 502(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 502(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections 502(a)
and (b) with respect to such dividend or distribution shall then be made),
except (A) the Distribution Record Date of such dividend or distribution shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Sections 502(a) and (b) and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such determination"
within the meaning of Section 502(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any quarterly
cash dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of (A)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require any adjustment of the Conversion Price pursuant to this
Section 502(e) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (B) 3.75% of the arithmetic average of the Closing Price
(determined as set forth in Section 502(h)) during the ten Trading Days (as
defined in Section 502(h)) immediately prior to the date of declaration of such
dividend, and (y) any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on such Distribution Record
Date by a fraction of which the numerator shall be the Current Market Price of
the Common Stock on the Distribution Record Date less the amount of cash so
distributed (and not excluded as provided above) applicable to one share of
Common Stock and the denominator shall be such Current Market Price of the
Common Stock, such reduction to be effective immediately prior to the opening of
business on the day following the Distribution 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 Distribution Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion the amount of cash such Holder would have
received had such Holder converted each Note on the Distribution Record Date. In
the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 502(e) as a
result of a distribution that is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 502(e)
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above as a result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
(f) In case a tender or exchange offer made by the Company
or any Subsidiary of the Company for all or any portion of the Common Stock
shall expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board if Directors) that as of the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it may be amended) that exceeds the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time and the denominator shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) on the Expiration Time and the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time. In the event that the Company is
obligated to purchase shares pursuant to any such tender or exchange offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person
other than the Company or any Subsidiary 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 "Offer 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 Offer Expiration Time,
and in which, as of the Offer Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Offer 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 Offer Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Offer Expiration Time and the denominator shall be the sum
of (x) the fair market value (determined as aforesaid) of the
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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 Offer
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Accepted Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Accepted Purchased
Shares) on the Offer Expiration Time and the Current Market Price of the Common
Stock on the Trading Day next succeeding the Offer Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Offer Expiration Time. In the event that such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 502(g) shall not be made if, as of the
Offer 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 Eight of the Indenture.
(h) For purposes of this Section 502, the following terms
shall have the meaning indicated:
(1) "Closing Price" with respect to any securities
on any day shall mean the closing sale price regular way on such day or,
in case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in each case on the
New York Stock Exchange, or, if such security is not listed or admitted
to trading on such Exchange, on the principal national security exchange
or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to trading
on any national securities exchange or quotation system, the average of
the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or if not so available, in such manner as furnished
by any New York Stock Exchange member firm selected from time to time by
the Board of Directors for that purpose, or a price determined in good
faith by the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof, whose determination
shall be conclusive.
(2) "Current Market Price" shall mean the average of
the daily Closing Prices per share of Common Stock for the ten
consecutive Trading Days immediately prior to the date in question;
provided, however, that (1) if the "ex" date (as hereinafter defined)
for any event (other than the issuance or distribution or Fundamental
Change requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 502(a), (b), (c), (d), (e), (f) or
(g) occurs during such ten consecutive Trading Days, the Closing Price
for each Trading Day prior to the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the same fraction by
which the Conversion Price is so required to be adjusted as a result of
such other event, (2) if the "ex" date for any event (other than the
issuance, distribution or Fundamental Change requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section
502(a), (b), (c), (d), (e),
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(f) or (g) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the Conversion Price is
so required to be adjusted as a result of such other event, and (3) if
the "ex" date for the issuance, distribution or Fundamental Change
requiring such computation is prior to the day in question, after taking
into account any adjustment required pursuant to clause (1) or (2) of
this proviso, the Closing Price for each Trading Day on or after such
"ex" date shall be adjusted by adding thereto the amount of any cash and
the fair market value (as determined by the Board of Directors or, to
the extent permitted by applicable law, a duly authorized committee
thereof in a manner consistent with any determination of such value for
purposes of Section 502(d), (f) or (g), whose determination shall be
conclusive and described in a resolution of the Board of Directors or
such duly authorized committee thereof, as the case may be) of the
evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock as of the close of
business on the day before such "ex" date. For purposes of any
computation under Section 502(f) or (g), the Current Market Price of the
Common Stock on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the next two
succeeding Trading Days; provided, however, that if the "ex" date for
any event (other than the tender or exchange offer requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 502(a), (b), (c), (d), (e), (f) or (g) occurs on or
after the Expiration Time or Offer Expiration Time, as the case may be,
for the tender or exchange offer requiring such computation and prior to
the day in question, the Closing Price for each Trading Day on and after
the "ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the Conversion
Price is so required to be adjusted as a result of such other event. For
purposes of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (2) when used with
respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades regular way on
such exchange or in such market after the time at which such subdivision
or combination becomes effective, and (3) when used with respect to any
tender or exchange offer means the first date on which the Common Stock
trades regular way on such exchange or in such market after the
Expiration Time or Offer Expiration Time, as the case may be, of such
offer.
(3) "Distribution Record Date" shall mean, with
respect to any dividend, distribution or other transaction or event in
which the holders of Common Stock have the right to receive any cash,
securities or other property or in which the Common Stock (or other
applicable security) is exchanged for or converted into any combination
of cash, securities or other property, the date fixed for determination
of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
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(4) "fair market value" shall mean the amount which
a willing buyer would pay a willing seller in an arm's length
transaction.
(5) "Trading Day" shall mean (x) if the applicable
security is listed or admitted for trading on the New York Stock
Exchange or another national security exchange, a day on which the New
York Stock Exchange or another national security exchange is open for
business or (y) if the applicable security is quoted on the Nasdaq
National Market, a day on which trades may be made on thereon or (z) if
the applicable security is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(i) The Company may make such reductions in the Conversion
Price, in addition to those required by Xxxxxxxx 000 (x), (x), (x), (x), (x),
(x) and (g), as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the reduction at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
Section 502(j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this 502 shall
be made by the Company and shall be made to the nearest cent or to the nearest
one hundredth of a share, as the case may be. No adjustment need be made for
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest. To the extent the Notes become convertible into cash,
assets, property or securities (other than capital stock of the Company), no
adjustment need be made thereafter as to the cash, assets, property or such
securities. Interest will not accrue on the cash.
(k) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
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adjustment of the Conversion Price to the Holder of each Note at his last
address appearing on the Security Register within 20 days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(l) In any case in which this Section 502 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
Holder of any Note converted after such record date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holder any amount in cash in lieu of any fraction pursuant
to Section 1403 of the Indenture.
(m) For purposes of this Section 502, the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
ARTICLE SIX
REDEMPTION AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE
Section 601 Right to Require Redemption.
If there shall occur a Fundamental Change, then each Holder shall have
the right, at such Holder's option, to require the Company to redeem all of such
Holder's Notes, or any portion thereof that is an integral multiple of $1,000
principal amount, on the date (the "Repurchase Date", with such Repurchase Date
for the purposes of Section 508 of the Indenture being a "Redemption Date") that
is 30 days after the date of the Company Notice (as defined in Section 602
below) of such Fundamental Change (or, if such 30th day is not a Business Day,
the next succeeding Business Day). Such repayment shall be made at the following
prices (expressed as a percentage of principal amount) in the event of a
Fundamental Change occurring during the 12-month period beginning August 1:
Year Percentage Year Percentage
---- ---------- ---- ----------
1997 . . . . . . . . . . . . 107% 2001 . . . . . . . . . . . . 103%
1998 . . . . . . . . . . . . 106 2002 . . . . . . . . . . . . 102
1999 . . . . . . . . . . . . 105 2003 . . . . . . . . . . . . 101
2000 . . . . . . . . . . . . 104
and 100% at August 1, 2004; provided in each case that if the Applicable Price
with respect to the Fundamental Change is less than the Reference Market Price,
the Company shall redeem such Notes at a price equal to the foregoing redemption
price multiplied by the fraction obtained by dividing the Applicable Price by
the Reference Market Price. In each case, the Company shall also pay to such
Holders accrued interest to, but excluding, the Repurchase Date on the redeemed
Notes; provided,
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however, that interest installments where Stated Maturity is on such Repurchase
Date will be paid to the Holder of such Notes, or one or more Predecessor Notes,
of record at the close of business on the relevant Record Dates.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.
Section 602 Provision of Company Notice.
On or before the tenth day after the occurrence of a Fundamental
Change, the Company, or, at its request the Trustee (which must be received by
the Trustee at least five Business Days prior to the date the Trustee is
requested to give notice as described below) in the name of and at the expense
of the Company, shall mail or cause to be mailed to all Holders of record on the
date of the Fundamental Change a notice (the "Company Notice") of the occurrence
of such Fundamental Change and of the redemption right at the option of the
Holders arising as a result thereof. Such notice shall be mailed in the manner
and with the effect set forth in Article Eleven of the Indenture. The Company
shall also deliver a copy of the Company Notice to the Trustee at such time as
it is mailed to Holders.
Each Company Notice shall specify the circumstances constituting the
Fundamental Change, the Repurchase Date, the price at which the Company shall be
obligated to redeem Notes, the latest time on the Repurchase Date by which the
Holder must exercise the redemption right (the "Fundamental Change Expiration
Time"), that the Holder shall have the right to withdraw any Notes surrendered
prior to the Fundamental Change Expiration Time, a description of the procedure
which a Holder must follow to exercise such redemption right and to withdraw any
surrendered Notes, the place or places where the Holder is to surrender such
Holder's Notes, and the amount of interest accrued on each Note to, but
excluding, the Repurchase Date.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Holders' redemption rights or affect the validity of the
proceedings for the repurchase of the Notes pursuant to this Article Six.
Section 603 Procedures for Redemption.
For a Note to be so redeemed at the option of the Holder, the Company
must receive at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York or, at the option of such
Holder, the Corporate Trust Office of the Trustee, such Note with the form
entitled "Option to Elect Redemption Upon A Fundamental Change" on the reverse
thereof duly completed, together with such Notes duly endorsed for transfer, on
or before the Fundamental Change Expiration Time. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
redemption shall be determined by the Company, whose determination shall be
final and binding absent manifest error.
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Section 604 Deposit of Redemption Price.
On or prior to the Repurchase Date, the Company will deposit with the
Trustee or with one or more Paying Agents (or, if the Company is acting as its
own Paying Agent, set aside, segregate and hold in trust as provided in Section
1003 of the Indenture) an amount of money sufficient to repay on the Repurchase
Date all the Notes to be redeemed on such date at the appropriate redemption
price, together with accrued interest to, but excluding, the Repurchase Date;
provided that if such payment is made on the Repurchase Date it must be received
by the Trustee or Paying Agent, as the case may be, by 10:00 a.m. New York City
time, on such date. Payment for Notes surrendered for redemption (and not
withdrawn) prior to the Fundamental Change Expiration Time will be made promptly
(but in no event more than three Business Days) following the Repurchase Date by
mailing checks for the amount payable to the Holders of such Notes entitled
thereto as they shall appear on Security Register.
Section 605 Successive Consolidations, Mergers, Etc.
In the case of consolidation, merger, conveyance, transfer or lease to
which Section 1409 of the Supplemental Indenture applies, in which the Common
Stock of the Company is changed or exchanged as a result into the right to
receive securities, cash or other property which includes shares of Common Stock
of the Company or another person that are, or upon issuance will be, traded on a
United States national securities exchange or approved for trading on an
established automated over-the-counter trading market in the United States and
such shares constitute at the time such change or exchange becomes effective in
excess of 50% of the aggregate fair market value of such securities, cash and
other property (as determined by the Company, which determination shall be
conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (which shall
comply with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of the Indenture and this
Supplemental Indenture, as applicable, relating to the right of Holders of the
Notes to cause the Company to redeem the Notes following a Fundamental Change,
including without limitation the applicable provisions of this Article Six and
the definitions of the Applicable Price, Common Stock, Fundamental Change and
Reference Market Price, as appropriate, as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provisions apply to the common stock and the issuer thereof if different from
the Company and Common Stock of the Company (in lieu of the Company and the
Common Stock of the Company).
ARTICLE SEVEN
MISCELLANEOUS
Section 701 Consent of Holders Required.
In addition to those modifications or amendments requiring the consent
of the Holder of each Outstanding Note effected thereby specified in Section 902
of the Indenture, there can be no modification or amendment that would change
the obligation of the Company to redeem any Note
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upon the happening of a Fundamental Change in a manner adverse to the Holder of
Notes without the consent of the Holder of each outstanding Note effected
thereby.
Section 702 Applicability of Certain Indenture Provisions.
Each of the defeasance and covenant defeasance provisions of Article
Thirteen of the Indenture shall apply to the Notes; provided, however, that the
Company will not be able to defease the right of the Holders to convert the
Notes pursuant to Article Fourteen of the Indenture.
Section 703 Reference to and Effect on the Indenture.
This Supplemental Indenture shall be construed as supplemental to the
Indenture and all the terms and conditions of this Supplemental Indenture shall
be deemed to be part of the terms and conditions of the Indenture. Except as set
forth herein, the Indenture heretofore executed and delivered is hereby
ratified, approved and confirmed. The provisions of this Supplemental Indenture
shall for the purposes of this series of Securities supersede the provisions of
the Indenture heretofore executed and delivered to the extent such Indenture
heretofore executed and delivered is inconsistent herewith. This Supplemental
Indenture is subject to the provisions of the Trust Indenture Act, and shall, to
the extent applicable, be governed by such provisions.
Section 704 Supplemental Indenture May be Executed In Counterparts.
This instrument may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
Section 705 Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
Section 706 Separability
In case any one or more of the provisions contained in this
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not effect any other provisions of this Supplemental
Indenture or of the Notes, but this Supplemental Indenture and the Notes shall
be construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed all as of the day and year first above written.
Quantum Corporation
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President, Finance and
Chief Financial Officer
LaSalle National Bank, as Trustee
By: /s/ XXXXXXXX X. XXXXXX
-------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Assistant Vice President
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Annex 1
[Form of Face of Security]
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT -- THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
QUANTUM CORPORATION
7% Convertible Subordinated Note due 2004
No. _________ $_____________
CUSIP: 747906 AC 9
Quantum Corporation, a corporation duly organized and existing under
the laws of Delaware (herein called the "Company," which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ________________, or registered assigns, the
principal sum of ___________________ Dollars on August 1, 2004 and to pay
interest thereon from August 1, 1997 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
February 1 and August 1 in each year, commencing February 1, 1998, at the rate
of 7% per annum, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the January 15 or July 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any interest on
this Security will be made at the office or agency of the Company maintained for
such purpose in the Borough of
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Xxxxxxxxx, Xxx Xxxx of New York, or at the option of the Holder of this
Security, at the Corporate Trust Office, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register;
provided, further, that a Holder with an aggregate principle amount in excess of
$5,000,000 will be paid by wire transfer in immediately available funds at the
election of such Holder.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be signed
manually or by facsimile by their duly authorized officers and by its corporate
seal to be affixed or imported hereon.
Dated:
QUANTUM CORPORATION
By:___________________________
Title:
Attest:
By:______________________________
Title:
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
LASALLE NATIONAL BANK
As Trustee
By:______________________________
Authorized Officer
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FORM OF REVERSE OF SECURITY
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of August 1, 1997 (herein called the
"Indenture," which term shall have the meaning assigned to it in such
instrument), between the Company and LaSalle National Bank, as Trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Indebtedness and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof, limited in
aggregate principal amount to $287,500,000, and is issued pursuant to a
Supplemental Trust Indenture supplementing the Indenture, dated as of August 1,
1997, from the Company to Trustee relating to the issuance of the "7%
Convertible Notes due 2004" of this series (the "Supplemental Indenture").
The Securities will not be subject to redemption prior to August 1,
1999 and will be redeemable on and after such date at the option of the Company,
in whole or in part, upon not less than 15 nor more than 60 days' notice to the
Holders, at the Redemption Prices (expressed as a percentage of principal
amount) set forth below; provided, however, that the Securities will not be
redeemable following August 1, 1999, and before August 1, 2001, unless the
Closing Price of the Company's Common Stock is at least 125% of the Conversion
Price for at least 20 Trading Days within a period of 30 consecutive Trading
Days ending within five Trading Days prior to the notice of redemption.
The Redemption Price (expressed as a percentage of principal amount) is
as follows for the 12-month periods beginning on August 1 of the following
years:
YEAR REDEMPTION PRICE
---- ----------------
1999.............................................. 105%
2000.............................................. 104%
2001.............................................. 103%
2002.............................................. 102%
2003.............................................. 101%
and 100% at August 1, 2004, in each case together with accrued and unpaid
interest to, but excluding, the Redemption Date; provided, however, that
interest installments whose Stated Maturity is on such Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.
The Securities are not subject to redemption through operation of any
sinking fund.
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In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If a Fundamental Change (as defined in the Supplemental Indenture)
occurs at any time prior to August 1, 2004, the Securities will be redeemable on
the 30th day after notice thereof at the option of the Holder. Such payment
shall be made at the following prices (expressed as a percentage of principal
amount) in the event of a Fundamental Change occurring during the 12-month
period beginning August 1 of the following years:
YEAR PERCENTAGE YEAR PERCENTAGE
---- ---------- ---- ----------
1997.................... 107% 2001............... 103%
1998.................... 106 2002............... 102
1999.................... 105 2003............... 101
2000.................... 104
and 100% at August 1, 2004; provided in each case that if the Applicable Price
(as defined in the Supplemental Indenture) is less than the Reference Market
Price (as defined in the Supplemental Indenture), 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. In each case, the Company shall also pay accrued interest, if any, on
such Securities to, but excluding, the Repurchase Date; provided, however, that
interest installments whose Stated Maturity is on such Repurchase Date will be
paid to the Holders of such Securities, or one or more Predecessor Securities,
of record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Supplemental Indenture. The Company
shall mail to all Holders a notice of the occurrence of a Fundamental Change and
of the redemption right arising as a result thereof on or before the 10th day
after the occurrence of such Fundamental Change. For a Security to be so repaid
at the option of the Holder, the Company must receive at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, the City of
New York, or, at the option of the Holder, the Corporate Trust Office of the
Trustee, such Security with the form entitled "Option to Elect Redemption Upon a
Fundamental Change" on the reverse thereof duly completed, together with such
Securities 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
succeeding Business Day).
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
and this Security is issued subject to such provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the Trustee
on his or her behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee as his or
her attorney-in-fact for any and all such purposes.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of Default with respect to this Security, in each
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case upon compliance with certain conditions set forth in the Indenture, except
that the Company will not be able to defease the right of the Holders to convert
this Security pursuant to Article Fourteen of the Indenture.
Subject to the provisions of the Indenture, the Holder of this Security
is entitled, at its option, at any time on or before August 1, 2004 (except
that, in case this Security or any portion hereof shall be redeemed, such right
shall terminate with respect to this Security or portion hereof, as the case may
be, so redeemed at the close of business on the first Business Day next
preceding the date fixed for redemption as provided in the Indenture, unless the
Company defaults in making the payment due upon redemption or except as
otherwise provided in the Indenture), to convert the principal amount of this
Security (or any portion hereof which is $1,000 or an integral multiple thereof)
into fully paid and non-assessable shares of the Common Stock of the Company, as
said shares shall be constituted at the date of conversion, at the initial
Conversion Price of $46.325 or at the adjusted Conversion Price in effect at the
date of conversion determined as provided in the Indenture, upon surrender of
this Security, together with the conversion notice hereon duly executed, to be
accompanied (if so required by the Company) by instruments of transfer, in form
satisfactory to the Company and to the Trustee, duly executed by the Holder or
by its duly authorized attorney in writing. Such surrender shall, if made during
any period beginning at the close of business on a Regular Record Date and
ending at the opening of business on the Interest Payment Date next following
such Regular Record Date (unless this Security or the portion being converted
shall have been called for redemption on a Redemption Date during the period
beginning at the close of business on a Regular Record Date and ending at the
opening of business on the first Business Day after the next succeeding Interest
Payment Date, or if such Interest Payment Date is not a Business Day, the second
such Business Day), also be accompanied by payment in funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment Date
on the principal amount of this Security then being converted. Subject to the
aforesaid requirement for payment and, in the case of a conversion after the
Regular Record Date next preceding any Interest Payment Date and on or before
such Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest (with certain exceptions provided in the Indenture), no
adjustment is to be made on conversion for interest accrued hereon or for
dividends on shares of Common Stock issued on conversion. The Company is not
required to issue fractional shares upon any such conversion, but shall make
adjustment therefor as provided in the Indenture. The Conversion Price is
subject to adjustment as provided in the Indenture. In the event of conversion
of this Security in part only, a new Security or Securities for the unconverted
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of more than 50% in principal amount of the Securities at
the
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time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
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No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this 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 this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties
(Cust)
JT TEN - as joint tenants with right of Custodian __________ under Uniform
survivorship and not as tenants (Minor)
in common Gifts to Minors Act __________
(State)
Additional abbreviations may also be used though not in the above list.
CONVERSION NOTICE
To Quantum Corporation:
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of the
Company in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon the
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 this Notice is being delivered on a date after the close of
business on a Regular Record Date and prior to the opening of business on the
related Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date after the close of
business on a Regular Record Date and prior to the opening of business on the
first Business Day after the next succeeding Interest Payment Date, or if such
Interest Payment Date is not a Business Day, the next such Business Day), this
Notice is accompanied by payment, in funds acceptable to the Company, of an
amount equal to the interest payable on such Interest Payment Date of the
principal of this Security to be converted. If shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect hereto. Any amount required to be paid by
the undersigned on account of interest accompanies this Security.
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Principal Amount to be Converted
(in an integral multiple of $1,000, if less
than all)
$____________
Dated:_____________ _______________________________________________
_______________________________________________
Signature(s) must be guaranteed by a qualified
guarantor institution with membership in an
approved signature guarantee program pursuant to
Rule 17Ad-15 under the Securities Exchange Act
of 1934 if shares of Common Stock are to be
delivered, or Securities to be issued, other
than to and in the name of the registered owner.
_______________________________________________
Signature Guaranty
Fill in for registration of shares of Common Stock and Security if to
be issued otherwise than to the registered Holder.
__________________________________ __________________________________
(Name) Social Security or Other Taxpayer
Identification Number
__________________________________
(Address)
__________________________________
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OPTION TO ELECT REDEMPTION
UPON A FUNDAMENTAL CHANGE
To: Quantum Corporation
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Quantum Corporation (the "Company") as to
the occurrence of a Fundamental Change with respect to the Company and requests
and instructs the Company to redeem the entire principal amount of this
Security, or the portion thereof (which is $1,000 or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture
referred to in this Security at the redemption price, together with accrued
interest to, but excluding, such date, to the registered Holder hereof.
Dated:
---------------- -----------------------------------------------
-----------------------------------------------
Signature(s)
Signature(s) must be guaranteed by a qualified
guarantor institution with membership in an
approved signature guarantee program pursuant to
Rule 17Ad-15 under the Securities Exchange Act
of 1934.
------------------------------------------------
Signature Guaranty
Principal amount to be redeemed
(in an integral multiple of $1,000, if less than all):
------------------------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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