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EXHIBIT 4.3
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ZERO COUPON CONVERTIBLE SUBORDINATED
DEBENTURES DUE 2018
WESTERN DIGITAL CORPORATION, ISSUER
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF APRIL 6, 0000
XXXXX XXXXXX BANK AND TRUST COMPANY OF CALIFORNIA, N.A., TRUSTEE
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FIRST SUPPLEMENTAL INDENTURE
This FIRST SUPPLEMENTAL INDENTURE, dated as of April 6, 2001, by and
among WESTERN DIGITAL TECHNOLOGIES, INC. (formerly, WESTERN DIGITAL
CORPORATION), a Delaware corporation (the "Company"), WESTERN DIGITAL
CORPORATION (formerly WESTERN DIGITAL HOLDINGS, INC.), a Delaware corporation,
of which the Company is a wholly-owned subsidiary pursuant to the Merger (as
defined below) ("Holdings"), and STATE STREET BANK and TRUST COMPANY of
CALIFORNIA, N.A., a national banking association organized and existing under
the laws of the United States of America (the "Trustee").
R E C I T A L S
A. The Company and the Trustee entered into an indenture, dated as
of February 18, 1998 (such indenture, as supplemented by this First Supplemental
Indenture, and as further supplemented or amended in accordance with its terms,
herein the "Indenture"), providing for the issuance by the Company of Zero
Coupon Convertible Subordinated Debentures due 2018 (the "Securities").
B. Contemporaneous with the execution hereof, the Company, Holdings
and WD Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of
Holdings ("Merger Sub"), entered into an Agreement and Plan of Merger to Form
Holding Company, dated April 6, 2001 (the "Merger Agreement"), pursuant to which
(i) Merger Sub merged into the Company, (ii) all of the Company's outstanding
capital stock was converted on a share for share basis into capital stock of
Holdings, (iii) the stockholders of the Company became stockholders of Holdings,
and (iv) the Company became a wholly-owned subsidiary of Holdings (the
"Merger").
C. In connection with the consummation of the Merger, and pursuant
to the Merger Agreement, the Company changed its name to "Western Digital
Technologies, Inc." and Holdings changed its name to "Western Digital
Corporation."
D. Section 11.14 of the Indenture provides, among other things, that
upon the occurrence of any consolidation, merger or combination of the Company
with another corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets with respect
to or in exchange for such Common Stock, then the Company or the successor
corporation shall execute with the Trustee a supplemental indenture, providing
that each Security shall be convertible into the kind and amount of shares of
stock and other securities or property or assets receivable upon such
consolidation, merger or combination by a holder of a number of shares of Common
Stock issuable upon conversion of such Security immediately prior to such
consolidation, merger or combination.
E. Pursuant to Section 11.14 of the Indenture, upon consummation of
the transactions contemplated by the Merger Agreement, each Security became
convertible into the common stock of Holdings, $0.01 par value per share, and
all of the adjustment provisions set forth in Article 11 of the Indenture became
applicable to the common stock of Holdings.
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F. Section 9.01 of the Indenture provides, among other things, that
the Company and the Trustee can amend the Indenture and the Securities without
the consent of any Securityholder, to (i) comply with Section 11.14 of the
Indenture and (ii) to make any change that does not adversely affect the right
of any Securityholder.
G. Article 5 of the Indenture permits the Merger because the Company
is the surviving Person in the Merger.
H. In no event, as a result of this First Supplemental Indenture,
will the Company be released from its obligations under the Indenture inasmuch
as such obligations relate to amounts payable under or in respect of the
Indenture or the Securities.
AGREEMENT:
NOW, THEREFORE, each party hereto agrees as follows for the benefit of
the other parties:
ARTICLE 1
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.01. This First Supplemental Indenture constitutes an integral
part of the Indenture. Except as hereby expressly modified, the Indenture and
the Securities issued thereunder are in all respects ratified and confirmed and
all of the terms, conditions and provisions thereof shall remain in full force
and effect.
SECTION 1.02. For all purposes of this First Supplemental Indenture
capitalized terms used herein without definition shall have the meanings
specified in the Indenture.
ARTICLE 2
ASSUMPTION OF RIGHTS AND OBLIGATIONS
SECTION 2.01. The Company hereby assigns, and Holdings hereby expressly
assumes all of the rights and obligations, covenants and duties of the Company
under the Indenture and the Securities issued thereunder.
SECTION 2.02. The parties hereby confirm the rights and obligations of
the Company under the Indenture and the Securities and that nothing contained
herein shall act or be deemed to be a release of the Company from its rights or
obligations under the Indenture.
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ARTICLE 3
AMENDMENTS
SECTION 3.01.
(a) The definitions of the following words contained in Section 1.01 of
the Indenture, are hereby amended by deleting them in their entirety and
inserting in lieu thereof the following respective definitions:
"Common Stock" means any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the
Company. Subject to the provisions of Section 11.14, however, shares
issuable upon conversion of the Securities shall include only shares of
Common Stock, par value of $0.01 per share, of the Company as it exists
on the date of this First Supplemental Indenture or shares of any class
or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which are not
subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which
the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
"Company" means Parent, except:
(i) in connection with the following provisions of the
Indenture, "Company" means Western Digital: (1) the recitals, (2) the
following definition: "Registration Rights Agreement," (3) Section 4.03
Compliance Certificate, Section 4.06 Existence, Section 4.07 Maintenance
of Properties, Section 4.08 Payment of Taxes and Other Claims, (4)
Article 5, (5) Section 7.04, (6) Section 9.05 Notation on or Exchange of
Securities and (7) Section 11.04 Taxes on Conversion; and
(ii) in connection with the following provisions of the
Indenture, "Company" means Western Digital and/or Parent as the context
may require in such provisions: (1) the following definitions: Board of
Directors, Officer, Officers' Certificate, Opinion of Counsel, (2)
Article 2 The Securities, (3) Article 3 Redemption and Purchases, (4)
Article 4 Covenants, except Section 4.02 Financial Information; SEC
Reports, Section 4.03 Compliance Certificate, Section 4.06 Existence,
Section 4.07 Maintenance of Properties, Section 4.08 Payment of Taxes
and Other Claims, (5) Article 6 Events of Default, (6) Section 7.07
Compensation and Indemnity, Section 7.08 Replacement of Trustee, (7)
Article 8 Discharge of Indenture, (8) Article 9 Amendments, and (9)
Section 12.04 Certificate and Opinion as to Conditions Precedent,
Section 12.11 Successors,
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in all cases, until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter shall mean such successor.
The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Credit Agreement" means that certain Credit Agreement, dated as
of September 20, 2000, by and among Western Digital, as Borrower, the
other Credit Parties signatory thereto, the other Lenders signatory
thereto from time to time, General Electric Capital Corporation, as
Administrative Agent, and Bank of America, as Documentation Agent, as
amended and as further amended from time to time.
"Designated Senior Indebtedness" means the Credit Agreement and
any particular Senior Indebtedness in which the instrument creating or
evidencing the same or the assumption or guarantee thereof (or related
agreements or documents to which Western Digital is a party) expressly
provides that such Senior Indebtedness shall be "Designated Senior
Indebtedness" for purposes of this Indenture; provided that such
instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the
rights of Designated Senior Indebtedness. If any payment to any holder
of Designated Senior Indebtedness is rescinded or must otherwise be
returned by such holder or Representative upon the insolvency,
bankruptcy or reorganization of Western Digital or otherwise, the
reinstated Indebtedness of Western Digital arising as a result of such
rescission or return shall constitute Designated Senior Indebtedness
effective as of the date of such rescission or return.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money (including
obligations in respect of overdrafts, foreign exchange contracts,
currency exchange agreements, interest rate protection agreements, and
any loans or advances from banks, whether or not evidenced by notes or
similar instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole
of the assets of such Person or to only a portion thereof), (b) all
reimbursement obligations and other liabilities (contingent or
otherwise) of such Person with respect to letters of credit, bank
guarantees or bankers' acceptances, (c) all obligations and liabilities
(contingent or otherwise) in respect of leases of such Person (i)
required, in conformity with generally accepted accounting principles,
to be accounted for as capitalized lease obligations on the balance
sheet of such Person, or (ii) required, in conformity with generally
accepted accounting principles, to be accounted for as an operating
lease, provided either (A) such operating lease requires, at the end of
the term thereof, that such Person make any payment other than accrued
periodic rent in the event that such Person does not acquire the leased
real property and related fixtures subject to such lease, or (B) such
Person has an option to acquire the leased real property and related
fixtures, whether such option is exercisable at any time or under
specific circumstances, (d) all obligations of such Person (contingent
or otherwise) with respect to an interest rate swap, cap or collar
agreement or other similar instrument or agreement, (e) all direct or
indirect guaranties or similar agreements by such Person in respect of,
and obligations or liabilities (contingent or otherwise) of such Person
to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses
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(a) through (d), (f) any indebtedness or other obligations described in
clauses (a) through (d) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person and (g) any and all
deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (a) through (f).
"Senior Indebtedness" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the commencement
of any bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowable as a claim in any such proceeding),
rent and end of term payments payable on or in connection with, and, to
the extent not included in the foregoing, all amounts payable as fees,
costs, expenses, liquidated damages, indemnities, repurchase and other
put obligations and other amounts to the extent accrued or due on or in
connection with, Indebtedness of Western Digital, whether outstanding on
the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by Western Digital (including all
deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing). Notwithstanding the
foregoing, the term Senior Indebtedness shall not include (i)
Indebtedness evidenced by the Securities, (ii) Indebtedness of Western
Digital to any subsidiary of Western Digital, a majority of the voting
stock or which is owned, directly, or indirectly, by Western Digital,
(iii) accounts payable or other Indebtedness to trade creditors created
or assumed by Western Digital in the ordinary course of business and
(iv) any particular Indebtedness in which the instrument creating or
evidencing such Indebtedness shall not be senior in right of payment to,
or is pari passu with, or is subordinated or junior to, the Securities.
Notwithstanding the foregoing, the term Senior Indebtedness shall not
include any Indebtedness of Western Digital to any subsidiary of Western
Digital, a majority of the voting stock of which is owned, directly or
indirectly, by Western Digital. If any payment made to any holder of any
Senior Indebtedness or its Representative with respect to such Senior
Indebtedness is rescinded or must otherwise be returned by such holder
or Representative upon the insolvency, bankruptcy or reorganization of
Western Digital or otherwise, the reinstated Indebtedness of Western
Digital arising as a result of such rescission or return shall
constitute Western Digital Senior Indebtedness effective as of the date
of such rescission or return.
(b) The following definitions are hereby included in Section
1.01 of the Indenture:
"Parent" means Western Digital Corporation (formerly, Western
Digital Holdings, Inc.), a Delaware corporation.
"Parent Designated Senior Indebtedness" means any particular
Senior Indebtedness in which the instrument creating or evidencing the
same or the assumption or guarantee thereof (or related agreements or
documents to which Parent is a party) expressly provides that such
Parent Senior Indebtedness shall be "Parent Designated Senior
Indebtedness" for purposes of this Indenture; provided that such
instrument, agreement or other document may place limitations and
conditions on the right of such Parent Senior Indebtedness to exercise
the rights of Parent Designated Senior
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Indebtedness. If any payment to any holder of Parent Designated Senior
Indebtedness is rescinded or must otherwise be returned by such holder
or Representative upon the insolvency, bankruptcy or reorganization of
Parent or otherwise, the reinstated Indebtedness of Parent arising as a
result of such rescission or return shall constitute Parent Designated
Senior Indebtedness effective as of the date of such rescission or
return.
"Parent Representative" means the (a) indenture trustee or other
trustee, agent or representative for any Parent Senior Indebtedness or
(b) with respect to any Parent Senior Indebtedness that does not have
any such trustee, agent or other representative, (i) in the case of such
Parent Senior Indebtedness issued pursuant to an agreement providing for
voting arrangements as among the holders or owners of such Parent Senior
Indebtedness, any holder or owner of such Parent Senior Indebtedness
acting with the consent of the required Persons necessary to bind such
holders or owners of such Parent Senior Indebtedness and (ii) in the
case of all other such Parent Senior Indebtedness, the holder or owner
of such Parent Senior Indebtedness.
"Parent Senior Indebtedness" means the principal of, premium, if
any, interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding, whether or not a
claim for post-petition interest is allowable as a claim in any such
proceeding), rent and end of term payments payable on or in connection
with, and, to the extent not included in the foregoing, all amounts
payable as fees, costs, expenses, liquidated damages, indemnities,
repurchase and other put obligations and other amounts to the extent
accrued or due on or in connection with, Indebtedness of Parent, whether
outstanding on the date of this Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by Parent
(including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing).
Notwithstanding the foregoing, the term Parent Senior Indebtedness shall
not include (i) Indebtedness evidenced by the Securities, (ii)
Indebtedness of Parent to any subsidiary of Parent, a majority of the
voting stock or which is owned, directly, or indirectly, by Parent,
(iii) accounts payable or other Indebtedness to trade creditors created
or assumed by Parent in the ordinary course of business and (iv) any
particular Indebtedness in which the instrument creating or evidencing
such Indebtedness shall not be senior in right of payment to, or is pari
passu with, or is subordinated or junior to, the Securities.
Notwithstanding the foregoing, the term Parent Senior Indebtedness shall
not include any Indebtedness of Parent to any subsidiary of Parent, a
majority of the voting stock of which is owned, directly or indirectly,
by Parent. If any payment made to any holder of any Parent Senior
Indebtedness or its Representative with respect to such Parent Senior
Indebtedness is rescinded or must otherwise be returned by such holder
or Representative upon the insolvency, bankruptcy or reorganization of
Parent or otherwise, the reinstated Indebtedness of Parent arising as a
result of such rescission or return shall constitute Parent Senior
Indebtedness effective as of the date of such rescission or return.
"Western Digital" means Western Digital Technologies, Inc.
(formerly, Western Digital Corporation), a Delaware corporation.
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(c) Section 6.10 of the Indenture is hereby amended by substituting
in its entirety the clause which reads, "Second: to holders of Senior
Indebtedness to the extent required by Article 10;" with the following:
"Second: to holders of Senior Indebtedness and Parent Senior
Indebtedness to the extent required by Article 10 and Article 10A,
respectively;"
(d) Article 10 of the Indenture is hereby amended by deleting it in
its entirety and inserting in lieu thereof the following:
"ARTICLE 10
SUBORDINATION
SECTION 10.1. AGREEMENT OF SUBORDINATION. Western Digital
covenants and agrees for itself and its successors, and each Holder of
Securities issued hereunder by such Holder's acceptance thereof likewise
covenants and agrees, that all Securities shall be issued subject to the
provisions of this Article 10; and each Person holding any such Security
whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by Western Digital of the Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price, interest and any other amounts payable, if any, in respect of all
Securities issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment
to the prior payment in full in cash or other payment satisfactory to
the holders of Senior Indebtedness of all Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred, or
thereafter created, assumed or guaranteed.
No provision of this Article 10 shall prevent the occurrence of
any Default or Event of Default hereunder.
SECTION 10.2. PAYMENTS TO HOLDERS. Western Digital shall make no
payment with respect to the payment of Principal Amount, Issue Price,
accrued Liquidated Damages, if any, accrued Original Issue Discount,
Redemption Price, Purchase Price, Fundamental Change Redemption Price,
interest and any other amounts payable, if any, on the Securities,
except payments and distributions made by the Trustee as permitted by
Section 10.05, if:
(i) a default in any payment obligations in respect of Senior
Indebtedness occurs and is continuing, without regard to any applicable
period of grace (whether at maturity or at a date fixed for payment or
by declaration or otherwise); or
(ii) any other default occurs and is continuing with respect to
Designated Senior Indebtedness that permits the holders of such
Designated
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Senior Indebtedness as to which such default relates to accelerate its
maturity and the Trustee receives a notice of the default (a "Payment
Blockage Notice") from a holder of Designated Senior Indebtedness, or a
Representative of Designated Senior Indebtedness.
If the Trustee receives any Payment Blockage Notice pursuant to
clause (ii) above, no subsequent Payment Blockage Notice shall be
effective for purposes of this Section unless and until at least 365
days shall have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice. No nonpayment default that
existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been
cured or waived for a period of not less than 90 days (it being
acknowledged that (x) any action of Western Digital or any of its
Subsidiaries occurring subsequent to delivery of a Payment Blockage
Notice that would give rise to any event of default pursuant to any
provision of Senior Indebtedness under which an event of default
previously existed (or was continuing at the time of delivery of such
Payment Blockage Notice) shall constitute a new event of default for
this purpose and (y) any breach of a financial covenant giving rise to a
nonpayment default for a period ending subsequent to the date of
delivery of the respective Payment Blockage Notice shall constitute a
new event of default for this purpose.)
Western Digital may and shall resume payments on and
distributions in respect of the Securities upon the earlier of:
(1) in case of a default referred to in clause (i) above, the
date upon which the default is cured or waived in accordance with the
terms of the governing instrument or ceases to exist, or
(2) in the case of a default referred to in clause (ii) above,
the date upon which the default is cured, waived in accordance with the
terms of the governing instrument or ceases to exist or 179 days pass
after the applicable Payment Blockage Notice is received if the maturity
of such Designated Senior Indebtedness has not been accelerated, unless
this Article 10 otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by Western Digital or distribution of assets of
Western Digital of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or
liquidation or reorganization or bankruptcy of Western Digital, whether
voluntary or involuntary or insolvency, receivership or similar
proceedings relating to Western Digital or its property, or an
assignment for the benefit of creditors or any marshaling of Western
Digital's assets or liabilities, all amounts due or to become due upon
all Senior Indebtedness of Western Digital shall first be paid in full
in cash or other payment satisfactory to the holders of such Senior
Indebtedness before any payment is made on account of the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price,
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Fundamental Change Redemption Price, interest or any other amounts
payable, if any, in respect of the Securities (except payments made
pursuant to Article 8 hereof from monies deposited with the Trustee
pursuant thereto prior to the happening of such dissolution or
winding-up or liquidation or reorganization or bankruptcy of Western
Digital, whether voluntary or involuntary or insolvency, receivership or
similar proceedings relating to Western Digital or its property, or an
assignment of the benefit of creditors or any marshaling of Western
Digital's assets or liabilities), and upon any such dissolution or
winding-up or liquidation or reorganization or bankruptcy of Company,
whether voluntary or involuntary or insolvency, receivership or similar
proceedings relating to Western Digital or its property, or an
assignment of the benefit of creditors or any marshalling of Western
Digital's assets or liabilities, any payment by Western Digital, or
distribution of assets of Western Digital of any kind or character,
whether in cash, property or securities, to which the Holders of the
Securities or the Trustee would be entitled, except for the provisions
of this Article 10, shall (except as aforesaid) be paid by Western
Digital or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the
Holders of the Securities or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness
of Western Digital as their interests may appear or their representative
or representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, as their respective interests may
appear to the extent necessary to pay all such Senior Indebtedness in
full in cash or other payment satisfactory to the holders of such Senior
Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before
any payment or distribution is made to the Holders of the Securities or
to the Trustee.
In the event that any Securities are declared due and payable
before their Stated Maturity pursuant to Section 6.02, then and in such
event Western Digital shall promptly notify holders of its Senior
Indebtedness of such acceleration. Western Digital may not pay the
Securities until 120 days have passed after such acceleration occurs and
may thereafter pay the Securities only to the extent that this Article
10 permits the payment at that time.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of Western Digital of any kind or
character, whether in cash, property or securities (including, without
limitation, by way of setoff or otherwise), prohibited by the foregoing
provisions in this Section 10.02, shall be received by the Trustee or
the Holders of the Securities before all Senior Indebtedness of Western
Digital is paid in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness such payment or distribution shall
be held in trust for the benefit of and shall be paid over or delivered
to the holders of Senior Indebtedness of Western Digital or their
representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any such
Senior Indebtedness may have been issued, as their respective interests
may appear, as calculated by
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Western Digital, for application to the payment of all such Senior
Indebtedness remaining unpaid to the extent necessary to pay all such
Senior Indebtedness in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article 10, the words, "cash, property or
securities" shall not be deemed to include shares of stock of Western
Digital as reorganized or readjusted, or securities of Western Digital
or any other corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinated at least to the
extent provided in this Article 10 with respect to the Securities to the
payment of all Senior Indebtedness of Western Digital which may at the
time be outstanding; provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of
such Senior Indebtedness (other than leases that are not assumed by
Western Digital or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of Western Digital with, or the merger
of Western Digital into, another corporation or the liquidation or
dissolution of Western Digital following the conveyance or transfer of
its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article 5
hereof shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 10.02 if such other
corporation shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions stated in Article 5 hereof.
Nothing in this Section 10.02 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07 or payments
or distributions received by the Trustee or Holders of the Securities
from Parent. This Section 10.02 shall be subject to the further
provisions of Section 10.05.
SECTION 10.3. SUBROGATION OF SECURITIES. Subject to the payment
in full in cash or other payment satisfactory to the holders of Senior
Indebtedness of all Senior Indebtedness of Western Digital, the rights
of the Holders of the Securities shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of Western Digital
applicable to such Senior Indebtedness until the Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price and interest, if any, in respect of the Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article 10,
and no payment over pursuant to the provisions of this Article 10, to or
for the benefit of the holders of such Senior Indebtedness by Holders of
the Securities or the Trustee, shall, as between Western Digital, its
creditors other
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than holders of its Senior Indebtedness, and the Holders of the
Securities be deemed to be a payment by Western Digital to or on account
of its Senior Indebtedness; and no payments or distributions of cash,
property or securities to or for the benefit of the holders of the Notes
pursuant to the subrogation provisions of this Article 10, which would
otherwise have been paid to the holders of Senior Indebtedness shall be
deemed to be a payment by Western Digital to or for the account of the
Securities. It is understood that the provisions of this Article 10 are
and are intended solely for the purpose of defining the relative rights
of the Holders of the Securities, on the one hand, and the holders of
Senior Indebtedness, on the other hand. Nothing contained in this
Article 10 or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as between Western Digital, its creditors
other than the holders of its Senior Indebtedness and the Holders of the
Securities, the obligation of Western Digital, which is absolute and
unconditional, to pay to the Holders of the Securities the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price and interest, if any, in respect of the Securities as
and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of Western Digital other than
the holders of its Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this
Article 10 of the holders of Senior Indebtedness in respect of cash,
property or securities of Western Digital received upon the exercise of
any such remedy.
Upon any payment or distribution of assets of Western Digital
referred to in this Article 10, the Trustee, subject to the provisions
of Section 7.01, and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, delivered to the Trustee, to
the Holders of the Securities for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of Western Digital, the
amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Article 10.
SECTION 10.4. AUTHORIZATION BY HOLDERS. Each Holder of a Security
by such Holder's acceptance thereof authorizes and directs the Trustee
in his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article 10 and appoints
the Trustee such Holder's attorney-in-fact for any and all such
purposes.
SECTION 10.5. NOTICE TO TRUSTEE. Western Digital shall give
prompt written notice in a form of an Officers' Certificate to a Trust
Officer of any fact
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known to Western Digital which would prohibit the making of any payment
of monies to or by the Trustee or any Paying Agent in respect of the
Securities pursuant to the provisions of this Article 10, but failure to
give such notice shall not affect the subordination of the Securities to
the Senior Indebtedness as provided in this Article 10. Notwithstanding
the provisions of this Article 10 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article 10, unless and until a Trust Officer shall
have received written notice thereof at the Corporate Trust Office from
Western Digital (in the form of an Officers' Certificate) or a holder or
holders of Senior Indebtedness or a Representative or from any trustee
therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.01, shall be entitled in
all respects to assume that no such facts exist; provided that if on a
date not fewer than two Business Days prior to the date upon which by
the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price, interest or any other amounts payable, if any, in
respect of any Security) the Trustee shall not have received, with
respect to such monies, the notice provided for in this Section 10.05,
then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received, and shall
not be affected by any notice to the contrary which may be received by
it on or after such prior date.
Notwithstanding anything to the contrary herein set forth,
nothing shall prevent any payment of amounts deposited with the Trustee
pursuant to Section 8.01 so long as the Trustee had no notice that such
amounts when so deposited were prohibited pursuant to the provisions of
Section 10.2.
The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder or a Representative of Designated
Senior Indebtedness (subject to the requirements set forth in the
definition of Designated Senior Indebtedness) or a Representative of
Senior Indebtedness of Western Digital (or a trustee on behalf of such
holder) to establish that such notice has been given by a holder or a
Representative of Designated Senior Indebtedness (subject to the
requirements set forth in the definition of Designated Senior
Indebtedness) or a Representative of such Senior Indebtedness or a
trustee on behalf of any such holder or holders. In the event that the
Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of
Western Digital to participate in any payment or distribution pursuant
to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount
of such Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution
and any other facts pertinent
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to the rights of such Person under this Article 10, and if such evidence
is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive
such payment.
SECTION 10.6. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The
Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 10 in respect of any Senior Indebtedness of
Western Digital at any time held by it, to the same extent as any other
holder of such Senior Indebtedness, and nothing or elsewhere in this
Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of Western
Digital, the Trustee undertakes to perform or to observe only such of
its covenants and obligations as are specifically set forth in this
Article 10, and no implied covenants or obligations with respect to the
holders of such Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of Western Digital
and, subject to the provisions of Section 7.01, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Holders of Securities, Western Digital or any other Person
money or assets to which any holder of Senior Indebtedness of Western
Digital shall be entitled by virtue of this Article 10 or otherwise.
SECTION 10.7. NO IMPAIRMENT OF SUBORDINATION. No right of any
present or future holder of any Senior Indebtedness of Western Digital
to enforce subordination as herein provided shall at any time in any way
be prejudiced or impaired by (i) any amendment of or addition or
supplement to any such Senior Indebtedness or any instrument or
agreement relating thereto (unless otherwise expressly provided
therein), or (ii) any act or failure to act on the part of Western
Digital or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by Western Digital with the terms,
provisions and covenants of the instrument, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with or
(iii) a failure to act by any Holders of Securities or the failure of
such Holder to comply with this Indenture.
SECTION 10.8. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Holder of Securities by such Holder's
acceptance thereof, acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and
a consideration to each holder of any Senior Indebtedness, whether such
Senior Indebtedness was created, assumed or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness, and no amendment or
modification of the provisions contained herein shall diminish the
rights of such holder or holders unless such holder or holders shall
have agreed in writing thereto.
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SECTION 10.9. REINSTATEMENT OF SUBORDINATION. If, at any time,
all or part of any payment of any Senior Indebtedness theretofore made
by Western Digital or any other Person is rescinded or must otherwise be
returned by the holders of such Senior Indebtedness for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of Western Digital or such other Person), these
subordination provisions shall continue to be effective or be
reinstated, as the case may be, all as though such payment had not been
made.
SECTION 10.10. PERMITTED PAYMENTS. Nothing contained in this
Article 10 or elsewhere in this Indenture, or in the Securities shall
prevent (a) Western Digital at any time, except under the conditions
described in Section 10.02, from making payments at any time of
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price or interest or any other amounts
payable, if any, in respect of the Securities, or from depositing with
the Trustee or any Paying Agent money for such payments, or (b) the
application by the Trustee or Paying Agent of any moneys deposited with
it under this Indenture to the payment of or on account of the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest or any other amounts payable, if any, in
respect of the Securities to the Holders of the Securities entitled
thereto to the beneficiaries thereof, if such payment would not have
been prohibited by the provisions of Section 10.02.
SECTION 10.11. ARTICLE APPLICABLE TO PAYING AGENTS. If at any
time any Paying Agent other than the Trustee shall have been appointed
by Western Digital or Parent and be then acting hereunder, the term
"Trustee" as used in this Article 10 shall (unless the context otherwise
requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article 10 in addition to or in place of
the Trustee; provided, however, that the first paragraph of Section
10.05 shall not apply to Western Digital or any Affiliate of Western
Digital if it or such Affiliate acts as Paying Agent.
SECTION 10.12. TREATMENT OF CONVERSION PAYMENTS. Notwithstanding
anything in this Indenture to the contrary, neither the issuance and
delivery of junior securities upon conversion of the Securities in
accordance with Article 11 nor the payment of cash in lieu of fractional
shares of Common Stock in accordance with Article 11 shall be deemed to
constitute a payment or distribution on account of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price or Fundamental Change Purchase Price
or interest or any other amounts payable, if any, in respect of the
Securities. For the purposes of this paragraph, the term "junior
securities" means (a) shares of any stock of any class of Western
Digital, (b) securities of Western Digital which are subordinated in
right of payment to all Senior Indebtedness of Western Digital which may
be outstanding at the time of issuance or delivery of
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such securities to substantially the same extent as, or to a greater
extent than, the Securities are so subordinated as provided in this
Article 10, and (c) any securities into which the Securities become
convertible pursuant to Section 11.14 which are securities of a Person
required to enter into a supplemental indenture pursuant to such section
(or Section 5.01) and are either (x) shares of any stock of any class of
such Person, or (y) securities of such Person which are subordinated in
right of payment to all Senior Indebtedness of such Person which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the
Securities or, are so subordinated as provided in this Article 10.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among Western Digital,
its creditors other than the holders of Senior Indebtedness, and the
holders of the Securities, the right, which is absolute and
unconditional, of the holder of any Security to convert such Security in
accordance with Article 11.
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT. Upon any payment or distribution of assets of Western
Digital referred to in this Article 10, the Trustee and the Holders of
Securities shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of
the trustee in bankruptcy, liquidating trustee, custodian, receiver,
assignee for the benefit of creditors, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of Western Digital, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10."
(e) The Indenture is hereby amended by adding new Article 10A as
follows:
"ARTICLE 10A
SUBORDINATION
SECTION 10A.1. AGREEMENT OF SUBORDINATION. Parent covenants and
agrees for itself and its successors, and each Holder of Securities
issued hereunder by such Holder's acceptance thereof likewise covenants
and agrees, that all Securities shall be issued subject to the
provisions of this Article 10A; and each Person holding any such
Security whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
The payment by Parent of the Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Liquidated Damages, if any,
Redemption Price, Purchase Price, Fundamental Change Redemption Price,
interest and any other
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amounts payable, if any, in respect of all Securities issued hereunder
shall, to the extent and in the manner hereinafter set forth, be
subordinated and subject in right of payment to the prior payment in
full in cash or other payment satisfactory to the holders of Parent
Senior Indebtedness of all Parent Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred, or
thereafter created, assumed or guaranteed.
No provision of this Article 10A shall prevent the occurrence of
any Default or Event of Default hereunder.
SECTION 10A.2. PAYMENTS TO HOLDERS. Parent shall make no payment
with respect to the payment of Principal Amount, Issue Price, accrued
Liquidated Damages, if any, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental Change Redemption Price, interest and
any other amounts payable, if any, on the Securities, except payments
and distributions made by the Trustee as permitted by Section 10A.05,
if:
(i) a default in any payment obligations in respect of Parent
Senior Indebtedness occurs and is continuing, without regard to any
applicable period of grace (whether at maturity or at a date fixed for
payment or by declaration or otherwise); or
(ii) any other default occurs and is continuing with respect to
Designated Senior Indebtedness that permits the holders of such
Designated Senior Indebtedness as to which such default relates to
accelerate its maturity and the Trustee receives a Payment Blockage
Notice from a holder of Designated Senior Indebtedness, or a
Representative of Designated Senior Indebtedness.
If the Trustee receives any Payment Blockage Notice pursuant to
clause (ii) above, no subsequent Payment Blockage Notice shall be
effective for purposes of this Section unless and until at least 365
days shall have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice. No nonpayment default that
existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been
cured or waived for a period of not less than 90 days (it being
acknowledged that (x) any action of Parent or any of its Subsidiaries
occurring subsequent to delivery of a Payment Blockage Notice that would
give rise to any event of default pursuant to any provision of Parent
Senior Indebtedness under which an event of default previously existed
(or was continuing at the time of delivery of such Payment Blockage
Notice) shall constitute a new event of default for this purpose and (y)
any breach of a financial covenant giving rise to a nonpayment default
for a period ending subsequent to the date of delivery of the respective
Payment Blockage Notice shall constitute a new event of default for this
purpose.)
Parent may and shall resume payments on and distributions in
respect of the Securities upon the earlier of:
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(1) in case of a default referred to in clause (i) above, the
date upon which the default is cured or waived in accordance with the
terms of the governing instrument or ceases to exist, or
(2) in the case of a default referred to in clause (ii) above,
the date upon which the default is cured, waived in accordance with the
terms of the governing instrument or ceases to exist or 179 days pass
after the applicable Payment Blockage Notice is received if the maturity
of such Designated Senior Indebtedness has not been accelerated, unless
this Article 10A otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by Parent or distribution of assets of Parent of
any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or
reorganization or bankruptcy of Parent, whether voluntary or involuntary
or insolvency, receivership or similar proceedings relating to Parent or
its property, or an assignment for the benefit of creditors or any
marshaling of Parent's assets or liabilities, all amounts due or to
become due upon all Parent Senior Indebtedness shall first be paid in
full in cash or other payment satisfactory to the holders of such Parent
Senior Indebtedness before any payment is made on account of the
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price, interest or any other amounts
payable, if any, in respect of the Securities (except payments made
pursuant to Article 8 hereof from monies deposited with the Trustee
pursuant thereto prior to the happening of such dissolution or
winding-up or liquidation or reorganization or bankruptcy of Parent,
whether voluntary or involuntary or insolvency, receivership or similar
proceedings relating to Parent or its property, or an assignment of the
benefit of creditors or any marshaling of Parent's assets or
liabilities), and upon any such dissolution or winding-up or liquidation
or reorganization or bankruptcy of Company, whether voluntary or
involuntary or insolvency, receivership or similar proceedings relating
to Parent or its property, or an assignment of the benefit of creditors
or any marshalling of Parent's assets or liabilities, any payment by
Parent, or distribution of assets of Parent of any kind or character,
whether in cash, property or securities, to which the Holders of the
Securities or the Trustee would be entitled, except for the provisions
of this Article 10A, shall (except as aforesaid) be paid by Parent or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or
it, directly to the holders of Parent Senior Indebtedness as their
interests may appear or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Parent Senior Indebtedness may have been
issued, as their respective interests may appear to the extent necessary
to pay all such Parent Senior Indebtedness in full in cash or other
payment satisfactory to the holders of such Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution
is made to the Holders of the Securities or to the
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Trustee. In the event that any Securities are declared due and payable
before their Stated Maturity pursuant to Section 6.02, then and in such
event Parent shall promptly notify holders of its Parent Senior
Indebtedness of such acceleration. Parent may not pay the Securities
until 120 days have passed after such acceleration occurs and may
thereafter pay the Securities only to the extent that this Article 10A
permits the payment at that time.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of Parent of any kind or character,
whether in cash, property or securities (including, without limitation,
by way of setoff or otherwise), prohibited by the foregoing provisions
in this Section 10A.02, shall be received by the Trustee or the Holders
of the Securities before all Parent Senior Indebtedness is paid in full
in cash or other payment satisfactory to the holders of such Parent
Senior Indebtedness such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of
Parent Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Parent Senior Indebtedness may have been
issued, as their respective interests may appear, as calculated by
Parent, for application to the payment of all such Parent Senior
Indebtedness remaining unpaid to the extent necessary to pay all such
Parent Senior Indebtedness in full in cash or other payment satisfactory
to the holders of such Senior Indebtedness, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article 10A, the words, "cash, property or
securities" shall not be deemed to include shares of stock of Parent as
reorganized or readjusted, or securities of Parent or any other
corporation provided for by a plan of reorganization or readjustment,
the payment of which is subordinated at least to the extent provided in
this Article 10A with respect to the Securities to the payment of all
Parent Senior Indebtedness which may at the time be outstanding;
provided that (i) such Parent Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of such Parent Senior
Indebtedness(other than leases that are not assumed by Parent or the new
corporation, as the case may be) are not, without the consent of such
holders, altered by such reorganization or readjustment. The
consolidation of Parent with, or the merger of Parent into, another
corporation or the liquidation or dissolution of Parent following the
conveyance or transfer of its property as an entirety, or substantially
as an entirety, to another corporation upon the terms and conditions
provided for in Article 5 hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this
Section 10A.02 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article 5 hereof.
Nothing in this Section 10A.02 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07. This Section
10A.02 shall be subject to the further provisions of Section 10A.05.
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SECTION 10A.3. SUBROGATION OF SECURITIES. Subject to the payment
in full in cash or other payment satisfactory to the holders of Parent
Senior Indebtedness of all Parent Senior Indebtedness, the rights of the
Holders of the Securities shall be subrogated to the rights of the
holders of such Parent Senior Indebtedness to receive payments or
distributions of cash, property or securities of Parent applicable to
such Parent Senior Indebtedness until the Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Liquidated Damages, if any,
Redemption Price, Purchase Price, Fundamental Change Redemption Price
and interest, if any, in respect of the Securities shall be paid in
full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Parent Senior Indebtedness of any
cash, property or securities to which the Holders of the Securities or
the Trustee would be entitled except for the provisions of this Article
10A, and no payment over pursuant to the provisions of this Article 10A,
to or for the benefit of the holders of such Parent Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as between Parent,
its creditors other than holders of its Senior Indebtedness, and the
Holders of the Securities be deemed to be a payment by Parent to or on
account of its Senior Indebtedness; and no payments or distributions of
cash, property or securities to or for the benefit of the holders of the
Notes pursuant to the subrogation provisions of this Article 10A, which
would otherwise have been paid to the holders of Parent Senior
Indebtedness shall be deemed to be a payment by Parent to or for the
account of the Securities. It is understood that the provisions of this
Article 10A are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and
the holders of Senior Indebtedness, on the other hand. Nothing contained
in this Article 10A or elsewhere in this Indenture or in the Securities
is intended to or shall impair, as between Parent, its creditors other
than the holders of its Parent Senior Indebtedness and the Holders of
the Securities, the obligation of Parent, which is absolute and
unconditional, to pay to the Holders of the Securities the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price and interest, if any, in respect of the Securities as
and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of Parent other than the holders
of its Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article 10A of the holders of
Parent Senior Indebtedness in respect of cash, property or securities of
Parent received upon the exercise of any such remedy.
Upon any payment or distribution of assets of Parent referred to
in this Article 10A, the Trustee, subject to the provisions of Section
7.01, and the Holders of the Securities shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which
such dissolution, winding-up, liquidation or reorganization proceedings
are pending, or a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making
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such payment or distribution, delivered to the Trustee, to the Holders
of the Securities for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of the Parent Senior
Indebtedness and other indebtedness of Parent, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article 10A.
SECTION 10A.4. AUTHORIZATION BY HOLDERS. Each Holder of a
Security by such Holder's acceptance thereof authorizes and directs the
Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 10A
and appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes.
SECTION 10A.5. NOTICE TO TRUSTEE. Parent shall give prompt
written notice in a form of an Officers' Certificate to a Trust Officer
of any fact known to Parent which would prohibit the making of any
payment of monies to or by the Trustee or any Paying Agent in respect of
the Securities pursuant to the provisions of this Article 10A, but
failure to give such notice shall not affect the subordination of the
Securities to the Parent Senior Indebtedness as provided in this Article
10A. Notwithstanding the provisions of this Article 10A or any other
provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making
of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article 10A, unless and
until a Trust Officer shall have received written notice thereof at the
Corporate Trust Office from Parent (in the form of an Officers'
Certificate) or a holder or holders of Parent Senior Indebtedness or a
Representative or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of
Section 7.01, shall be entitled in all respects to assume that no such
facts exist; provided that if on a date not fewer than two Business Days
prior to the date upon which by the terms hereof any such monies may
become payable for any purpose (including, without limitation, the
payment of the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase
Price, Fundamental Change Redemption Price, interest or any other
amounts payable, if any, in respect of any Security) the Trustee shall
not have received, with respect to such monies, the notice provided for
in this Section 10A.05, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they
were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such prior date.
Notwithstanding anything to the contrary herein set forth,
nothing shall prevent any payment of amounts deposited with the Trustee
pursuant to Section 8.01 so long as the Trustee had no notice that such
amounts when so deposited were prohibited pursuant to the provisions of
Section 10A.2.
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The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder or a Representative of Designated
Senior Indebtedness (subject to the requirements set forth in the
definition of Designated Senior Indebtedness) or a Representative of
Parent Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder or a
Representative of Designated Senior Indebtedness (subject to the
requirements set forth in the definition of Designated Senior
Indebtedness) or a Representative of such Parent Senior Indebtedness or
a trustee on behalf of any such holder or holders. In the event that the
Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Parent Senior
Indebtedness to participate in any payment or distribution pursuant to
this Article 10A, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount
of such Parent Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person
under this Article 10A, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 10A.6. TRUSTEE'S RELATION TO PARENT SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 10A in respect of any Parent Senior
Indebtedness at any time held by it, to the same extent as any other
holder of such Parent Senior Indebtedness, and nothing or elsewhere in
this Indenture shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Parent Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article 10A, and
no implied covenants or obligations with respect to the holders of such
Parent Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Parent Senior Indebtedness and, subject to the provisions
of Section 7.01, the Trustee shall not be liable to any holder of such
Parent Senior Indebtedness if it shall pay over or deliver to Holders of
Securities, Parent or any other Person money or assets to which any
holder of Parent Senior Indebtedness shall be entitled by virtue of this
Article 10A or otherwise.
SECTION 10A.7. NO IMPAIRMENT OF SUBORDINATION. No right of any
present or future holder of any Parent Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be
prejudiced or impaired by (i) any amendment of or addition or supplement
to any such Parent Senior Indebtedness or any instrument or agreement
relating thereto (unless otherwise expressly provided therein), or (ii)
any act or failure to act on the part of Parent or by any act or failure
to act, in good faith, by any such holder, or by any noncompliance by
Parent with the terms, provisions and covenants of the
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instrument, regardless of any knowledge thereof which any such holder
may have or otherwise be charged with or (iii) a failure to act by any
Holders of Securities or the failure of such Holder to comply with this
Indenture.
SECTION 10A.8. RELIANCE BY HOLDERS OF PARENT SENIOR INDEBTEDNESS
ON SUBORDINATION PROVISIONS. Each Holder of Securities by such Holder's
acceptance thereof, acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and
a consideration to each holder of any Parent Senior Indebtedness,
whether such Parent Senior Indebtedness was created, assumed or acquired
before or after the issuance of the Securities, to acquire and continue
to hold, or to continue to hold, such Parent Senior Indebtedness and
such holder of Parent Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness,
and no amendment or modification of the provisions contained herein
shall diminish the rights of such holder or holders unless such holder
or holders shall have agreed in writing thereto.
SECTION 10A.9. REINSTATEMENT OF SUBORDINATION. If, at any time,
all or part of any payment of any Parent Senior Indebtedness theretofore
made by Parent or any other Person is rescinded or must otherwise be
returned by the holders of such Parent Senior Indebtedness for any
reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of Parent or such other Person), these
subordination provisions shall continue to be effective or be
reinstated, as the case may be, all as though such payment had not been
made.
SECTION 10A.10. PERMITTED PAYMENTS. Nothing contained in this
Article 10A or elsewhere in this Indenture, or in the Securities shall
prevent (a) Parent at any time, except under the conditions described in
Section 10A.02, from making payments at any time of Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest or any other amounts payable, if any, in
respect of the Securities, or from depositing with the Trustee or any
Paying Agent money for such payments, or (b) the application by the
Trustee or Paying Agent of any moneys deposited with it under this
Indenture to the payment of or on account of the Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest or any other amounts payable, if any, in respect of
the Securities to the Holders of the Securities entitled thereto to the
beneficiaries thereof, if such payment would not have been prohibited by
the provisions of Section 10A.02.
SECTION 10A.11. ARTICLE APPLICABLE TO PAYING AGENTS. If at any
time any Paying Agent other than the Trustee shall have been appointed
by Parent and Western Digital and be then acting hereunder, the term
"Trustee" as used in this Article 10A shall (unless the context
otherwise requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all
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intents and purposes as if such Paying Agent were named in this Article
10A in addition to or in place of the Trustee; provided, however, that
the first paragraph of Section 10A.05 shall not apply to Parent or any
Affiliate of Parent if it or such Affiliate acts as Paying Agent.
SECTION 10A.12. TREATMENT OF CONVERSION PAYMENTS. Notwithstanding
anything in this Indenture to the contrary, neither the issuance and
delivery of junior securities upon conversion of the Securities in
accordance with Article 11 nor the payment of cash in lieu of fractional
shares of Common Stock in accordance with Article 11 shall be deemed to
constitute a payment or distribution on account of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price or Fundamental Change Purchase Price
or interest or any other amounts payable, if any, in respect of the
Securities. For the purposes of this paragraph, the term "junior
securities" means (a) shares of any stock of any class of Parent, (b)
securities of Parent which are subordinated in right of payment to all
Parent Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent
as, or to a greater extent than, the Securities are so subordinated as
provided in this Article 10A, and (c) any securities into which the
Securities become convertible pursuant to Section 11.14 which are
securities of a Person required to enter into a supplemental indenture
pursuant to such section (or Section 5.01) and are either (x) shares of
any stock of any class of such Person, or (y) securities of such Person
which are subordinated in right of payment to all Parent Senior
Indebtedness of such Person which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent
as, or to a greater extent than, the Securities or, are so subordinated
as provided in this Article 10A. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities is intended to or shall
impair, as among Parent, its creditors other than the holders of Senior
Indebtedness, and the holders of the Securities, the right, which is
absolute and unconditional, of the holder of any Security to convert
such Security in accordance with Article 11.
SECTION 10A.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT. Upon any payment or distribution of assets of Parent
referred to in this Article 10A, the Trustee and the Holders of
Securities shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of
the trustee in bankruptcy, liquidating trustee, custodian, receiver,
assignee for the benefit of creditors, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Parent
Senior Indebtedness and other indebtedness of Parent, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 10A."
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SECTION 3.02. The reference in the third paragraph of Section 3.08(d) of
the Indenture to the "Rights Agreement" is hereby amended to reference the
Rights Agreement dated as of April 6, 2001 between Holdings and American Stock
Transfer & Trust Company, as Rights Agent.
SECTION 3.03. The address for notices to the Company in Section 12.02 of
the Indenture is hereby amended to read:
Western Digital Corporation
00000 Xxxx Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
and
Western Digital Technologies, Inc.
00000 Xxxx Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
ARTICLE 4
TRUSTEE
The Trustee has accepted the amendment of the Indenture effected by this
First Supplemental Indenture and agrees to execute the Indenture as hereby
amended, but only upon the terms and conditions set forth in the Indenture,
including the terms and provisions defining and limiting the liabilities and
responsibilities of the Trustee, and without limiting the generality of the
foregoing, except as set forth in the Indenture, the Trustee shall not be
responsible in any manner whatsoever for or with respect to any of the recitals
or statements contained herein, all of which recitals or statements are made
solely by the Company, or for or with respect to (a) the validity or sufficiency
of this First Supplemental Indenture or any of the terms or provisions hereof,
(b) the proper authorization hereof by the Company by corporate action or
otherwise, (c) the due execution hereof by the Company, and (d) the consequences
(direct or indirect and whether deliberate or inadvertent) of any amendment
herein provided for, and the Trustee makes no representation with respect to any
such matters.
ARTICLE 5
MISCELLANEOUS
SECTION 5.01. This First Supplemental Indenture shall become effective
as of the date and time of the consummation of the Merger.
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SECTION 5.02. The parties may sign multiple counterparts of this First
Supplemental Indenture. Each signed counterpart shall be deemed an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this First Supplemental Indenture.
SECTION 5.03. In case any provision in this First Supplemental Indenture
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 5.04. THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS.
[THE REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this First Supplemental Indenture on behalf of the respective parties
hereto as of the date first written above.
WESTERN DIGITAL TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President, Law and
Administration and Secretary
WESTERN DIGITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President, Law and
Administration and Secretary
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Authorized Signatory
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