EXHIBIT 4.02
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EXODUS COMMUNICATIONS, INC.
AND
HSBC BANK USA,
TRUSTEE
__________________
SUPPLEMENTAL SUBORDINATED INDENTURE
Dated as of February 9, 2001
supplementing that certain
SUBORDINATED INDENTURE
Dated as of February 9, 2001
__________________
5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE FEBRUARY 15, 2008
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TABLE OF CONTENTS
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ARTICLE I ISSUANCE OF SECURITIES....................................................................... 2
SECTION 1.1 Designation of Series.......................................................... 2
SECTION 1.2 Form of Securities............................................................. 2
SECTION 1.3 Limit on Amount of Series...................................................... 2
SECTION 1.4 No Sinking Fund................................................................ 2
SECTION 1.5 Certificate of Authentication.................................................. 2
SECTION 1.6 Interest on the Securities; Payment of Interest................................ 2
ARTICLE II DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..................................... 3
SECTION 2.1 Definitions.................................................................... 3
ARTICLE III SECURITY FORMS............................................................................. 8
SECTION 3.1 Form Generally................................................................. 8
SECTION 3.2 Form of Security............................................................... 9
SECTION 3.3 Form of Certificate of Authentication.......................................... 21
SECTION 3.4 Form of Conversion Notice...................................................... 22
SECTION 3.5 Form of Assignment............................................................. 24
ARTICLE IV REMEDIES..................................................................................... 25
SECTION 4.1 Events of Default.............................................................. 25
SECTION 4.2 Acceleration of Maturity; Rescission and Annulment............................. 26
SECTION 4.3 Restoration of Rights and Remedies............................................. 27
SECTION 4.4 Waiver of Past Defaults........................................................ 27
ARTICLE V THE TRUSTEE.................................................................................. 28
SECTION 5.1 May Hold Securities, Act as Trustee under Other Indentures..................... 28
ARTICLE VI COVENANTS................................................................................... 28
SECTION 6.1 Use of Proceeds................................................................ 28
ARTICLE VII REDEMPTION OF SECURITIES................................................................... 29
SECTION 7.1 Right of Redemption............................................................ 29
SECTION 7.2 Applicability of Article....................................................... 29
SECTION 7.3 Securities Not Paid Upon Surrender for Redemption.............................. 29
SECTION 7.4 Conversion Arrangement on Call for Redemption.................................. 29
ARTICLE VIII CONVERSION OF SECURITIES.................................................................. 30
SECTION 8.1 Conversion Privilege and Conversion Rate....................................... 30
SECTION 8.2 Exercise of Conversion Privilege............................................... 30
SECTION 8.3 Fractions of Shares............................................................ 31
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TABLE OF CONTENTS
(continued)
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SECTION 8.4 Adjustment of Conversion Rate.................................................. 32
SECTION 8.5 Notice of Adjustments of Conversion Rate....................................... 36
SECTION 8.6 Notice of Certain Corporate Action............................................. 37
SECTION 8.7 Company to Reserve Common Stock................................................ 37
SECTION 8.8 Taxes on Conversions........................................................... 38
SECTION 8.9 Covenant as to Common Stock.................................................... 38
SECTION 8.10 Cancellation of Converted Securities........................................... 38
SECTION 8.11 Provision in Case of Consolidation, Merger or Sale of Assets................... 38
SECTION 8.12 Rights Issued in Respect of Common Stock....................................... 39
SECTION 8.13 Responsibility of Trustee for Conversion Provisions............................ 40
ARTICLE IX SUBORDINATION OF SECURITIES................................................................. 40
SECTION 9.1 No Payment in Certain Circumstances, Payment over of Proceeds upon
Dissolution, Etc............................................................... 40
SECTION 9.2 Prior Payment to Senior Indebtedness upon Acceleration of Securities........... 42
SECTION 9.3 Payment Permitted If No Default................................................ 43
SECTION 9.4 No Waiver of Subordination Provisions.......................................... 43
SECTION 9.5 Reliance on Judicial Order or Certificate of Liquidating Agent................. 43
SECTION 9.6 Trustee Not Fiduciary for Holders of Senior Indebtedness....................... 44
SECTION 9.7 Reliance by Holders of Senior Indebtedness on Subordination Provisions......... 44
SECTION 9.8 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's
Rights......................................................................... 44
SECTION 9.9 Article Applicable to Paying Agents............................................ 44
SECTION 9.10 Certain Conversions and Repurchases Deemed Payment............................. 44
ARTICLE X REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER
UPON A CHANGE IN CONTROL...................................................................... 45
SECTION 10.1 Right to Require Repurchase.................................................... 45
SECTION 10.2 Conditions to the Company's Election to Pay the Repurchase Price in Common
Stock.......................................................................... 46
SECTION 10.3 Notices; Method of Exercising Repurchase Right, Etc............................ 46
SECTION 10.4 Certain Definitions............................................................ 49
SECTION 10.5 Consolidation, Merger, etc..................................................... 50
ARTICLE XI CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE........................................ 51
SECTION 11.1 Company May Consolidate, Etc................................................... 51
SECTION 11.2 Successor Substituted.......................................................... 52
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TABLE OF CONTENTS
(continued)
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ARTICLE XII SUPPLEMENTAL INDENTURES.................................................................... 52
SECTION 12.1 Supplemental Indentures Without Consent of Holders of Securities............... 52
SECTION 12.2 Supplemental Indentures with Consent of Holders of Securities.................. 53
ARTICLE XIII MISCELLANEOUS............................................................................. 54
SECTION 13.1 Reference to and Effect on the Indenture....................................... 54
SECTION 13.2 Supplemental Indenture May be Executed in Counterparts......................... 54
SECTION 13.3 Effect of Headings............................................................. 54
SECTION 13.4 Recitals....................................................................... 54
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This SUPPLEMENTAL SUBORDINATED INDENTURE, dated as of February 9, 2001
(herein called the "Supplemental Indenture"), between EXODUS COMMUNICATIONS,
INC., a Delaware corporation (herein called the "Company"), and HSBC Bank USA, a
banking corporation and trust company duly organized and existing under the laws
of the State of New York, as Trustee hereunder (herein called the "Trustee"),
supplementing that certain Subordinated Indenture, dated as of February 9, 2001,
between the Company and the Trustee (herein called the "Subordinated Indenture"
and collectively with the Supplemental Indenture, the "Indenture").
RECITALS
The Company has duly authorized the execution and delivery of the
Subordinated Indenture to provide for the issuance from time to time of its
unsecured debentures, notes or other evidences of subordinated indebtedness to
be issued in one or more series as provided for in the Subordinated Indenture
heretofore executed and delivered.
The Subordinated Indenture heretofore executed and delivered provides that
the securities of each series shall be in substantially the form set forth in
the Subordinated Indenture heretofore executed and delivered, or in such other
form as may be established by or pursuant to one or more Board Resolutions and
as set forth in an Officers' Certificate or in one or more supplemental
subordinated 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 (but which do not
affect the rights or duties of the Trustee).
The Company shall issue and deliver, and the Trustee shall authenticate,
Securities denominated "5 1/4% Convertible Subordinated Notes due February 15,
2008" (the "Securities") 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 Subordinated 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 (but which do not affect the
rights or duties of the Trustee).
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
ISSUANCE OF SECURITIES
SECTION 1.1 Designation of Series. Pursuant to the terms hereof and Section
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2.01 and 2.05 of the Indenture, the Company hereby creates a series of its
convertible subordinated debt securities designated as the "5 1/4% Convertible
Subordinated Notes due February 15, 2008" (the "Securities").
SECTION 1.2 Form of Securities. The Securities will be issued in permanent
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global form without coupons in denominations of $1,000 and integrate multiples
of $1,000 in excess thereof and the definitive form of the Securities shall be
substantially in the form set forth in Article III. The Securities shall bear
interest, be payable and have such other terms as are stated in the form of
definitive Securities or in the Indenture, as supplemented by this Supplemental
Indenture. The Stated Maturity of the Securities shall be February 15, 2008.
SECTION 1.3 Limit on Amount of Series. The Securities shall not exceed
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$500,000,000 in aggregate principal amount plus such aggregate principal amount
(which may not exceed $75,000,000 principal amount) of Securities as may be
purchased by the Underwriters pursuant to their over allotment option under the
Underwriting Agreement, and may, upon the execution and delivery of this
Supplemental Indenture or from time to time thereafter, be executed by the
Company and delivered to the Trustee for authentication and the Trustee shall
thereupon authenticate and deliver said Securities to or upon Company Order.
SECTION 1.4 No Sinking Fund. No sinking fund will be provided with respect
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to the Securities.
SECTION 1.5 Certificate of Authentication. The Trustee's certificate of
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authentication to be borne on the Securities shall be substantially as provided
in Article III.
SECTION 1.6 Interest on the Securities; Payment of Interest.
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(a) The Securities shall bear interest at the rate of 5 1/4% per
annum from and including February 9, 2001 until the principal amount thereof is
due and at a rate of 7 1/4% per annum on any overdue principal and premium,
if any, and, to the extent permitted by law, on any overdue interest.
(b) The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date shall, as provided in the Subordinated
Indenture, be paid to the Person in whose name a Security is registered at the
close of business on the Record Date for such Interest Payment Date, which shall
be the February 1 or August 1 (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 Securities 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 the Corporate Trust Office in
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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
Register.
The Company hereby initially designates the Trustee as Paying Agent,
Registrar, custodian and Conversion Agent and the Corporate Trust Office as the
office or agency where the Securities may be surrendered for transfer or
exchange or for presentation for payment or for conversion, redemption or
repurchase and where notices and demands to or upon the Company in respect of
the Securities or this Supplemental Indenture may be received.
ARTICLE II
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 2.1 Definitions. In addition to the definitions set forth in
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Section 1.01 of the Subordinated Indenture or as otherwise set forth herein, the
Securities shall include the following additional definitions, which in the
event of a conflict with the definitions of terms in the Subordinated Indenture,
shall control:
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of DTC, in each case to the extent applicable to such transfer or
transaction and as in effect from time to time.
"Change in Control" has the meaning specified in Section 10.4(2).
"Closing Price Per Share" means, with respect to the Common Stock, for any
day, (i) the last reported bid price regular way on the Nasdaq National Market
or, (ii) if the Common Stock is not quoted on the Nasdaq National Market, the
last reported sale price regular way per share or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or (iii) if
the Common Stock is not quoted on the Nasdaq National Market or listed or
admitted to trading on any national securities exchange, the average of the
closing bid prices in the over-the-counter market as furnished by any New York
Stock Exchange member firm selected from time to time by the Company for that
purpose.
"Code" has the meaning specified in Section 3.l.
"Common Stock" means the common stock, par value $0.001 per share, of the
Company authorized at the date of this instrument as originally executed.
Subject to the provisions of Section 8.11, shares issuable on conversion or
repurchase of Securities shall include only shares of Common Stock or shares of
any class or classes of common stock resulting from any reclassification or
reclassifications thereof; provided, however, that if at any time there shall be
more than one such resulting class, the shares so issuable on conversion or
repurchase of Securities shall include shares of all such classes, and the
shares of each such class then so issuable shall be substantially in the
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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.
"common stock" includes any stock of any class of capital stock 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 issuer
thereof and which is not subject to redemption by the issuer thereof.
"Constituent Person" has the meaning specified in Section 8.11.
"Conversion Agent" means any Person authorized by the Company to convert
Securities in accordance with Article VIII. The Company has initially appointed
the Trustee as its Conversion Agent.
"Conversion Price" has the meaning specified in Section 10.4(3).
"Conversion Rate" has the meaning specified in Section 8.1.
"Corporation" means a corporation, company, association, joint-stock
company or business trust.
"Designated Senior Debt" means the Company's obligations in respect of (x)
the Company's $275 million principal amount of its 11 1/4% Senior Notes due
2008, the Euro 200 million principal amount of its 11 3/8% Senior Notes due
2008, the $375 million principal amount of its 10 3/4% Senior Notes due 2009
(the "Dollar Securities"), the Euro 125 million principal amount of its 10 3/4%
Senior Notes due 2009 (the "Euro Securities") and the $1 billion principal
amount of its 11 5/8% Senior Notes due 2010 and (y) any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Senior Indebtedness shall be
"Designated Senior Debt" for purposes of this Supplemental 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 Debt).
"Dollar" or "U.S. $" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"Event of Default" has the meaning specified in Section 4.1.
"Expiration Time" has the meaning specified in Section 8.4(6).
"Global Security" means a Security that is registered in the Register in
the name of a Depositary or a nominee thereof.
"Holder" means the Person in whose name the Security is registered in the
Register.
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"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, exercise of the repurchase right set forth in Article X or
otherwise.
"Non-electing Share" has the meaning specified in Section 8.11.
"Notice of Default" has the meaning specified in Section 4.1(d).
"Offer to Purchase" has the meaning specified in Section 10.3
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Supplemental Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money in
the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities, provided that if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 2.09
of the Subordinated Indenture or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Supplemental
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
(iv) Securities converted into Common Stock pursuant to Article
VIII; provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Securities are present at a meeting of
Holders of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which a Responsible Officer of the Trustee has been notified in
writing to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee is not
the Company or any other obligor upon the
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Securities or any Affiliate of the Company or such other obligor, and the
Trustee shall be protected in relying upon an Officers' Certificate to such
effect.
"Payment Blockage Notice" has the meaning specified in Section 9.1.
"Place of Conversion" means any city in which any Conversion Agent is
located.
"Place of Payment" means any city in which any Paying Agent is located.
"Press Release" means any press release issued by the Company and
disseminated through Dow Xxxxx & Company, Inc., Reuters Business News Services,
Bloomberg Business News or any other national business news service commonly
used by U.S. businesses in the same line of business as the Company for
disseminating information regarding corporate events.
"Prior Indentures" has the meaning specified in Section 5.1.
"Purchasers" has the meaning specified in Section 7.4.
"Record Date Period" means the period from the close of business on any
Record Date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date.
"Redemption Date", when used with respect to any Security 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 Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Supplemental
Indenture.
"Record Date" for interest payable in respect of any Security on any
Interest Payment Date means the February 1 or August 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
"Register" means the register kept at the Corporate Trust Office of the
Trustee in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and the transfer of
Securities.
"Registrar" means the Person appointed for the purpose of registering
Securities and transfers and exchanges of Securities as herein provided, who
shall initially be the Trustee.
"Representative" means the (a) indenture trustee or other trustee, agent or
representative for any Senior Indebtedness or (b) with respect to any Senior
Indebtedness that does not have any such trustee, agent or other representative,
(i) in the case of such Senior Indebtedness issued pursuant to an agreement
providing for voting arrangements as among the holders or owners of such Senior
Indebtedness, any holder or owner of such Senior Indebtedness acting with the
consent of the required persons necessary to bind such holders or owners of such
Senior Indebtedness and (ii) in the case of all other such Senior Indebtedness,
the holder or owner of such Senior Indebtedness.
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"Repurchase Date" has the meaning specified in Section 10.1.
"Repurchase Price" has the meaning specified in Section 10.1.
"Securities" has the meaning ascribed to it in the first paragraph under
the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933 (or any
successor statute), as amended from time to time.
"Senior Indebtedness" means the principal of (and premium, if any) and
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, 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, in connection with the following, whether secured or unsecured, due or to
become due, outstanding on the date of this Supplemental Indenture or thereafter
created, incurred or assumed: (a) indebtedness of the Company evidenced by a
credit or loan agreement, note, bond, debenture or other written obligation, (b)
all obligations of the Company for money borrowed, (c) all obligations of the
Company evidenced by a note or similar instrument given in connection with the
acquisition of any businesses, properties or assets of any kind, (d) obligations
of the Company (i) as lessee under leases required to be capitalized on the
balance sheet of the lessee under generally accepted accounting principles and
(ii) as lessee under other leases for facilities, capital equipment or related
assets, whether or not capitalized, entered into or leased for financing
purposes, (e) all obligations of the Company under interest rate and currency
swaps, caps, floors, collars, hedge agreements, forward contracts or similar
agreements or arrangements, (f) all obligations of the Company with respect to
letters of credit, bankers' acceptances and similar facilities (including
reimbursement obligations with respect to the foregoing), (g) all obligations of
the Company issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable and accrued expenses arising in
the ordinary course of business), (h) all obligations of the type referred to in
clauses (a) through (g) above of another Person and all dividends of another
Person, the payment of which, in either case, the Company has assumed or
guaranteed, or for which the Company is responsible or liable, directly or
indirectly, jointly or severally, as obligor, guarantor or otherwise, or which
is secured by a lien on the property of the Company, and (i) renewals,
extensions, modifications, replacements, restatements and refundings of, or any
indebtedness or obligation issued in exchange for, any such indebtedness or
obligation described in clauses (a) through (h) of this paragraph; provided,
however, that Senior Indebtedness shall not include the Securities or any such
indebtedness or obligation if the terms of such indebtedness or obligation (or
the terms of the instrument under which, or pursuant to which it is issued)
expressly provide that such indebtedness or obligation is not superior in right
of payment to the Securities.
"Significant Subsidiary" means, with respect to any Person, a Subsidiary of
such Person that would constitute a "significant subsidiary" as such term is
defined under Rule 1-02 of Regulation S-X under the Securities Act and the
Exchange Act.
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"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock or other similar
interests in the corporation which ordinarily has or have voting power for the
election of directors, or persons performing similar functions, whether at all
times or only so long as no senior class of stock or other interests has or have
such voting power by reason of any contingency.
"Trading Day" means, (i) if the Common Stock is quoted on the Nasdaq
National Market or any other system of automated dissemination of quotations of
securities prices, days on which trades may be effected through such system,
(ii) if the Common Stock is listed or admitted for trading on any national or
regional securities exchange, days on which such national or regional securities
exchange is open for business, or (iii) if the Common Stock is not listed on a
national or regional securities exchange or quoted on the Nasdaq National Market
or any other system of automated dissemination of quotation of securities
prices, days on which the Common Stock is traded regular way in the over-the-
counter market and for which a closing bid and a closing asked price for the
Common Stock are available.
"Trigger Event" has the meaning specified in Section 8.12.
"Underwriters" means Xxxxxxx, Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx, Xxxxxx &
Xxxxx Incorporated, Xxxxxx Xxxxxxx & Co., Incorporated and X.X. Xxxxxx
Securities Inc.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
February __, 2001, between the Company and the Underwriters, as such agreement
may be amended from time to time.
"United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (its "possessions" including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
ARTICLE III
SECURITY FORMS
SECTION 3.1 Form Generally.
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The Securities shall be in substantially the form set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Supplemental 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, the Internal Revenue Code of 1986, as amended, and
regulations thereunder (the "Code"), or as may, consistent herewith, be
determined by the officers executing such Securities, as
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evidenced by their execution thereof (but which do not affect the rights or
duties of the Trustee). All Securities shall be in fully registered form.
The Trustee's certificates of authentication shall be in substantially the
form set forth in Section 3.3.
Conversion notices shall be in substantially the form set forth in Section
3.4.
Repurchase notices shall be substantially in the form set forth in Section
3.2.
The Securities shall be printed, lithographed, typewritten or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any automated quotation system or securities
exchange (including on steel engraved borders if so required by any securities
exchange upon which the Securities may be listed) on which the Securities may be
quoted or listed, as the case may be, all as determined by the officers
executing such Securities, as evidenced by their execution thereof.
Upon their original issuance, Securities issued as contemplated by the
Underwriting Agreement shall be issued in the form of one or more Global
Securities in definitive, fully registered form without interest coupons. Such
Global Security shall be registered in the name of DTC, as Depositary, or its
nominee, and deposited with the Trustee, as custodian for DTC, for credit by DTC
to the respective accounts of beneficial owners of the Securities represented
thereby (or such other accounts as they may direct). Such Global Security,
together with its successor Securities which are Global Securities, are
collectively herein called the "Global Security".
SECTION 3.2 Form of Security.
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[FORM OF FACE]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND
ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
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AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE
INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]
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EXODUS COMMUNICATIONS, INC.
5 1/4% CONVERTIBLE SUBORDINATED NOTE DUE FEBRUARY 15, 2008
No. _____ $ ____________
CUSIP NO. ________
EXODUS COMMUNICATIONS, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of ___________ United States Dollars ($_______) [if
this Security is a Global Security, then insert -- (which principal amount may
from time to time be increased or decreased to such other principal amounts
(which, taken together with the principal amounts of all other Outstanding
Securities, shall not exceed $___________ in the aggregate at any time) by
adjustments made on the records of the Trustee hereinafter referred to in
accordance with the Indenture)] on February 15, 2008 and to pay interest
thereon, from February 9, 2001, or from the most recent Interest Payment Date
(as defined below) to which interest has been paid or duly provided for, semi-
annually in arrears on February 15 and August 15 in each year (each, an
"Interest Payment Date"), commencing August 15, 2001, at the rate of 5 1/4% per
annum, using a 360-day year composed of twelve 30 day months, until the
principal hereof is due, and at the rate of 7 1/4% per annum, using a 360-day
year composed of twelve 30 day months, on any overdue principal and premium, if
any, and, to the extent permitted by law, on any overdue interest. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Subordinated Securities) is registered
at the close of business on the Record Date for such Interest Payment Date,
which shall be the February 1 or August 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date. Except as otherwise
provided in the Indenture, any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Record
Date and may either be paid to the Person in whose name this Security (or one or
more Predecessor Subordinated 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 not less
than 10 days prior to the Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any automated
quotation system or securities exchange on which the Securities may be quoted or
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. Payments of principal shall be made upon the
surrender of this Security at the option of the Holder at the Corporate Trust
Office of the Trustee, or at such other office or agency of the Company as may
be designated by it for such purpose in the Borough of Manhattan, The City of
New York, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, or at such other offices or agencies as the Company may designate, by
United States Dollar check drawn on, or transfer to, a
-11-
United States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of $2,000,000, and only if
such Holder shall have furnished wire instructions in writing to the Trustee no
later than 15 days prior to the relevant payment date). Payment of interest on
this Security may be made by United States Dollar check mailed to the address of
the Person entitled thereto as such address shall appear in the Register, or,
upon written application by the Holder to the Registrar setting forth wire
instructions not later than the relevant Record Date, by transfer to a United
States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of $2,000,000 and only if
such Holder shall have furnished wire instructions in writing to the Trustee no
later than 15 days prior to the relevant payment date).
Except as specifically provided herein and in the Indenture, the Company
shall not be required to make any payment with respect to any tax, assessment or
other governmental charge imposed by any government or any political subdivision
or taxing authority thereof or therein.
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 or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-12-
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed.
EXODUS COMMUNICATIONS, INC.
By:_______________________________
Name:
Title:
Attest:___________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
Dated: ________________, 2001
HSBC BANK USA,
as Trustee
By:__________________________
Authorized Signatory
-13-
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "5 1/4% Convertible Subordinated Notes due February
15, 2008" (herein called the "Securities"), limited in aggregate principal
amount to $575,000,000, issued and to be issued in one or more series under a
Subordinated Indenture, dated as of February 9, 2001 as supplemented by the
Supplemental Subordinated Indenture, dated as of February 9, 2001 (herein called
the "Indenture"), between the Company and HSBC Bank USA, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all subordinated indentures supplemental
thereto reference is hereby made 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. As provided in the Indenture and subject to certain limitations
therein set forth, Securities are exchangeable for a like aggregate principal
amount of Securities of any authorized denominations as requested by the Holder
surrendering the same upon surrender of the Security or Securities to be
exchanged, at the Corporate Trust Office of the Trustee. The Trustee upon such
surrender by the Holder will issue the new Securities in the requested
denominations.
No sinking fund is provided for the Securities. The Securities will not be
subject to redemption prior to February 20, 2004 and will be redeemable on and
after that date at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days notice to the Holders prior to the Redemption Date
at the Redemption Prices (expressed as percentages of the principal amount) set
forth below.
The following table sets forth the Redemption Prices (expressed as
percentages of the principal amount) if this Security is redeemed during the 12-
month periods beginning on February 15 of the years indicated below (other than
2004, which period will be from February 20, 2004 to February 14, 2005);
YEAR REDEMPTION PRICE
------ ------------------
2004 103.00%
2005 102.25%
2006 101.50%
2007 100.75%
and thereafter at a Redemption Price equal to 100% of the principal amount,
together, in each case, with accrued interest to the Redemption Date; provided,
however, that interest installments on Securities whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Subordinated 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.
In the event of a redemption of the Securities, the Company will not be
required (a) to register the transfer or exchange of Securities for a period of
15 days immediately preceding the date
-14-
notice is given identifying the serial numbers of the Securities called for such
redemption or (b) to register the transfer or exchange of any Security, or
portion thereof, called for redemption.
In any case where the due date for the payment of the principal of,
premium, if any, or interest, on any Security or the last day on which a Holder
of a Security has a right to convert its Security shall be, at any Place of
Payment or Place of Conversion as the case may be, a day on which banks and
trust companies at such Place of Payment or Place of Conversion are authorized
or obligated by law, regulation or executive order to close, then payment of
principal, premium, if any, or interest, or delivery for conversion of such
Security need not be made on or by such date at such place but may be made on or
by the next succeeding day at such place which is not a day on which banks and
trust companies are authorized or obligated by law, regulation or executive
order to close, with the same force and effect as if made on the date for such
payment or the date fixed for redemption or repurchase, or by such last day for
conversion, and no interest shall accrue on the amount so payable for the period
after such date.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at its option, at any time following the
initial issuance date of the Securities and on or before the close of business
on the date of Maturity, or in case this Security or a portion hereof is called
for redemption or the Holder hereof has exercised its right to require the
Company to repurchase this Security or such portion hereof, then in respect of
this Security until and including, but (unless the Company defaults in making
the payment due upon redemption or repurchase, as the case may be) not after,
the close of business on the Redemption Date or the Repurchase Date, as the case
may be, to convert this Security (or any portion of the principal amount hereof
that is an integral multiple of $1,000, provided that the unconverted portion of
such principal amount is $1,000 or any integral multiple of $1,000 in excess
thereof) into fully paid and nonassessable shares of Common Stock of the Company
at an initial Conversion Rate of 43.9464 shares of Common Stock for each $1,000
principal amount of Securities (or at the current adjusted Conversion Rate if an
adjustment has been made as provided in the Indenture) by surrender of this
Security, duly endorsed or assigned to the Company or in blank, with the
conversion notice hereon duly executed and, in case such surrender shall be made
during the period from the close of business on any Record Date next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date (except if this Security or portion thereof has been called for redemption
on a Redemption Date during the period from such Record Date through the date
that is three (3) Business Days following such Interest Payment Date), also
accompanied by payment in New York Clearing House or other 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, to the
Company at the Corporate Trust Office of the Trustee, or at such other office or
agency of the Company, subject to any laws or regulations applicable thereto and
subject to the right of the Company to terminate the appointment of any
Conversion Agent (as defined below) as may be designated by it for such purpose
in the Borough of Manhattan, The City of New York, or at such other offices or
agencies as the Company may designate (each a "Conversion Agent"). Subject, in
the case of a conversion after the close of business on the Record Date next
preceding any Interest Payment Date and on or before the close of business on
such Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Subordinated Security of record as of such Record Date) to receive
the related
-15-
installment of interest to the extent and under the circumstances provided in
the Indenture, no cash payment or adjustment is to be made on conversion for
interest accrued hereon from the Interest Payment Date next preceding the day of
conversion, or for dividends on the Common Stock issued on conversion hereof.
The Company shall thereafter deliver to the Holder the fixed number of shares of
Common Stock (together with any cash adjustment, as provided in the Indenture)
into which this Security is convertible and such delivery will be deemed to
satisfy the Company's obligation to pay the principal amount of this Security.
No fractions of shares or scrip representing fractions of shares will be issued
on conversion, but instead of any fractional interest (calculated to the nearest
1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture. The Conversion Rate is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party (other than a
consolidation or merger that does not result in any reclassification,
conversion, exchange or cancellation of the Common Stock) or the conveyance,
transfer, sale or lease of all or substantially all of the property and assets
of the Company, the Indenture shall be amended, without the consent of any
Holders of Securities, so that this Security, if then Outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, transfer, sale
or lease by a holder of the number of shares of Common Stock of the Company into
which this Security could have been converted immediately prior to such
consolidation, merger, conveyance, transfer, sale or lease (assuming such holder
of Common Stock is not a Constituent Person or an Affiliate of a Constituent
Person, failed to exercise any rights of election and received per share the
kind and amount received per share by a plurality of Non-electing Shares). No
adjustment in the Conversion Rate will be made until such adjustment would
require an increase or decrease of at least one percent of such rate, provided
that any adjustment that would otherwise be made will be carried forward and
taken into account in the computation of any subsequent adjustment.
If a Change in Control occurs, the Holder of this Security, at the Holder's
option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is an integral multiple of $1,000) for cash at
a Repurchase Price equal to 100% of the principal amount thereof plus interest
accrued to the Repurchase Date. At the option of the Company, the Repurchase
Price may be paid in cash or, subject to the conditions provided in the
Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. For purposes of this paragraph, the fair market
value of shares of Common Stock shall be determined by the Company and shall be
equal to 95% of the average of the Closing Prices Per Share for the five
consecutive Trading Days immediately preceding and including the third Trading
Day prior to the Repurchase Date. Whenever in this Security there is a
reference, in any context, to the principal of any Security as of any time, such
reference shall be deemed to include reference to the Repurchase Price payable
in respect of such Security to the extent that such Repurchase Price is, was or
would be so payable at such time, and express mention of the Repurchase Price in
any provision of this Security shall not be construed as excluding the
Repurchase Price so payable in those provisions of this Security when such
express mention is not made; provided, however, that, for the purposes of the
second succeeding paragraph,
-16-
such reference shall be deemed to include reference to the Repurchase Price only
to the extent the Repurchase Price is payable in cash.
[The following paragraph shall appear in each Global Security:
In the event of a deposit or withdrawal of an interest in this Security,
including an exchange, transfer, redemption, repurchase or conversion of this
Security in part only, the Trustee, as custodian of the Depositary, shall make
an adjustment on its records to reflect such deposit or withdrawal in accordance
with the Applicable Procedures.]
[The following paragraph shall appear in each Security that is not a Global
Security:
In the event of redemption, repurchase or conversion of this Security in
part only, a new Security or Securities for the unredeemed, unrepurchased or
unconverted portion hereof will be issued in the name of the Holder hereof.]
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
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of all
the Securities, together with accrued interest to the date of declaration, may
be declared due and payable in the manner and with the effect provided in the
Indenture. Upon payment (i) of the amount of principal so declared due and
payable, together with accrued interest to the date of declaration, and (ii) of
interest on any overdue principal and, to the extent permitted by applicable
law, overdue interest, all of the Company's obligations in respect of the
payment of the principal of and interest on the Securities shall terminate.
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 under the Indenture at
any time by the Company and the Trustee with either (a) the written consent of
the Holders of not less than a majority in principal amount of the Securities at
the time Outstanding, or (b) by the adoption of a resolution, at a meeting of
Holders of the Outstanding Securities at which a quorum is present, by the
Holders of at least 66-2/3% in aggregate principal amount of the Outstanding
Securities represented and entitled to vote at such meeting. The Indenture also
contains provisions permitting the Holders of specified percentages in principal
amount of the Securities at the time Outstanding, on behalf of the Holders of
all the Securities, 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
-17-
Security and of any Security issued in exchange therefore or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security or
such other 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, the Holders of not less
than 25% in principal amount of the Outstanding Securities 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 against the
costs, expenses and liabilities to be incurred in compliance with such request
(including the reasonable fees of counsel for the Trustee) and the Trustee shall
not have received from the Holders of a majority in principal amount of the
Securities 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, premiums if any, or interest hereon on or after the
respective due dates expressed herein or for the enforcement of the right to
convert this Security as provided in the Indenture.
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, premium, if any, and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable on the Register upon
surrender of this Security for registration of transfer at the Corporate Trust
Office of the Trustee or at such other office or agency of the Company as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York (which shall initially be the Corporate Trust Office of the Trustee), or at
such other offices or agencies as the Company may designate, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by, the Holder thereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees by the Registrar. 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 recover any tax or other
governmental charge payable in connection therewith.
Prior to due presentation 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 such Security is registered as the owner thereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent of the Company or the Trustee shall be affected
by notice to the contrary.
No recourse for the payment of the principal (and premium, if any) or
interest on this Security and no recourse under or upon any obligation, covenant
or agreement of the Company in the Indenture or any subordinated indenture
supplemental thereto or in any Security, or because of
-18-
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of consideration for the issue
hereof, expressly waived and released.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-19-
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 tenant in common UNIF GIFT MIN ACT _____ Custodian _______
TEN ENT as tenants by the entireties (Cust) (Cust) (Minor)
JT TEN as joint tenants with right of under Uniform Gifts
survivorship and not as tenants in to Minors Act _______
common (State)
Additional abbreviations may also be used though not in the above list.
-20-
ELECTION OF HOLDER TO REQUIRE REPURCHASE
(1) Pursuant to Article X of the Supplemental Indenture, the undersigned
hereby elects to have this Security repurchased by the Company.
(2) The undersigned hereby directs the Company to pay it or ______________
an amount in cash or, at the Company's election, Common Stock valued as set
forth in the Indenture, equal to 100% of the principal amount to be repurchased
(as set forth below), plus interest accrued to the Repurchase Date, as provided
in the Indenture.
Dated:
Signature(s)
Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an
approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange
Act of 1934.
Signature Guaranteed
Principal amount to be repurchased (at least
$5,000 or an integral multiple of $1,000
in excess thereof): ___________________
Remaining principal amount following such
repurchase (not less than $1,000):
______________
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.
SECTION 3.3 Form of Certificate of Authentication. The Trustee's certificate
-------------------------------------
of authentication shall be in substantially the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated:_________
HSBC BANK USA,
as Trustee
-21-
By:__________________________
Authorized Signatory
SECTION 3.4 Form of Conversion Notice. CONVERSION NOTICE
-------------------------
The undersigned Holder of this Security hereby irrevocably exercises the
option to convert this Security, or any portion of the principal amount hereof
(which is $1,000 or an integral multiple of $1,000 in excess thereof, provided
that the unconverted portion of such principal amount is $1,000 or any integral
multiple of $1,000 in excess thereof) below designated, into shares of Common
Stock in accordance with the terms of the Indenture referred to in this
Security, and directs that such shares, together with a check in payment for any
fractional share and any Securities representing any unconverted principal
amount hereof, be delivered to and be registered in the name of the undersigned
unless a different name has been indicated below. If shares of Common Stock or
Securities are to be registered in the name of a Person other than the
undersigned, (a) the undersigned will pay all transfer taxes payable with
respect thereto and (b) signature(s) must be guaranteed by an Eligible Guarantor
Institution with membership in an approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange Act of 1934. Any amount required
to be paid by the undersigned on account of interest accompanies this Security.
Dated:___________ ______________________________
Signature(s)
If shares or Securities are to be registered in the
name of a Person other than the Holder, please
print such Person's name and address:
(Name)
(Address)
Social Security or other Identification
Number, if any
[Signature Guaranteed]
If only a portion of the Securities is to be converted, please indicate:
1. Principal amount to be converted: $ ___________
2. Principal amount and denomination of Securities
representing unconverted principal amount to be issued:
Amount: $___________ Denominations: $____________
-22-
($1,000 or any integral multiple of $1,000 in excess thereof, provided that the
unconverted portion of such principal amount is $1,000 or any integral multiple
of $1,000 in excess thereof)
-23-
SECTION 3.5 Form of Assignment. For value received ________________ hereby
------------------
sell(s), assign(s) and transfer(s) unto ________________ (Please insert social
security or other identifying number of assignee) the within Security, and
hereby irrevocably constitutes and appoints ____________________as attorney to
transfer the said Security on the books of the Company, with full power of
substitution in the premises.
Dated: ______________
_____________________________________________
Signature(s)
Signature(s) must be guaranteed by an
Eligible Guarantor Institution with
membership in an approved signature
guarantee program pursuant to Rule 17
Ad - 15 under the Securities Exchange Act
of 1934.
_____________________________________________
Signature Guarantee
-24-
ARTICLE IV
REMEDIES
With respect to the Securities issued under this Supplemental Indenture,
Section 6.01 of the Subordinated Indenture is hereby replaced in its entirely as
follows:
SECTION 4.1 Events of Default. "Event of Default", wherever used herein,
-----------------
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be occasioned by the provisions of Article IX or be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of the principal of or premium, if any, on
any Security at its Maturity, whether or not such payment is prohibited by the
subordination provisions of the Securities or of this Supplemental Indenture; or
(b) default in the payment of any interest (including any interest
upon overdue interest) upon any Security when it becomes due and payable, and
continuance of such default for a period of 30 days, whether or not such payment
is prohibited by the subordination provisions of the Securities or of this
Supplemental Indenture; or
(c) failure by the Company to provide an Offer to Purchase in
accordance with Section 10.3 whether or not such Offer to Purchase is prohibited
by the subordination provisions of the Securities or this Supplemental
Indenture; or
(d) default in the performance, or breach, of any covenant or
warranty of the Company in this Supplemental Indenture (other than a covenant or
warranty a default in the performance or breach of which is specifically dealt
with elsewhere in this Section), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Securities a written
notice (a "Notice of Default") specifying such default or breach and requiring
it to be remedied and stating that such notice is a Notice of Default hereunder;
or
(e) any default by the Company or any Significant Subsidiary in the
payment of the principal, premium, if any, or interest has occurred with respect
to amounts in excess of $10.0 million under any agreement, indenture or
instrument evidencing indebtedness for money borrowed, or any guarantee thereto,
when the same shall become due and payable in full and such default shall have
continued after any applicable grace period and shall not have been cured or
waived and, if not already matured at its final maturity in accordance with its
terms, the holder of such indebtedness shall have the right to accelerate such
indebtedness, or (ii) any event of default as defined in any agreement,
indenture or instrument of the Company or any Significant Subsidiary evidencing
-25-
indebtedness in excess of $10.0 million shall have occurred and the Indebtedness
thereunder, if not already matured at its final maturity in accordance with its
terms, shall have been accelerated; or
(f) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company or any Significant Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or State law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Significant Subsidiary or of any
substantial part of the property of either, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or
(g) the commencement by the Company or any Significant Subsidiary of
a voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by either
to the entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
either, or the filing by either of a petition or answer or consent seeking
reorganization or similar relief under any applicable Federal or State law, or
the consent by either to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Significant
Subsidiary or of any substantial part of the property of either, or the making
by either of an assignment for the benefit of creditors, or the admission by
either in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company or any Significant
Subsidiary in furtherance of any such action.
SECTION 4.2 Acceleration of Maturity; Rescission and Annulment. If an Event
--------------------------------------------------
of Default (other than an Event of Default specified in Section 4.1(1)(f) or
4.1(1)(g) with respect to the Company) occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may, subject to the provisions of Article XIII,
declare the principal of all the Securities to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by the
Holders), and upon any such declaration such principal and all accrued interest
thereon shall become immediately due and payable. If an Event of Default
specified in Section 4.1(1)(f) or 4.1(1)(g) with respect to the Company occurs,
the principal of, and accrued interest on, all the Securities shall, subject to
the provisions of Article IX, ipso facto become immediately due and payable
without any declaration or other Act of the Holders or any act on the part of
the Trustee.
At any time after such declaration of acceleration has been made and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this
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Article IV provided, the Holders of a majority in principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may,
on behalf of all Holders, rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(i) all overdue interest on all Securities,
(ii) the principal of and premium, if any, on any Securities which
have become due otherwise than by such declaration of acceleration and any
interest thereon at the rate borne by the Securities,
(iii) to the extent permitted by applicable law, interest upon
overdue interest at a rate of 7 1/4% per annum, and
(iv) all amounts payable to the Trustee under Section 7.06 of the
Subordinated Indenture;
(2) all Events of Default, other than the nonpayment of the principal of,
and any premium and interest on, Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
4.4; and
(3) such rescission and annulment would not conflict with any judgment or
decree issued in appropriate judicial proceedings regarding the payment by the
Trustee to the Holders of the amounts referred to in Section 4.2(1).
No rescission or annulment referred to above shall affect any subsequent
default or impair any right consequent thereon.
SECTION 4.3 Restoration of Rights and Remedies. If the Trustee or any Holder
----------------------------------
of a Security has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders of Securities shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and such Holders shall continue as though no such
proceeding had been instituted.
SECTION 4.4 Waiver of Past Defaults. The Holders, either (i) through the
-----------------------
written consent of not less than a majority in principal amount of the
Outstanding Securities or (ii) by the adoption of a resolution, at a meeting of
Holders of the Outstanding Securities as which a quorum is present, by the
Holders of at least 66-2/3% in principal amount of the Outstanding Securities
represented at such meeting, may be on behalf of the Holders of all the
Securities waive any past default hereunder and its consequences, except a
default (A) in the payment of the principal of, premium, if any, or interest on
any Security, or (B) in respect of a covenant or provision hereof which under
Article Ten of the
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Subordinated Indenture cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
ARTICLE V
THE TRUSTEE
SECTION 5.1 May Hold Securities, Act as Trustee under Other Indentures. In
----------------------------------------------------------
addition to the authority granted to the Trustee in Section 7.04 of the
Subordinated Indenture, the Trustee is hereby authorized to act as trustee under
those certain indentures between Exodus Communications, Inc. and the Trustee
related to the Company's (i) dollar-denominated 11 5/8% senior notes due 2010
and its euro-denominated 11 3/8% senior notes due 2008; (ii) 11 1/4% senior
notes due 2008; (iii) dollar-denominated 10 3/4% senior notes due 2009 and its
euro-denominated 10 3/4% senior notes due 2009; (iv) 5% convertible subordinate
notes due 2006; and (v) 4 3/4% convertible subordinated notes due 2008 ((i) -
(v) collectively referred to as the "Prior Indentures") notwithstanding any
provisions of the Indenture or the Prior Indentures affecting the relative
rights of holders of securities issued under such indentures to payment thereon
and to security given to secure such payment. The Trustee may become and act as
trustee under other indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding in
the same manner as if it were not Trustee hereunder. The Trustee is authorized
to resign from any of its appointments as Trustee hereunder, as trustee under
any of the Prior Indentures, or as trustee under any other indenture in the
event that the Trustee determines in good faith that its performance hereunder
or thereunder subjects the Trustee to a conflict of interest.
ARTICLE VI
COVENANTS
With respect to the Securities issued under this Supplemental Indenture,
the following supplements Article Four of the Subordinated Indenture:
SECTION 6.1 Use of Proceeds. The Company shall use the net proceeds of the
---------------
sale of any Securities issued under this Supplemental Indenture to finance the
purchase or other acquisition of assets or businesses related to the System and
Network Management Business. "System and Network Management Business" means: (i)
server and other hardware hosting; (ii) connectivity, data networking,
telecommunications or content for computer or data networks or systems; (iii)
management of computer or data networks or systems; (iv) technology services,
equipment sales or leasing or software licensing for computer or data networks
or systems; and (v) businesses reasonably related, complementary or incidental
thereto.
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ARTICLE VII
REDEMPTION OF SECURITIES
With respect to the Securities issued under this Supplemental Indenture,
the following supplements Article Three of the Subordinated Indenture:
SECTION 7.1 Right of Redemption. The Securities may be redeemed in
-------------------
accordance with the provisions of the form of Securities set forth in Section
3.2.
SECTION 7.2 Applicability of Article. Redemption of Securities at the
------------------------
election of the Company or otherwise, as permitted or required by any provision
of the Securities or this Supplemental Indenture, shall be made in accordance
with such provision and this Article VII.
SECTION 7.3 Securities Not Paid Upon Surrender for Redemption. If any
-------------------------------------------------
Security called for redemption shall not be paid in accordance with Section 3.03
of the Subordinated Indenture upon surrender thereof for redemption, the
principal amount of, premium, if any, and to the extent permitted by applicable
law, accrued interest on such Security shall, until paid, bear interest from the
Redemption Date at a rate of 7 1/4% per annum and such Security shall remain
convertible until the Redemption Price of such Security (or position thereof, as
the case may be) shall have been paid or duly provided for.
SECTION 7.4 Conversion Arrangement on Call for Redemption. In connection with
---------------------------------------------
any redemption of Securities, the Company may arrange for the purchase and
conversion of any Securities by an agreement with one or more investment bankers
or other purchasers (the "Purchasers") to purchase such Securities by paying to
the Trustee in trust for the Holders, on or before the Redemption Date, an
amount not less than the applicable Redemption Price, together with interest
accrued to the Redemption Date, of such Securities. Notwithstanding anything to
the contrary contained in this Article VII, the obligation of the Company to pay
the Redemption Price, together with interest accrued to 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
shall be filed with the Trustee prior to the close of business on the Business
Day immediately prior to the Redemption Date), any Securities called for
redemption that are not duly surrendered for conversion by the Holders thereof
may, at the option of the Company, be deemed, to the fullest extent permitted by
law, and consistent with any agreement or agreements with such Purchasers, to be
acquired by such Purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article VIII) 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 Securities shall be extended
through such time), subject to payment of the above amount as aforesaid. At the
written direction of the Company, the Trustee shall hold and dispose of any such
amount paid to it by the Purchasers to the Holders in the same manner as it
would monies deposited with it by the Company for the redemption of Securities.
Without the Trustee's prior written consent, no arrangement between the Company
and such Purchasers for the purchase and conversion of any Securities shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the
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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 Securities between the Company and such Purchasers, 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 the Indenture.
ARTICLE VIII
CONVERSION OF SECURITIES
SECTION 8.1 Conversion Privilege and Conversion Rate. Subject to and upon
----------------------------------------
compliance with the provisions of this Article, at the option of the Holder
thereof, any Security may be converted into fully paid and nonassessable shares
(calculated as to each conversion to the nearest 1/100th of a share) of Common
Stock of the Company at the Conversion Rate, determined as hereinafter provided,
in effect at the time of conversion. Such conversion right shall be absolute and
unconditional and shall commence on the date the Securities are issued and
expire at the close of business on the date of Maturity, subject, in the case of
conversion of any Global Security, to any Applicable Procedures. In case a
Security or portion thereof is called for redemption at the election of the
Company or the Holder thereof exercises its right to require the Company to
repurchase the Security, such conversion right in respect of the Security, or
portion thereof so called, shall expire at the close of business on the Business
Day next preceding such Redemption Date or the Repurchase Date, as the case may
be, unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be (in each case subject as aforesaid to any
Applicable Procedures with respect to any Global Security).
The rate at which shares of Common Stock shall be delivered upon conversion
(herein called the "Conversion Rate") shall be initially 43.9464 shares of
Common Stock for each $1,000 principal amount of Securities. The Conversion
Rate shall be adjusted in certain instances as provided in this Article VIII.
SECTION 8.2 Exercise of Conversion Privilege. In order to exercise the
--------------------------------
conversion privilege, the Holder of any Security to be converted shall surrender
such Security, duly endorsed in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 4.03 of the Subordinated
Indenture, accompanied by a duly signed conversion notice substantially in the
form set forth in Section 3.4 stating that the Holder elects to convert such
Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Each Security surrendered for
conversion (in whole or in part) during the Record Date Period shall (except in
the case of any Security or portion thereof which has been called for redemption
on a Redemption Date occurring within the period beginning on such Record Date
and ending on the date three Business Days after the next succeeding Interest
Payment Date) be accompanied by payment in New York Clearing House funds or
other funds acceptable to the Company of an amount equal to the interest payable
on such Interest Payment Date on the principal amount of such Security (or part
thereof, as the case may be) being surrendered for conversion. The interest so
payable on such Interest
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Payment Date with respect to any Security (or portion thereof, if applicable)
which is surrendered for conversion during the Record Date Period shall be paid
to the Holder of such Security as of such Record Date in an amount equal to the
interest that would have been payable on such Security if such Security had been
converted as of the close of business on such Interest Payment Date. Interest
payable in respect of any Security surrendered for conversion on or after an
Interest Payment Date shall be paid to the Holder of such Security as of the
next preceding Record Date, notwithstanding the exercise of the right of
conversion. Except as provided in this paragraph, no cash payment or adjustment
shall be made upon any conversion on account of any interest accrued from the
Interest Payment Date next preceding the conversion date, in respect of any
Security (or part thereof, as the case may be) surrendered for conversion, or on
account of any dividends on the Common Stock issued upon conversion. The
Company's delivery to the Holder of the number of shares of Common Stock (and
cash in lieu of fractions thereof, as provided in this Supplemental Indenture)
into which a Security is convertible will be deemed to satisfy the Company's
obligation to pay the principal amount of the Security.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and deliver to the Trustee, for delivery to the Holder, a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 8.3
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the principal amount of such Security. A Security
may be converted in part, but only if the principal amount of such Security to
be converted is any integral multiple of $1,000 and the principal amount of such
Security to remain Outstanding after such conversion is equal to $1,000 or any
integral multiple of $1,000 in excess thereof.
SECTION 8.3 Fractions of Shares.
-------------------
No fractional shares of Common Stock shall be issued upon conversion of any
Security or Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall calculate and pay a cash
adjustment in respect of such fraction (calculated to the nearest 1/100th of a
share) in an amount equal to the same fraction of the Closing Price Per Share at
the close of business on the day of conversion.
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SECTION 8.4 Adjustment of Conversion Rate. The Conversion Rate shall be
-----------------------------
subject to adjustments from time to time as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on shares of any class of Common Stock payable in shares of Common
Stock, the Conversion Rate in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased by dividing such
Conversion Rate 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 increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. If, after
any such date fixed for determination, any dividend or distribution is not in
fact paid, the Conversion Rate shall be immediately readjusted, effective as of
the date the Board of Directors determines not to pay such dividend or
distribution, to the Conversion Rate that would have been in effect if such
determination date had not been fixed. For the purposes of this paragraph (1),
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.
(2) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in paragraph (8) of this Section 8.4) of the
Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than any rights, options or
warrants that by their terms will also be issued to any Holder upon conversion
of a Security into shares of Common Stock without any action required by the
Company or any other Person), the Conversion Rate in effect at the opening of
business on the day following the date fixed for such determination shall be
increased by dividing such Conversion Rate 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 plus the number of shares of
Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. If, after any such date fixed for determination, any such rights,
options or warrants are not in fact issued, or are not exercised prior to the
expiration thereof, the Conversion Rate shall be immediately readjusted,
effective as of the date such rights, options or warrants expire, or the date
the Board of Directors determines not to issue such rights, options or warrants,
to the Conversion Rate that would have been in effect if the unexercised rights,
options or warrants had never been granted or such determination date had not
been fixed, as the case may be. For the purposes of this paragraph (2), 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
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shares of Common Stock. The Company will not issue any rights, options or
warrants in respect of shares of Common Stock held in the treasury of the
Company.
(3) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such subdivision or combination becomes
effective shall be proportionately reduced, such increase or reduction, 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.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares of any
class of capital stock or other assets (including securities, but excluding (i)
any rights, options or warrants referred to in paragraph (2) of this Section,
(ii) any dividend or distribution paid exclusively in cash, (iii) any dividend
or distribution referred to in paragraph (1) of this Section and (iv) mergers or
consolidations to which Section 8.11 applies), the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (8) of this Section 8.4) of
the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution filed with the Trustee) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
distribution. If after any such date fixed for determination, any such
distribution is not in fact made, the Conversion Rate shall be immediately
readjusted, effective as of the date of the Board of Directors determines not to
make such distribution, to the Conversion Rate that would have been in effect if
such determination date had not been fixed.
(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed as
part of a distribution referred to in paragraph (4) of this Section or cash
distributed upon a merger or consolidation to which Section 8.11 applies) in an
aggregate amount that, combined together with (I) the aggregate amount of any
other all-cash distributions to all holders of its Common Stock made exclusively
in cash within the 12 months preceding the date of payment of such distribution
and in respect of which no adjustment pursuant to this paragraph (5) has been
made and (II) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) of other
consideration payable in respect of any tender offer by the Company or any of
its Subsidiaries for all or any portion of the Common
-33-
Stock concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to paragraph (6) of
this Section 8.4 has been made (the "combined cash and tender amount") exceeds
10% of the product of the current market price per share (determined as provided
in paragraph (8) of this Section 8.4) of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such date
(the "aggregate current market price"), then, and in each such case, immediately
after the close of business on such date for determination, the Conversion Rate
shall be adjusted so that the same shall equal the rate determined by dividing
the Conversion Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of this
Section 8.4) of the Common Stock on the date fixed for such determination less
an amount equal to the quotient of (x) the excess of such combined cash and
tender amount over such aggregate current market price divided by (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of which shall be equal to the current market price per share
(determined as provided in paragraph (8) of this Section 8.4) of the Common
Stock on such date fixed for determination.
(6) In case a tender offer made by the Company or any Subsidiary for all
or any portion of the Common Stock shall expire and such tender offer (as
amended upon the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of the tender
offer) of Purchased Shares (as defined below)) of an aggregate consideration
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution filed with
the Trustee) that combined together with (I) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution filed with the Trustee),
as of the expiration of such tender offer, of consideration payable in respect
of any other tender offer by the Company or any Subsidiary for all or any
portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to this paragraph (6) has been made and (II) the aggregate amount of any cash
distributions to all holders of the Common Stock within 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to paragraph (5) of this Section has been made (the "combined tender and cash
amount") exceeds 10% of the product of the current market price per share of the
Common Stock (determined as provided in paragraph (8) of this Section 8.4) as of
the last time (the "Expiration Time") tenders could have been made pursuant to
such tender offer (as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) as of the Expiration Time,
then, and in each such case immediately prior to the opening of business on the
day after the date of the Expiration Time, the Conversion Rate shall be adjusted
so that the same shall equal the rate determined by dividing the Conversion Rate
immediately prior to close of business on the date of the Expiration Time by a
fraction (i) the numerator of which shall be equal to (A) the product of (I) the
current market price per share of the Common Stock (determined as provided in
paragraph (8) of this Section 8.4) on the date of the Expiration Time multiplied
by (II) the number of shares of Common Stock outstanding (including any tendered
shares) on the date of the Expiration Time less (B) the combined tender and cash
amount, and (ii) the denominator of
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which shall be equal to the product of (A) the current market price per share of
the Common Stock (determined as provided in paragraph (8) of this Section 8.4)
as of the Expiration Time multiplied by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time less the
number of all shares validly tendered 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").
(7) The reclassification of Common Stock into securities other than Common
Stock (other than any reclassification upon a consolidation or merger to which
Section 8.11 applies) shall be deemed to involve (a) a distribution of such
securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraph (4) of
this Section), and (b) a subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision becomes effective" or "the day
upon which such combination becomes effective", as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the meaning
of paragraph (3) of this Section 8.4).
(8) For the purpose of any computation under paragraphs (2), (4), (5) or
(6) of this Section 8.4, the current market price per share of Common Stock on
any date shall be calculated by the Company and be the average of the daily
Closing Prices Per Share for the five consecutive Trading Days selected by the
Company commencing not more than 10 Trading Days before, and ending not later
than the earlier of the day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "'ex' date", when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades regular
way in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(9)) would require an increase or decrease of at least one percent in such rate;
provided, however, that any adjustments which by reason of this paragraph (9)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.
(10) The Company may make such increases in the Conversion Rate, for the
remaining term of the Securities or any shorter term, in addition to those
required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 8.4, as
it considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock or
from any event treated as such for income tax purposes. The Company shall have
the power to resolve any ambiguity or
-35-
correct any error in this paragraph (10) and its actions in so doing shall,
absent manifest error, be final and conclusive.
(11) Notwithstanding the foregoing provisions of this Section, no
adjustment of the Conversion Rate shall be required to be made (a) upon the
issuance of shares of Common Stock pursuant to any present or future plan for
the reinvestment of dividends or (b) because of a tender or exchange offer of
the character described in Rule 13e-4(h)(5) under the Exchange Act or any
successor rule thereto.
(12) To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during such
period, and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive; provided, however, that no such increase shall be taken
into account for purposes of determining whether the Closing Price Per Share of
the Common Stock equals or exceeds 105% of the Conversion Price in connection
with an event which would otherwise be a Change in Control pursuant to Section
10.4. Whenever the Conversion Rate is increased pursuant to the preceding
sentence, the Company shall give written notice of the increase to the Holders
in the manner provided in Section 13.12 of the Subordinated Indenture at least
fifteen (15) days prior to the date the increased Conversion Rate takes effect,
and such notice shall state the increased Conversion Rate and the period during
which it will be in effect.
SECTION 8.5 Notice of Adjustments of Conversion Rate. Whenever the Conversion
----------------------------------------
Rate is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Rate in accordance
with Section 8.4 and shall prepare a certificate signed by the Chief Financial
Officer of the Company setting forth the adjusted Conversion Rate and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Trustee and with each Conversion
Agent; and
(2) upon each such adjustment, a notice stating that the Conversion Rate
has been adjusted and setting forth the adjusted Conversion Rate shall be
required, and as soon as practicable after it is required, such notice shall be
provided by the Company to all Holders in accordance with Section 13.12 of the
Subordinated Indenture.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or notice or the information
and calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at the Corporate Trust Office and such
office or agency maintained for the purpose of conversion of Securities pursuant
to Section 4.03 of the Indenture during normal business hours, and shall not be
deemed to have knowledge of any adjustment in the Conversion Rate unless and
until a Responsible Officer of the Trustee shall have received such a
certificate. Until a Responsible Officer of the Trustee receives such a
certificate, the Trustee and each Conversion Agent may assume without inquiry
that the last Conversion Rate of which the Trustee has knowledge of remains in
effect.
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SECTION 8.6 Notice of Certain Corporate Action. In case:
----------------------------------
(1) the Company shall declare a dividend (or any other distribution) on
its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require any adjustment pursuant to
Section 8.4; or
(2) the Company shall authorize the granting to all or substantially all
of the holders of its Common Stock of rights, options or warrants to subscribe
for or purchase any shares of capital stock of any class or of any other rights
that would require any adjustment pursuant to Section 8.4; or
(3) of any reclassification of the Common Stock, or of any consolidation,
merger or share exchange to which the Company is a party and for which approval
of any stockholders of the Company is required, or of the conveyance, sale,
transfer or lease of all or substantially all of the assets of the Company; or
(4) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;
then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section 4.03
of the Subordinated Indenture, and shall cause to be provided to all Holders in
accordance with Section 13.12 of the Subordinated Indenture, at least 20 days
(or 10 days in any case specified in clause (1) or (2) above) prior to the
applicable record or effective date hereinafter specified, a written notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights, options or warrants, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up. Neither the failure to give such notice
or the notice referred to in the following paragraph nor any defect therein
shall affect the legality or validity of the proceedings described in clauses
(1) through (4) of this Section 8.6. If at the time the Trustee shall not be the
Conversion Agent, a copy of such notice shall also forthwith be filed by the
Company with the Trustee.
The Company shall cause to be filed at the Corporate Trust Office and each
office or agency maintained for the purpose of conversion of Securities pursuant
to Section 4.03 of the Subordinated Indenture, and shall cause to be provided to
all Holders in accordance with Section 13.12 of the Subordinated Indenture,
written notice of any tender offer by the Company or any Subsidiary for all or
any portion of the Common Stock at or about the time that such notice of tender
offer is provided to the public generally.
SECTION 8.7 Company to Reserve Common Stock. The Company shall at all times
-------------------------------
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock,
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for the purpose of effecting the conversion of Securities, the full number of
shares of Common Stock then issuable upon the conversion of all Outstanding
Securities.
SECTION 8.8 Taxes on Conversions. Except as provided in the next sentence,
--------------------
the Company will pay any and all taxes and duties that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax or duty which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock in a name other than that of the
Holder of the Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax or duty, or has established to
the satisfaction of the Company that such tax or duty has been paid.
SECTION 8.9 Covenant as to Common Stock. The Company agrees that all shares
---------------------------
of Common Stock which may be delivered upon conversion of Securities, upon such
delivery, will have been duly authorized and validly issued and will be fully
paid and nonassessable and, except as provided in Section 8.8, the Company will
pay all taxes, liens and charges with respect to the issue thereof.
SECTION 8.10 Cancellation of Converted Securities. All Securities delivered
------------------------------------
for conversion shall be delivered to the Trustee or its agent to be canceled by
or at the direction of the Trustee, which shall dispose of the same as provided
in Section 2.10 of the Subordinated Indenture.
SECTION 8.11 Provision in Case of Consolidation, Merger or Sale of Assets. In
------------------------------------------------------------
case of any consolidation or merger of the Company with or into any other
Person, any merger of another Person with or into the Company (other than a
merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company, 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 subordinated indenture providing that the
Holder of each Security then Outstanding shall have the right thereafter, during
the period such Security shall be convertible as specified in Section 8.1, to
convert such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer or lease by a holder of the number of shares of Common Stock of the
Company into which such Security might have been converted immediately prior to
such consolidation, merger, conveyance, sale, transfer or lease, assuming such
holder of Common Stock of the Company (i) is not (A) a Person with which the
Company consolidated or merged with or into or which merged into or with the
Company or to which such conveyance, sale, transfer or lease was made, as the
case may be (a "Constituent Person"), or (B) an Affiliate of a Constituent
Person and (ii) failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease (provided that if the
kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer, or lease is not the same for
each share of Common Stock of the Company held immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease by others than a
Constituent Person or an Affiliate thereof and in
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respect of which such rights of election shall not have been exercised ("Non-
electing Share"), then for the purpose of this Section 8.11 the kind and amount
of securities, cash and other property receivable upon such consolidation,
merger, conveyance, sale, transfer or lease by the holders of each Non-electing
Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-electing Shares). Such supplemental subordinated indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental subordinated indenture, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article. The above
provisions of this Section 8.11 shall similarly apply to successive
consolidations, mergers, conveyances, sales, transfers or leases. Notice of the
execution of such a supplemental indenture shall be given by the Company to the
Holder of each Security as provided in Section 13.12 of the Subordinated
Indenture promptly upon such execution.
Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental subordinated indenture relating either to the kind or amount
of shares of stock or other securities or property or cash receivable by Holders
of Securities upon the conversion of their Securities after any such
consolidation, merger, conveyance, transfer, sale or lease or to any such
adjustment, but may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, an Opinion of Counsel with
respect thereto, which the Company shall cause to be furnished to the Trustee.
SECTION 8.12 Rights Issued in Respect of Common Stock. 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"):
(1) are deemed to be transferred with such shares of Common Stock,
(2) are not exercisable, and
(3) are also issued in respect of future issuances of Common Stock
shall not be deemed distributed for purposes of Section 8.4(2) 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 Section 8.4(4). 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 or
different amounts of any of the foregoing, or both, then the date of the
occurrence of any 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 of
rights or warrants, or any Trigger Event with respect thereto, that shall have
resulted in an adjustment to the Conversion Rate under Section 8.4(2), (1) in
the case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Rate shall
be readjusted upon such final redemption or repurchase to
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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 of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of any such rights or warrants all of which shall have expired
without exercise by any holder thereof, the Conversion Price shall be readjusted
as if such issuance had not occurred.
SECTION 8.13 Responsibility of Trustee for Conversion Provisions. The Trustee,
---------------------------------------------------
subject to the provisions of Section 7.01 of the Subordinated Indenture, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Rate, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, herein
or in any supplemental subordinated indenture provided to be employed, in making
the same, or whether a supplemental subordinated indenture need be entered into.
Neither the Trustee, subject to the provisions of Section 7.01 of the
Subordinated Indenture, nor any Conversion Agent shall be accountable with
respect to the validity or value (or the kind or amount) of any Common Stock, or
of any other securities or property or cash, which may at any time be issued or
delivered upon the conversion of any Security; and it or they do not make any
representation with respect thereto. Neither the Trustee, subject to the
provisions of Section 7.01 of the Subordinated Indenture, nor any Conversion
Agent shall be responsible for any failure of the Company to make or calculate
any cash payment or to issue, transfer or deliver any shares of Common Stock or
share certificates or other securities or property or cash upon the surrender of
any Security for the purpose of conversion; and the Trustee, subject to the
provisions of Section 7.01 of the Subordinated Indenture, and any Conversion
Agent shall not be responsible for any failure of the Company to comply with any
of the covenants of the Company contained in this Article.
ARTICLE IX
SUBORDINATION OF SECURITIES
With respect to the Securities issued under this Supplemental Indenture,
the following supplements Article Fourteen of the Subordinated Indenture:
SECTION 9.1 No Payment in Certain Circumstances, Payment over of Proceeds
-------------------------------------------------------------
upon Dissolution, Etc . No payment shall be made with respect to the principal
---------------------
of, or premium, if any, or interest on the Securities (including, but not
limited to, the Redemption Price with respect to the Securities to be called for
redemption in accordance with Article VIII or the Repurchase Price with respect
to Securities submitted for repurchase in accordance with Article X), except
payments and distributions made by the Trustee as permitted by Section 14.06 of
the Subordinated Indenture, if:
(1) a default in the payment of principal, premium, if any, or interest
(including a default under any repurchase or redemption obligation) or other
amounts with respect to any Designated Senior Debt occurs and is continuing (or,
in the case of Designated Senior Debt for which there is a period of grace, in
the event of such a default that continues beyond the period of grace, if any,
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specified in the instrument or lease evidencing such Designated Senior Debt)
unless and until such default shall have been cured or waived or shall have
ceased to exist; or
(2) any other event of default occurs and is continuing with respect to
Designated Senior Debt that then permits holders of such Designated Senior Debt
to accelerate its maturity and the Trustee receives a written notice of the
default (a "Payment Blockage Notice") from a Representative or holder of
Designated Senior Debt or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to clause (ii)
above, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section unless and until (A) at least 365 days shall have elapsed since the
initial effectiveness of the immediately prior Payment Blockage Notice, and (B)
all scheduled payments of principal, premium, if any, and interest on the
Securities that have come due have been paid in full in cash. 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.
The Company may and shall resume payments on and distributions in respect
of the Securities upon the earlier of:
(1) in the case of a default referred to in clause (i) above, the date
upon which the default is cured or waived 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 or waived or ceases to exist or 179 days pass
after the Payment Blockage Notice is received if the maturity of such Designated
Senior Debt has not been accelerated.
unless this Article IX otherwise prohibits the payment or distribution at
the time of such payment or distribution.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets and liabilities of the Company, then and in any
such event the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness in cash before the Holders of the Securities are entitled to
receive any payment on account of principal of (or premium, if any) or interest
on the Securities or on account of the purchase, redemption or other acquisition
of Securities, and to that end the holders of Senior Indebtedness shall be
entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities,
which may be payable or deliverable in respect of the Securities in any such
case, proceeding, dissolution, liquidation or other winding up or event.
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In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, securities or other property, before all Senior Indebtedness is
paid in full, and if such fact shall, at or prior to the time of such payment or
distribution, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution shall be paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include shares of capital stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, which shares of stock
or securities are subordinated in right of payment to all then outstanding
Senior Indebtedness to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article XI shall not be deemed
a dissolution, winding up, liquidation, reorganization, assignment for the
benefit of creditors or marshaling of assets and liabilities of the Company for
the purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article XI.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company, in the case of the Trustee, or to the
Trustee, in the case of such Holder.
SECTION 9.2 Prior Payment to Senior Indebtedness upon Acceleration of
---------------------------------------------------------
Securities. In the event of the acceleration of the Securities because of an
----------
Event of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities in respect of the principal of, premium, if any, or
interest on the Securities (including, but not limited to, the Redemption Price
with respect to the Securities called for redemption in accordance with Article
VII or the Repurchase Price with respect to the Securities submitted for
repurchase in accordance with Article X), except payments and distributions made
by the Trustee as permitted by Section 14.06 of the Indenture, until all Senior
Indebtedness has been paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Supplemental Indenture. If payment of the Securities is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration.
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SECTION 9.3 Payment Permitted If No Default. Nothing contained in this
-------------------------------
Article or elsewhere in this Supplemental Indenture or in any of the Securities
shall prevent (a) the Company, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshaling of assets and liabilities of the
Company referred to in Section 9.1, or during the circumstances referred to in
the first paragraph of Section 9.1, or under the conditions described in Section
9.2, from making payments at any time of principal of (and premium, if any) or
interest on the Securities, or (b) the application by the Trustee of any money
deposited with it hereunder to the payment of or on account of the principal of
(and premium, if any) or interest on the Securities or the retention of such
payment by the Holders, if, at the time of such application by the Trustee, it
did not have knowledge that such payment would have been prohibited by the
provisions of this Article.
SECTION 9.4 No Waiver of Subordination Provisions. No right of any present
-------------------------------------
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company, or by any non-compliance by the
Company with the terms, provisions and covenants of this Supplemental Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 9.5 Reliance on Judicial Order or Certificate of Liquidating Agent.
--------------------------------------------------------------
Upon any payment or distribution of assets of the Company referred to in this
Article, the Trustee, subject to the provisions of Section 7.01 of the
Subordinated Indenture, and the Holders of the 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, receiver, liquidating trustee,
custodian, 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 the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
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SECTION 9.6 Trustee Not Fiduciary for Holders of Senior Indebtedness. The
--------------------------------------------------------
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall in good
faith mistakenly pay over or distribute to Holders of Securities or to the
Company or to any other Person cash, property or securities to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.
SECTION 9.7 Reliance by Holders of Senior Indebtedness on Subordination
-----------------------------------------------------------
Provisions. Each Holder by accepting a Security acknowledges and agrees that the
----------
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness, whether such
Senior Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders of Senior Indebtedness unless such holders shall have agreed in
writing thereto.
SECTION 9.8 Rights of Trustee as Holder of Senior Indebtedness; Preservation
----------------------------------------------------------------
of Trustee's Rights. The Trustee in its individual capacity shall be entitled to
-------------------
all the rights set forth in this Article with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Supplemental Indenture shall deprive
the Trustee of any of its rights as such holder.
Nothing in this Article shall subordinate any claims of, or payments to,
the Trustee under or pursuant to Section 7.06 of the Subordinated Indenture to
Senior Indebtedness.
SECTION 9.9 Article Applicable to Paying Agents. In case at any time any
-----------------------------------
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall in
such case (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 in addition to or in
place of the Trustee; provided, however, that Section 9.8 shall not apply to the
Company or any Affiliate of the Company if it or such Affiliate acts as Paying
Agent.
SECTION 9.10 Certain Conversions and Repurchases Deemed Payment. For the
--------------------------------------------------
purposes of this Article only, (i) the issuance and delivery of junior
securities upon conversion of Securities in accordance with Article VIII or upon
the repurchase of Securities in accordance with Article X shall not be deemed to
constitute a payment or distribution on account of the principal of or premium
or interest on Securities or on account of the purchase or other acquisition of
Securities, and (ii) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 8.3), property or
securities (other than junior securities) upon conversion of a Security shall be
deemed to constitute payment on account of the principal of such Security. For
the purposes of this Section, the term "junior securities" means (a) shares of
any stock of any class of the Company and securities into which the Securities
are convertible pursuant to Article VIII and (b) securities of
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the Company which are subordinated in right of payment to all Senior
Indebtedness which may be outstanding at the time of issuance or delivery of
such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Supplemental Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than 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 VIII or to exchange such
Security for Common Stock in accordance with Article X if the Company elects to
satisfy the obligations under Article X by the delivery of Common Stock.
ARTICLE X
REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER
UPON A CHANGE IN CONTROL
SECTION 10.1 Right to Require Repurchase. In the event that a Change in
---------------------------
Control (as hereinafter defined) shall occur, then each Holder shall have the
right, at the Holder's option, but subject to the provisions of Section 10.2, to
require the Company to repurchase, and upon the exercise of such right the
Company shall repurchase, all of such Holder's Securities not theretofore called
for redemption, or any portion of the principal amount thereof that is equal to
any integral multiple of $1,000 (provided that no single Security may be
repurchased in part unless the portion of the principal amount of such Security
to be Outstanding after such repurchase is equal to $1,000 or integral multiples
of $1,000 in excess thereof), on the date (the "Repurchase Date") specified by
the Company that is not less than 40 nor more than 60 days after the date of the
Offer to Purchase (as defined in Section 10.3) at a purchase price equal to 100%
of the principal amount of the Securities to be repurchased plus interest
accrued to the Repurchase Date (the "Repurchase Price"); provided, however, that
installments of interest on Securities whose Stated Maturity is on or prior to
the Repurchase Date shall be payable to the Holders of such Securities, or one
or more Predecessor Subordinated Securities, registered as such on the relevant
Record Date according to their terms and the provisions of Section 1.2 of this
Supplemental Indenture and Section 2.07 of the Subordinated Indenture. Such
right to require the repurchase of the Securities shall not continue after a
discharge of the Company from its obligations with respect to the Securities in
accordance with Article Eleven of the Subordinated Indenture, unless a Change in
Control shall have occurred prior to such discharge. At the option of the
Company, the Repurchase Price may be paid in cash or, subject to the fulfillment
by the Company of the conditions set forth Section 10.2, by delivery of shares
of Common Stock having a fair market value equal to the Repurchase Price.
Whenever in the Indenture (including Sections 1.1, 2.2, 4.1(1) of the
Supplemental Indenture and Section 14.03 of the Subordinated Indenture) there is
a reference, in any context, to the principal of any Security as of any time,
such reference shall be deemed to include reference to the Repurchase Price
payable in respect of such Security to the extent that such Repurchase Price is,
was or would be so payable at such time, and express mention of the Repurchase
Price in any provision of this Supplemental Indenture shall not be construed as
excluding the Repurchase Price in those provisions of this Supplemental
Indenture when such express mention is not made; provided, however, that for the
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purposes of Article IX such reference shall be deemed to include reference to
the Repurchase Price only to the extent the Repurchase Price is payable in cash.
SECTION 10.2 Conditions to the Company's Election to Pay the Repurchase Price
----------------------------------------------------------------
in Common Stock. The Company may elect to pay the Repurchase Price by delivery
---------------
of shares of Common Stock pursuant to Section 10.1 if and only if the following
conditions shall have been satisfied:
(1) The shares of Common Stock deliverable in payment of the Repurchase
Price shall have a fair market value as of the Repurchase Date of not less than
the Repurchase Price. For purposes of Section 10.1 and this Section 10.2, the
fair market value of shares of Common Stock shall be determined by the Company
and shall be equal to 95% of the average of the Closing Prices Per Share of the
Common Stock for the five consecutive Trading Days immediately preceding and
including the third Trading Day prior to the Repurchase Date;
(2) The Repurchase Price shall be paid only in cash in the event any
shares of Common Stock to be issued upon repurchase of Securities hereunder (i)
require registration under any federal securities law before such shares may be
freely transferable without being subject to any transfer restrictions under the
Securities Act upon repurchase and if such registration is not completed or does
not become effective prior to the Repurchase Date, and/or (ii) require
registration with or approval of any governmental authority under any state law
or any other federal law before such shares may be validly issued or delivered
upon repurchase and if such registration is not completed or does not become
effective or such approval is not obtained prior to the Repurchase Date;
(3) Payment of the Repurchase Price may not be made in Common Stock
unless such stock is, or shall have been, approved for quotation on the Nasdaq
National Market or listed on a national securities exchange, in either case,
prior to the Repurchase Date; and
(4) All shares of Common Stock which may be issued upon repurchase of
Securities will be issued out of the Company's authorized but unissued Common
Stock and, will upon issue, be duly and validly issued and fully paid and non-
assessable and free of any preemptive or similar rights.
If all of the conditions set forth in this Section 10.2 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.
SECTION 10.3 Notices; Method of Exercising Repurchase Right, Etc. Unless the
---------------------------------------------------
Company shall have theretofore called for redemption all of the Outstanding
Securities, on or before the 30th day after the occurrence of a Change in
Control, the Company or, at the written request and expense of the Company on or
before the 15th day after such occurrence, the Trustee, shall give to all
Holders of Securities, in the manner provided in Section 13.12 of the
Subordinated Indenture, written notice (the "Offer to Purchase") of the
occurrence of the Change of Control and of the repurchase right set forth herein
arising as a result thereof. The Company shall also deliver a copy
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of such Offer to Purchase to the Trustee. Simultaneously with giving such
notice, the Company shall issue a Press Release including all relevant
information in such notice.
Each Offer to Purchase shall state:
(i) the Repurchase Date,
(ii) the date by which the repurchase right must be
exercised pursuant to Section 10.3(2),
(iii) the Repurchase Price, and whether the Repurchase Price
shall be paid by the Company in cash or by delivery of shares of Common Stock,
(iv) a description of the procedure which a Holder must
follow to exercise a repurchase right, and the place or places where such
Securities are to be surrendered for payment of the Repurchase Price and accrued
interest, if any to the Repurchase Date ,
(v) that on the Repurchase Date the Repurchase Price, and
accrued interest, if any to the Repurchase Date, will become due and payable
upon each such Security designated by the Holder to be repurchased, and that
interest thereon shall cease to accrue on and after said date,
(vi) the Conversion Rate then in effect, the date on which
the right to convert the principal amount of the Securities to be repurchased
will terminate and the place or places where such Securities may be surrendered
for conversion, and
(vii) the place or places that the Security certificate with
the Election of Holder to Require Repurchase as specified in Section 3.2 shall
be delivered.
No failure of the Company to give the foregoing Offer to Purchase or defect
therein shall limit any Holder' s right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article X
are inconsistent with applicable law, such law shall govern.
(1) To exercise a repurchase right, a Holder shall deliver to the Trustee
on or before the date that is five Business Days prior to the Repurchase Date
stated in the Offer to Purchase (i) written notice of the Holder's exercise of
such right, which notice shall set forth the name of the Holder, the principal
amount of the Securities to be repurchased (and, if any Security is to
repurchased in part, the serial number thereof, the portion of the principal
amount thereof to be repurchased and the name of the Person in which the portion
thereof to remain Outstanding after such repurchase is to be registered) and a
statement that an election to exercise the repurchase right is being made
thereby, and, in the event that the Repurchase Price shall be paid in shares of
Common Stock, the name or names (with addresses) in which the certificate or
certificates for shares of
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Common Stock shall be issued, and (ii) the Securities with respect to which the
repurchase right is being exercised. Such written notice shall be irrevocable,
except that the right of the Holder to convert the Securities with respect to
which the repurchase right is being exercised shall continue until the close of
business on the Repurchase Date.
(2) In the event a repurchase right shall be exercised in accordance with
the terms hereof, the Company shall pay or cause to be paid to the Trustee the
Repurchase Price in cash or shares of Common Stock, as provided above, for
payment to the Holder on the Repurchase Date or, if shares of Common Stock are
to be paid, as promptly after the Repurchase Date as practicable, together with
accrued and unpaid interest to the Repurchase Date payable with respect to the
Securities as to which the repurchase right has been exercised; provided,
however, that installments of interest that mature on or prior to the Repurchase
Date shall be payable in cash to the Holders of such Securities, or one or more
Predecessor Subordinated Securities, registered as such at the close of business
on the relevant Record Date.
(3) If any Security (or portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal amount of such Security (or
portion thereof, as the case may be) shall, until paid, bear interest to the
extent permitted by applicable law from the Repurchase Date at the rate of 7
1/4% per annum, and each Security shall remain convertible into Common Stock
until the principal of such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(4) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge and at no charge to the Trustee, a new Security
or Securities, containing identical terms and conditions, each in an authorized
denomination in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
(5) Any issuance of shares of Common Stock in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the Person or Persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open. No payment or adjustment shall be made for dividends or distributions on
any Common Stock issued upon repurchase of any Security declared prior to the
Repurchase Date.
(6) No fractions of shares shall be issued upon repurchase of Securities.
If more than one Security shall be repurchased from the same Holder and the
Repurchase Price shall be payable in
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shares of Common Stock, the number of full shares which shall be issuable upon
such repurchase shall be computed on the basis of the aggregate principal amount
of the Securities so repurchased. Instead of any fractional share of Common
Stock which would otherwise be issuable on the repurchase of any Security or
Securities, the Company will deliver to the applicable Holder its check for the
current market value of such fractional share. The current market value of a
fraction of a share is determined by multiplying the current market price of a
full share by the fraction, and rounding the result to the nearest cent. For
purposes of this Section, the current market price of a share of Common Stock is
the Closing Price Per Share of the Common Stock on the Trading Day immediately
preceding the Repurchase Date.
(7) Any issuance and delivery of certificates for shares of Common Stock
on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Securities being repurchased, and no such issuance or delivery shall be made
unless and until the Person requesting such issuance or delivery has paid to the
Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(8) All Securities delivered for repurchase shall be delivered to the
Trustee to be canceled and disposed of as provided in Section 2.10 of the
Indenture.
SECTION 10.4 Certain Definitions. For purposes of this Article X,
-------------------
(1) the term "beneficial owner" shall be determined in accordance with
Rule 13d-3, as in effect on the date of the original execution of this
Supplemental Indenture, promulgated by the Commission pursuant to the Exchange
Act;
(2) a "Change in Control" shall be deemed to have occurred at the time,
after the original issuance of the Securities, of:
(i) the acquisition by any Person (including any syndicate
or group deemed to be a "person" under Section 13(d)(3) of the Exchange Act) of
beneficial ownership, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of transactions, of shares of capital
stock of the Company entitling such Person to exercise 50% or more of the total
voting power of all shares of capital stock of the Company entitled to vote
generally in the elections of directors, other than any such acquisition by the
Company, any Subsidiary of the Company or any employee benefit plan of the
Company; or
(ii) any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company,
or any conveyance, sale, transfer or lease of all or substantially all of the
assets of the Company to another Person (other than (a) any such transaction (x)
which does not result in any reclassification, conversion, exchange or
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cancellation of outstanding shares of capital stock of the Company and (y)
pursuant to which the holders of the Common Stock immediately prior to such
transaction have the entitlement to exercise, directly or indirectly, 50% or
more of the total voting power of all shares of capital stock entitled to vote
generally in the election of directors of the continuing or surviving
corporation immediately after such transaction and (b) any merger which is
effected solely to change the jurisdiction of incorporation of the Company and
results in a reclassification, conversion or exchange of outstanding shares of
Common Stock into solely shares of common stock);
provided, however, that a Change in Control shall not be deemed to have occurred
if (I) the Closing Sales Price Per Share of the Common Stock for any five
Trading Days within the period of 10 consecutive Trading Days ending immediately
after the later of the Change in Control or the public announcement of the
Change in Control (in the case of a Change in Control under clause (i) above) or
the period of 10 consecutive Trading Days ending immediately before the Change
in Control (in the case of a Change in Control under clause (ii) above) shall
equal or exceed 105% of the Conversion Price of the Securities in effect on each
such Trading Day, or (II) all of the consideration (excluding cash payments for
fractional shares and cash payments made pursuant to dissenters' appraisal
rights) in a merger or consolidation constituting a Change of Control consists
of shares of common stock traded on a national securities exchange or on the
Nasdaq National Market (or will be so traded or quoted immediately following the
Change of Control).
(3) the term "Conversion Price" shall equal $1,000 divided by the
Conversion Rate (rounded to the nearest cent); and
(4) for purposes of Section 10.4(2)(i), the term "Person" shall include
any syndicate or group which would be deemed to be a "person" under Section
13(d)(3) of the Exchange Act, as in effect on the date of the original execution
of this Supplemental Indenture.
SECTION 10.5 Consolidation, Merger, etc. In the case of any merger,
--------------------------
consolidation, conveyance, sale, transfer or lease of all or substantially all
of the assets of the Company to which Section 8.11 applies, in which the Common
Stock of the Company is changed or exchanged as a result into the right to
receive shares of stock and other securities or property or assets (including
cash) which includes shares of Common Stock of the Company or common stock of
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 shares of stock and other securities,
property and assets (including cash) (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 combination or which acquires the
properties or assets (including cash) of the Company, as the case may be, shall
execute and deliver to the Trustee a supplemental subordinated indenture (which
shall comply with this Indenture and the Trust Indenture Act as in force at the
date of execution of such supplemental subordinated indenture) modifying the
provisions of this Indenture relating to the right of Holders to cause the
Company to repurchase the Securities following a Change in Control, including
without limitation the applicable provisions of this Article X and the
definitions of the
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Common Stock and Change in Control, as appropriate, and such other related
definitions set forth herein as determined in good faith by the Company (which
determination shall be conclusive and binding), to make such provisions apply in
the event of a subsequent Change in Control 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 XI
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
With respect to the Securities issued under this Supplemental Indenture,
Section 4.02 of the Subordinated Indenture is hereby replaced in its entirety as
follows:
SECTION 11.1 Company May Consolidate, Etc., Only on Certain Terms.
------------------------------
The Company covenants that so long as any of the Securities remain
Outstanding, the Company will maintain its existence and shall not consolidate
with or merge into any other Person or convey, transfer or lease all its
properties and assets substantially as an entirety to any Person, and the
Company shall not permit any Person to consolidate with or merge into the
Company or convey, transfer, sell or lease such Person's properties and assets
substantially as an entirety to the Company unless:
(1) the Person formed by such consolidation or into or with which the
Company is merged or the Person to which the properties and assets of the
Company are so conveyed, transferred, sold or leased shall be a corporation,
limited liability company, partnership or trust organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and, if other than the Company, shall expressly assume, by
a subordinated indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee and which shall comply with the
provisions of the Indenture, due and punctual payment of the principal of,
premium, if any, and interest on all of the Securities as applicable, and the
performance or observance of every covenant of this Indenture on the part of the
Company to be performed or observed and shall have provided for conversion
rights in accordance with Article VIII;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event that after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental subordinated indenture is required in
connection with such transaction, such supplemental subordinated indenture
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with, together with any
documents required under Section 10.03 of the Subordinated Indenture.
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SECTION 11.2 Successor Substituted. Upon any consolidation of the Company
---------------------
with, or merger of the Company into any other Person or any conveyance, transfer
or lease of all or substantially all the properties and assets of the Company in
accordance with Section 11.1, the successor Person formed by such consolidation
or into or with which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE XII
SUPPLEMENTAL INDENTURES
With respect to the Securities issued under this Supplemental Indenture,
the following supplements Article Ten of the Subordinated Indenture:
SECTION 12.1 Supplemental Indentures Without Consent of Holders of Securities.
----------------------------------------------------------------
(1) Without the consent of any Holders of Securities the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more subordinated indentures supplemental hereto for
any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants and obligations of the
Company herein and in the Securities as permitted by Article XI of this
Supplemental Indenture; or
(b) to add to the covenants of the Company for the benefit of the
Holders of Securities or to surrender any right or power herein conferred upon
the Company; or
(c) to secure the Securities; or
(d) to make provision with respect to the conversion rights of
Holders of Securities pursuant to Section 8.11 or to make provision with respect
to the repurchase rights of Holders of Securities pursuant to Section 10.5; or
(e) to comply with the requirements of the Trust Indenture Act or the
rules and regulations of the Commission thereunder in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act, as
contemplated by this Indenture or otherwise; or
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Xxxxxxx; or
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(g) subject to Section 9.7, to make any change in Article IX that
would limit or terminate the benefits available to any holder of Senior
Indebtedness under such Article; or
(h) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or which is
otherwise defective, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with the
provisions of the Indenture, provided such action pursuant to this clause (h)
shall not adversely affect the interests of the Holders of Securities in any
material respect.
Upon Company Order, accompanied by a Board Resolution authorizing the
execution of any such supplemental subordinated indenture, and subject to and
upon receipt by the Trustee of the documents described in Section 10.03 of the
Subordinated Indenture, the Trustee shall join with the Company in the execution
of any supplemental subordinated indenture authorized or permitted by the terms
of this Indenture unless such supplemental subordinated indenture affects the
Trustee's own rights, duties, liabilities or immunities under the Subordinated
Indenture or otherwise, in which case the Trustee may, in its discretion, but
shall not be obligated to, enter into such supplemental subordinated indenture.
SECTION 12.2 Supplemental Indentures with Consent of Holders of Securities.
-------------------------------------------------------------
(1) With either (i) the written consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities, by the Act of said
Holders delivered to the Company and the Trustee, or (ii) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of at least 66-2/3% in principal amount of the
Outstanding Securities represented at such meeting, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, however, that no such supplemental subordinated indenture
shall, without the consent or affirmative vote of the Holder of each Outstanding
Security affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount of, or
the premium, if any, or the rate of interest payable thereon, or reduce the
amount payable upon a redemption or mandatory repurchase, or change the place or
currency of payment of the principal of, premium, if any, or interest on any
Security (including any payment of Redemption Price or Repurchase Price in
respect of such Security) or impair the right to institute suit for the
enforcement of any payment in respect of any Security on or after the Stated
Maturity thereof (or, in the case of redemption or any repurchase, on or after
the Redemption Date or Repurchase Date, as the case may be) or, except as
permitted by Section 8.11, adversely affect the right of Holders to convert any
Security as provided in Article VIII, or modify the provisions of this Indenture
with respect to the subordination of the Securities in a manner adverse to the
Holders; or
(b) reduce the requirements of Section 9.05 of the Subordinated
Indenture for quorum or voting, or reduce the percentage in principal amount of
the Outstanding Securities the
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consent of whose Holders is required for any such supplemental subordinated
indenture or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture; or
(c) modify the obligation of the Company to maintain an office or
agency in the Borough of Manhattan, The City of New York, pursuant to Section
4.03 of the Subordinated Indenture; or
(d) modify any of the provisions of this Section or Section 4.4,
except to increase any percentage contained herein or therein or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected thereby; or
(e) adversely affect the right of Holders to require the Company to
repurchase any Security other than as provided in Article X.
It shall not be necessary for any Act of Holders of Securities under this
Section to approve the particular form of any proposed supplemental subordinated
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
(2) Section 10.02 of the Subordinated Indenture shall not be applicable to
the Securities.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Reference to and Effect on the Indenture. This Supplemental
----------------------------------------
Indenture shall be construed as supplemental to the Subordinated Indenture and
all the terms and conditions of this Supplemental Indenture shall be deemed to
be part of the terms and conditions of the Subordinated Indenture. Except as set
forth herein, the Subordinated Indenture heretofore executed and delivered is
hereby (i) incorporated by reference in this Supplemental Indenture and (ii)
ratified, approved and confirmed.
SECTION 13.2 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 13.3 Effect of Headings. The Article and Section headings herein are
------------------
for convenience only and shall not affect the construction hereof.
SECTION 13.4 Recitals. The recitals contained herein shall be taken as the
--------
statements of the Company and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Supplemental Indenture.
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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.
EXODUS COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President, Legal
and Corporate Affairs, General
Counsel and Secretary
HSBC BANK USA,
as Trustee
By: /s/ Xxx Xxxxxxxx
--------------------------
Name: Xxx Xxxxxxxx
Title: Vice President
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