1
EXHIBIT 4.5
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN SUCH NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO SUCH ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNED HEREOF HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE THIRD ANNIVERSARY (OR
SUCH SHORTER PERIOD AS MAY THEN BE APPLICABLE UNDER THE SECURITIES ACT REGARDING
THE HOLDING PERIOD FOR NOTES UNDER RULE 144(k) OF THE SECURITIES ACT OR ANY
SUCCESSOR RULE) OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR
(Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE
THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1)
TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE SIDE OF THIS
SECURITY) AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (3) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY), AND, IF SUCH TRANSFER IS BEING
EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE (AS DEFINED BELOW)
PRIOR TO THE EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF
RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE
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WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (4) TO AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE
WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE (PROVIDED THAT CERTAIN HOLDERS
SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS SECURITY PURSUANT TO THIS
CLAUSE (4) PRIOR TO THE EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE
MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT AND A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE
COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE
TRUSTEE, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR OTHER JURISDICTION. AN INSTITUTIONAL ACCREDITED
INVESTOR HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND
THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(o)(2) OF RULE 902) UNDER REGULATION S UNDER THE SECURITIES ACT.
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No. 1
Cusip No. 403917AB3
HMT TECHNOLOGY CORPORATION
5 3/4% CONVERTIBLE SUBORDINATED NOTE
DUE 2004
HMT TECHNOLOGY CORPORATION
HMT Technology Corporation, a Delaware corporation (the "Company")
promises to pay to CEDE & CO. or registered assigns, the principal sum indicated
on Schedule A hereof on January 15, 2004, and to pay interest thereon accruing
from January 21, 1997 at the rate of 5 3/4% per annum.
Interest Payment Dates: January 15 and July 15, commencing July 15,
1997
Record Date: June 30 and December 31
Reference is hereby made to the further provisions of this Convertible
Note set forth on the reverse hereof which further provisions shall for all
purposes have the same effect as if set forth at this place.
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IN WITNESS WHEREOF, HMT Technology Corporation has caused this
Convertible Note to be signed manually or by facsimile by its duly authorized
officers and a facsimile of its corporate seal to be affixed hereto or imprinted
hereon.
Dated: January 21, 1997
HMT TECHNOLOGY CORPORATION
By:_____________________________________________________
Peter S. Norris, Vice President, Finance, Chief
Financial Officer, Treasurer and Assistant
Secretary
By:_____________________________________________________
James C. Kitch, Secretary
[Seal]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the 5 3/4% Convertible Subordinated Notes due 2004 described in
the within-mentioned Indenture.
State Street Bank and Trust Company of California, N.A.,
as Trustee
By:__________________________
Authorized Officer
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HMT TECHNOLOGY CORPORATION
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
1. Interest. HMT Technology Corporation, a Delaware corporation (the
"Company"), is the issuer of this 5 3/4% Convertible Subordinated Note due 2004
(the "Convertible Note"). The Company promises to pay interest on the
Convertible Notes in cash semiannually on each January 15 and July 15,
commencing on July 15, 1997, to holders of record on the immediately preceding
June 30 and December 31.
Interest on the Convertible Notes will accrue from the most
recent date to which interest has been paid, or if no interest has been paid,
from January 21, 1997. Interest will be computed on the basis of a 360-day year
of 12 30-day months. To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the rate borne by the Convertible Notes, compounded annually.
2. Method of Payment. The Company will pay interest and Liquidated
Damages, if any, on the Convertible Notes (except defaulted interest) to the
persons who are registered holders of the Convertible Notes entitled to such
payments at the close of business on the record date for the next interest
payment date even though Convertible Notes are cancelled after the record date
and on or before the interest payment date. The Noteholder hereof must surrender
Convertible Notes to a Paying Agent to collect principal payments. The Company
will pay principal and interest and Liquidated Damages, if any, in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest and
Liquidated Damages, if any, by check payable in such money. It may mail an
interest check to a holder's registered Address.
3. Paying Agent and Registrar. The Trustee will act as Paying Agent,
Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar, co-registrar or Conversion Agent without prior notice. The Company or
any of its Affiliates may act in any such capacity.
4. Indenture. The Company issued the Convertible Notes under an
indenture, dated as of January 15, 1997 (the "Indenture"), between the Company
and State Street Bank and Trust Company of California, N.A., as Trustee. The
terms of the Convertible Notes include those stated in the Indenture (which is
incorporated hereby as though fully set forth herein) and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the Indenture. The Convertible Notes
are subject to, and ratified by, all such terms, certain of which are summarized
hereon, and Noteholders are referred to the Indenture and such Act for a
statement of such terms. The Convertible Notes are unsecured obligations of the
Company limited to (except as otherwise provided in the Indenture) up to an
aggregate principal amount of $200,000,000 (plus up to $30,000,000 aggregate
principal amount of Convertible Notes that may be sold by the Company pursuant
to the over-allotment option granted pursuant to the Purchase Agreement), and
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are subordinated in right of payment to all existing and future Senior Debt of
the Company as provided in the Indenture. The Indenture does not limit the
ability of the Company or any of its Subsidiaries to incur indebtedness or to
grant security interests or liens in respect of their assets. Any holder of this
Convertible Note shall be deemed to have agreed to and be bound by all the terms
and conditions contained in the Indenture applicable to a holder of a
Convertible Note.
5. Optional Redemption. The Convertible Notes are not subject to
redemption at the Company's option prior to January 20, 2000. On such date and
thereafter, the Convertible Notes will be subject to redemption at the option of
the Company, in whole or in part (in any integral multiple of $1,000), upon not
less than 15 nor more than 60 days' prior notice by mail at the following
redemption prices (expressed as -percentages of the principal amount set forth
below), if redeemed during the 12-month period beginning January 15 of the years
indicated:
REDEMPTION
YEAR PRICE
---- -----
2000................................................. 103.286%
2001................................................. 102.464
2002................................................. 101.643
2003................................................. 100.821
and, at January 15, 2004, 100% in each case together with accrued and unpaid
interest and Liquidation Damages, if any, up to but not including the redemption
date (subject to the right of holders of record an the relevant record date to
receive interest due on an interest payment date). On or after the redemption
date, interest will cease to accrue on the Convertible Notes, or portion
thereof, called for redemption.
6. Notice of Redemption. Notice of redemption will be mailed at least
15 days but not more than 60 days before the redemption date to each holder of
the Convertible Notes to be redeemed at his address of record. The Convertible
Notes in denominations larger than $1,000 may be redeemed in part but only in
integral multiples of $1,000. In the event of a redemption of less than all of
the Convertible Notes, the Convertible Notes will be chosen for redemption by
the Trustee in accordance with the Indenture. Unless the Company defaults in
making such redemption payment, or the Paying Agent is prohibited from making
such payment pursuant to the Indenture, interest and Liquidated Damages cease to
accrue on the Convertible Notes or portions of them called for redemption on and
after the redemption date.
If this Convertible Note is redeemed subsequent to a record
date with respect to any interest payment date specified above and on or prior
to such interest payment date, then any accrued interest or Liquidated Damages,
if any, payable on such interest payment date will be paid to the person in
whose name this Convertible Note is registered at the close of business on such
record date.
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7. Mandatory Redemption. The Company will not be required to make
mandatory redemption payments with respect to the Convertible Notes. There are
no sinking fund payments with respect to the Convertible Notes.
8. Repurchase at Option of Holder. If there is a Designated Event, the
Company shall be required to offer to purchase on the Designated Event Payment
Date all outstanding Convertible Notes at a purchase price equal to 101% of the
principal amount thereof on the date of purchase, plus accrued and unpaid
interest and Liquidated Damages, if any, to the Designated Event Payment Date.
Holders of Convertible Notes that are subject to such a Designated Event Offer
will be mailed a notice of Designated Event Offer from the Company prior to any
related Designated Event Payment Date and, in accordance with the procedures and
terms set forth in the Indenture, may elect to have such Convertible Notes or
portions thereof in authorized denominations purchased by completing the form
entitled "Option of Noteholder To Elect Purchase." Noteholders have the right to
withdraw their election by delivering a written notice of withdrawal to the
Paying Agent in accordance with the terms of the Indenture.
9. Subordination. The payment of the principal of, premium, if any,
interest on, Liquidated Damages, if any, or any other amounts due on the
Convertible Notes is subordinated in right of payment to all existing and future
Senior Debt of the Company, as described in the Indenture. Each Noteholder, by
accepting a Convertible Note, agrees to such subordination and authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
as its attorney-in-fact for such purpose.
10. Conversion. The holder of any Convertible Note has the right,
exercisable at any time after 90 days following the date of original issuance
thereof and prior to the close of business (New York time) on the date of the
Convertible Note's maturity, to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $1,000) into shares of Common
Stock at the initial Conversion Price of $23.75 per share, subject to adjustment
under certain circumstances, except that if a Convertible Note is called for
redemption, the conversion right will terminate at the close of business on the
Business Day immediately preceding the date fixed for redemption.
To convert a Convertible Note, a holder must (1) complete and
sign a notice of election to convert substantially in the form set forth below,
(2) surrender the Convertible Note to a Conversion Agent, (3) furnish
appropriate endorsements or transfer documents if required by the Registrar or
Conversion Agent and (4) pay any transfer or similar tax, if required. Upon
conversion, no adjustment or payment will be made for interest or dividends, but
if any Noteholder surrenders a Convertible Note for conversion after the close
of business on the record date for the payment of an installment of interest and
Liquidated Damages, if any, and prior to the opening of business on the next
interest payment date, then, notwithstanding such conversion, the interest and
Liquidated Damages, if any, payable on such interest payment date will be paid
to the registered holder of such Convertible Note on such record date. In such
event, such Convertible Note, when surrendered for conversion, must be
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest and Liquidated Damages, if any, payable on such interest payment
date on the portion so converted. The number of shares of Common Stock issuable
upon conversion of a
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Convertible Note is determined by dividing the principal amount of the
Convertible Note converted by the Conversion Price in effect on the Conversion
Date. No fractional shares will be issued upon conversion but a cash adjustment
will be made for any fractional interest.
A Convertible Note in respect of which a holder has delivered
an "Option of Noteholder to Elect Purchase" form appearing below exercising the
option of such holder to require the Company to purchase such Convertible Note
may be converted only if the notice of exercise is withdrawn as provided above
and in accordance with the terms of the Indenture. The above description of
conversion of the Convertible Notes is qualified by reference to, and is subject
in its entirety by, the more complete description thereof contained in the
Indenture.
11. Registration Rights. The holder of this Convertible Note is
entitled to the benefits of a Registration Agreement, dated as of January 15,
1997, between Company and the Initial Purchasers (the "Registration Agreement").
Pursuant to the Registration Agreement the Company has agreed for the benefit of
the holders of the Convertible Notes and the Common Stock issuable upon
conversion thereof that are, in either case, Registrable Securities, that (i) it
will, at its cost, within 75 days after the first closing of the sale of the
Convertible Notes (the "Closing"), file a shelf registration statement (the
"Shelf Registration Statement") with the Securities and Exchange Commission (the
"Commission") with respect to resales of the Convertible Notes and the Common
Stock issuable upon conversion thereof, (ii) the Company will use all reasonable
efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act as soon as practicable but in any event, within 105
days after the Closing and (iii) the Company will use all reasonable efforts to
keep such Shelf Registration Statement continuously effective under the
Securities Act until the earlier of (a) the third anniversary of the last date
of original issuance of the Convertible Notes, (b) the date on which the
Convertible Notes or the Common Stock issuable upon conversion thereof may be
sold by non-affiliates of the Company pursuant to paragraph (k) of Rule 144 (or
any successor provision) promulgated by the Commission under the Securities Act
and (c) the date as of which all the Convertible Notes or the Common Stock
issuable upon conversion thereof have been sold pursuant to such Shelf
Registration Statement. Any resale of the Convertible Notes or the Common Stock
issued upon conversion thereof pursuant to the Shelf Registration Statement must
be made in accordance with the terms provided in the Registration Agreement.
Pursuant to the Registration Agreement, the Company may suspend the use of the
prospectus which is a part of the Shelf Registration Statement for one period in
any three month period or three periods in any twelve month period under certain
circumstances (each, a "Deferral Period") and no deferral shall exceed 30 days.
If (i) the Shelf Registration Statement has not been filed on
or prior to the date seventy-five days following the Closing Date (as defined in
the Purchase Agreement), (ii) the Shelf Registration Statement has not been
declared effective under the Securities Act on or before the date one hundred
five days following the Closing Date, (iii) prior to the end of the Shelf
Registration Period (as defined in the Registration Agreement), the Commission
shall have issued a stop order suspending the effectiveness of the Shelf
Registration Statement or proceedings have been initiated with respect to the
Shelf Registration Statement under Section 8(d) or 8(e) of the Act, (iv) the
aggregate number of days in any one Deferral Period exceeds the periods
permitted pursuant to Section 2(c) of the Registration Agreement or (v) the
number of Deferral Periods exceeds the number
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permitted pursuant to Section 2(c) of the Registration Agreement (each of the
events of a type described in any of the foregoing clauses (i) through (v) are
individually referred to herein as an "Event"; and the date seventy-five days
following the Closing Date in the case of clause (i), the date one hundred five
days following the Closing Date in the case of clause (ii), the date on which
the effectiveness of the Shelf Registration Statement has been suspended or
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Act have been commenced in the case of clause (iii), the date on
which the duration of a Deferral Period exceeds the periods permitted by Section
2(c) of the Registration Agreement in the case of clause (iv), and the date of
the commencement of a Deferral Period that causes the limit on the number of
Deferral Periods under Section 2(c) of the Registration Agreement to be exceeded
in the case of clause (v), are referred to herein as an "Event Date"). Events
shall be deemed to continue until the date of the termination of such Event,
which shall be the following date with respect to the respective types of
Events: the date the Registration Statement is filed in the case of an Event of
the type described in clause (i), the date the Registration Statement is
declared effective under the Act in the case of an Event described in clause
(ii), the date that all stop orders suspending effectiveness of the Shelf
Registration Statement have been removed and the proceedings initiated with
respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the
Act have terminated, as the case may be, in the case of Events of the types
described in clause (iii), termination of the Deferral Period which caused the
aggregate number of days in any one Deferral Period to exceed the number
permitted by Section 2(c) of the Registration Agreement to be exceeded in the
case of Events of the type described in clause (iv), and termination of the
Deferral Period the commencement of which caused the number of Deferral Periods
permitted by Section 2(c)(ii) of the Registration Agreement to be exceeded in
the case of Events of the type described in clause (v).
Accordingly, upon the occurrence of any Event and until such
time as there are no Events which have occurred and are continuing (a "Damages
Accrual Period"), commencing on the Event Date on which such Damages Accrual
Period began, the Company agrees to pay, as liquidated damages, and not as a
penalty, an additional amount (the "Liquidated Damages"): (A) to each holder of
the Convertible Notes, during such time as such holder is a Notice Holder (as
defined in the Registration Agreement), accruing at a rate equal to one-half of
one percent per annum (50 basis points) on (s) the aggregate principal amount of
the Convertible Notes held by such Notice Holder and (t) where such Convertible
Notes have been converted into shares of Common Stock, the aggregate principal
amount of the Convertible Notes that were converted into such shares and (B) if
the Damages Accrual Period continues for a period in excess of thirty days from
the Event Date, from and after the end of such thirty day period until such time
as there are no Events which have occurred and are continuing, to each holder of
the Convertible Notes (whether or not a Notice Holder), accruing at a rate equal
to one-half of one percent per annum (50 basis points) on (u) the aggregate
principal amount of the Convertible Notes held by such Notice Holder and (v)
where such Convertible Notes have been converted into shares of Common Stock,
the aggregate principal amount of the Convertible Notes that were converted into
such shares. Notwithstanding the fore going, no Liquidated Damages shall accrue
under clause (A) of the preceding sentence during any period for which
Liquidated Damages accrue under clause (B) of the preceding sentence or as to
the Convertible Notes or shares of Common Stock from and after the earlier of
(x) the date such Convertible Notes or shares of Common Stock are no longer
Registrable Securities (as defined in the
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Registration Agreement), and (y) the expiration of the Shelf Registration
Period. In addition, Liquidated Damages will not accrue as to any Convertible
Note or Common Stock issuable upon conversion thereof represented by the
Unrestricted Global Note (as defined in the Indenture) provided that such
securities are not subject to limitations on transfer under U.S. federal or
state securities laws and there shall have been at least six months during which
the Shelf Registration Statement was effective and available for effecting
resales of the Convertible Notes and the Common Stock issuable upon conversion
thereof. The rate of accrual of the Liquidated Damages with respect to any
period shall not exceed the rate provided for in this paragraph notwithstanding
the occurrence of multiple concurrent Events. Liquidated Damages due on any of
the Convertible Notes or Common Stock into which they have been converted shall
be payable on each interest payment date occurring during the Damages Accrual
Period and on the interest payment date immediately following (or which would
have followed) the termination of such period, and shall be considered
additional interest for all purposes of the Convertible Notes and the Indenture.
12. Denominations, Transfer, Exchange. The Convertible Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. The transfer of Convertible Notes may be registered, and
Convertible Notes may be exchanged, as provided in the Indenture. The Registrar
may require a Noteholder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Convertible Note or portion of a Convertible Note selected
for redemption (except the unredeemed portion of any Convertible Note being
redeemed in part). Also, it need not exchange or register the transfer of any
Convertible Note for a period of 15 days before a selection of Convertible Notes
to be redeemed.
13. Persons Deemed Owners. Except as provided in paragraph 2 of this
Convertible Note, the registered Noteholder of a Convertible Note may be treated
as its owner for all purposes.
14. Unclaimed Money. If money for the payment of principal, interest or
Liquidated Damages, if any, remains unclaimed for the shorter of two years after
such payment was due or a period ending 10 Business Days prior to the date such
funds would escheat to the State, the Trustee and the Paying Agent shall pay the
money back to the Company at its request. After that, Noteholders of Convertible
Notes entitled to the money must look to the Company for payment unless an
abandoned property law designates another person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
15. Defaults and Remedies. The Convertible Notes shall have the Events
of Default as set forth in Section 8.1 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the Noteholders of at least 25% in
aggregate principal amount of the then outstanding Convertible Notes by notice
to the Company and the Trustee may declare all the Convertible Notes to be due
and payable immediately, except that in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all unpaid principal, interest
and Liquidated Damages, if any, accrued on the Convertible Notes shall become
due and payable immediately without further action or notice. Upon acceleration
as described in either of the preceding sentences, the subordination provisions
of the Indenture preclude
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any payment being made to Noteholders for at least 5 days except as otherwise
provided in the Indenture and may preclude payment entirely.
The Noteholders of a majority in principal amount of the
Convertible Notes then outstanding by written notice to the Trustee may rescind
an acceleration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration. Noteholders may not enforce the Indenture or the
Convertible Notes except as provided in the Indenture. Subject to certain
limitations, Noteholders of a majority in principal amount of the then
outstanding Convertible Notes issued under the Indenture may direct the Trustee
in its exercise of any trust or power. The Company must furnish compliance
certificates to the Trustee annually. The above description of Events of Default
and remedies is qualified by reference to, and subject in its entirety by, the
more complete description thereof contained in the Indenture.
16. Amendments, Supplements and Waivers. Subject to certain exceptions,
the Indenture or the Convertible Notes may be amended or supplemented with the
consent of the Noteholders of at least a majority in principal amount of the
then outstanding Convertible Notes (including consents obtained in connection
with a tender offer or exchange offer for Convertible Notes), and any existing
default may be waived with the consent of the Noteholders of a majority in
principal amount of the then outstanding Convertible Notes including consents
obtained in connection with a tender offer or exchange offer for Convertible
Notes. Without the consent of any Noteholder, the Indenture or the Convertible
Notes may be amended, among other things, to cure any ambiguity, defect or
inconsistency, to provide for assumption of the Company's obligations to
Noteholders, to make any change that does not adversely affect the rights of any
Noteholder, to qualify the Indenture under the TIA, and to comply with the
requirements of the SEC in order to maintain the qualification of the Indenture
under the TIA.
17. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity, may become the owner or pledgee of Convertible Notes and
may otherwise deal with the Company or an Affiliate with the same rights it
would have if it were not Trustee, subject to certain limitations provided for
in the Indenture and in the TIA. Any Agent may do the same with like rights.
18. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Convertible Notes or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Noteholder, by accepting a Convertible Note, waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Convertible Notes.
19. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE CONVERTIBLE NOTES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
20. Authentication. The Convertible Notes shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee or
an authenticating agent.
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12
21. Abbreviations. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (for tenants in common), TEN ENT
(for tenants by the entireties), JT TEN (for joint tenants with right of
survivorship and not as tenants in common), CUST (for Custodian), and U/G/M/A
(for Uniform Gifts to Minors Act).
22. Definitions. Capitalized terms not defined in this Convertible Note
have the meaning given to them in the Indenture.
The Company will furnish to any Noteholder of the Convertible
Notes upon written request and without charge a copy of the Indenture and the
Registration Agreement. Request may be made to:
HMT Technology Corporation
1055 Page Avenue
Fremont, California 94538
Attention of: Investor Relations
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ASSIGNMENT FORM AND CERTIFICATE OF TRANSFER
To assign this Convertible Note, fill in the form below:
(I) or (we) assign and transfer this Convertible Note to
________________________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ___________________ agent to transfer this Convertible
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:_______________________________________________________
(Sign exactly as your name appears on the other side of this
Convertible Note)
Date:_____________
Signature Guarantee: (1)_____________________________________________
In connection with any transfer of any of the Convertible Notes
evidenced by this certificate occurring prior to the date that is three years
(or such shorter period as may then be applicable under the Securities Act)
after the later of the date of original issuance of such Convertible Notes and
the last date, if any, on which such Convertible Notes were owned by the Company
or any Affiliate of the Company, the undersigned confirms that such Convertible
Notes are being transferred:
CHECK ONE BOX BELOW
(1) \ \ to the Company; or
(2) \ \ pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) \ \ pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(4) \ \ to an institutional "accredited investor" as defined
in Rule 501(a) (1), (2), (3) or (7) under the
Securities Act of 1933 that has furnished to the
Trustee a signed letter containing certain
representations and agreements (the form of which
letter can be obtained from the Trustee); or
--------
(1) Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
14
(5) \ \ pursuant to Rule 144 of the Securities Act of 1933;
or
(6) \ \ pursuant to another available exemption from the
registration requirements of the Securities Act of
1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Convertible Notes evidenced by this certificate in the name of any
person other than the registered holder thereof ; provided, however, that if box
(2), (3), (4), (5) or (6) is checked, the Trustee and the Company may require,
prior to registering any such transfer of the Convertible Notes such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act.
_______________________
Signature
Signature Guarantee:(1)
____________________________________ _______________________
Signature must be guaranteed Signature
____________________
(1) Signature must be guaranteed by a commercial bank, trust
company or member firm of the New York Stock Exchange.
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SCHEDULE A
The initial principal amount at maturity of this Global Security shall
be $188,650,000. The following increases or decreases in the principal amount of
this Global Security have been made:
AMOUNT OF INCREASE
IN PRINCIPAL AMOUNT OF
THIS GLOBAL SECURITY
INCLUDING UPON EXERCISE AMOUNT OF DECREASE IN PRINCIPAL AMOUNT OF THIS SIGNATURE OF AUTHORIZED
DATE OF THE OVER-ALLOTMENT PRINCIPAL AMOUNT OF THIS GLOBAL SECURITY FOLLOWING OFFICER OF TRUSTEE OR
MADE OPTION GLOBAL SECURITY SUCH DECREASE OR INCREASE SECURITIES CUSTODIAN
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
16
OPTION OF NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have this Convertible Note or a portion thereof
repurchased by the Company pursuant to Section 3.8 or 4.7 of the Indenture,
check the box: \ \
If the purchase is in part, indicate the portion (in denominations of
$1,000 or any integral multiple thereof) to be purchased: __________
Your Signature:_______________________________________________________
(Sign exactly as your name appears on the other side of this
Convertible Note)
Date:__________________
Signature Guarantee:(1)___________________________________________
_________________________
(1) Signature must be guaranteed by a commercial bank, trust
company or member firm of the New York Stock Exchange.
17
ELECTION TO CONVERT
To: HMT Technology Corporation
The undersigned owner of $________ in principal of HMT Technology
Corporation's 5 3/4% Convertible Subordinated Notes due 2004 (the "Convertible
Note") hereby irrevocably exercises the option to convert the Convertible Note,
or the portion below designated, into Common Stock of HMT Technology Corporation
in accordance with the terms of the Indenture referred to in the Convertible
Note, and directs that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be issued in the name
of and delivered to the undersigned, unless a different name has been indicated
in the assignment below. If shares are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
Any Noteholder, upon the exercise of its conversion rights in
accordance with the terms of the Indenture and the Convertible Note, agrees to
be bound by the terms of the Registration Agreement relating to the Common Stock
issuable upon conversion of the Convertible Note.
Date:
Amount of Convertible Note to be converted
($1,000 or integral multiples thereof);
$_____________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
______________________________
Signature Guarantee (1)
________________
(1) Signature must be guaranteed by a commercial bank, trust
company or member firm of the New York Stock Exchange.