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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 0R 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 24, 1998
DATA PROCESSING RESOURCES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 0-27612 95-3931443
(State or other jurisdiction (Commission file (I.R.S. Employer
of incorporation) number) Identification No.)
4400 MACARTHUR BOULEVARD, SUITE 600
NEWPORT BEACH, CA 92660
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 553-1102
NOT APPLICABLE
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
On March 24, 1998, Data Processing Resources Corporation, a California
corporation (the "COMPANY"), sold $115,000,000 aggregate principal amount of its
5 1/4% Convertible Subordinated Notes due 2005 (the "NOTES"), all of which were
sold in reliance upon Rule 144A under the Securities Act of 1933, as amended
(the "SECURITIES ACT"). The Notes were sold by the Company to NationsBanc
Montgomery Securities LLC, Donaldson, Lufkin & Jenrette Securities Corporation,
Robert W. Baird & Co. Incorporated and Lehman Brothers Inc. (collectively, the
"INITIAL PURCHASERS"), pursuant to a Purchase Agreement, dated March 18, 1998
(the "PURCHASE AGREEMENT"). The Initial Purchasers exercised their over-
allotment in full to purchase an additional $15,000,000 in aggregate principal
amount of Notes. The price to investors for the Notes sold in the offering was
100% of the principal amount thereof for an aggregate offering price of
$115,000,000. The Company received approximately $111,000,000 in net proceeds
from the sale of Notes after the Initial Purchasers' discount of 3% of the
aggregate principal amount of the Notes for an aggregate discount of $3,450,000
and after other offering expenses. The Company expects to use the net proceeds
of the offering for repayment of debt, including amounts outstanding under its
credit facility, working capital and other general corporate purposes, including
acquisitions.
The Notes were issued pursuant to the provisions of the Indenture, dated as
of March 24, 1998 (the "INDENTURE"), between the Company and State Street Bank
and Trust Company of California, N.A., as trustee thereunder. The Notes will
bear interest at the rate of 5 1/4% per annum until April 1, 2005. The Notes
are convertible at the option of the holder into common stock, no par value (the
"COMMON STOCK"), of the Company at any time prior to the close of business on
the maturity date, unless previously redeemed or repurchased, at a conversion
price of $35.50 per share (equivalent to a conversion rate of approximately
28.17 shares per $1,000 principal amount of Notes), subject to adjustment in
certain circumstances. The payment of principal, premium, if any, interest and
any other amounts payable on or in respect of the Notes by the Company are on a
subordinated basis in accordance with the terms of the Indenture.
The Notes and the Common Stock issuable upon conversion of the Notes have
not been registered under the Securities Act, in reliance upon the exemption
afforded by Rule 144A under the Securities Act. Accordingly, the Notes and the
Common Stock issuable upon conversion of the Notes, were offered and sold in an
aggregate principal amount of $115,000,000 only to qualified institutional
buyers in reliance upon Rule 144A under the Securities Act.
The Company has agreed to file by May 23, 1998, a shelf registration
statement to register resales by the holders of the Notes and the Common Stock
issuable upon conversion of the Notes, pursuant to a Registration Rights
Agreement dated as of March 24, 1998, by and among the Company and the Initial
Purchasers (the "REGISTRATION RIGHTS AGREEMENT").
The foregoing summary of the Notes, the Indenture, the Purchase Agreement
and the Registration Rights Agreement does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the provisions
of the Notes, the Indenture, the Purchase Agreement and the Registration Rights
Agreement, forms of which are filed as Exhibits to this Current Report on Form
8-K (included in the Indenture in the case of the form of the Note) and as are
incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
The following exhibits are filed herewith:
Exhibit No. Document
----------- --------
1.1 Purchase Agreement dated March 18, 1998, by
and between Data Processing Resources
Corporation, NationsBanc Montgomery
Securities LLC, Donaldson, Lufkin & Jenrette
Securities Corporation, Robert W. Baird & Co.
Incorporated and Lehman Brothers Inc.
4.1 Indenture dated March 24, 1998, by and
between Data Processing Resources Corporation
and State Street Bank and Trust Company of
California, N.A., as trustee thereunder.
4.2 Registration Rights Agreement dated March 24,
1998, by and between Data Processing
Resources Corporation and NationsBanc
Montgomery Securities LLC, Donaldson, Lufkin
& Jenrette Securities Corporation, Robert W.
Baird & Co. Incorporated and Lehman Brothers
Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized, on this 24th day of March 1998.
DATA PROCESSING RESOURCES CORPORATION
Date: March 24, 1998 By: /s/ MICHAEL A. PIRAINO
-----------------------------------------
Michael A. Piraino, Executive Vice President
and Chief Financial Officer (Principal
Financial and Accounting Officer)
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EXHIBIT INDEX
Exhibit No. Document
----------- --------
1.1 Purchase Agreement dated March 18, 1998, by and
between Data Processing Resources Corporation,
NationsBanc Montgomery Securities LLC, Donaldson,
Lufkin & Jenrette Securities Corporation, Robert
W. Baird & Co. Incorporated and Lehman Brothers
Inc.
4.1 Indenture dated March 24, 1998, by and between
Data Processing Resources Corporation and State
Street Bank and Trust Company of California, N.A.,
as trustee thereunder.
4.2 Registration Rights Agreement dated March 24,
1998, by and between Data Processing Resources
Corporation and NationsBanc Montgomery Securities
LLC, Donaldson, Lufkin & Jenrette Securities
Corporation, Robert W. Baird & Co. Incorporated
and Lehman Brothers Inc.
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EXHIBIT 1.1
DATA PROCESSING RESOURCES CORPORATION
$100,000,000
5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2005
PURCHASE AGREEMENT
DATED MARCH 18, 1998
NATIONSBANC MONTGOMERY SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
ROBERT W. BAIRD & CO. INCORPORATED
LEHMAN BROTHERS INC.
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TABLE OF CONTENTS
<TABLE>
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SECTION 1. REPRESENTATIONS AND WARRANTIES................................................... 3
No Registration Required................................................................ 3
No Integration of Offerings or General Solicitation..................................... 3
Eligibility for Resale under Rule 144A.................................................. 3
The Offering Memorandum................................................................. 3
Incorporated Documents.................................................................. 4
The Purchase Agreement.................................................................. 4
The Registration Rights Agreement and DTC Agreement..................................... 5
Authorization of the Securities......................................................... 5
Authorization of the Indenture.......................................................... 5
Description of the Notes and the Indenture.............................................. 5
No Material Adverse Change.............................................................. 6
Independent Accountants................................................................. 6
Capitalization and Other Stock Matters.................................................. 7
Independent Accountants;................................................................ 7
Preparation of the Financial Statements;................................................ 7
Non-Contravention of Articles and By-laws............................................... 8
Stock Exchange Listing.................................................................. 8
No Material Actions or Proceedings...................................................... 8
Title to Properties..................................................................... 8
Intellectual Property Rights............................................................ 9
Compliance with Laws.................................................................... 9
Tax Law Compliance...................................................................... 9
Company Not an.......................................................................... 9
Insurance............................................................................... 10
Contributions........................................................................... 10
No Price Stabilization or Manipulation.................................................. 10
Compliance with Cuba Act................................................................ 10
SECTION 2. PURCHASE, SALE AND DELIVERY OF NOTES............................................. 10
The Notes............................................................................... 10
The Closing Date........................................................................ 11
Delivery of the Securities.............................................................. 11
Delivery of Offering Memorandum to the Initial Purchasers............................... 12
Initial Purchasers as Qualified Institutional Buyers.................................... 12
SECTION 3. ADDITIONAL COVENANTS............................................................. 12
Initial Purchasers' Review of Proposed Amendments and Supplements....................... 12
Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters.. 12
Copies of the Offering Memorandum....................................................... 13
Blue Sky Compliance..................................................................... 13
Use of Proceeds......................................................................... 13
The Depositary.......................................................................... 13
Additional Issuer Information........................................................... 13
Future Reports to the Initial Purchasers................................................ 13
Registration Rights Agreement........................................................... 14
No Integration.......................................................................... 14
Legended Notes.......................................................................... 14
PortalL................................................................................. 14
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<TABLE>
<S> <C>
Form D.................................................................................. 14
Due Diligence........................................................................... 15
Periodic Reporting Obligations.......................................................... 15
Agreement Not To Offer or Sell Additional Securities.................................... 15
Lock-Up Agreement from Certain Stockholders............................................. 15
Waiver of Registration Rights........................................................... 15
SECTION 4. PAYMENT OF EXPENSES.............................................................. 16
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS.......................... 16
Accountants' Comfort Letter............................................................. 16
No Material Adverse Change or Ratings Agency Change..................................... 17
Opinion of Counsel for the Company...................................................... 17
Opinion of Counsel for the Initial Purchasers........................................... 17
Officers' Certificate................................................................... 17
Bring-down Comfort Letter............................................................... 17
PORTAL Listing.......................................................................... 17
Registration Rights Agreement........................................................... 18
Additional Documents.................................................................... 18
SECTION 6. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES.................................... 18
SECTION 7. OFFER, SALE AND RESALE PROCEDURES................................................ 18
Offers and Sales only to Qualified Institutional Buyers................................. 18
No General Solicitation................................................................. 18
Purchases by Non-Bank Fiduciaries....................................................... 19
Restrictions on Transfer................................................................ 19
Delivery of Offering Memorandum......................................................... 20
SECTION 8. INDEMNIFICATION.................................................................. 20
Indemnification of the Initial Purchasers............................................... 20
Indemnification of the Company, its Directors and Officers.............................. 21
Notifications and Other Indemnification Procedures...................................... 22
Settlements............................................................................. 23
SECTION 9. CONTRIBUTION..................................................................... 23
SECTION 10. TERMINATION OF THIS AGREEMENT.................................................... 25
SECTION 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.............................. 25
SECTION 12. NOTICES.......................................................................... 25
SECTION 13. SUCCESSORS....................................................................... 26
SECTION 14. PARTIAL UNENFORCEABILITY......................................................... 26
SECTION 15. GOVERNING LAW PROVISIONS......................................................... 26
SECTION 16. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS......................... 26
SECTION 17. GENERAL PROVISIONS............................................................... 27
</TABLE>
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PURCHASE AGREEMENT
March 18, 1998
NATIONSBANC MONTGOMERY SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
ROBERT W. BAIRD & CO. INCORPORATED
LEHMAN BROTHERS INC.
As Initial Purchasers
c/o NATIONSBANC MONTGOMERY SECURITIES LLC
600 Montgomery Street
San Francisco, California 94111
Ladies and Gentlemen:
INTRODUCTORY. Data Processing Resources Corporation, a California
corporation (the "Company), proposes to issue and sell to the several Initial
Purchasers named in Schedule A hereto (the "Initial Purchasers"), acting
severally and not jointly, the respective amounts set forth in such Schedule A
of an $100,000,000 aggregate principal amount of the Company's 5 1/4%
Convertible Subordinated Notes due 2005 (the "Initial Notes"). In addition, the
Company has granted the Initial Purchasers an option to purchase up to an
additional $15,000,000 aggregate principal amount of its 5 1/4% Convertible
Subordinated Notes due 2005 (the "Additional Notes" and, together with the
Initial Notes, the "Notes"). NationsBanc Montgomery Securities LLC, Donaldson,
Lufkin & Jenrette Securities Corporation, Robert W. Baird & Co. Incorporated and
Lehman Brothers Inc. have agreed to act as the several Initial Purchasers in
connection with the offering and sale of the Notes.
The Notes will be issued pursuant to an indenture dated as of March
24, 1998 (the "Indenture") between the Company and State Street Bank and Trust
of California, N.A., as trustee (the "Trustee"). Notes issued in book-entry
form will be issued in the name of Cede & Co., as nominee of The Depository
Trust Company (the "Depositary") pursuant to a DTC Agreement, to be dated as of
the Closing Date (as defined in Section 2) (the "DTC Agreement"), among the
Company, the Trustee and the Depositary.
The holders of the Notes will be entitled to the benefits of a
registration rights agreement dated as of March 24, 1998 (the "Registration
Rights Agreement"), among the Company and the Initial Purchasers, pursuant to
which the Company will agree to file, within 60 days of the Closing Date, a
shelf registration statement with the Securities and Exchange Commission (the
"Commission") registering the Shares (as defined below) under the Securities
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Act of 1933, as amended (the "Securities Act", which term, as used herein,
includes the rules and regulations of the Commission promulgated thereunder).
The Notes are convertible into shares (the "Shares") of common stock,
no par value, of the Company (the "Common Stock") in accordance with the terms
of the Notes and the Indenture, at an initial conversion price of $35.50 per
share (equivalent to a conversion rate of approximately 28.17 shares per $1,000
principal amount of Notes). The Notes and the Common Stock into which they are
convertible are sometimes herein collectively referred to as the "Securities."
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
in the Offering Memorandum (as defined below) and agrees that the Initial
Purchasers may resell (the "Exempt Resales"), subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the "Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are
to be offered and sold to or through the Initial Purchasers without being
registered with the Commission under the Securities Act, in reliance upon
exemptions therefrom. The terms of the Securities and the Indenture will
require that investors that acquire Securities expressly agree that Securities
may only be resold or otherwise transferred, after the date hereof, if such
Securities are registered for sale under the Securities Act or if an exemption
from the registration requirements of the Securities Act is available (including
the exemptions afforded by Rule 144A ("Rule 144A") thereunder).
The Company has prepared and delivered to each Initial Purchaser
copies of an Offering Memorandum "subject to completion" dated March 6, 1998
(the "Preliminary Offering Memorandum") and has prepared and will deliver to
each Initial Purchaser, on the date hereof or the next succeeding day, copies of
the Offering Memorandum dated March 18, 1998 describing the terms of the
Securities, each for use by such Initial Purchaser in connection with its
solicitation of offers to purchase the Securities. As used herein, the
"Offering Memorandum" shall mean, with respect to any date or time referred to
herein this Agreement, the Company's Offering Memorandum dated March 18, 1998,
including amendments or supplements thereto, any exhibits thereto and the
Incorporated Documents (as defined by Section 1(e) below), in the most recent
form that has been prepared and delivered by the Company to the Initial
Purchasers in connection with their solicitation of offers to purchase
Securities. Further, any reference to the Preliminary Offering Memorandum or
the Offering Memorandum shall be deemed to refer to and include any Additional
Issuer Information (as defined in Section 3(g)) furnished by the Company prior
to the completion of the distribution of the Securities.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which are incorporated by reference in the Offering Memorandum; and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "Exchange Act", which term,
as used herein, includes the rules and regulations of the Commission promulgated
thereunder) which is incorporated or deemed to be incorporated by reference in
the Offering Memorandum.
2
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The Company and the Initial Purchasers hereby confirm their agreements
as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents, warrants and covenants to each Initial Purchaser as follows:
(a) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section
2(e) hereof and with the procedures set forth in Section 7 hereof, it is
not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and to each Subsequent Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939 (the "Trust Indenture Act",
which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder).
(b) No Integration of Offerings or General Solicitation. The Company
has not, directly or indirectly, solicited any offer to buy or offered to
sell, and will not, directly or indirectly, solicit any offer to buy or
offer to sell, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to be registered
under the Securities Act. None of the Company, its affiliates (as such term
is defined in Rule 501(b) under the Securities Act) (each, an "Affiliate"),
or any person acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation or warranty) has
engaged or will engage, in connection with the offering of the Securities,
in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.
(c) Eligibility for Resale under Rule 144A. The Notes are eligible
for resale pursuant to Rule 144A and will not be, at either the First
Closing Date or the Second Closing Date, of the same class, within the
meaning of Rule 144A, as securities listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted in a U.S.
automated interdealer quotation system.
(d) The Offering Memorandum. The Offering Memorandum does not, and at
either Closing Date will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and
agreement shall not apply to statements in or omissions from the Offering
Memorandum made in reliance upon and in conformity with information
furnished to the Company in writing by any Initial Purchaser through
NationsBanc Montgomery Securities LLC or Donaldson, Lufkin & Jenrette
Securities Corporation expressly for use in the Offering Memorandum. Each
of the Preliminary Offering Memorandum and the Offering Memorandum, as of
its date, contains all the information specified in, and meeting the
requirements of, Rule 144A(d)(4). The Company has not distributed and will
not distribute, prior to the later of the Closing Date and the completion
of the Initial Purchasers' distribution of the Securities, any offering
material
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in connection with the offering and sale of the Securities other than a
preliminary Offering Memorandum or the Offering Memorandum.
(e) Incorporated Documents. The Offering Memorandum as delivered
from time to time shall incorporate by reference the most recent Annual
Report of the Company on Form 10-K filed with the Commission and each
Quarterly Report of the Company on Form 10-Q filed with the Commission
since the filing of the end of the fiscal year to which such Annual Report
relates. All documents incorporated or deemed to be incorporated by
reference in the Offering Memorandum at the time they were or hereafter are
filed with the Commission collectively, the "Incorporated Documents"
complied and will comply in all material respects with the requirements of
the Exchange Act and, when read together with the other information in the
Offering Memorandum, at the date of the Offering Memorandum and at the
Closing Date, do not and will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(f) The Purchase Agreement. The Company has full legal right, and
corporate power and corporate authority to enter into and perform its
obligations under each of this Agreement, the Registration Rights
Agreement, the DTC Agreement, the Securities and the Indenture and perform
the transactions contemplated hereby and thereby. This Agreement has been
duly authorized, executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as enforceability may be limited by
general principles of equity, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights or may be limited by
public policy related to indemnification for liabilities arising under the
Securities Act. The execution and performance of this Agreement, the
Registration Rights Agreement, the DTC Agreement and the Indenture by the
Company and the consummation of the transactions herein and therein
contemplated (i) will not violate any provisions of the articles of
incorporation or bylaws of the Company or any of its subsidiaries and (ii)
will not conflict with, result in the breach or violation of, constitute,
either by itself or upon notice or the passage of time or both, a default
under, or a Debt Repayment Triggering Event (as defined below) under any
material agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the properties or assets of the Company or any of its
subsidiaries is subject, any statute or any authorization, judgment,
decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable to the Company,
any of its subsidiaries or any of the properties or assets of the Company
or any of its subsidiaries. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this
Agreement, the Registration Rights Agreement, the DTC Letter of
Representations to be dated March 24, 1988 (the "DTC Agreement") or the
Indenture or the consummation of the transactions contemplated herein or
therein, except for compliance with the Securities Act, any applicable
state securities laws or Blue Sky laws of any state of the United States or
of any foreign jurisdiction. As used herein, a
4
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"Debt Repayment Triggering Event" means any event or condition which gives,
or with the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of
its subsidiaries.
(g) The Registration Rights Agreement and DTC Agreement. Each of the
Registration Rights Agreement and the DTC Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable against the Company in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles or may be limited by public policy related to indemnification
for liabilities arising under the Securities Act.
(h) Authorization of the Securities. (i) The Notes to be purchased by
the Initial Purchasers from the Company are in the form attached to the
Indenture, have been duly authorized for issuance and sale pursuant to this
Agreement and the Indenture and, at each Closing Date, will have been duly
executed by the Company and, when authenticated in the manner provided for
in the Indenture and delivered against payment of the purchase price
therefor, will constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with their terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles and
will be entitled to the benefits of the Indenture. (ii) Upon issuance and
delivery of the Notes in accordance with this Agreement and the Indenture,
the Notes will be convertible at the option of the holders thereof for the
Shares in accordance with the terms of the Notes and the Indenture. The
Shares issuable upon conversion of the Notes have been duly authorized by
all necessary corporate action and such shares, when issued upon such
conversion in accordance with this Agreement, the Indenture and the Notes,
(a) will be validly issued, fully paid and nonassessable, (b) will have
been issued in compliance with federal and state securities laws and (c)
will not have been issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase
securities of the Company.
(i) Authorization of the Indenture. The Indenture has been duly
authorized, has been, or at the First Closing Date will be, executed and
delivered by the Company and is, or will then be, a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles or may be limited by public policy related to
indemnification for liabilities arising under the Securities Act.
(j) Description of the Securities and the Indenture. The Notes, the
Shares and the Indenture will conform in all material respects to the
respective statements
5
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relating thereto contained in the Offering Memorandum and will be in
substantially the respective forms previously delivered to the Initial
Purchasers.
(k) No Material Adverse Change. Since the respective dates as of
which information is given in the Offering Memorandum, and except as
described in or specifically contemplated by the Offering Memorandum: (i)
neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, indirect, direct or contingent, or entered into
any material verbal or written agreement or other transaction which is not
in the ordinary course of business or which could result in a material
reduction in the future earnings of the Company and its subsidiaries,
considered as one entity; (ii) neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its
business or properties from fire, flood, windstorm, accident or other
calamity, whether or not covered by insurance; (iii) neither the Company
nor any of its subsidiaries has paid or declared any dividends or other
distributions with respect to its capital stock and neither the Company nor
any of its subsidiaries is in default in the payment of principal or
interest on any outstanding debt obligations; (iv) there has not been any
change in the capital stock (other than upon the sale of the Securities
hereunder and upon the exercise of options described in the Offering
Memorandum) or indebtedness (other than upon the sale of the Securities
hereunder) material to the Company and its subsidiaries (other than in the
ordinary course of business); and (v) there has not been any material
adverse change in the condition (financial or otherwise), business,
properties, results of operations or prospects of the Company and its
subsidiaries, considered as one entity (a "Material Adverse Change").
(l) Incorporation and Good Standing of the Company and its
Subsidiaries. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Company's Annual Report on Form
10-K for the fiscal year ended July 31, 1997. The Company and each of its
subsidiaries have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation with full corporate power and corporate
authority to own and lease their respective properties and conduct their
respective businesses as described in the Offering Memorandum; the Company
and each of its subsidiaries are in possession of and operating in material
compliance with all authorizations, licenses, permits, consents,
certificates and orders material to the conduct of their respective
businesses, all of which are valid and in full force and effect. The
Company and each of its subsidiaries are duly qualified to do business and
in good standing as a foreign corporation in each jurisdiction in which the
ownership or leasing of properties or the conduct of their respective
businesses requires such qualification, except for jurisdictions in which
the failure to so qualify would not have a material adverse effect upon the
Company and its subsidiaries, considered as one entity; and no proceeding
has been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification. All of the issued and outstanding capital stock
of each subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable, except for the security interest, mortgage,
pledge, lien encumbrance or claim created by the Credit Facility (as
defined in the Offering Memorandum), and is owned
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by the Company, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim.
(m) Capitalization and Other Stock Matters. The Company has an
authorized and outstanding capital stock as set forth under the heading
"Capitalization" in the Offering Memorandum; the issued and outstanding
shares of Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or
purchase securities, and conform to the description thereof contained in
the Offering Memorandum. Except as disclosed in or contemplated by the
Offering Memorandum or the financial statements of the Company, and the
related notes thereto, included in the Offering Memorandum, neither the
Company nor any of its subsidiaries has outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. The description of
the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Offering Memorandum accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(n) Independent Accountants. Deloitte & Touche LLP, who have
expressed their opinion with respect to certain financial statements and
schedules filed with the Commission included in the Offering Memorandum are
independent accountants as required by the Act and the Rules and
Regulations.
(o) Preparation of the Financial Statements. The historical and pro
forma financial statements and schedules of the Company and the related
notes thereto included or incorporated by reference in the Offering
Memorandum comply as to form in all material respects with the requirements
of the Securities Act and present fairly the financial position of the
Company and its subsidiaries as of the respective dates of such financial
statements and schedules, and the results of operations and changes in
financial position of the Company and its subsidiaries for the respective
periods covered thereby. Such statements, schedules and related notes have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis as certified by Deloitte & Touche LLP. The
pro forma financial statements have been prepared on a basis consistent
with the historical statements, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable
basis and present fairly the historical and proposed transactions
contemplated by the Offering Memorandum and this Agreement. The other
financial statements and schedules and the related notes thereto included
or incorporated by reference in the Offering Memorandum comply as to form
in all material respects with the requirements of the Securities Act and
present fairly the financial position of the entities purported to be shown
thereby as of the respective dates of such financial statements and
schedules, and the results of operations and changes in financial position
of the entities purported to be shown thereby for the respective periods
covered thereby. No additional financial statements or
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schedules are required to be included in the Offering Memorandum. The
historical selected financial data and pro forma financial data set forth
in the Offering Memorandum under the captions "Capitalization" and
"Selected Financial Data," fairly present the information set forth therein
have been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and have been properly
presented on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein.
(p) Non-Contravention of Articles and By-laws. Neither the Company
nor any of its subsidiaries is in violation or default of any provision of
its articles of incorporation or bylaws or in breach of or default with
respect to any provision of any agreement, judgment, decree, order,
mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument to which it is a party or by which it or any of its
properties may be bound or affected, nor any provision of any judgment,
decree or order against the Company or any of its subsidiaries, except
where such violation, breach or default would not materially adversely
affect the Company and its subsidiaries, considered as one entity.
(q) Stock Exchange Listing. The Common Stock is registered pursuant
to Section 12(g) of the Exchange Act and is listed on the Nasdaq National
Market, and the Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the Nasdaq National Market,
nor has the Company received any notification that the Commission or the
National Association of Securities Dealers, Inc. (the "NASD") is
contemplating terminating such registration or listing. The Shares will be
approved for listing on the Nasdaq National Market, subject to notice of
issuance.
(r) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened to which the Company or any of its
subsidiaries is or may be a party or of which property owned or leased by
the Company or any of its subsidiaries is or may be the subject, or related
to environmental or discrimination matters, which actions, suits or
proceedings might, individually or in the aggregate, prevent or adversely
affect the transactions contemplated by this Agreement or result in a
material adverse change in the condition (financial or otherwise),
properties, business, results of operations or prospects of the Company and
its subsidiaries, considered as one entity, and no labor disturbance by the
employees of the Company or any of its subsidiaries exists or, to the best
of the Company's knowledge, is imminent which might be expected to affect
adversely such condition, properties, business, results of operations or
prospects. Neither the Company nor any of its subsidiaries is a party or
subject to the provisions of any injunction, judgment, decree or order of
any court regulatory body, administrative agency or other governmental
body.
(s) Title to Properties. The Company and each of its subsidiaries
have good and marketable title to all the properties and assets reflected
as owned in the financial statements hereinabove described (or elsewhere in
the Offering Memorandum), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any,
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reflected in such financial statements (or elsewhere in the Offering
Memorandum), (ii) those, if any, created by the Credit Facility, or (iii)
those which are in the aggregate not material in amount to the Company and
its subsidiaries, considered as one entity, and do not adversely affect the
use made and proposed to be made of such property by the Company or such
subsidiary. The Company and each of its subsidiaries hold their respective
leased properties under valid and binding leases, with such exceptions as
are not materially significant in relation to the business of the Company
and its subsidiaries, considered as one entity. Except as disclosed in the
Offering Memorandum, the Company and each of its subsidiaries own or lease
all such properties as are necessary to the operations of the Company and
its subsidiaries as now conducted or as proposed to be conducted.
(t) Intellectual Property Rights. Except as disclosed in or
specifically contemplated by the Offering Memorandum, (i) the Company and
each of its subsidiaries have sufficient trademarks, trade names, patent
rights, mask works, copyrights, licenses, approvals and governmental
authorizations to conduct their respective businesses as now conducted;
(ii) the expiration of any trademarks, trade names, patent rights, mask
works, copyrights, licenses, approvals or governmental authorizations would
not have a material adverse effect on the condition (financial or
otherwise), business, results of operations or prospects of the Company and
its subsidiaries, considered as one entity; and (iii) the Company has no
knowledge of any material infringement by it or any of its subsidiaries of
trademark, trade name rights, patent rights, mask works, copyrights,
licenses, trade secret or other similar rights of others, and the Company
has not received notice of any claim against the Company or any of its
subsidiaries regarding trademark, trade name, patent, mask work, copyright,
license, trade secret or other infringement which could have a material
adverse effect on the condition (financial or otherwise), business, results
of operations or prospects of the Company or any of its subsidiaries.
(u) Compliance with Laws. Neither the Company nor any of its
subsidiaries has been advised, or has any reason to believe, that it is not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business
(whether U.S. or foreign), including, without limitation, all applicable
local, state, federal and foreign environmental laws and regulations;
except where failure to be so in compliance would not materially adversely
affect the condition (financial or otherwise), business, results of
operations or prospects of the Company and its subsidiaries, considered as
one entity.
(v) Tax Law Compliance. The Company and its subsidiaries have filed
all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes shown as due thereon, and, except as disclosed in a
disclosure schedule provided by the Company to you, the Company has no
knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company or any of its subsidiaries which could
materially and adversely affect the business, operations or properties of
the Company and its subsidiaries, considered as one entity.
(w) Company Not an "Investment Company". The Company is not, and
upon receipt and pending application of the net proceeds from the sale of
the Shares in
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the manner described in the Offering Memorandum will not be, an "investment
company" or an entity "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(x) Insurance. The Company and each of its subsidiaries maintain
insurance of the types and in the amounts generally deemed adequate for
their respective businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full
force and effect.
(y) Contributions. To the best of the Company's knowledge after due
inquiry, neither the Company nor any of its subsidiaries has at any time
during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution
in violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by
the laws of the United States or any jurisdiction thereof.
(z) No Price Stabilization or Manipulation. The Company has not taken
and will not take, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Notes or the Shares issuable upon conversion of the
Notes.
(aa) Compliance with Cuba Act. Neither the Company nor any of its
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba in violation of Section 517.075 of the Florida
Statutes.
Any certificate signed by an executive officer of the Company named in
the Offering Memorandum and delivered to the Initial Purchasers or to
counsel for the Initial Purchasers shall be deemed to be a representation
and warranty by the Company to each Initial Purchaser as to the matters set
forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
(a) The Securities. The Company agrees to issue and sell to the
several Initial Purchasers, severally and not jointly, all of the Initial
Notes upon the terms herein set forth. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject
to the conditions herein set forth, the Initial Purchasers agree, severally
and not jointly, to purchase from the Company the aggregate principal
amount of Initial Notes set forth opposite their names on Schedule A, at a
discounted purchase price of 97% (which amount equals a Price to Investors
of 100% less the Initial Purchasers' Discount of 3%) of the principal
amount thereof payable on the First Closing Date. The discounted purchase
price shall not include interest accrued on the Initial Notes during the
period, if any, from the date of the original issuance of the Notes to and
including the First Closing Date (as herein defined).
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In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Initial Purchasers to
purchase, severally and not jointly, up to an aggregate of $15,000,000
aggregate principal amount of Additional Notes, for use solely in covering
any over-allotments made by you for the account of the Initial Purchasers
in the sale and distribution of the Initial Notes. The option granted
hereunder may be exercised at any time (but not more than once) within 30
days after the date of this Agreement, upon notice by you to the Company
setting forth the aggregate number of Additional Notes as to which the
Initial Purchasers are exercising the option, the names and denominations
in which the certificates for such Additional Notes are to be registered
and the time and place at which such certificates will be delivered. The
purchase price for the Additional Notes will be equal to the price set
forth in the first paragraph of Section 2(a). The discounted purchase price
shall not include interest accrued on the Additional Notes during the
period, if any, from the date of the original issuance of the Notes to and
including the Second Closing Date (as herein defined).
(b) The Closing Dates. Delivery of certificates for the Initial
Notes in global form to be purchased by the Initial Purchasers and payment
therefor shall be made at the offices of NationsBanc Montgomery Securities
LLC, 600 Montgomery Street, San Francisco, California (or such other place
as may be agreed to by the Company and the Initial Purchasers) at 6:00 a.m.
San Francisco time, on March 24, 1998, or such other time and date not
later than 10:30 a.m., San Francisco time, on April 3, 1998 as the Initial
Purchasers and the Company shall agree (the time and date of such closing
are called the "First Closing Date"). Delivery of other closing documents
shall be made at the offices of Riordan & McKinzie, 695 Town Center Drive,
Suite 1500, Costa Mesa, California 92626 on the First Closing Date.
In the event the Initial Purchasers exercise the overallotment option,
such time of delivery (which may not be earlier than the First Closing
Date), being herein referred to as the "Second Closing Date," shall be
determined by NationsBanc Montgomery Securities LLC and Donaldson, Lufkin &
Jenrette Securities Corporation, but if at any time other than the First
Closing Date, shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise.
(c) Delivery of the Securities. The Company shall deliver, or cause
to be delivered, to NationsBanc Montgomery Securities LLC for the accounts
of the several Initial Purchasers, certificates in global form for the
Securities at each Closing Date against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase
price therefor. The certificates for the Securities shall be in such
denominations ($1,000 or integral multiples thereof) and registered in the
name of Cede & Co., as nominee of the Depository, pursuant to the DTC
Agreement and shall be made available for inspection on the business day
preceding the Closing Date at a location in New York City as the Initial
Purchasers may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Initial Purchasers.
The number of Additional Notes to be purchased by each Initial
Purchaser shall be determined by multiplying the number of Additional Notes
to be sold by the
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Company pursuant to such notice of exercise by a fraction, the numerator of
which is the number of Initial Notes to be purchased by such Initial
Purchaser as set forth opposite its name in Schedule A and the denominator
of which is the total number of Initial Notes . The manner of payment for
and delivery of the Additional Notes shall be the same as for the Initial
Notes purchased from the Company as specified in the preceding paragraphs.
At any time before lapse of the option, NationsBanc Montgomery Securities
LLC and Donaldson, Lufkin & Jenrette Securities Corporation may cancel such
option by giving written notice of such cancellation to the Company.
(d) Delivery of Offering Memorandum to the Initial Purchasers. Not
later than 12:00 p.m. on the second business day following the date of this
Agreement, the Company shall deliver or cause to be delivered copies of the
Offering Memorandum in such quantities and at such places as the Initial
Purchasers shall reasonably request.
(e) Initial Purchasers as Qualified Institutional Buyers. Each
Initial Purchaser severally and not jointly represents and warrants to, and
agrees with, the Company that it is a "qualified institutional buyer"
within the meaning of Rule 144A (a "Qualified Institutional Buyer").
SECTION 3. ADDITIONAL COVENANTS. The Company further covenants and agrees
with each Initial Purchaser as follows:
(a) Initial Purchasers' Review of Proposed Amendments and
Supplements. Prior to amending or supplementing the Offering Memorandum
(including any amendment or supplement through incorporation by reference
of any report filed under the Exchange Act), the Company shall furnish to
the Initial Purchasers for review a copy of each such proposed amendment or
supplement, and the Company shall not file any such proposed amendment or
supplement to which the Initial Purchasers reasonably and timely object.
(b) Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters. If, during such period as in the opinion of counsel
for the Initial Purchasers an Offering Memorandum is required by law to be
delivered in connection with Exempt Resales by the Initial Purchasers, any
event shall occur or condition exist as a result of which it is necessary
to amend or supplement the Offering Memorandum in order to make the
statements therein, in the light of the circumstances when the Offering
Memorandum is delivered to a purchaser, not misleading, or if in the
opinion of the Initial Purchasers or counsel for the Initial Purchasers it
is otherwise necessary to amend or supplement the Offering Memorandum to
comply with law, the Company agrees to promptly prepare (subject to Section
3(a) hereof), and furnish at its own expense to the Initial Purchasers,
amendments or supplements to the Offering Memorandum so that the statements
in the Offering Memorandum as so amended or supplemented will not, in the
light of the circumstances when the Offering Memorandum is delivered to a
purchaser, be misleading or so that the Offering Memorandum, as amended or
supplemented, will comply with law. The Company hereby acknowledges that
the indemnification and contribution provisions of Sections 8 and 9 hereof
are specifically applicable and relate
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<PAGE>
to each offering memorandum, registration statement, prospectus, amendment
or supplement referred to in this Section 3(b).
(c) Copies of the Offering Memorandum. The Company agrees to furnish
the Initial Purchasers, without charge, as many copies of the Offering
Memorandum and any amendments and supplements thereto as they shall have
reasonably requested.
(d) Blue Sky Compliance. The Company shall cooperate with the
Initial Purchasers and counsel for the Initial Purchasers to qualify or
register the Securities for sale under (or obtain exemptions from the
application of) the Blue Sky or state securities laws of those U.S.
jurisdictions designated by the Initial Purchasers, shall comply with such
laws and shall continue such qualifications, registrations and exemptions
in effect so long as required for the distribution of the Securities. The
Company shall not be required to qualify as a foreign corporation or to
take any action that would subject it to general service of process in any
such jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise the
Initial Purchasers promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Securities for
offering, sale or trading in any jurisdiction or any initiation or threat
of any proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(e) Use of Proceeds. The Company shall apply the net proceeds from
the sale of the Securities sold by it in the manner described under the
caption "Use of Proceeds" in the Offering Memorandum.
(f) The Depositary. The Company will cooperate with the Initial
Purchasers and use its reasonable efforts to permit the Securities to be
eligible for clearance and settlement through the facilities of the
Depositary.
(g) Additional Issuer Information. Prior to the completion of the
placement of the Securities by the Initial Purchasers with the Subsequent
Purchasers (as evidenced by a notice in writing from the Initial Purchasers
to the Company), the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents
required to be filed under Section 13 or 15(d) of the Exchange Act.
Additionally, at any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, for the benefit of holders and beneficial owners
from time to time of Securities, the Company shall furnish, at its expense,
upon request, to holders and beneficial owners of Securities and
prospective purchasers of Securities information ("Additional Issuer
Information") satisfying the requirements of subsection (d)(4) of Rule
144A.
(h) Future Reports to the Initial Purchasers. During the period of
five years hereafter the Company will furnish to NationsBanc Montgomery
Securities LLC at 600 Montgomery Street, San Francisco, CA 94111 Attention:
Corporate Finance and, upon request, to Donaldson, Lufkin & Jenrette
Securities Corporation at 2121 A venue of the Stars, Los Angeles, CA 90067
Attention: Corporate Finance, Lehman Brothers Inc. at
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<PAGE>
601 South Figueroa Street, Suite 4425, Los Angeles, CA 90017 Attention:
Corporate Finance and Robert W. Baird & Co. Incorporated at 777 East
Wisconsin Avenue, Milwaukee, WI 53202 Attention: Corporate Finance (i) as
soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, shareholders' equity
and cash flows for the year then ended and the opinion thereon of the
Company's independent public or certified public accountants; (ii) as soon
as practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
on Form 8-K or other report filed by the Company with the Commission, the
NASD or any securities exchange; and (iii) as soon as available, copies of
any report or communication of the Company mailed generally to holders of
its capital stock or debt securities (including the holders of the
Securities).
(i) Registration Rights Agreement. The Company shall comply with all
provisions and obligations of, and shall cause the shelf registration
statement to be filed and declared effective in the appropriate form and at
the appropriate time as contemplated by, the Registration Rights Agreement,
and shall comply with all applicable federal and state securities laws in
connection with the shelf registration statement.
(j) No Integration. The Company agrees that it will not and will
cause its Affiliates not to make any offer or sale of securities of the
Company of any class if, as a result of the doctrine of "integration"
referred to in Rule 502 under the Securities Act, such offer or sale would
render invalid (for the purpose of (i) the sale of the Securities by the
Company to the Initial Purchasers, (ii) the resale of the Securities by the
Initial Purchasers to Subsequent Purchasers or (iii) the resale of the
Securities by such Subsequent Purchasers to others) the exemption from the
registration requirements of the Securities Act provided by Section 4(2)
thereof or by Rule 144A thereunder or otherwise.
(k) Legended Securities. Each certificate for a Note will bear the
legend contained in "Transfer Restrictions" in the Offering Memorandum for
the time period and upon the other terms stated in the Offering Memorandum.
(l) PORTAL. The Company will use its reasonable efforts to cause such
Notes to be eligible for the National Association of Securities Dealers,
Inc. PORTAL market (the "PORTAL market").
(m) Form D. The Company will file with the Commission, not later than
15 days after the Closing Date, five copies of a notice on Form D under the
Securities Act (one of which will be manually signed by a person duly
authorized by the Company); will otherwise comply with the requirements of
Rule 503 under the Securities Act; and will furnish promptly to NationsBanc
Montgomery Securities LLC and Donaldson, Lufkin & Jenrette Securities
Corporation evidence of each such required timely filing (including a copy
thereof).
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(n) Due Diligence. In connection with the original distribution of
the Securities, the Company agrees that, prior to any offer or resale of
the Securities by the Initial Purchasers, the Initial Purchasers and
counsel for the Initial Purchasers shall have the right to make reasonable
inquiries into the business of the Company and its subsidiaries. The
Company also agrees to provide answers to each prospective Subsequent
Purchaser of Securities who so requests concerning the Company and its
subsidiaries (to the extent that such information is publicly available or
can be acquired and made available to prospective Subsequent Purchasers
without unreasonable effort or expense and to the extent the provision
thereof is not prohibited by applicable law) and the terms and conditions
of the offering of the Securities, as provided in the Offering Memorandum.
(o) Periodic Reporting Obligations. So long as any of the Notes are
outstanding, the Company shall file, on a timely basis, with the Commission
and the Nasdaq National Market all reports and documents required to be
filed under the Exchange Act.
(p) Agreement Not To Offer or Sell Additional Securities. During the
period of 90 days following the date of this Agreement, the Company will
not, subject to certain exceptions, without the prior written consent of
NationsBanc Montgomery Securities LLC (which consent may be withheld at the
sole discretion of NationsBanc Montgomery Securities LLC), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the meaning
of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement
under the Securities Act in respect of, any shares of Common Stock, options
or warrants to acquire shares of the Common Stock or securities
exchangeable or exercisable for or convertible into shares of Common Stock
(other than as contemplated by this Agreement); provided, however, that the
Company may issue shares of its Common Stock or options to purchase its
Common Stock, or Common Stock upon exercise of options, pursuant to any
stock option, stock purchase, stock bonus or other stock plan or
arrangement described in the Offering Memorandum; and provided further that
the Company may issue shares of its Common Stock or options or other rights
to issue its Common Stock in acquisitions, but only if the holders of such
shares, options, or shares issued upon exercise of such options acquired in
connection with an acquisition, agree in writing not to sell, offer,
dispose of or otherwise transfer any such shares or options during such 90
day period without the prior written consent of NationsBanc Montgomery
Securities LLC (which consent may be withheld at the sole discretion of the
NationsBanc Montgomery Securities LLC).
(q) Lock-Up Agreement from Certain Stockholders of the Company. On
the date hereof, the Company shall have furnished to the Initial Purchasers
an agreement in the form of Exhibit B hereto from those stockholders listed
on Exhibit C hereto, and each such agreement shall be in full force and
effect on each of the Closing Date.
(r) Waiver of Registration Rights. The Company agrees that it will
not alter, amend or otherwise modify without the prior written consent of
NationsBanc Montgomery Securities LLC the Waivers of Registration Rights,
each dated as of March
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18, 1998, executed by certain holders of registration rights with respect
to the Common Stock.
NationsBanc Montgomery Securities LLC, on behalf of the several
Initial Purchasers, may, in its sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Notes and the Shares issuable upon conversion of the Notes (including all
printing and engraving costs), (ii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Securities to the
Initial Purchasers, (iii) all fees and expenses of the Company's counsel,
independent public or certified public accountants and other advisors, (iv) all
costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of each preliminary Offering Memorandum and
the Offering Memorandum (including financial statements and exhibits), and all
amendments and supplements thereto, this Agreement, the Registration Rights
Agreement, the Indenture, the DTC Agreement, the Notes and the Shares issuable
upon conversion of the Notes, (v) all filing fees, reasonable attorneys' fees
and expenses incurred by the Company or the Initial Purchasers in connection
with qualifying or registering (or obtaining exemptions from the qualification
or registration of) all or any part of the Notes and the Shares issuable upon
conversion of the Notes for offer and sale under the Blue Sky laws and, if
requested by the Initial Purchasers, preparing and printing a "Blue Sky Survey"
or memorandum, and any supplements thereto, advising the Initial Purchasers of
such qualifications, registrations and exemptions, (vi) the fees and expenses of
the Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (vii) any fees payable in
connection with the listing of the Securities with the PORTAL market, (viii) all
fees and expenses (including reasonable fees and expenses of counsel) of the
Company in connection with approval of the Securities by DTC for "book-entry"
transfer, (ix) the fees and expenses of any transfer agent or registrar for the
Shares, (x) the fees and expenses incurred in connection with the listing of the
Shares issuable upon conversion of the Notes on the Nasdaq National Market, and
(xi) the performance by the Company of its other obligations under this
Agreement. Except as provided in this Section 4, Section 6, Section 8 and
Section 9 hereof, the Initial Purchasers shall pay their own expenses, including
the fees and disbursements of their counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the several Initial Purchasers to purchase and pay for the
Initial Notes on the First Closing Date and the Additional Notes on the Second
Closing Date, if any, shall be subject to the accuracy of the representations
and warranties on the part of the Company set forth in Section 1 hereof as of
the date hereof and as of the First Closing Date or the Second Closing Date, as
the case may be, as though then made and to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof , the Initial
Purchasers shall have received from Deloitte & Touche LLP, independent
public or certified public accountants for the Company, a letter dated such
date addressed to the Initial Purchasers, in form and substance
satisfactory to the Initial Purchasers, containing statements and
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information of the type ordinarily included in accountant's "comfort
letters" to Initial Purchasers, delivered according to Statement of
Auditing Standards Nos. 72 and 76 (or any successor bulletins), with
respect to the audited and unaudited financial statements and certain
financial information contained in the Offering Memorandum.
(b) No Material Adverse Change. For the period from and after the
date of this Agreement and prior to each Closing Date in the judgment of
the Initial Purchasers there shall not have occurred any Material Adverse
Change; and
(c) Opinion of Counsel for the Company. On each Closing Date the
Initial Purchasers shall have received the favorable opinion of Riordan &
McKinzie, counsel for the Company, dated as of such Closing Date, in
substantially the form of which is attached as Exhibit A.
(d) Opinion of Counsel for the Initial Purchasers. On each Closing
Date the Initial Purchasers shall have received the favorable opinion of
Latham & Watkins, counsel for the Initial Purchasers, dated as of such
Closing Date, with respect to such matters as may be reasonably requested
by the Initial Purchasers.
(e) Officers' Certificate. On each Closing Date the Initial
Purchasers shall have received a written certificate executed by the
Chairman of the Board, Chief Executive Officer or President of the Company
and the Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of such Closing Date, to the effect set forth in subsection
(b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement
and prior to such Closing Date there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the
Company set forth in Section 1 of this Agreement are true and correct with
the same force and effect as though expressly made on and as of such
Closing Date; and
(iii) the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(f) Bring-down Comfort Letter. On the First Closing Date and the
Second Closing Date, if any, the Initial Purchasers shall have received
from Deloitte & Touche LLP, independent public or certified public
accountants for the Company, a letter dated such date, in form and
substance satisfactory to the Initial Purchasers, to the effect that they
reaffirm the statements made in the letter furnished by them pursuant to
subsection (a) of this Section 5, except that the specified date referred
to therein for the carrying out of procedures shall be no more than three
business days prior to the Closing Date.
(g) PORTAL Listing. At each Closing Date the Notes shall have been
designated for trading on the PORTAL market.
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(h) Registration Rights Agreement. The Company shall have entered
into the Registration Rights Agreement and the Initial Purchasers shall
have received executed counterparts thereof.
(i) Additional Documents. On or before each Closing Date, the Initial
Purchasers and counsel for the Initial Purchasers shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of
any of the representations and warranties, or the satisfaction of any of
the conditions or agreements, herein contained.
(j) Approval of Listing. At each Closing Date, the Shares issuable
upon conversion of the Notes shall have been approved for listing on the
Nasdaq National Market, subject only to official notice of issuance.
If any condition specified in this Section 5 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to such Closing
Date, which termination shall be without liability on the part of any party to
any other party, except that Section 4, Section 6, Section 8 and Section 9 shall
at all times be effective and shall survive such termination.
SECTION 6. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If this
Agreement is terminated by the Initial Purchasers pursuant to Section 5 or
Section 10, or if the sale to the Initial Purchasers of the Securities on either
the First Closing Date or the Second Closing Date, if applicable, is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the Initial Purchasers (or such Initial
Purchasers as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Initial Purchasers in connection with the
unconsummated purchase and the offering and sale of the Securities, including
but not limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
SECTION 7. OFFER, SALE AND RESALE PROCEDURES. Each of the Initial
Purchasers and the Company hereby establish and agree to observe the following
procedures in connection with the offer and sale of the Securities:
(i) Offers and Sales only to Qualified Institutional Buyers.
Offers and sales of the Securities will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the
jurisdictions in which such offers or sales are made. Each such offer
or sale shall only be made to persons whom the offeror or seller
reasonably believes to be qualified institutional buyers in the United
States (as defined in Rule 144A under the Securities Act) ("Qualified
Institutional Buyers").
(ii) No General Solicitation. The Securities will be offered by
approaching prospective Subsequent Purchasers on an individual basis.
No general solicitation or general advertising (within the meaning of
Rule 502(c)
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under the Securities Act) will be used in the United States in
connection with the offering of the Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-
bank Subsequent Purchaser of a Note acting as a fiduciary for one or
more third parties, in connection with an offer and sale to such
purchaser pursuant to clause (i) above, each third party shall, in the
judgment of the applicable Initial Purchaser, be a Qualified
Institutional Buyer.
(iv) Restrictions on Transfer. Upon original issuance by the
Company, and until such time as the same is no longer required under
the applicable requirements of the Securities Act, the Securities (and
all securities issued in exchange therefor or in substitution thereof,
other than the Exchange Securities) shall bear the following legend:
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U S. PERSONS, EXCEPT AS
SET FORTH BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) (A "QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AN "IAI"), OR (C) IT IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHO THE HOLDER REASONABLY BELIEVES IS A
QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES
ACT, (C) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF THE COMPANY SO REQUESTS, AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
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BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, THE
TRUSTEE AND THE REGISTRAR) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.
Following the sale of the Securities by the Initial Purchasers to
Subsequent Purchasers pursuant to the terms hereof, the Initial
Purchasers shall not be liable or responsible to the Company for any
losses, damages or liabilities suffered or incurred by the Company,
including any losses, damages or liabilities under the Securities Act,
arising from or relating to any resale or transfer of any Security by
a Subsequent Purchaser.
(v) Delivery of Offering Memorandum. Each Initial Purchaser will
deliver to each purchaser of the Securities from such Initial
Purchaser, in connection with its original distribution of the
Securities, a copy of the Offering Memorandum, as amended and
supplemented at the date of such delivery.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser, its officers and
employees, and each person, if any, who controls any Initial Purchaser
within the meaning of the Securities Act and the Exchange Act against any
loss, claim, damage, liability or expense, as incurred, to which such
Initial Purchaser or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based
(i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; or (ii) in whole or in part upon any inaccuracy
in the representations and warranties of the Company contained herein; or
(iii) in whole or in part upon any failure of the Company to perform its
obligations hereunder or under law; or (iv) any act or failure to act or
any alleged act or failure to act by any Initial Purchaser in connection
with, or relating in any
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manner to, the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising
out of or based upon any matter covered by clause (i) above, provided that
the Company shall not be liable under this clause (iv) to the extent that a
court of competent jurisdiction shall have determined by a final judgment
that such loss, claim, damage, liability or action resulted directly from
any such acts or failures to act undertaken or omitted to be taken by such
Initial Purchaser through its gross negligence or willful misconduct; and
to reimburse each Initial Purchaser and each such controlling person for
any and all legal and other expenses (including the reasonable fees and
disbursements of counsel chosen by NationsBanc Montgomery Securities LLC
and Donaldson, Lufkin & Jenrette Securities Corporation) as such expenses
are reasonably incurred by such Initial Purchaser or such controlling
person in connection with investigating, defending, settling, compromising
or paying any such loss, claim, damage, liability, expense or action;
provided, however, that the foregoing indemnity agreement shall not apply
with respect to an Initial Purchaser to any loss, claim, damage, liability
or expense to the extent, but only to the extent, arising out of or based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information regarding such Initial Purchaser furnished to the Company by
such Initial Purchasers expressly for use in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto); and provided, further, that with respect to any Preliminary
Offering Memorandum, the foregoing indemnity agreement shall not inure to
the benefit of any Initial Purchaser from whom the person asserting any
loss, claim, damage, liability or expense purchased Securities, or any
person controlling such Initial Purchaser, if copies of the Offering
Memorandum were timely delivered to the Initial Purchaser pursuant to
Section 2 and a copy of the Offering Memorandum (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Initial
Purchaser to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Securities to such
person, and if the Offering Memorandum (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage,
liability or expense. The indemnity agreement set forth in this Section
8(a) shall be in addition to any liabilities that the Company may otherwise
have.
(b) Indemnification of the Company, its Directors and Officers. Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company and each of its directors and each person, if any, who
controls the Company within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company or any such director, or controlling person
may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of such Initial Purchaser), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged
omission to
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state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), (i) in reliance upon and in conformity with written information
furnished to the Company by the Initial Purchasers expressly for use
therein; or (ii) with respect to the Initial Purchaser from whom the person
asserting the loss, claim, damage or liability purchased securities, made
in any Preliminary Offering Memorandum if a copy of the Offering Memorandum
(as amended or supplemented, if the Company shall have furnished the
Initial Purchasers with such amendments or supplements thereto on a timely
basis) was not delivered by or on behalf of any of the Initial Purchasers
to the person asserting the claim or action, if required by law to have
been so delivered by the Initial Purchaser seeking indemnification, at or
prior to the written confirmation of the sale of the Securities, and that
the Offering Memorandum (as amended or supplemented) would have corrected
such untrue statement or omission; and to reimburse the Company, or any
such director or controlling person for any and all legal and other
expenses as such expenses are reasonably incurred by the Company, or any
such director or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company hereby acknowledges that the only
information that the Initial Purchasers have furnished to the Company
expressly for use in any Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto) are the statements set
forth (A) as the last paragraph on the front cover page and the last
paragraph on the inside front cover page of the Offering Memorandum
concerning stabilization by the Initial Purchasers and (B) in the fifth
paragraph and the second sentence of the seventh paragraph under the
caption "Plan of Distribution" in the Offering Memorandum and (C) in the
first clause of the second sentence under the caption "Risk Factors--
Absence of Public Market for Notes" and the first clause of the fifth
sentence under the caption "Description of Notes--Absence of Public Market;
Transfer Restrictions;" and the Initial Purchasers confirm that such
statements are correct. The indemnity agreement set forth in this Section
8(b) shall be in addition to any liabilities that each Initial Purchaser
may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
for contribution or otherwise than under the indemnity agreement contained
in this Section 8 or to the extent it is not prejudiced as a proximate
result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in and, to the extent that it shall elect, jointly
with all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified
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<PAGE>
party; provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that a conflict may arise between the
positions of the indemnifying party and the indemnified party in conducting
the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of such
indemnifying party's election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (together with local counsel), approved by the indemnifying party
(NationsBanc Montgomery Securities LLC in the case of Section 8(b) and
Section 9), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 8(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement, compromise or consent to
the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been
a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes
an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION.
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If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, and the total discount received by the Initial Purchasers bear to
the aggregate initial offering price of the Securities. The relative fault of
the Company, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company, on
the one hand, or the Initial Purchasers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the discount received by
such Initial Purchaser in connection with the Securities distributed by it. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this Section 9 are several,
and not joint, in proportion to
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their respective commitments as set forth opposite their names in Schedule A.
For purposes of this Section 9, each officer and employee of an Initial
Purchaser and each person, if any, who controls an Initial Purchaser within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Initial Purchaser, and each director of the Company, each
officer of the Company and each person, if any, who controls the Company with
the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as the Company.
SECTION 10. TERMINATION OF THIS AGREEMENT. Prior to each Closing Date,
this Agreement may be terminated by the Initial Purchasers by notice given to
the Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market, or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York or
California authorities; (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions, as
in the judgment of the Initial Purchasers is material and adverse and makes it
impracticable to market the Securities in the manner and on the terms described
in the Offering Memorandum or to enforce contracts for the sale of securities;
(iv) in the judgment of the Initial Purchasers there shall have occurred any
Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Initial Purchasers may interfere materially with the
conduct of the business and operations of the Company regardless of whether or
not such loss shall have been insured. Any termination pursuant to this Section
10 shall be without liability on the part of (a) the Company to any Initial
Purchaser, except that the Company shall be obligated to reimburse the expenses
of the Initial Purchasers pursuant to Sections 4 and 6 hereof, (b) any Initial
Purchaser to the Company, or (c) of any party hereto to any other party except
that the provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
SECTION 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Initial Purchasers
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Initial
Purchaser or the Company or any of its or their partners, officers or directors
or any controlling person, as the case may be, and will survive delivery of and
payment for the Securities sold hereunder and any termination of this Agreement.
SECTION 12. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
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If to the Initial Purchasers:
NationsBanc Montgomery Securities LLC
600 Montgomery Street
San Francisco, California 94111
Facsimile: 415-249-5558
Attention: Richard A. Smith
with a copy to:
NationsBanc Montgomery Securities LLC
600 Montgomery Street
San Francisco, California 94111
Facsimile: (415) 249-5553
Attention: David A. Baylor, Esq.
If to the Company:
Data Processing Resources Corporation
4400 MacArthur Boulevard, Suite 600
Newport Beach, California 92660
(714) 752-5850
Attention: Mary Ellen Weaver
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 13. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 16 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.
SECTION 14. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 15. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
SECTION 16. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS. If
any one or more of the several Initial Purchasers shall fail or refuse to
purchase Securities that it or they
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have agreed to purchase hereunder on either the First or the Second Closing
Date, and the aggregate number of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on such
date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule A bears to the aggregate number of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Initial Purchasers with the consent
of the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on such date. If any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities and the aggregate number of Securities
with respect to which such default occurs exceeds 10% of the aggregate number of
Securities to be purchased on either the First or the Second Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other party
(other than as set forth in the last sentence of the next paragraph) except that
the provisions of Section 4, Section 6, Section 8 and Section 9 shall at all
times be effective and shall survive such termination. In any such case either
the Initial Purchasers or the Company shall have the right to postpone either
the First or the Second Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Offering Memorandum or any other documents or arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser" shall be
deemed to include any person substituted for a defaulting Initial Purchaser
under this Section 16. Any action taken under this Section 16 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
two or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary Offering
Memorandum and the Offering Memorandum (and any amendments and supplements
thereto), as required by the Securities Act and the Exchange Act.
27
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
DATA PROCESSING RESOURCES CORPORATION
By:/s/ MICHAEL A. PIRAINO
-------------------------
Name: Michael A. Piraino
Title: Executive Vice President and Chief
Financial Offier
The foregoing Purchase Agreement is hereby confirmed and accepted by
the Initial Purchasers in San Francisco, California as of the date first above
written.
NATIONSBANC MONTGOMERY SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
ROBERT W. BAIRD & CO. INCORPORATED
LEHMAN BROTHERS INC.
c/o NATIONSBANC MONTGOMERY SECURITIES LLC
600 Montgomery Street
San Francisco, California 94111
As the several Initial Purchasers
By NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ REVELL HORSEY
-------------------------------
Name: Revell Horsey
Title: Senior Managing Director
By DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: /s/ JAMES T. SINGTON
------------------------
Name: James T. Sington
Title: Managing Director
28
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
INITIAL PURCHASERS OF INITIAL NOTES OF ADDITIONAL
TO BE PURCHASED NOTES TO BE
PURCHASED
<S> <C> <C>
NationsBanc Montgomery Securities LLC............... $ 35,000,000 $ 5,250,000
Donaldson, Lufkin & Jenrette Securities
Corporation........................................ $ 35,000,000 $ 5,250,000
Robert W. Baird & Co. Incorporated.................. $ 15,000,000 $ 2,250,000
Lehman Brothers, Inc................................ $ 15,000,000 $ 2,250,000
Total.......................................... $100,000,000 $15,000,000
</TABLE>
A-1
<PAGE>
EXHIBIT B
LOCK UP AGREEMENT
NationsBanc Montgomery Securities LLC
Donaldson, Lufkin & Jenrette Securities Corporation
Robert W. Baird & Co. Incorporated
Lehman Brothers Inc.
c/o NationsBanc Montgomery Securities LLC
600 Montgomery Street
San Francisco, California 94111
Re: Data Processing Resources Corporation
Ladies & Gentlemen:
Data Processing Resources Corporation (the "Company") proposes to carry out
an offering of its 5 1/4% Subordinated Convertible Notes (the "Offering") for
which you will act as the Initial Purchasers (the "Initial Purchasers"). The
undersigned is an owner of record or beneficially of certain shares of Common
Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock, or is an executive officer of
director of the Company. The undersigned recognizes that the Offering will be
of benefit to the undersigned and will benefit the Company by, among other
things, raising additional capital for its operations. The undersigned
acknowledges that you are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into the purchase arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of NationsBanc
Montgomery Securities LLC, directly or indirectly, sell, offer, contract or
grant any option to sell (including without limitation any short sale), pledge,
transfer, establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) by the undersigned, or publicly announce the undersigned's
intention to do any of the foregoing, for a period commencing on the date hereof
and continuing to a date 90 days from the date of the Purchase Agreement (the
"Purchase Agreement"), dated March 18, 1998, between the Company and the Initial
Purchases (the "Sale Date"); provided, however, that the individuals listed in
Exhibit C to the Purchase Agreement, including the undersigned (the "Covered
Individuals"), may sell, without the consent of NationsBanc Montgomery
Securities LLC, an aggregate total of 100,000 shares of Common Stock commencing
at any time after 30 days after the Sale Date, and an additional aggregate total
of 100,000 shares of Common Stock commencing at any time after 60 days after the
Sale Date; provided, however, that in no event shall the total number of shares
of Common Stock sold by
B-1
<PAGE>
the Covered Individuals pursuant to this exception exceed, in the aggregate,
200,000 shares of Common Stock. Notwithstanding the foregoing, the undersigned
may make bona fide gifts or transfers, effected through private transfers to
family members of the undersigned, provided such donee agrees to be bound by
restrictions the same as those set forth in this letter, and the initial
purchasers agree that there will be no costs or expenses imposed. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against transfer of the shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common stock held by the undersigned except in compliance with the foregoing
restrictions.
This agreement is irrevocable and will be binding on the undersigned and
the respective successors heirs, personal representatives and assigns of the
undersigned.
Dated:__________________, 1998
____________________________
Printed Name of Holder
By:_________________________
Signature
____________________________
Printed Name of Person Signing
(and indicate capacity of person signing
if signing as custodian, trustee, or on
behalf of an entity)
B-2
<PAGE>
EXHIBIT C
Mary Ellen Weaver
David M. Connell
Michael A. Piraino
Richard E. Earley
J. Christopher Lewis
Patrick C. Haden
Christopher W. Lancashire
Alicia R. Lancashire
C-1
<PAGE>
================================================================================
EXECUTION COPY
EXHIBIT 4.1
DATA PROCESSING RESOURCES CORPORATION
ISSUER,
AND
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
TRUSTEE
______________________________________
INDENTURE
Dated as of March 24, 1998
______________________________
$115,000,000
5 1/4% Convertible Subordinated Notes due 2005
================================================================================
<PAGE>
TABLE OF CONTENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions....................................................... 1
Section 1.2. Incorporation by Reference of TIA................................. 10
Section 1.3. Rules of Construction............................................. 11
ARTICLE II. THE SECURITIES
Section 2.1. Form and Dating................................................... 11
Section 2.2. Execution and Authentication...................................... 12
Section 2.3. Registrar and Paying Agent........................................ 12
Section 2.4. Paying Agent to Hold Assets in Trust.............................. 13
Section 2.5. Securityholder Lists.............................................. 13
Section 2.6. Transfer and Exchange............................................. 14
Section 2.7. Replacement Securities............................................ 21
Section 2.8. Outstanding Securities............................................ 21
Section 2.9. Treasury Securities............................................... 22
Section 2.10. Temporary Securities.............................................. 22
Section 2.11. Cancellation...................................................... 22
Section 2.12. Defaulted Interest................................................ 23
ARTICLE III. REDEMPTION
Section 3.1. Right of Redemption............................................... 24
Section 3.2. Notices to Trustee................................................ 24
Section 3.3. Selection of Securities to Be Redeemed............................ 25
Section 3.4. Notice of Redemption.............................................. 25
Section 3.5. Effect of Notice of Redemption.................................... 26
Section 3.6. Deposit of Redemption Price....................................... 27
Section 3.7. Securities Redeemed in Part....................................... 27
ARTICLE IV. COVENANTS
Section 4.1. Payment of Securities............................................. 28
Section 4.2. Maintenance of Office or Agency................................... 28
Section 4.3. Corporate Existence............................................... 28
Section 4.4. Payment of Taxes and Other Claims................................. 29
Section 4.5. Maintenance of Properties and Insurance........................... 29
Section 4.6. Compliance Certificate; Notice of Default......................... 30
Section 4.7. Reports........................................................... 30
Section 4.8. Limitation on Status as Investment Company........................ 31
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 4.9. Waiver of Stay, Extension or Usury Laws........................... 31
Section 4.10. Rule 144A Information Requirement................................. 31
ARTICLE V. SUCCESSOR CORPORATION
Section 5.1. Limitation on Merger, Sale or Consolidation....................... 31
Section 5.2. Successor Corporation Substituted................................. 33
ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default................................................. 33
Section 6.2. Acceleration of Maturity Rescission and Annulment................. 35
Section 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee... 37
Section 6.4. Trustee May File Proofs of Claim.................................. 37
Section 6.5. Trustee May Enforce Claims Without Possession of Securities....... 38
Section 6.6. Priorities........................................................ 39
Section 6.7. Limitation on Suits............................................... 39
Section 6.8. Unconditional Right of Holders to Receive Principal,
Premium, Interest and Liquidated Damages....................................... 40
Section 6.9. Rights and Remedies Cumulative.................................... 40
Section 6.10. Delay or Omission Not Waiver...................................... 40
Section 6.11. Control by Holders................................................ 41
Section 6.12. Waiver of Past Default............................................ 41
Section 6.13. Undertaking for Costs............................................. 41
Section 6.14. Restoration of Rights and Remedies................................ 42
ARTICLE VII. TRUSTEE
Section 7.1. Duties of Trustee................................................. 42
Section 7.2. Rights of Trustee................................................. 44
Section 7.3. Individual Rights of Trustee...................................... 45
Section 7.4. Trustee's Disclaimer.............................................. 45
Section 7.5. Notice of Default................................................. 45
Section 7.6. Reports by Trustee to Holders..................................... 46
Section 7.7. Compensation and Indemnity........................................ 46
Section 7.8. Replacement of Trustee............................................ 47
Section 7.9. Successor Trustee by Merger, Etc.................................. 48
Section 7.10. Eligibility; Disqualification..................................... 48
Section 7.11. Preferential Collection of Claims Against Company................. 49
Section 7.12. Other Capacities.................................................. 49
ARTICLE VIII. SATISFACTION AND DISCHARGE
Section 8.1. Satisfaction and Discharge of Indenture........................... 49
Section 8.2. Repayment to the Company.......................................... 49
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Supplemental Indentures Without Consent of Holders............... 50
Section 9.2. Amendments, Supplemental Indentures and Waivers with
Consent of Holders.............................................................. 51
Section 9.3. Compliance with TIA.............................................. 52
Section 9.4. Revocation and Effect of Consents................................ 52
Section 9.5. Notation on or Exchange of Securities............................ 53
Section 9.6. Trustee to Sign Amendments, Etc.................................. 53
ARTICLE X. MEETINGS OF SECURITYHOLDERS
Section 10.1. Purposes for Which Meetings May Be Called........................ 53
Section 10.2. Manner of Calling Meetings....................................... 54
Section 10.3. Calling of Meetings by the Company or Holders.................... 54
Section 10.4. Who May Attend and Vote at Meetings.............................. 55
Section 10.5. Regulations May Be Made by Trustee; Conduct of the............... 55
Section 10.6. Voting at the Meeting and Record to Be Kept...................... 56
Section 10.7. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting.......................................... 56
ARTICLE XI. RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL
Section 11.1. Repurchase of Securities at Option of the Holder Upon a.......... 57
Change of Control............................................................... 57
Section 11.2. Rescission of Change of Control Determination.................... 59
ARTICLE XII. SUBORDINATION
Section 12.1. Securities Subordinated to Senior Indebtedness................... 60
Section 12.2. No Payment on Securities in Certain Circumstances................ 60
Section 12.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution Liquidation or Reorganization....................... 62
Section 12.4. Securityholders to Be Subrogated to Rights of Holders of
Senior Indebtedness............................................................. 63
Section 12.5. Obligations of the Company Unconditional......................... 63
Section 12.6. Trustee and Other Agents Entitled to Assume Payments Not
Prohibited in Absence of Notice................................................. 64
Section 12.7. Application by Trustee of Assets Deposited with It.
ERROR! BOOKMARK NOT DEFINED.
Section 12.8. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness................................ 64
Section 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities..................................................... 65
Section 12.10. Right of Trustee to Hold Senior Indebtedness..................... 65
Section 12.11. Article XII Not to Prevent Events of Default..................... 65
Section 12.12. No Duty of Trustee and Other Agents to Holders of Senior
Indebtedness.................................................................... 66
ARTICLE XIII. CONVERSION OF SECURITIES
Section 13.1. Conversion Privilege............................................. 66
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
Section 13.2. Exercise of Conversion Privilege.................................. 66
Section 13.3. Fractional Interests.............................................. 67
Section 13.4. Conversion Price.................................................. 68
Section 13.5. Adjustment of Conversion Price.................................... 68
Section 13.6. Continuation of Conversion Privilege in Case of Reclassification,. 74
Change, Merger, Consolidation or Sale of Assets.................................. 74
Section 13.7. Notice of Certain Events.......................................... 75
Section 13.8. Taxes on Conversion............................................... 76
Section 13.9. Company to Provide Stock.......................................... 76
Section 13.10. Disclaimer of Responsibility for Certain Matters.................. 77
Section 13.11. Return of Funds Deposited for Redemption of Converted
Securities....................................................................... 77
ARTICLE XIV. MISCELLANEOUS
Section 14.1. TIA Controls...................................................... 77
Section 14.2. Notices........................................................... 78
Section 14.3. Communications by Holders with Other Holders...................... 79
Section 14.4. Certificate and Opinion as to Conditions Precedent................ 79
Section 14.5. Statements Required in Certificate or Opinion..................... 79
Section 14.6. Rules by Trustee, Paying Agent, Registrar......................... 79
Section 14.7. Legal Holidays.................................................... 80
Section 14.8. No Adverse Interpretation of Other Agreements..................... 80
Section 14.9. No Recourse Against Others........................................ 80
Section 14.10. Successors........................................................ 81
Section 14.11. Duplicate Originals............................................... 81
Section 14.12. Severability...................................................... 82
Section 14.13. Table of Contents, Headings, Etc.................................. 82
Section 14.14. Qualification Indenture........................................... 82
Section 14.15. Registration Rights............................................... 82
EXHIBIT A - Form of Security...................................................... A-1
EXHIBIT B - Accredited Investor Letter............................................ B-1
EXHIBIT C - Form of Conversion Notice............................................. B-1
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- -------
<S> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.8;
7.10;
14.2
(c) N.A.
311(a) 7.11
(b) 7.10
(c) N.A.
312(a) 2.5
(b) 14.3
(c) 14.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6;
14.2
(d) 7.6
314(a) 4.6;
13.2
(b) N.A.
(c)(1) 2.2;
7.2;
14.4
(c)(2) 7.2;
14.4
(c)(3) N.A.
(d) N.A.
(e) 14.5
(f) N.A.
315(a) 7.1(b)
(b) 7.5;
7.6;
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
14.2
(c) 7.1(a)
(d) 2.8;
6.11;
7.1(b)(c)
(e) 6.13
316(a)(last sentence) 2.9
(a)(1)(A) 6.11
(a)(1)(B) 6.12
(a)(2) N.A.
(b) 6.12;
6.7
317(a)(1) 6.3
(a)(2) 6.4
(b) 2.4
318(a) 14.1
</TABLE>
______________________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemend a part
of the Indenture.
vi
<PAGE>
INDENTURE, dated as of March 24, 1998, between DATA PROCESSING
RESOURCES CORPORATION, a California corporation (the "Company"), and State
Street Bank and Trust Company of California, N.A., a national banking
association formed under the laws of the United States of America, as Trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 5
1/4% Convertible Subordinated Notes due 2005:
ARTICLE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
-----------
"Acceleration Notice" shall have the meaning specified in Section
-------------------
6.2.
"Affiliate" means any person directly or indirectly controlling
---------
or controlled by or under direct or indirect common control with the Company.
For purposes of this definition, the terms "control," "controlling" and
"controlled" mean the power to direct the management and policies of a person,
directly or through one or more intermediaries, whether through the ownership of
voting securities, by contract, or otherwise.
"Agent" means the Trustee and any Registrar, Paying Agent, co-
-----
Registrar, authenticating agent or Securities Custodian.
"Bankruptcy Law" means Title 11, U. S. Code, or any similar
--------------
federal, state or foreign law for the relief of debtors.
"Beneficial Owner" for purposes of the definition of Change of
----------------
Control has the meaning attributed to it in Rules 13d-3 and 13d-5 under the
Exchange Act (as in effect on the Issue Date), whether or not applicable.
"Board of Directors" means, with respect to any person, the Board
------------------
of Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"Board Resolution" means, with respect to any person, a duly
----------------
adopted resolution of the Board of Directors of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
------------
Friday that is not a day on which banking institutions in New York, New York or
Los Angeles, California are authorized or obligated by law or executive order to
close.
<PAGE>
"Capitalized Lease Obligation" means, as to any Person, the obligation
----------------------------
of such Person to pay rent or other amounts under a lease to which such Person
is a party that is required to be classified and accounted for as a capital
lease obligation under GAAP.
"Capital Stock" means, with respect to any corporation, any and all
-------------
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Cash" means 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.
"Change of Control" means (i) an event or series of events as a result
-----------------
of which any "person" or "group" (as such terms are used in Sections 13(d)(3)
and 14(d) of the Exchange Act) (excluding the Company or any wholly owned
Subsidiary thereof or any employee benefit plan of the Company or any such
Subsidiary) is or becomes, directly or indirectly, the Beneficial Owner of more
than 50% of the Voting Stock, (ii) the completion of any consolidation with or
merger of the Company into any other Person, or sale, conveyance, transfer or
lease by the Company of all or substantially all of its assets to any Person, or
any merger of any other Person into the Company in a single transaction or
series of related transactions, and, in the case of any such transaction or
series of related transactions, the outstanding Common Stock of the Company is
changed or exchanged as a result, unless the shareholders of the Company
immediately before such transaction own, directly or indirectly, immediately
following such transaction, at least a majority of the combined voting power of
the outstanding voting securities of the Person resulting from such transaction
in substantially the same proportion as their ownership of the Voting Stock
immediately before such transaction, (iii) such time as the Continuing Directors
do not constitute a majority of the Board of Directors of the Company (or, if
applicable, a successor corporation to the Company) or (iv) if the Common Stock
is neither listed for trading on a U.S. national securities exchange nor
approved for trading on an established automated over-the-counter trading market
in the United States; provided that a Change of Control shall not be deemed to
have occurred if either (x) the last sale price of the Common Stock for any five
Trading Days during the 10 Trading Days immediately preceding the Change of
Control is at least equal to 105% of the Conversion Price in effect on such day,
or (y) with respect to a merger or consolidation otherwise constituting a Change
of Control described in clause (ii) above, at least 90% of the consideration in
such transaction or transactions consists of common stock or securities
convertible into common stock that are, or upon issuance will be, traded on a
United States national securities exchange or approved for quotation on the
Nasdaq National Market.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Common Stock" means the Company's common stock, no par value, or as
------------
such stock may be reconstituted from time to time.
2
<PAGE>
"Company" means the party named as such in this Indenture until a
-------
successor replaces it pursuant to the Indenture, and thereafter means such
successor.
"Continuing Director" means at any date a member of the Company's
-------------------
Board of Directors (i) who was a member of such board on the Issue Date or (ii)
who was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Company's Board of Directors was recommended or endorsed by at
least a majority of the directors who were Continuing Directors at the time of
such nomination or election.
"Conversion Price" shall have the meaning specified in Section 13.4.
----------------
"Conversion Shares" shall have the meaning specified in Section
-----------------
13.5(1).
"Credit Facility" shall mean the five-year, $60.0 million
---------------
Revolving/Term Loan Agreement, dated September 25, 1997, as amended to date,
between the Company and a bank syndicate led by Wells Fargo, N.A., and all
related or ancillary documents and agreements, as such agreements may be
amended, extended, renewed, restated, supplemented or otherwise modified from
time to time, together with any refunding, refinancing or replacement of such
facility.
"Custodian" means any receiver, trustee, assignee, liquidator,
---------
sequestrator or similar official under any Bankruptcy Law.
"Date of Conversion" shall have the meaning specified in Section 13.2.
------------------
"Default" means any event or condition that is, or after notice or
-------
passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
------------------
"Definitive Securities" means Securities that are in the form of
---------------------
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 1 and 3 thereof.
"Depositary" means, with respect to the Securities issuable or issued
----------
in whole or in part in global form, the person specified in Section 2.3 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Capital Stock" means, with respect to the Company,
--------------------------
Capital Stock of the Company that, by its terms or by the terms of any security
into which it is convertible, exercisable or exchangeable, is, or upon the
happening of an event or the passage of time would
3
<PAGE>
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by the Company, in whole or in part, on or prior to the Stated
Maturity of the Notes, provided that only the portion of such Capital Stock
which is so convertible, exercisable, exchangeable or redeemable or subject to
repurchase prior to such Stated Maturity shall be deemed to be Disqualified
Capital Stock.
"Distribution Date" shall have the meaning specified in Section
-----------------
13.5(1).
"DTC" shall have the meaning specified in Section 2.3.
---
"Event of Default" shall have the meaning specified in Section 6.1.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated by the SEC thereunder.
"Expiration Time" shall have the meaning specified in Section 13.5(f).
---------------
"GAAP" means United States generally accepted accounting principles
----
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession which are in effect in the United States; provided,
--------
however, that for purposes of determining compliance with covenants in the
- -------
Indenture, "GAAP" means such generally accepted accounting principles which are
in effect as of the Issue Date.
"Global Security" means a Security that contains the paragraph
---------------
referred to in footnote 1 and the additional schedule referred to in footnote 3
to the form of Security attached hereto as Exhibit A.
"Holder" or "Securityholder" means the person in whose name a Security
------ --------------
is registered on the Registrar's books.
"Indebtedness" of any person means, without duplication, (a) all
------------
liabilities and obligations, contingent or otherwise, of any such Person, (i) in
respect of borrowed money (whether or not the lender has recourse to all or any
portion of the assets of such Person), (ii) evidenced by credit or loan
agreements, bonds, notes, debentures or similar instruments (including, without
limitation, notes or similar instruments given in connection with the
acquisition of any business, properties or assets of any kind), (iii) evidenced
by bankers' acceptances or similar instruments issued or accepted by banks, (iv)
for the payment of money relating to a Capitalized Lease Obligation or (v)
evidenced by a letter of credit, bank guarantee or a reimbursement obligation of
such Person with respect to any letter of credit; (b) all obligations
4
<PAGE>
of such Person issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities arising in
the ordinary course of business); (c) all net obligations of such person under
Interest Swap and Hedging Obligations; (d) all liabilities of others of the kind
described in the preceding clauses (a), (b) or (c) that such Person has
guaranteed or that is otherwise its legal liability, or which is secured by a
lien on property of such Person, and all obligations to purchase, redeem or
acquire any Capital Stock; and (e) any and all deferrals, renewals, extensions,
modifications, replacements, restatements, refinancings and refundings (whether
direct or indirect) of, or any indebtedness or obligation issued in exchange
for, any liability of the kind described in any of the preceding clauses (a),
(b), (c) or (d), or this clause (e), whether or not between or among the same
parties.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time in accordance with the terms hereof.
"Initial Purchasers" means NationsBanc Montgomery Securities LLC,
------------------
Donaldson, Lufkin & Jenrette Securities Corporation, Robert W. Baird & Co.
Incorporated and Lehman Brothers Inc.
"Interest Payment Date" means the stated due date of an installment of
---------------------
interest on the Securities.
"Interest Swap and Hedging Obligation" means the obligations of any
------------------------------------
Person under any interest rate or currency protection agreement, future
agreement, option agreement, swap agreement, cap agreement or other interest
rate or currency hedge agreement, collar agreement or other similar agreement or
arrangement to which such Person is a party or beneficiary.
"Issue Date" means the date of first issuance of the Securities under
----------
this Indenture.
"Junior Securities" means any Qualified Capital Stock and any
-----------------
Indebtedness of the Company that is fully subordinated in right of payment to
the Securities and has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of the
Securities.
"Last Sale Price" shall have the meaning specified in Section 13.3.
---------------
"Legal Holiday" shall have the meaning specified in Section 14.7.
-------------
"Lien" means any mortgage, lien, pledge, charge, security interest or
----
other encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable
5
<PAGE>
law (including any conditional sale or other title retention agreement and any
lease deemed to constitute a security interest and any option or other agreement
to give any security interest).
"Liquidated Damages" shall have the meaning specified in the
------------------
Registration Rights Agreement.
"non-electing share" shall have the meaning specified in Section 13.6.
------------------
"Non-Payment Default" shall have the meaning specified in Section
-------------------
12.2(b).
"Notice of Default" shall have the meaning specified in Section
-----------------
6.1(3), (4) or (5).
"Offer" shall have the meaning specified in Section 13.5(f).
-----
"Officer" means, with respect to the Company, the Chief Executive
-------
Officer, the President, any Vice President, the Chief Financial Officer, the
Treasurer, the Controller, or the Secretary or the Assistant Secretary of the
Company.
"Officers' Certificate" means, with respect to the Company, a
---------------------
certificate signed by two Officers of the Company and otherwise complying with
the requirements of Section 2.2, if applicable, and Sections 14.4 and 14.5.
"Opinion of Counsel" means a written opinion from legal counsel who is
------------------
reasonably acceptable to the Trustee and which complies with the requirements of
Sections 14.4 and 14.5.
"Paving Agent" shall have the meaning specified in Section 2.3.
-------------
"Payment Blockage Period" shall have the meaning specified in Section
-----------------------
12.2(b).
"Payment Default" shall have the meaning specified in Section 12.2(a).
---------------
"Payment Notice" shall have the meaning specified in Section 12.2(b).
--------------
"Person" or "person" means any corporation, individual, limited
------ ------
liability company, joint stock company, joint venture, partnership,
unincorporated association, governmental regulatory entity, country, state or
political subdivision thereof, trust, municipality or other entity.
"principal" of any Indebtedness means the principal of such
---------
Indebtedness plus, without duplication, any applicable premium, if any, on such
Indebtedness.
6
<PAGE>
"property" means any right or interest in or to property or assets of
--------
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Agreement" means that certain Purchase Agreement, dated
------------------
March --, 1998, by and among the Company and the Initial Purchasers, as such
agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Purchased Shares" shall have the meaning specified in Section
----------------
13.5(f).
"Qualified Capital Stock" means any Capital Stock of the Company that
-----------------------
is not Disqualified Capital Stock.
"Record Date" means a record date specified in the Securities whether
-----------
or not such record date is a Business Day.
"Redemption Date," when used with respect to any Security to be
---------------
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security attached hereto as
Exhibit A.
7
<PAGE>
"Redemption Price," when used with respect to any Security to be
----------------
redeemed, means the redemption price for such redemption pursuant to Paragraph 5
in the form of Security attached hereto as Exhibit A, which shall include,
without duplication, in each case, accrued and unpaid interest and Liquidated
Damages, if any, to but excluding, the Redemption Date.
"Registrar" shall have the meaning specified in Section 2.3.
---------
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement, dated the date hereof, by and among the Initial Purchasers and the
Company, as such agreement may be amended, modified or supplemented from time to
time in accordance with the terms thereof.
"Repurchase Date" shall have the meaning specified in Section 11.1
---------------
(a).
"Repurchase Offer" shall have the meaning specified in Section
----------------
11.1(b).
"Repurchase Offer Period" shall have the meaning specified in Section
-----------------------
11.1 (b).
"Repurchase Price" shall have the meaning specified in Section 11.1
----------------
(a).
"Repurchase Put Date" shall have the meaning specified in Section 1
-------------------
1.1(b).
"Restricted Security" means a Security, unless or until it has been
-------------------
(i) disposed of in a transaction effectively registered under the Securities Act
or (ii) distributed to the public pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
---
"Securities" means, collectively, the --% Convertible Subordinated
----------
Notes due 2005, as supplemented from time to time in accordance with the terms
hereof, issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to
--------------------
the Securities in global form, or any successor entity thereto.
"Senior Indebtedness" means all obligations of the Company to pay the
-------------------
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all letters of
credit, reimbursement obligations and fees, costs, expenses and other amounts
and liabilities accrued or due on or in connection with, any Indebtedness of the
Company, whether
8
<PAGE>
outstanding on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company, unless the
instrument creating or evidencing such Indebtedness expressly provides that such
Indebtedness is not senior or superior in right of payment to the Securities or
is pari passu with, or subordinated to, the Securities; provided that in no
event shall Senior Indebtedness include (a) Indebtedness of the Company owed or
owing to any Subsidiary of the Company, (b) Indebtedness of the Company
representing or with respect to any account payable or other accrued current
liability or obligation incurred in the ordinary course of business in
connection with the obtaining of materials or services, (c) any liability for
taxes owed or owing by the Company or any Subsidiary of the Company, or (d) the
Securities..
"Shelf Registration Statement" shall have the meaning specified in the
----------------------------
Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which is a "significant
----------------------
subsidiary" of the Company within the meaning of Rule 1-02(w) of Regulation S-X
promulgated by the Commission as in effect as of the date of the Indenture.
"Special Record Date" for payment of any Defaulted Interest means a
-------------------
date fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Security, means April
---------------
1, 2005.
"Subsidiary" with respect to any Person, means (i) a corporation a
----------
majority of whose Capital Stock with voting power normally entitled to vote in
the election of directors is at the time, directly or indirectly, owned by such
Person, by such Person and one or more Subsidiaries of such Person or by one or
more Subsidiaries of such Person, (ii) a partnership in which such Person or a
Subsidiary of such Person is, at the time, a general partner and owns alone or
together with one or more Subsidiaries of such Person a majority of the
partnership interests, or (iii) any other Person (other than a corporation) in
which such Person, one or more Subsidiaries of such Person, or such Person and
one or more Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof has at least majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
---
77aaa-77bbbb) as in effect on the date of the execution of this Indenture.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
-----------
Friday, other than any day on which securities are not traded on the Nasdaq
National Market (or, if the Common Stock is not listed thereon, on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading).
"Transfer Restricted Securities" means Securities that bear or are
------------------------------
required to bear the legend set forth in Section 2.6 hereof.
9
<PAGE>
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
-------------
division (or any successor group) of the Trustee or any other officer of the
Trustee customarily performing functions similar to those performed by the
Persons who at that time shall be such officers, and also means, with respect to
a particular corporate trust matter, any other officer of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"U.S. Government Obligations" means direct noncallable obligations
---------------------------
of, or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Voting Stock" means the combined voting power of the then
------------
outstanding securities entitled to vote generally in elections of directors,
managers or trustees, as applicable, of the Company or any successor entity.
Section 1.2. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
----------
"Indenture securities" means the Securities.
--------------------
"Indenture securityholder" means a Holder or a Securityholder.
------------------------
"Indenture to be qualified" means this Indenture.
-------------------------
"Indenture trustee" or "institutional trustee" means the Trustee.
----------------- ---------------------
"Obligor" on the indenture securities means the Company and any
-------
other obliger on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
10
<PAGE>
Section 1.3. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II.
THE SECURITIES
Section 2.1. Form and Dating.
---------------
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto, which
Exhibit is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company shall
approve the form of the Securities and any notation, legend or endorsement on
them. Any such notations, legends or endorsements not contained in the form of
Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. If any term or provision of a Security limits, qualifies, or conflicts
with the terms of this Indenture, the terms of this Indenture shall control.
11
<PAGE>
Section 2.2. Execution and Authentication.
----------------------------
Two Officers shall sign the Security for the Company by manual or
facsimile signature. The Company's seal may be, but is not required to be,
impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that or any office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless and
the Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate the Securities for original issue in
the aggregate principal amount of up to $115,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify (i) the amount of Securities to be authenticated and (ii) the date on
which the Securities are to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $115,000,000 except as
provided in Section 2.7; provided, that Securities in excess of $100,000,000
--------
shall not be issued other than pursuant to the overallotment option granted by
the Company to the Initial Purchasers as provided in the Purchase Agreement.
Upon the written order of the Company in the form of an Officers' Certificate,
the Trustee shall authenticate Securities in substitution of Securities
originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate of the Company,
or any of their respective Subsidiaries, and has the same protections under the
Indenture.
Securities shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof.
Section 2.3. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency in Los Angeles,
California, where Securities may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Securities may be
presented for payment ("Paying Agent") and where notices and demands to or upon
the Company in respect of the Securities may be served. The
12
<PAGE>
Company may act as Registrar or Paying Agent, except that, for the purposes of
Articles III, VIII and XI and as otherwise specified in the Indenture, neither
the Company nor any Affiliate of the Company shall act as Paying Agent. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-Registrars and one or more
additional Paying Agents. The term "Paying Agent" includes any additional Paying
Agent. The Company hereby initially appoints the Trustee as Registrar and Paying
Agent, and the Trustee hereby initially agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Securities.
Section 2.4. Paying Agent to Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium, if any, interest on or Liquidated Damages with respect
to, the Securities (whether such assets have been distributed to it by the
Company or any other obligor on the Securities), and shall notify the Trustee in
writing of any Default in making any such payment. If either of the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate such assets
and hold them as a separate trust fund for the benefit of the Holders or the
Trustee. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any Payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent (if other than the Company or an
Affiliate of the Company) shall have no further liability for such assets.
Section 2.5. Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before the third Business Day
13
<PAGE>
preceding each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee
reasonably may require of the names and addresses of Holders.
Section 2.6. Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Definitive Securities. When Definitive
----------------------------------------------
Securities are presented to the Registrar or a co-Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations;
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
- -------- -------
exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the
Registrar or co-Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of a Definitive Security that is a Transfer
Restricted Security, shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Definitive Security is being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
substantially the form set forth on the reverse of the Security); or
(B) if such Definitive Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act,
a certification to that effect (in substantially the form set forth on
the reverse of the Security); or
(C) if such Definitive Security is being transferred to an
institutional investor that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act, a
certification to that effect (in substantially the form set forth on
the Security)
14
<PAGE>
accompanied by a certificate in the form of Exhibit B to the Indenture
to the Trustee and if either the Trustee or the Company so requests,
an Opinion of Counsel satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act;
(D) if such Definitive Security is being transferred in
accordance with Regulation S under the Securities Act, a certification
to that effect (in substantially the form set forth on the Security)
and if either the Trustee or the Company so requests, an Opinion of
Counsel satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act; or
(E) if such Definitive Security is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the
form set forth on the Security) and if either the Trustee or the
Company so requests, an Opinion of Counsel satisfactory to the Company
to the effect that such transfer is in compliance with the Securities
Act.
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
------------------------------------------------------------------
Interest in a Global Security. A Definitive Security may not be exchanged for a
- -----------------------------
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer in
form reasonably satisfactory to the Company and the Registrar or Co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing,
together with:
(i) if such Definitive Security is a Transfer Restricted Security,
certification, substantially in the form set forth on the Security, that
such Definitive Security is being transferred (x) to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act or (y) in accordance
with Regulation S under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer Restricted
Security, written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an endorsement on the Global Security to
reflect an increase in the aggregate principal amount of the Securities
represented by the applicable Global Security;
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing
15
<PAGE>
between the Depositary and the Securities Custodian, the aggregate principal
amount of Securities represented by the appropriate Global Security to be
increased accordingly. If no Global Securities are then outstanding, the Company
shall issue and the Trustee, upon receipt of the authentication order of the
Company in the form of an Officers' Certificate, shall authenticate an
appropriate new Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and exchange
------------------------------------------
of Global Securities or beneficial interests therein shall be effected through
the Depositary, in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Security for a
------------------------------------------------------------
Definitive Security.
- -------------------
(i) Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depositary from the Depositary
or its nominee on behalf of any Person having a beneficial interest in a
Global Security and upon receipt by the Trustee of a written order or such
other form of instructions as is customary for the Depositary or the Person
designated by the Depositary as having such a beneficial interest in a
Transfer Restricted Security only, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in substantially the
form set forth on the reverse of the Security); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act,
a certification to that effect from the transferor (in substantially
the form set forth on the reverse of the Security); or
(C) if such beneficial interest is being transferred to an
institutional investor that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act, a
certification to that effect (in substantially the form set forth on
the reverse of the Security) accompanied by a certificate in the form
of Exhibit B to the Indenture to the Trustee and if either the Trustee
or the Company so requests, an Opinion of Counsel satisfactory to the
Company to the effect that such transfer is in compliance with the
Securities Act;
16
<PAGE>
(D) if such beneficial interest is being transferred in
accordance with Regulation S under the Securities Act, a certification
to that effect (in substantially the form set forth on the reverse of
the Security) and if either the Trustee or the Company so requests, an
Opinion of Counsel satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect from the transferee or
transferor (in substantially the form set forth on the reverse of the
Security) and if either the Trustee or the Company so requests, an
Opinion of Counsel satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act;
then the Trustee or the Securities Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate principal
amount of the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an authentication order
in the form of an Officers' Certificate, the Trustee will authenticate and
deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.6(d) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
make such Definitive Securities available for delivery to the persons in
whose names such Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
----------------------------------------------------------
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Security
may not be transferred as a whole except (i) by the Depositary to a nominee of
the Depositary, (ii) by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or (iii) by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Securities in Absence of Depositary. If
----------------------------------------------------------------
at any time:
17
<PAGE>
(i) the Depositary for the Securities notifies the Company and the
Company notifies the Trustee in writing that the Depositary is no longer
willing or able to continue as Depositary for the Global Securities and a
successor Depositary for the Global Securities is not appointed by the
Company within 90 days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Securities under
this Indenture;
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will authenticate and make available for delivery Definitive Securities, in an
aggregate principal amount equal to the principal amount of the Global
Securities, in exchange for such Global Securities.
(g) Legends.
-------
(i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A "QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT (AN "IAI"), OR (C) IT IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO
A PERSON WHO THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN IAI THAT,
PRIOR TO
18
<PAGE>
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF THE COMPANY SO
REQUESTS, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE
SECURITIES ACT, (E) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security or that is represented by a Global Security, the
Registrar shall permit the Holder thereof to exchange such Transfer
Restricted Security for a Definitive Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security (1) in the case of a sale or
transfer pursuant to Rule 144 under the Securities Act, after delivery
of a customary Opinion of Counsel satisfactory to the Company to the
effect that such transfer is in compliance with the Securities Act or
(2) in the case of a sale or transfer
19
<PAGE>
pursuant to an effective registration statement under the
Securities Act; and
(B) any such Transfer Restricted Security represented
by a Global Security shall not be subject to the provisions
set forth in (i) above (such sales or transfers being
subject only to the provisions of Section 2.6(c) hereof).
(h) Cancellation and/or Adjustment of Global Security. At such
-------------------------------------------------
time as all beneficial interests in a Global Security have either been
exchanged for Definitive Securities, redeemed, repurchased or
canceled, such Global Security shall be returned to or retained and
canceled by the Trustee. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for
Definitive Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by such Global Security
shall be reduced and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the written
direction of the Trustee, to reflect such reduction.
(i) Obligations with respect to Transfers and Exchanges of
------------------------------------------------------
Definitive Securities.
- ---------------------
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee, upon receipt of the
authentication order of the Company in the form of an Officers'
Certificate, shall authenticate Definitive Securities and Global
Securities at the Registrar's or co-Registrar's written request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than
any such transfer taxes, assessments, or similar governmental
charge payable upon exchanges or transfers pursuant to Section
2.2 (fourth paragraph), 2.10, 3.7, 9.5, or 1 1.1 (final
paragraph)).
(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of (a) any Definitive
Security selected for redemption in whole or in part pursuant to
Article III, except the unredeemed portion of any Definitive
Security being redeemed in part, or (b) any Security for a period
beginning 15 days before the mailing of a notice of an offer to
repurchase pursuant to Article XI hereof or the mailing of a
notice of redemption of
20
<PAGE>
Securities pursuant to Article III hereof and ending at the close
of business on the day of such mailing.
Section 2.7. Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims and submits an affidavit or other evidence, satisfactory to
the Trustee, to the effect that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee, upon receipt of the
authentication order of the Company in the form of an Officers' Certificate,
shall authenticate a replacement Security if the Trustee's requirements are met.
If required by the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the conditions set forth in the preceding
paragraph.
Every new Security issued pursuant to this Section 2.7 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and such new Security shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies of any Holder with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
Section 2.8. Outstanding Securities.
----------------------
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security, except as provided in Section
2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), the replaced Security ceases to
be outstanding unless the Trustee
21
<PAGE>
receives proof satisfactory to it that the replaced Security is held by a bona
----
fide purchaser. A mutilated Security ceases to be outstanding upon surrender of
- ----
such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date the Paying Agent (other than the Company or an
Affiliate of the Company) holds Cash or U. S. Government Obligations sufficient
to pay all of the principal and interest due on the Securities payable on that
date in accordance with Section 3.6 hereof and payment of the Securities called
for redemption is not otherwise prohibited pursuant to Article XII hereof or
otherwise, then on and after that date, such Securities cease to be outstanding
and interest on them ceases to accrue.
Section 2.9. Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or an Affiliate of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that the Trustee knows are so owned shall be
disregarded.
Section 2.10. Temporary Securities.
--------------------
Until Definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but may
have variations that the Company reasonably and in good faith considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities in
exchange for temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
permanent Securities authenticated and delivered hereunder.
Section 2.11. Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no one else, shall
cancel and return all Securities surrendered for transfer, exchange, payment or
cancellation to the Company. Subject to Section 2.7, the Company may not issue
new Securities to replace Securities that have been paid or delivered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
22
<PAGE>
exchange for any Securities canceled as provided in this Section 2.11, except as
expressly permitted in the form of Securities and as permitted by this
Indenture.
Section 2.12. Defaulted Interest.
------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more predecessor Securities) is registered
at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest (collectively, herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant Record Date, and such Defaulted Interest may
be paid by the Company, at its election in each case, as provided in clause (1)
or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the
Securities (or their respective predecessor Securities) are
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of Cash equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the
proposed payment, such Cash when deposited to be held in
trust for the benefit of the persons entitled to such
Defaulted Interest as provided in this clause (1). Thereupon
the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than 15
Business Days and not less than 10 Business Days prior to
the date of the proposed payment and not less than 10
Business Days after the receipt by the Trustee of the notice
of the proposed payment ("Special Record Date"). The Trustee
shall promptly notify the Company in writing of such Special
Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder at
his address as it appears in the Security register not less
than 10 Business Days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as
aforesaid,
23
<PAGE>
such Defaulted Interest shall be paid to the persons in
whose names the Securities (or their respective predecessor
Securities) are registered on such Special Record Date and
shall no longer be payable pursuant to the following clause
(2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be
required by such exchange, if, after written notice given by
the Company to the Trustee of the proposed payment pursuant
to this clause, such manner shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section 2.12, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the grace period provided in Section 6.1 shall be paid to the
Holders of the Securities as of the regular Record Date for such Interest
Payment Date for which interest has not been paid.
ARTICLE III.
REDEMPTION
Section 3.1. Right of Redemption.
--------------------
Redemption of Securities, as permitted by any provision of this
Indenture, shall be made in accordance with Paragraph 5 of the Securities and
this Article III. The Company will not have the right to redeem any Securities
prior to April 1, 2001. On or after April 1, 2001, the Company will have the
right to redeem all or any part of the Securities at the Redemption Prices
specified in Paragraph 5 therein under the caption "Redemption," in each case
including accrued and unpaid interest and Liquidated Damages, if any, to, but
excluding, the Redemption Date.
Section 3.2. Notices to Trustee.
-------------------
If the Company elects to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date, the
principal amount of Securities to be redeemed, the Redemption Price and whether
it wants the Trustee, on behalf of the Company, to give notice of redemption to
the Holders.
24
<PAGE>
If the Company elects to reduce the principal amount of Securities to
be redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee for
cancellation, it shall so notify the Trustee in writing of the amount of the
reduction and deliver such Securities with such notice.
The Company shall give each notice to the Trustee provided for in this
Section 3.2 at least 30 days but not more than 60 days before the Redemption
Date (unless a shorter notice period shall be satisfactory to the Trustee). Any
such notice to the Trustee may be canceled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
Section 3.3. Selection of Securities to Be Redeemed.
--------------------------------------
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on a
pro rata basis, by lot or by such other method as the Trustee shall determine to
- --------
be fair and appropriate and in such manner as complies with any applicable
depositary, legal and stock exchange or automated quotation system requirements.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 may be redeemed only in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
Section 3.4. Notice of Redemption.
---------------------
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to the Trustee and each Holder whose Securities are to be redeemed at
such Holder's address as it appears on the security register maintained by the
Registrar. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice of
redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date, and that the Securities called for
redemption may not be converted after the Business Day immediately
prior to the Redemption Date;
25
<PAGE>
(2) the Redemption Price, including the amount of accrued and
unpaid interest and Liquidated Damages, if any, to be paid upon
such redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent at the address specified in such notice to
collect the Redemption Price;
(5) that, unless (a) the Company defaults in its obligation to
deposit Cash with the Paying Agent in accordance with Section 3.6
hereof or (b) such redemption payment is prohibited pursuant to
Article XII hereof or otherwise, interest on, and Liquidated
Damages with respect to, Securities called for redemption ceases to
accrue on and after the Redemption Date and the only remaining
right of the Holders of such Securities is to receive payment of
the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to, but excluding the Redemption Date,
upon surrender to the Paying Agent of the Securities called for
redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion of
the principal amount, equal to $1,000 or any integral multiple
thereof, of such Security to be redeemed and that, on or after the
Redemption Date, upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed
portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to
be redeemed, as well as the aggregate principal amount of such
Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.4
and pursuant to the redemption provisions of Paragraph 5 of the
Securities.
Section 3.5. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to, but excluding,
26
<PAGE>
the Redemption Date. Upon surrender to the Trustee or Paying Agent, such
Securities called for redemption shall be paid at the Redemption Price,
including accrued and unpaid interest and Liquidated Damages, if any, to, but
excluding, the Redemption Date; provided that if the Redemption Date is after a
--------
regular Record Date and on or prior to the corresponding Interest Payment Date,
the accrued interest and Liquidated Damages, if any, shall be payable to the
Holder of the redeemed Securities registered on the relevant Record Date; and
provided, further, that if a Redemption Date is a Legal Holiday, payment shall
- -------- -------
be made on the next succeeding Business Day and no interest or Liquidated
Damages shall accrue for the period from such Redemption Date to such succeeding
Business Day.
Section 3.6. Deposit of Redemption Price.
---------------------------
Prior to 9:00 a.m. Los Angeles time on the Redemption Date, the
Company shall deposit with the Paying Agent (other than the Company or an
Affiliate of the Company) Cash sufficient to pay the Redemption Price of,
including accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to, all Securities to be redeemed on such Redemption Date (other than
Securities or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancellation). The Paying Agent
shall promptly return to the Company any Cash so deposited which is not required
for that purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not prohibited under Article XII or otherwise, interest and
Liquidated Damages, if any, on the Securities to be redeemed will cease to
accrue on and after the applicable Redemption Date, whether or not such
Securities are presented for payment. Notwithstanding anything herein to the
contrary, if any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, Liquidated
Damages shall continue to accrue and be paid from the Redemption Date if so
required pursuant to Section 3 of the Registration Rights Agreement and interest
shall continue to accrue and be paid from the Redemption Date until such payment
is made on the unpaid principal, and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the rate and in the manner
provided in Section 4.1 hereof and the Security.
Section 3.7. Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee, upon receipt of a written order of the
Company in the form of an Officers' Certificate, shall thereafter authenticate
and make available for delivery to the Holder, without service charge to the
Holder, a new Security or Securities equal in principal amount to the unredeemed
portion of the Security surrendered.
27
<PAGE>
ARTICLE IV.
COVENANTS
Section 4.1. Payment of Securities.
----------------------
The Company shall pay the principal of, interest on, and Liquidated
Damages with respect to, the Securities on the dates and in the manner provided
in the Securities and the Registration Rights Agreement, as applicable. An
installment of principal of, interest on, or Liquidated Damages with respect to,
the Securities shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company or an Affiliate of the Company) holds for
the benefit of the Holders, on or before 9:00 a.m. Los Angeles time on that
date, Cash deposited and designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
Section 4.2. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in Los Angeles, California, an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange and for
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 14.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
- -------- -------
relieve the Company of its obligation to maintain an office or agency in Los
Angeles, California, for such purposes. The Company shall give prior written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. The Company hereby initially
designates the Corporate Trust Office of the Trustee in Los Angeles, California,
as such office.
Section 4.3. Corporate Existence.
--------------------
Subject to Article V, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence in accordance with
28
<PAGE>
its organizational documents and the rights (charter and statutory) and
corporate franchises of the Company; provided, however, that the Company shall
--------- -------
not be required to preserve, with respect to itself, any right or franchise, if
(a) the Company shall, in good faith, reasonably determine that the preservation
thereof is no longer desirable in the conduct of the business of such entity and
(b) the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 4.4. Payment of Taxes and Other Claims.
---------------------------------
Except with respect to immaterial items, the Company shall, and shall
cause each of its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes, assessments
and governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon the Company or any of
its Subsidiaries or any of their respective properties and assets and (ii) all
lawful claims, whether for labor, materials, supplies, services or anything
else, which have become due and payable and which by law have or may become a
Lien upon the property and assets of the Company or any of its Subsidiaries;
provided, however, that neither the Company nor any Subsidiary shall be required
- -------- -------
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which disputed amounts adequate
reserves have been established in accordance with GAAP.
Section 4.5. Maintenance of Properties and Insurance.
---------------------------------------
The Company shall cause all material properties used or useful to the
conduct of its business and the business of each of its Subsidiaries to be
maintained and kept in good condition, repair and working order (reasonable wear
and tear excepted) and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals and replacements thereof, all as in its
reasonable judgment may be necessary, so that the business carried on in
connection therewith may be properly conducted at all times; provided, however,
-------- --------
that nothing in this Section 4. 5 shall prevent the Company or any Subsidiary
from discontinuing any operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is (a), in the
judgment of the Company, desirable in the conduct of the business of such entity
and (b) would not have a material adverse effect on the financial condition of
the Company or on the Company's ability to perform its obligations hereunder or
under the Securities.
The Company shall provide, or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the Company is adequate and appropriate for the conduct of the business of
the Company and such Subsidiaries in a prudent manner, with (except for self-
insurance) reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as shall be customary, in the reasonable, good
faith opinion of the Company and
29
<PAGE>
adequate and appropriate for the conduct of the business of the Company and such
Subsidiaries in a prudent manner for entities similarly situated in the
industry, unless failure to provide such insurance (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company or such Subsidiary.
Section 4.6. Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company shall deliver to the Trustee within 120
days after the end of its fiscal year an Officers' Certificate
complying with Section 314(a)(4) of the TIA and stating that a review
of its activities and the activities of its Subsidiaries during the
preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has
kept, observed, performed and fulfilled its obligations under this
Indenture and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure by the
Company or any Subsidiary of the Company to comply with any conditions
or covenants in this Indenture and, if such signor does know of such a
failure to comply, the certificate shall describe such failure with
reasonable particularity. The Officers' Certificate shall also notify
the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of
any Default, Event of Default or fact which would prohibit the making
of any payment to or by the Trustee in respect of the Securities, an
Officers' Certificate specifying such Default, Event of Default or
fact and what action the Company is taking or proposes to take with
respect thereto. The Trustee shall not be deemed to have knowledge of
any Default, any Event of Default or any such fact unless one of its
Trust Officers receives written notice thereof from the Company or any
of the Holders.
Section 4.7. Reports.
-------
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder, as their names and addresses appear on the security
register maintained by the Registrar, within 15 days after it is or would have
been required to file such with the SEC, annual and quarterly consolidated
financial statements substantially equivalent to financial statements that would
have been included in reports filed with the SEC if the Company were subject to
the requirements of Section 13 or 15(d) of the Exchange Act, including, with
respect to annual information only, a report thereon by the Company's certified
independent public accountants as such would be required in such reports to the
SEC and, in each case, together with a management's discussion and analysis of
financial condition and results of operations which would be so required.
30
<PAGE>
Section 4.8. Limitation on Status as Investment Company.
------------------------------------------
Neither the Company nor any of its Subsidiaries shall become an
"investment company" (as that term is defined in the Investment Company Act of
1940, as amended), or otherwise become subject to regulation under the
Investment Company Act.
Section 4.9. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law which would prohibit or forgive the Company from paying all or any
portion of the principal of, premium of, interest on, or Liquidated Damages with
respect to, the Securities as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 4.10. Rule 144A Information Requirement.
---------------------------------
If at any time there are Transfer Restricted Securities outstanding
and the Company shall cease to have a class of equity securities registered
under Section 12(g) of the Exchange Act or shall cease to be subject to Section
15(d) of the Exchange Act, the Company shall furnish, within a reasonable period
of time, to the Holders or beneficial holders of the Securities or the
underlying Common Stock and prospective purchasers of Securities or the
underlying Common Stock designated by the Holders of Transfer Restricted
Securities, upon their written request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act until such time as the
Shelf Registration Statement has become effective under the Securities Act. The
Company shall also furnish such information during the pendency of any
suspension of effectiveness of the Shelf Registration Statement.
ARTICLE V.
SUCCESSOR CORPORATION
Section 5.1. Limitation on Merger, Sale or Consolidation.
-------------------------------------------
(a) The Company shall not, directly or indirectly,
consolidate with or merge with or into another Person or sell, lease,
convey or transfer all or substantially all of its assets (computed on
a consolidated basis), whether in a single transaction or a series
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of related transactions, to another Person or group of affiliated
(other than to its wholly owned Subsidiaries), unless (i) either (a)
in the case of a merger or consolidation, the Company is the surviving
entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state
thereof or the District of Columbia and expressly assumes by
supplemental indenture all of the obligations of the Company in
connection with the Securities and the Indenture; (ii) no Default or
Event of Default shall exist or shall occur immediately before or
after giving effect to such transaction; and (iii) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and,
if a supplemental indenture is required, such supplemental indenture
comply with the Indenture and that all conditions precedent relating
to such transactions have been satisfied.
(b) For purposes of clause (a) of this Section 5.1 and
Section 13.6, the sale, lease, conveyance, assignment, transfer, or
other disposition of all or substantially all of the properties and
assets of one or more Subsidiaries of the Company, which properties
and assets, if held by the Company instead of such Subsidiaries, would
constitute all or substantially all of the properties and assets of
the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of
the Company, unless such disposition is to the Company.
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Section 5.2. Successor Corporation Substituted.
---------------------------------
Upon any permitted consolidation or merger or any permitted sale,
lease, conveyance or transfer of all or substantially all of the assets of the
Company in accordance with the foregoing, the successor corporation formed by
such consolidation or into which the Company is merged or to which such sale,
lease, conveyance or transfer is made, shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under the Indenture with
the same effect as if such successor corporation had been named therein as the
Company, and when a successor corporation duly assumes all of the obligations of
the Company pursuant hereto and pursuant to the Securities, the predecessor
shall be released from such obligations (except with respect to any obligations
that arise from or as a result of such transaction).
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. 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 caused voluntarily or involuntarily or effected, without limitation, 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):
(1) failure to pay any installment of interest on, or Liquidated
Damages with respect to, the Securities as and when the same becomes due
and payable, or to perform any conversion of the Securities required under
this Indenture, and the continuance of such failure for a period of 30
days, whether or not such payment is prohibited by Article XII;
(2) failure to pay all or any part of the principal of, or premium, if
any on the Securities when and as the same become due and payable at
maturity, redemption, by acceleration or otherwise, including, without
limitation, failure to pay all or any part of the Repurchase Price on the
Repurchase Date in accordance with Article XI, whether or not such payment
is prohibited by Article XII;
(3) failure by the Company to observe or perform any covenant or
agreement contained in the Securities or this Indenture (other than a
default in the performance of any covenant or agreement which is
specifically dealt with elsewhere in this Section
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6.1), and continuance of such failure 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 Holders of at least 25% in
aggregate principal amount of the then outstanding Securities, a written
notice specifying such failure, requesting it to be remedied and stating
that such notice is a "Notice of Default" hereunder;
(4) failure by the Company or any Significant Subsidiary to pay
principal, premium or interest when due (after giving effect to any
applicable period of grace) at maturity of any Indebtedness (other than
non-recourse obligations), in an amount in excess of $15,000,000 and the
continuance of such failure for 30 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 aggregate
principal amount of the then outstanding Securities, a written notice
specifying such default, requesting that it be remedied and stating that
such notice is a "Notice of Default" hereunder;
(5) default by the Company or any Significant Subsidiary with respect
to any Indebtedness (other than non-recourse obligations), which default
results in the acceleration of Indebtedness having a principal amount in
excess of $15,000,000 without such Indebtedness having been discharged or
such acceleration having been rescinded or annulled for 30 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
aggregate principal amount of the then outstanding Securities, a written
notice specifying such default, requesting that it be remedied and stating
that such notice is a "Notice of Default" hereunder;
(6) a decree, judgment, or order by a court of competent jurisdiction
shall have been entered adjudging the Company or any of its Significant
Subsidiaries as bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of the Company or any of its Significant
Subsidiaries under any bankruptcy or similar law, and such decree or order
shall have continued undischarged and unstayed for a period of 60 days; or
a decree or order of a court of competent jurisdiction over the appointment
of a receiver, liquidator, trustee, or assignee in bankruptcy or insolvency
of the Company, any of its Significant Subsidiaries, or of the property of
any such Person, or for the winding up or liquidation of the affairs of any
such Person, shall have been entered, and such decree, judgment, or order
shall have remained in force undischarged and unstayed for a period of 60
days;
(7) the Company or any of its Significant Subsidiaries shall institute
proceedings to be adjudicated a voluntary bankrupt, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization under any bankruptcy or similar
law or similar statute, or shall consent to the filing of any such
petition, or shall consent
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to the appointment of a Custodian, receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency of it or any of its assets or
property, or shall make a general assignment for the benefit of creditors,
or shall admit in writing its inability to pay its debts generally as they
become due, or shall, within the meaning of any Bankruptcy Law, become
insolvent, fail generally to pay its debts as they become due, or take any
corporate action in furtherance of or to facilitate, conditionally or
otherwise, any of the foregoing; or
(8) final unsatisfied judgments not covered by insurance of, or the
execution of a writ against the Company or any of its Significant
Subsidiaries, aggregating in excess of $15,000,000 at any one time shall
have been rendered against the Company or any of its Significant
Subsidiaries and not have been stayed, bonded or discharged for a period
(during which execution shall not be effectively stayed) of 60 days after
the right to appeal such judgment has expired (or, in the case of any such
final judgment which provides for payment over time, which shall so remain
unstayed, unhanded or undischarged beyond any applicable payment date
provided therein).
Notwithstanding the 60-day period and notice requirement contained in
Section 6. 1(3) above, with respect to a default under Article XI the 60-day
period referred to in Section 6.1(3) shall be deemed to have begun as of the
date the Change of Control notice is required to be sent in the event that the
Company has not complied with the provisions of Section 11.1 and the Trustee or
Holders of at least 25% in principal amount of the outstanding Securities
thereafter give the Notice of Default referred to in Section 6.1(3) to the
Company and, if applicable, the Trustee; provided, however, that if the breach
-------- -------
or default is a result of a default in the payment when due of the Repurchase
Price on the Repurchase Date, such Event of Default shall be deemed, for
purposes of this Section 6.1, to arise no later than on the final Repurchase
Date.
Section 6.2. Acceleration of Maturity Rescission and Annulment.
-------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Section 6.1(6) or (7) relating to the Company) occurs and is continuing, then in
every such case, unless the principal of all of the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of then outstanding Securities, by a
notice in writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all of the principal of the Securities (or
the Repurchase Price if the Event of Default includes failure to pay the
Repurchase Price, determined as set forth below), including in each case
premium, if any, accrued interest and Liquidated Damages on or with respect
thereto, to be due and payable immediately. If an Event of Default specified in
Section 6.1(6) or (7) relating to the Company occurs, all principal, premium, if
any, accrued interest and Liquidated Damages on or with respect thereto will be
immediately due and payable on all outstanding Securities without any
declaration or other act on the part of Trustee or the Holders.
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At any time after such a 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 provided in this Article VI, the Holders of no less
than a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee
Cash sufficient to pay
(A) all overdue interest on, and overdue Liquidated
Damages with respect to, all Securities,
(B) the principal of (and premium, if any, applicable
to) any Securities which would then be due otherwise than by
such declaration of acceleration, and interest thereon at
the rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest and Liquidated
Damages at the rate borne by the Securities,
(D) all sums paid or advanced by the Trustee hereunder
and the compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, and
(2) all Events of Default, other than the non-payment
of the principal of, premium, if any, interest on and
Liquidated Damages with respect to Securities that have
become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 6.12, including,
if applicable, any Event of Default relating to the
covenants contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event. No such waiver shall cure or waive any subsequent Default or Event of
Default or impair any right consequent thereon.
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Section 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if an Event of Default in payment of
principal, premium, interest or Liquidated Damages specified in clause (1) or
(2) of Section 6.1 occurs and is continuing, the Company shall, upon demand of
the Trustee, pay to it, for the benefit of the Holders of such Securities, the
whole amount then due and payable on such Securities for principal, premium (if
any), interest, Liquidated Damages and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal (and
premium, if any), Liquidated Damages and on any overdue interest, at the rate
borne by the Securities, and, in addition thereto, such further amount as shall
be sufficient to cover the costs, fees and expenses of collection, including
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.4. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (which term as used in this Section shall include any
predecessor Trustee) (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, interest or Liquidated
Damages) shall be entitled and empowered, by intervention in such proceeding or
otherwise to take any and all actions under the TIA, including
(1) to file and prove a claim for the whole amount of
principal (and premium, if any), interest and Liquidated
Damages owing and unpaid in respect of the Securities and to
file such other papers or documents as
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may be necessary or advisable in order to have the claims of
the Trustee (including any claim under Section 7.7 for the
compensation, fees, expenses, disbursements and advances of
the Trustee, its agent and counsel) and of the Holders
allowed in such judicial proceeding, and
(2) To collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same in accordance with Section 6.6;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the compensation, expenses, fees,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7. To the extent that the payment of
such compensation, expenses, fees, disbursements and advances of Trustee, its
agents and counsel and any other amounts due to the Trustee under Section 7.7
hereof out of the estate in any such judicial proceeding shall be denied for any
reason, payment of the same shall be secured by a perfected first priority
security interest in and lien on, and shall be paid out of, any and all
distributions, dividends, money securities and other properties that the Holders
may be entitled to receive in such proceeding whether in liquidation or under
any plan of reorganization or arrangement or otherwise, and any such security
interest and lien in favor of any predecessor Trustee shall be senior to the
security interest and lien in favor of the current Trustee.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.5. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, fees, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the Securities in respect
of which such judgment has been recovered.
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Section 6.6. Priorities.
-------------
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any), interest or Liquidated Damages, upon presentation of the Securities
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the Trustee (including any predecessor Trustee) in payment
of all amounts due pursuant to Section 7.7;
SECOND: To the holders of Senior Indebtedness of the Company to the
extent provided in Article XII;
THIRD: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), interest on and Liquidated Damages with
respect to, the Securities in respect or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal, premium (if
any), interest and Liquidated Damages, respectively; and
FOURTH: To whomsoever may be lawfully entitled thereto, the
remainder, if any.
Section 6.7. Limitation on Suits.
----------------------
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of then
outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities to be incurred or
reasonably probable to be incurred in compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
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(E) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of then outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 6.8. Unconditional Right of Holders to Receive Principal, Premium,
-------------------------------------------------------------
Interest and Liquidated Damages.
- -------------------------------
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any), interest on and
Liquidated Damages with respect to, such Security when due (including, in the
case of redemption, the Redemption Price on the applicable Redemption Date, and
in the case of the Repurchase Price, on the applicable Repurchase Date), to
convert such Security in accordance with Article XIII, and to institute suit for
the enforcement of any such payment and right to convert after such respective
dates, and such rights shall not be impaired without the consent of such Holder.
Section 6.9. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.10. Delay or Omission Not Waiver.
----------------------------
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
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Section 6.11. Control by Holders.
---------------------
The Holder or Holders of no less than a majority in aggregate
principal amount of then outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred upon the Trustee,
provided, that
- --------
(1) such direction shall be made in writing to the Trustee and shall
not be in conflict with any rule of law or with this Indenture,
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders not taking part in such direction,
and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 6.12. Waiver of Past Default.
----------------------
Holder or Holders of not less than a majority in aggregate principal
amount of then outstanding Securities may, on behalf of all Holders, prior to
the declaration of acceleration of the maturity of the Securities, waive any
past default hereunder and its consequences, except a default
(A) in the payment of the principal of, premium, if
any, interest on, or Liquidated Damages with respect to, any
Security not yet cured as specified in clauses (1) and (2)
of Section 6.1, or
(B) in respect of a covenant or provision hereof which,
under Article IX, cannot be modified or amended without the
consent of the Holder of each outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
Section 6.13. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against
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the Trustee for any action taken, suffered or omitted to be taken by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section 6.13 shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in aggregate principal amount of
then outstanding Securities, or to any suit instituted by any Holder for
enforcement of the payment of principal of, premium (if any), interest on or
Liquidated Damages with respect to, any Security on or after the respective
Stated Maturity of such Security (including, in the case of redemption, on or
after the Redemption Date).
Section 6.14. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
Section 7.1. Duties of Trustee.
------------------
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no others, and no covenants or obligations shall
be implied in or read into this Indenture which are adverse to the Trustee.
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(2) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not they
substantially conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1.
(2) The Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a written direction received by
it pursuant to Section 6.11.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any liability. The
Trustee shall be under no obligation to perform any of its rights or
duties hereunder or to take or omit to take any action under this
Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers unless such Holders shall
have offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
(e) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b), (c), (d) and (f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated
from other assets except to the extent required by law.
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Section 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1:
(a) The Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in
the document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and if the Trustee shall determine to make such further
inquiry or investigation it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel of its selection and may require an Officers'
Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its discretion, rights or powers conferred upon it by this
Indenture.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, notice, request, direction, consent,
order, bond, debenture, or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Holders, pursuant to the provisions
of this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company
shall be sufficient if signed by an Officer of the Company.
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(h) The Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article IV hereof. In
addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.1(1), 6.1(2) or 5.1, or (ii) any Default or
Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(i) No permissive right of the Trustee to act hereunder shall be
construed as a duty.
(j) in the administration of this Indenture the Trustee deems it
desirable that a matter be proved or established prior to taking,
suffering or omitting to take any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate,
an Opinion of Counsel, or both.
(k) The Trustee shall not be deemed to have notice or knowledge
(including actual knowledge) of any matter unless a Trust Officer has
actual knowledge thereof or unless written notice thereof is received
by the Trustee at the office specified in Section 14.2 and such notice
references the Securities generally, the Company or this Indenture.
Section 7.3. Individual Rights of Trustee.
-----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any of
its Subsidiaries, or their respective Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer.
---------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Registration Rights Agreement, the Offering Memorandum or
the Securities and it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
in the Securities, other than the Trustee's certificate of authentication, or
the use or application of any funds received by a Paying Agent other than the
Trustee.
Section 7.5. Notice of Default.
------------------
If a Default or an Event of Default occurs and is continuing and if it
is actually known to the Trustee, the Trustee shall mail to each Holder notice
of the uncured Default or Event of Default within 90 days after the later to
occur of (i) the occurrence of such Default or
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Event of Default or (ii) the date the Trustee becomes aware of such Default or
Event of Default. Except in the case of a Default or an Event of Default in
payment of principal (or premium, if any) of, interest on or Liquidated Damages
with respect to, any Security (including the payment of the Repurchase Price on
the Repurchase Date and the payment of the Redemption Price on the Redemption
Date), the Trustee may withhold the notice if and so long as a Trust Officer in
good faith determines that withholding the notice is in the interest of the
Holders.
Section 7.6. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each April 15 beginning with the April 15
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Holder a brief report dated as of such April 15 that complies with
TIA (S) 313(a). The Trustee also shall comply with TIA (S)(S) 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and, if required, filed with the SEC and each stock
exchange, if any, on which the Securities are listed.
Section 7.7. Compensation and Indemnity.
--------------------------
The Company agrees to pay to the Trustee from time to time such
compensation for its services as the parties shall agree from time to time and,
in the absence of such agreement, reasonable compensation for its acceptance of
this Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable disbursements,
expenses, fees and advances incurred or made by it. Such expenses shall include
the reasonable compensation, disbursements, fees and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company agrees to indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, employees, attorneys-in-fact and
agents for, and hold them harmless against, any claim, demand, expense
(including but not limited to reasonable compensation, fees, disbursements and
expenses of the Trustee's agents and counsel), loss or liability incurred by it
without negligence, bad faith or willful misconduct on its part, arising out of,
related to, or in connection with the administration of this trust and its
rights or duties hereunder including the reasonable costs and expenses, the
costs and expenses of enforcing this Indenture against the Company and of
defending itself against any claim (whether asserted by the Company, or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall notify
the Company
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promptly of any claim asserted against the Trustee for which it may seek
indemnity. The Company shall defend the claim and the Trustee shall provide
reasonable cooperation at the Company's expense in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel; provided, that the Company will not be required to pay such
--------
fees and expenses if it assumes the Trustee's defense and there is no conflict
of interest between the Company and the Trustee in connection with such defense.
The Company need not pay for any settlement made without its written consent.
The Company need not reimburse any expense or indemnify against any loss or
liability to the extent attributable to the negligence, bad faith or willful
misconduct of the Trustee.
To secure the Company's payment obligations in this Section 7.7, the
Trustee and each predecessor Trustee shall have a perfected lien prior to the
Securities on all assets held or collected by the Trustee, in its capacity as
Trustee, except assets held in trust to pay principal and premium, if any, of or
interest or Liquidated Damages on particular Securities. Any lien in favor of a
predecessor Trustee shall be senior to any lien in favor of the current Trustee.
When the Trustee incurs expenses or fees or renders services after an
Event of Default specified in Section 6.1(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive indefinitely, including upon the resignation or removal
of the Trustee, the discharge of the Company's obligations pursuant to Article
VIII of this Indenture and any rejection or termination of this Indenture under
any Bankruptcy Law.
Section 7.8. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in principal amount of then outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing. The Company, by Board of Directors resolution, may remove the Trustee
if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian, or other public officer takes charge of
the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
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No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section 7.8.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in principal amount of then outstanding Securities may,
with the Company's consent, appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately upon
delivery of such notice and provided that all sums owing to the retiring Trustee
provided for in Section 7.7 have been paid, the retiring Trustee shall transfer
all property held by it as trustee to the successor Trustee, subject to the lien
provided in Section 7.7, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in principal amount of then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any bona fide Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue indefinitely for
the benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
-----------------------------
The Trustee shall at all times satisfy the requirements of TIA (S)
310(a)(1), (2) and (5). The Trustee and its direct parent or, in the case of a
corporation included in a bank holding
48
<PAGE>
company system, the related bank holding company, shall have a combined capital
and surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
Section 7.12. Other Capacities.
----------------
All references in this Indenture to the Trustee shall be deemed to
refer to the Trustee in its capacity as Trustee and in its capacities as any
Agent, to the extent acting in such capacities, and every provision of this
Indenture relating to the conduct or affecting the liability or offering
protection, immunity or indemnity to the Trustee shall be deemed to apply with
the same force and effect to the Trustee acting in its capacity as any Agent.
ARTICLE VIII.
SATISFACTION AND DISCHARGE
Section 8.1. Satisfaction and Discharge of Indenture.
---------------------------------------
The Company may terminate its obligations under this Indenture
(subject to the provisions of this Article VIII and Section 7.7) when it shall
have delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than any Securities which shall have been destroyed, lost
or stolen and which shall have been replaced or paid as provided in Article II
hereof) and the following conditions shall be satisfied:
(1) The Company has paid all sums payable under the Indenture; and
(2) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent have been complied with as contemplated by this Section
8.1.
Section 8.2. Repayment to the Company.
------------------------
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, for the payment of the principal of, premium, if any, interest
on or Liquidated Damages with respect to any Security and remaining unclaimed
for two years after such
49
<PAGE>
principal, premium, if any, interest or Liquidated Damages has become due and
payable shall be paid to the Company on its written request; and the Holder of
such Security shall thereafter look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holder, the Company, when authorized by
Board Resolutions, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, 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 this Indenture, provided, that such action pursuant to
----------
this clause (1) does not adversely affect the interests of any Holder
in any respect;
(2) to create additional covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein conferred
upon the Company or to make any other change that does not adversely
affect the rights of any Holder, provided, that the Company has
--------
delivered to the Trustee an Opinion of Counsel stating that such
change pursuant to this clause (2) does not adversely affect the
rights of any Holder;
(3) to provide for collateral for or guarantors of the
Securities;
(4) to evidence the succession of another Person to the Company
and the assumption by any such successor of the obligations of the
Company herein and in the Securities in accordance with Article V; or
(5) to comply with the TIA.
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<PAGE>
Section 9.2. Amendments, Supplemental Indentures and Waivers with Consent of
---------------------------------------------------------------
Holders.
- -------
Subject to the last sentence of this paragraph, with the consent of
the Holders of not less than a majority in aggregate principal amount of then
outstanding Securities, by written act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by Board Resolutions, and the
Trustee may amend or supplement this Indenture or the Securities or 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 the Securities or of modifying in any manner the rights of the
Holders under this Indenture or the Securities. Subject to the last sentence of
this paragraph, the Holder or Holders of not less than a majority in aggregate
principal amount of then outstanding Securities may, in writing, waive
compliance by the Company with any provision of this Indenture or the
Securities. Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall, without the consent of the Holder of
each outstanding Security affected thereby:
(1) change the Stated Maturity of any Security or reduce the
principal amount thereof or the rate (or extend the time for payment)
of interest thereon or any premium payable upon the redemption
thereof, or change the place of payment where, or the coin or currency
in which, any Security or any premium or the interest thereon or
Liquidated Damages with respect thereto is payable, or impair the
right to institute suit for the conversion of any Security or the
enforcement of any such payment on or after the due date thereof
(including, in the case of redemption, on or after the Redemption
Date), or reduce the Repurchase Price, or alter the Repurchase Offer
or redemption provisions in a manner adverse to the Holders (other
than as set forth in Section 11.2);
(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in the
Indenture;
(3) adversely affect the right of such Holder to convert
Securities; or
(4) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Security affected thereby.
51
<PAGE>
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section 9.2 or
Section 9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or (at the option of the
Company) to all Holders, consideration for consent to such amendment, supplement
or waiver.
Section 9.3. Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by written notice to the
Company, the Trustee or the Person designated by the Company as the Person to
whom consents should be sent if such revocation is received by the Company or
such Person before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Securities have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not
52
<PAGE>
such Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.
Notwithstanding the preceding paragraph, after an amendment,
supplement or waiver becomes effective, it shall bind every Holder, unless it
makes a change described in any of clauses (1) through (4) of Section 9.2, in
which case, the amendment, supplement or waiver shall bind only each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security unless consent of all Holders has been obtained pursuant to clauses (1)
through (4) of Section 9.2.
Section 9.5. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms. Any
failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment, supplement or waiver.
Section 9.6. Trustee to Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
----------
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
ARTICLE X.
MEETINGS OF SECURITYHOLDERS
Section 10.1. Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article X for any of the following
purposes:
53
<PAGE>
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to waive or to consent to the waiving of any
Default or Event of Default hereunder and its consequences, or to take any other
action authorized to be taken by Securityholders pursuant to any of the
provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to the
provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to
provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on behalf of
the Holder or Holders of any specified aggregate principal amount of the
Securities under any other provision of this Indenture, or authorized or
permitted by law or (ii) which the Trustee deems necessary or appropriate in
connection with the administration of this Indenture.
Section 10.2. Manner of Calling Meetings.
--------------------------
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 10.1, to be held at such time and at such place
in Los Angeles, California or elsewhere as the Trustee shall determine. Notice
of every meeting of Securityholders, setting forth the time and place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be mailed at the Company's expense by the Trustee, first-class postage
prepaid, to the Company and to the Holders at their last addresses as they shall
appear on the registration books of the Registrar, not less than 10 nor more
than 60 days prior to the date fixed for a meeting.
Any meeting of Securityholders shall be valid without notice if the
Holders of all Securities then outstanding are present in Person or by proxy, or
if notice is waived before or after the meeting by the Holders of all Securities
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 10.3. Calling of Meetings by the Company or Holders.
---------------------------------------------
In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Securities then outstanding, shall have
requested the Trustee to call a meeting of Securityholders to take any action
specified in Section 10.1, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such written
request, then the Company or the Holders of Securities in the amount above
specified may determine the time
54
<PAGE>
and place in Los Angeles, California or elsewhere for such meeting and may call
such meeting for the purpose of taking such action, by mailing or causing to be
mailed notice thereof as provided in Section 10.2, or by causing notice thereof
to be published at least once in each of two successive calendar weeks (on any
Business Day during such week) in a newspaper or newspapers printed in the
English language, customarily published at least five days a week of a general
circulation in the City of New York, State of New York, the first such
publication to be not less than 10 nor more than 60 days prior to the date fixed
for the meeting.
Section 10.4. Who May Attend and Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Securityholders, a Person
shall (a) be a registered Holder of one or more Securities, or (b) be a Person
appointed by an instrument in writing as proxy for the registered Holder or
Holders of Securities. The only Persons who shall be entitled to be present or
to speak at any meeting of Securityholders shall be the Persons entitled to vote
at such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company, and its counsel.
Section 10.5. Regulations May Be Made by Company; Conduct of the Meeting:
-----------------------------------------------------------
Voting Rights: Adjournment.
- --------------------------
Notwithstanding any other provision of this Indenture, the Company may
make such reasonable regulations as it may deem advisable for any action by or
any meeting of Securityholders, in regard to proof of the holding of Securities
and of the appointment of proxies, and in regard to the appointment and duties
of inspectors of votes, and submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think appropriate. Such regulations may fix a
record date and time for determining the Holders of record of Securities
entitled to vote at such meeting, in which case those and only those Persons who
are Holders of Securities at the record date and time so fixed, or their
proxies, shall be entitled to vote at such meeting whether or not they shall be
such Holders at the time of the meeting.
The Holders shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 10.3, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Holders of a majority
in principal amount of the Securities represented at the meeting and entitled to
vote.
At any meeting each Securityholder or proxy shall be entitled to one
vote for each $1,000 principal amount of Securities held or represented by him,
in whole vote increments; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Securities challenged as not
outstanding and ruled by the chairman of the meeting to be not then
55
<PAGE>
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Securityholders. Any
meeting of Securityholders duly called pursuant to the provisions of Section
10.2 or Section 10.3 may be adjourned from time to time by vote of the Holder or
Holders of a majority in aggregate principal amount of the Securities
represented at the meeting and entitled to vote, and the meeting may be held as
so adjourned without further notice.
Section 10.6. Voting at the Meeting and Record to Be Kept.
-------------------------------------------
The vote upon any resolution submitted to any meeting of
Securityholders shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amount of the Securities voted by the ballot. The permanent
chairman of the meeting shall appoint two inspectors of votes, who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to such record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more Persons having knowledge of the facts, setting forth a
copy of the notice of the meeting and showing that such notice was mailed as
provided in Section 10.2 or published as provided in Section 10.3. The record
shall be signed and verified by the affidavits of the permanent chairman and the
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7. Exercise of Rights of Trustee or Holders May Not Be Hindered or
---------------------------------------------------------------
Delayed by Call of Meeting.
- --------------------------
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Securityholders or
any rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Securityholders under any of the provisions of
this Indenture or of the Securities.
56
<PAGE>
ARTICLE XI.
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL
Section 11.1. Repurchase of Securities at Option of the Holder Upon a Change of
-----------------------------------------------------------------
Control.
- -------
(a) Subject to Section 11.2, in the event that a Change of Control occurs,
the Company shall offer, subject to the terms and conditions of this Indenture,
to purchase all or any part of each Holder's Securities (provided, that the
--------
principal amount of such Securities must be $1,000 or an integral multiple
thereof) on the date (the "Repurchase Date") that is no later than 45 Business
Days (except as hereinafter provided) after the occurrence of such Change of
Control, at a cash price (the "Repurchase Price") equal to 100% of the principal
amount thereof, together with accrued and unpaid interest and Liquidated
Damages, if any, to (but excluding) the Repurchase Date.
(b) In the event that, pursuant to this Section 11.1, the Company shall be
required to commence an offer to purchase Securities (a "Repurchase Offer"), the
Company shall follow the procedures set forth in this Section 1 1.1 as follows:
(1) the Repurchase Offer shall commence within 25 Business Days
following a Change of Control;
(2) the Repurchase Offer shall remain open for 20 Business Days
following its commencement, except to the extent that a longer period is
required by applicable law, but in any case not more than 60 Business Days
following the Change of Control (the "Repurchase Offer Period");
(3) upon the expiration of a Repurchase Offer, the Company shall
purchase all Securities tendered in response to the Repurchase Offer;
(4) if the Repurchase Date is on or after an interest payment Record
Date and on or before the related Interest Payment Date, any accrued interest
and Liquidated Damages will be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest or Liquidated Damages will be payable to Securityholders who tender
Securities pursuant to the Repurchase Offer;
(5) the Company shall provide the Trustee with written notice of the
Repurchase Offer at least 5 Business Days before the commencement of any
Repurchase Offer (or such shorter period that is satisfactory to the Trustee);
and
57
<PAGE>
(6) on or before the commencement of any Repurchase Offer, the Company
or the Trustee (upon the request and at the expense of the Company) shall send,
by first-class mail, a notice to each of the Securityholders, which (to the
extent consistent with this Indenture) shall govern the terms of the Repurchase
Offer and shall state:
(i) that the Repurchase Offer is being made pursuant to
such notice and this Section 11.1 and that all Securities, or
portions thereof, tendered will be accepted for payment;
(ii) the Repurchase Price (including the amount of accrued
and unpaid interest and Liquidated Damages, if any), the
Repurchase Date and the Repurchase Put Date;
(iii) that any Security, or portion thereof, not tendered
and accepted for payment will continue to accrue interest and
Liquidated Damages, if any;
(iv) that, unless the Company defaults in depositing Cash
with the Paying Agent in accordance with the last paragraph of
this clause (b) or such payment is prevented pursuant to Article
XII, any Security, or portion thereof, accepted for payment
pursuant to the Repurchase Offer shall cease to accrue interest
and Liquidated Damages after the Repurchase Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Repurchase Offer will be
required to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent (which may not for
purposes of this Section 11.1, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of the
Company) at the address specified in the notice prior to the
close of business on the earlier of (a) the third Business Day
prior to the Repurchase Date and (b) the third Business Day
following the expiration of the Repurchase Offer (such earlier
date being the "Repurchase Put Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent (which may not
for purposes of this Section 11.1, notwithstanding anything in
this Indenture to the contrary, be the Company or any Affiliate
of the Company) receives, up to the close of business on the
Repurchase Put Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount
of the Securities the Holder is withdrawing and a statement that
such Holder is withdrawing his election to have such principal
amount of Securities purchased; and
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(vii) a brief description of the events resulting in such Change of
Control.
Any such Repurchase Offer shall comply with all applicable provisions
of federal and state laws, including those regulating tender offers, if
applicable, and any provisions of this Indenture which conflict with such laws
shall be deemed to be superseded by the provisions of such laws.
On or before the Repurchase Date, the Company shall (i) accept for
payment Securities or portions thereof properly tendered pursuant to the
Repurchase Offer on or before the Repurchase Put Date, (ii) deposit with the
Paying Agent Cash sufficient to pay the Repurchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Securities or
portions thereof so tendered and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate listing the Securities or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to Holders of Securities so accepted payment in an amount equal to the
Repurchase Price (together with accrued and unpaid interest and Liquidated
Damages, if any), and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Security or Securities equal in principal amount
to any unpurchased portion of the Securities surrendered. Any Securities not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Repurchase Offer
on or as soon as practicable after the Repurchase Date.
Section 11.2. Rescission of Change of Control Determination.
---------------------------------------------
At any time prior to the close of business on the Business day
immediately preceding the Repurchase Date, the Holders of more than 66-2/3% in
aggregate principal amount of the then outstanding Securities, by written act of
said Holders delivered to the Company and the Trustee, may determine that the
event giving rise to the Change of Control shall not be treated as a Change of
Control for purposes of Section 11.1, in which event:
(1) the provisions of Section 11.1(a) shall not apply;
(2) if a Repurchase Offer has been made by the Company pursuant to
Section 11.1 (b), such Repurchase Offer shall be deemed revoked; and
(3) if any Securities have been tendered in response to the revoked
Repurchase Offer, such tenders shall be deemed rescinded and the Securities
promptly returned to the Holders thereof.
Following a determination by the Holders pursuant to this Section
11.2, the Company shall mail to all Holders a notice briefly describing such
determination. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or
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affect the validity of any such determination. An effective determination under
this Section 11.2 shall be binding on all holders.
ARTICLE XII.
SUBORDINATION
Section 12.1. Securities Subordinated to Senior Indebtedness.
----------------------------------------------
The Company and each Holder, by its acceptance of Securities, agree
that (a) the payment of the principal of and interest on the Securities and (b)
any other payment in respect of the Securities, including on account of the
acquisition or redemption of the Securities by the Company and any premium and
Liquidated Damages (including, without limitation, pursuant to Article XI (but
specifically excluding payments to the Trustee for its own benefit), is
subordinated, to the extent and in the manner provided in this Article XII, to
the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter created, incurred,
assumed or guaranteed, and that these subordination provisions are for the
benefit of the holders of Senior Indebtedness.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are made obligees hereunder and any one
or more of them may enforce such provisions.
Section 12.2. No Payment on Securities in Certain Circumstances.
-------------------------------------------------
(a) No payment may be made by the Company on account of the
principal of, premium, if any, interest on, or Liquidated Damages with
respect to, the Securities, or to acquire any of the Securities
(including repurchases of Securities at the option of the Holder
pursuant to a Repurchase Offer) for cash or property (other than
Junior Securities), or on account of the redemption provisions of the
Securities, (i) upon the maturity of any Senior Indebtedness by lapse
of time, acceleration (unless waived) or otherwise, unless and until
all principal of, premium, if any, and interest and other amounts
payable on such Senior Indebtedness are first paid in full (or the
prompt payment thereof is duly provided for in cash), or (ii) in the
event of default in the payment of any principal of, premium, if any,
or interest on any Senior Indebtedness when it becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise (collectively, a "Payment Default"), unless
and until such Payment Default has been cured or waived or otherwise
has ceased to exist.
(b) Upon (i) the happening of an event of default (other
than a Payment Default) that permits, or would permit, with (w) the
passage of time, (x) the
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giving of notice, (y) the making of any payment of the Securities then
required to be made, or (z) any combination thereof (collectively, a "Non-
Payment Default"), the holders of Indebtedness under the Credit Facility or
the holders of other Senior Indebtedness having a principal amount then
outstanding in excess of $10,000,000 (or with respect to which Senior
Indebtedness the holders are obligated to lend the Company in excess of
$10,000,000 principal amount) or their representative immediately to
accelerate its maturity and (ii) written notice of such Non-Payment Default
given to the Company and the Trustee by the holders of Indebtedness under
the Credit Facility or the holders of an aggregate of at least $10,000,000
principal amount outstanding of such Senior Indebtedness (or holders of
commitments to lend an aggregate of at least $10,000,000 principal amount
of Senior Indebtedness) or their representative (a "Payment Notice"), then,
unless and until such Non-Payment Default has been cured or waived or
otherwise has ceased to exist, no payment (by set-off or otherwise) may be
made by or on behalf of the Company directly or through any Subsidiary on
account of the principal of, premium, if any, interest on, or Liquidated
Damages with respect to, the Securities, or to acquire or repurchase any of
the Securities for cash or property, or on account of the redemption
provisions of the Securities, in any such case other than payments made
with Junior Securities. Notwithstanding the foregoing, unless (i) the
Senior Indebtedness in respect of which such Non-Payment Default exists has
been declared due and payable in its entirety within 179 days after the
Payment Notice is delivered as set forth above (the "Payment Blockage
Period"), and (ii) such declaration has not been rescinded or waived, at
the end of the Payment Blockage Period, the Company shall be required to
pay all sums not paid to the Holders of the Securities during the Payment
Blockage Period due to the foregoing prohibitions and to resume all other
payments as and when due on the Securities. Not more than one Payment
Notice may be given in any consecutive 365-day period, irrespective of the
number of defaults with respect to Senior Indebtedness during such period.
In no event, however, may the total number of days during which any Payment
Blockage Period is or Payment Blockage Periods are in effect exceed 179
days in the aggregate during any consecutive 365 day period.
(c) In furtherance of the provisions of Section 12.1, in the
event that, notwithstanding the foregoing provisions of this Section 12.2,
any payment or distribution of assets of the Company (other than Junior
Securities) shall be received by the Trustee for the benefit of the Holders
or the Holders or any Paying Agent for the benefit of the Holders at a time
when such payment or distribution is prohibited by the provisions of this
Section 12.2, then such payment or distribution (subject to the provisions
of Article VII and Sections 12.6, 12.7 and 12.12) shall be received and
held in trust by the Trustee or such Holder or Paying Agent for the benefit
of the holders of Senior Indebtedness of the Company, and shall be paid or
delivered by the Trustee or such Holders or such Paying Agent, as the case
may be, to the holders of Senior Indebtedness of the Company remaining
unpaid or their representative or representatives,
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or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness of the Company may
have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior
Indebtedness of the Company in full after giving effect to any concurrent
payment and distribution to the holders of such Senior Indebtedness.
Section 12.3. Securities Subordinated to Prior Payment of All Senior
------------------------------------------------------
Indebtedness on Dissolution Liquidation or Reorganization
- ---------------------------------------------------------
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshaling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company shall first be
entitled to receive payments in full (or have the prompt payment thereof duly
provided for in cash) before the Holders are entitled to receive any payment on
account of the principal of, premium, if any, interest on, and Liquidated
Damages with respect to, the Securities (other than Junior Securities);
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Junior
Securities) to which the Holders or the Trustee on behalf of the Holders would
be entitled (by setoff or otherwise), except for the provisions of this Article
XII, shall be paid by the liquidating trustee or agent or other Person making
such a payment or distribution directly to the holders of Senior Indebtedness or
their representative to the extent necessary to make payment in full of all such
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness (but this
Section 12.3(b) shall not apply to payments or distributions to the Trustee for
its own benefit); and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than Junior Securities), shall be received by the
Trustee for the benefit of the Holders or the Holders or any Paying Agent for
the benefit of the Holders (or, if the Company or any Affiliate of the Company
is acting as its own Paying Agent, money for any such payment or distribution
shall be segregated or held in trust) on account of the principal of, premium,
if any, interest on or Liquidated Damages with respect to, the Securities before
all Senior Indebtedness is paid in full, such payment or distribution (subject
to the provisions of Article VII and Sections 12.6, 12.7 and 12.12) shall be
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received and held in trust by the Trustee or such Holder or Paying Agent for the
benefit of the holders of such Senior Indebtedness, or their respective
representative, and shall be paid over to or delivered to the holders of the
Senior Indebtedness, ratably according to the respective amounts of such Senior
Indebtedness held or represented by each, to the extent necessary to make
payment as provided herein of all such Senior Indebtedness remaining unpaid
after giving effect to all concurrent payments and distributions to or for the
holders of such Senior Indebtedness, but only to the extent that as to any
holder of such Senior Indebtedness, as promptly as practical following notice
from the Trustee to the holders of such Senior Indebtedness that such prohibited
payment has been received by the Trustee, Holder(s) or Paying Agent (or has been
segregated as provided above), such holder (or a representative therefor)
notifies the Trustee of the amounts then due and owing on such Senior
Indebtedness, if any, held by such holder and only the amounts specified in such
notices to the Trustee shall be paid to the holders of such Senior Indebtedness.
Section 12.4. Securityholders to Be Subrogated to Rights of Holders of Senior
---------------------------------------------------------------
Indebtedness.
- ------------
Subject to the payment in full of all Senior Indebtedness of the
Company as provided herein, the Holders of Securities shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Securities shall be paid in full, and for the
purpose of such subrogation no such payments or distributions to the holders of
such Senior Indebtedness by the Company, or by or on behalf of the Holders by
virtue of this Article XII, which otherwise would have been made to the Holders
shall, as between the Company and the Holders, be deemed to be payment by the
Company or on account of such Senior Indebtedness, it being understood that the
provisions of this Article XII are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
such Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article XlI shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any payments
or distributions received by such holders of Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full.
Section 12.5. Obligations of the Company Unconditional.
----------------------------------------
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Securities is intended to or shall impair as between the Company and
the Holders, the obligation
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of each such Person, which is absolute and unconditional, to pay to the Holders
the principal of, premium, if any, interest on, and Liquidated Damages with
respect to, the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Company other than the holders of the
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article XII, of the holders of Senior Indebtedness in respect of cash, property
or securities of the Company received upon the exercise of any such remedy.
Notwithstanding anything to the contrary in this Article XII or elsewhere in
this Indenture or in the Securities, upon any distribution of assets of the
Company referred to in this Article XII, the Trustee, subject to the provisions
of Sections 7.1 and 7.2, and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the liquidating trustee or agent or other Person making any
distribution to the Trustee or to the Holders for the purpose of ascertaining
the Persons entitled to participate in such 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 XII so long as such court has been
apprised of the provisions of, or the order, decree or certificate makes
reference to, the provisions of this Article XII. Nothing in this Section 12.5
shall apply to the claims of, or payments to, the Trustee under or pursuant to
Section 7.7 or otherwise for its own benefit.
Section 12.6. Trustee and Other Agents Entitled to Assume Payments Not
--------------------------------------------------------
Prohibited in Absence of Notice.
- -------------------------------
The Trustee and all other Agents shall not at any time be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee unless and until a Trust Officer of the Trustee or
any Paying Agent shall have actually received, no later than one Business Day
prior to such payment, written notice thereof in compliance with Section 14.2
from the Company or from one or more holders of Senior Indebtedness or from any
representative therefor and, prior to the receipt of any such written notice,
the Trustee, subject to the provisions of Sections 7.1 and 7.2, shall be
entitled in all respects conclusively to assume that no such fact exists.
Section 12.6. Subordination Rights Not Impaired by Acts or Omissions of the
-------------------------------------------------------------
Company or Holders of Senior Indebtedness.
- -----------------------------------------
No right of any present or future holders of any Senior Indebtedness
to enforce subordination provisions contained in this Article XII 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 act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company with the terms of
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this Indenture, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with. Without the consent of or notice to the
Trustee or the Holders, the holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and release, sell or exchange such security and otherwise deal freely with the
Company, all without impairing the liabilities and obligations of the parties to
this Indenture or the Holders.
Section 12.8. Securityholders Authorize Trustee to Effectuate Subordination of
----------------------------------------------------------------
Securities.
- -----------
Each Holder of the Securities by his acceptance thereof authorizes the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provisions contained in this Article XII and to
protect the rights of the Holders pursuant to this Indenture, and appoints the
Trustee his attorney-in-fact for such purpose, including, in the event of any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors of the Company), the immediate filing of a claim for
the unpaid balance of his Securities in the form required in said proceedings
and cause said claim to be approved. If the Trustee does not file a proper claim
or proof of debt in the form required in such proceeding prior to 30 days before
the expiration of the time to file such claim or claims, then the holders of the
Senior Indebtedness or their representative are or is hereby authorized to have
the right to file and are or is hereby authorized to file an appropriate claim
for and on behalf of the Holders of said Securities. Nothing herein contained
shall be deemed to authorize the Trustee or the holders of Senior Indebtedness
or their representative to authorize or consent to or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to vote in respect of the claim of any Securityholder in any such
proceeding.
Section 12.9. Right of Trustee to Hold Senior Indebtedness.
--------------------------------------------
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Indebtedness at any time held by it to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
Section 12.10. Article XII Not to Prevent Events of Default.
---------------------------------------------
The failure to make a payment on account of principal of, premium, if
any, interest on, or Liquidated Damages with respect to, the Securities by
reason of any provision of this Article XII shall not be construed as preventing
the occurrence of a Default or an Event of
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Default under Section 6.1 or in any way prevent the Holders from exercising any
right hereunder other than the right to receive payment on the Securities.
Section 12.11. No Duty of Trustee and Other Agents to Holders of Senior
--------------------------------------------------------
Indebtedness.
------------
The Trustee and the other Agents shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness, and shall not be liable to
any such holders (other than for its willful misconduct or negligence) if it
shall in good faith mistakenly pay over or distribute to the Holders of
Securities or the Company or any other Person, cash, property or securities to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article XII or otherwise. Nothing in this Section 12.12 shall affect the
obligation of any other such Person receiving such payment or distribution from
the Trustee or any other Agent to hold such payment for the benefit of, and to
pay such payment over to, the holders of Senior Indebtedness or their
representative.
ARTICLE XIII.
CONVERSION OF SECURITIES
Section 13.1. Conversion Privilege.
---------------------
Subject to and upon compliance with the provisions of this Article
XIII, at the option of the Holder thereof, any Security may at any time, be
converted, in whole, or in part in multiples of $1,000 principal amount, into
fully paid and non-assessable shares of Common Stock issuable upon conversion of
the Securities, at the conversion price in effect at the Date of Conversion,
until and including, but not after the close of business on the Stated Maturity,
unless such Security or some portion thereof shall have been called for
redemption or delivered for repurchase prior to such date and no default is made
in making due provision for the payment of the Redemption Price in accordance
with the terms of this Indenture, in which case, with respect to such Security
or portion thereof as has been so called for redemption or delivered for
repurchase, such Security or portion thereof may be so converted until and
including, but not after, the close of business on the Business Day immediately
prior to the Redemption Date or Repurchase Date, as applicable, for such
Security, unless the Company subsequently fails to pay the applicable Redemption
Price or Repurchase Price, as the case may be.
Section 13.2. Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security to the Company at any
time during usual business hours at its office or agency maintained for the
purpose as provided in this Indenture, accompanied by a fully executed written
notice, in substantially the form set forth on the reverse of the Security, that
the Holder elects to convert such Security or a stated portion thereof
constituting a multiple
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of $1,000 principal amount, and, if such Security is surrendered for conversion
during the period between the close of business on any Record Date and the
opening of business on the next following Interest Payment Date and has not been
called for redemption on a Redemption Date or repurchase on a Repurchase Date
which occurs within such period, accompanied (except in the case of the Interest
Payment Date occurring on April 1, 2001) also by payment of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
the Security being surrendered for conversion, notwithstanding such conversion.
Such notice of conversion shall also state the name or names (with address) in
which the certificate or certificates for shares of Common Stock shall be
issued. Securities surrendered for conversion shall (if reasonably required by
the Company or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company duly
executed by, the Holder or his attorney duly authorized in writing. As promptly
as practicable after the receipt of such notice and the surrender of such
Security as aforesaid, the Company shall, subject to the provisions of Section
13.8 hereof, issue and deliver at such office or agency to such Holder, or on
his written order, a certificate or certificates for the number of full shares
of Common Stock issuable on such conversion of Securities in accordance with the
provisions of this Article XIII and Cash, as provided in Section 13.3 hereof, in
respect of any fraction of a share of Common Stock otherwise issuable upon such
conversion. Such conversion shall be deemed to have been effected immediately
prior to the close of business on the date (herein called the "Date of
Conversion") on which such Security shall have been surrendered as aforesaid,
and the person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become on the Date of Conversion the holder or holders of record
of the shares represented thereby; provided, however, that any such surrender
-------- -------
on any date when the stock transfer books of the Company shall be closed shall
cause the person or persons in whose name or names the certificate or
certificates for such shares are to be issued to be deemed to have become 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 but such
conversion shall nevertheless be at the conversion price in effect at the close
of business on the date when such Security shall have been so surrendered with
the conversion notice. In the case of conversion of a portion, but less than
all, of a Security, the Company shall as promptly as practicable execute, and
the Trustee shall thereafter authenticate and deliver to the Holder thereof, at
the expense of the Company, a Security or Securities in the aggregate principal
amount of the unconverted portion of the Security surrendered. Except as
otherwise expressly provided in this Indenture, no payment or adjustment shall
be made for interest accrued on any Security (or portion thereof) converted or
for dividends or distributions on any Common Stock issued upon conversion of any
Security.
Section 13.3. Fractional Interests.
---------------------
No fractions of shares or scrip representing fractions of shares shall
be issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at
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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 so surrendered. If any fraction of a share of
Common Stock would, except for the foregoing provisions of this Section 13.3, be
issuable on the conversion of any Security or Securities, the Company shall make
payment in lieu thereof in an amount of Cash equal to the value of such fraction
computed on the basis of the last sale price of the Common Stock as reported on
the Nasdaq National Market (or if not listed for trading thereon, then on the
principal national securities exchange or on the principal automated quotation
system on which the Common Stock is listed or admitted to trading) at the close
of business on the Date of Conversion or if no such sale takes place on such
day, the last sale price for such day shall be the average of the closing bid
and asked prices regular way on the Nasdaq National Market (or if not listed for
trading thereon, on the principal national securities exchange or on the
principal automated quotation system on which the Common Stock is listed or
admitted to trading) for such day (any such last sale price being hereinafter
referred to as the "Last Sale Price"). If on such Trading Day the Common Stock
is not quoted by any such organization, the fair value of such Common Stock on
such day, as reasonably determined in good faith by the Board of Directors of
the Company, shall be used.
Section 13.4. Conversion Price.
-----------------
The conversion price per share of Common Stock issuable upon
conversion of the Securities (as such price may be adjusted, herein called the
"Conversion Price) shall initially be $35.50 (which reflects a conversion rate
of 28.17 shares of Common Stock per $1,000 in principal amount of Securities).
Section 13.4. Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be subject to adjustment from time to time
as follows:
(a) In case the Company shall make or pay a dividend or make a
distribution in shares of Common Stock on any class of Capital Stock of the
Company, the Conversion Price in effect immediately following the record date
fixed for the determination of shareholders entitled to receive such dividend or
other distribution shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such date and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution. An adjustment made pursuant to this
subsection (a) shall become effective immediately, except as provided in
subsection (i) and (j) below, after such record date.
(b) In case the Company shall (1) subdivide its outstanding shares of
Common Stock into a greater number of shares or (2) combine or reclassify its
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outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately following the effectiveness of such
action shall be adjusted by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
immediately prior to such subdivision or combination and the denominator shall
be the number of shares outstanding immediately after giving effect to such
subdivision or combination. An adjustment made pursuant to this subsection (b)
shall become effective immediately, except as provided in subsection (i) and (j)
below, after the effective date of a subdivision or combination.
(c) In case the Company shall issue rights, options or warrants to
all or substantially all holders of Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less than the then
current market price per share of the Common Stock (as determined pursuant to
subsection (g) below) on the record date fixed for determination of the
shareholders entitled to receive such rights, option or warrants, the Conversion
Price in effect immediately following such record date shall be adjusted to a
price, computed to the nearest cent, so that the same shall equal the price
determined by multiplying:
(i) such Conversion Price by a fraction, of which
(ii) the numerator shall be (A) the number of shares of Common Stock
outstanding on such record date plus (B) the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price
(determined by multiplying such total number of shares by the exercise
price of such rights, options or warrants and dividing the product so
obtained by such current market price), and of which
(iii) the denominator shall be (A) the number of shares of Common
Stock outstanding on such record date plus (B) the number of additional
shares of Common Stock which are so offered for subscription or purchase.
Such adjustment shall become effective immediately, except as provided
in subsection (i) and (j) below, after the record date for the determination of
holders entitled to receive such rights, options or warrants; provided, however,
-------- -------
that if any such rights, options or warrants issued by the Company as described
in this subsection (c) are only exercisable upon the occurrence of certain
triggering events, then the Conversion Price will not be adjusted as provided in
this subsection (c) until such triggering events occur. Upon the expiration or
termination of any rights, options or warrants without the exercise of such
rights, options or warrants, the Conversion Price then in effect shall be
adjusted immediately to the Conversion Price which would have been in effect at
the time of such expiration or termination had such
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rights, options or warrants, to the extent outstanding immediately prior to such
expiration or termination, never been issued.
(d) In case the Company or any Subsidiary of the Company shall
distribute to all or substantially all holders of Common Stock, any of its
assets, evidences of indebtedness, cash or securities (other than (x) dividends
or distributions exclusively in cash, (y) any dividend or distribution for which
an adjustment is required to be made in accordance with subsection (a) or (c)
above and in mergers and consolidations to which Section 13.6 applies, or (z)
any distribution of rights or warrants subject to subsection (1) below or any
distribution in connection with a liquidation, dissolution or winding up of the
Company or any Subsidiary) then in each such case the Conversion Price in effect
immediately following the record date fixed for the determination of the
shareholders entitled to such distribution shall be adjusted so that the same
shall equal the price determined by multiplying such Conversion Price by a
fraction of which the numerator shall be the then current market price per share
of the Common Stock (determined as provided in subsection (g) below) on such
record date less the then fair market value (as reasonably determined in good
faith by the Board of Directors of the Company) of the portion of the assets so
distributed applicable to one share of Common Stock, and of which the
denominator shall be such current market price per share of the Common Stock.
Such adjustment shall become effective immediately, except as provided in
subsection (i) and (j) below, after the record date for the determination of
shareholders entitled to receive such distribution.
(e) In case the Company or any Subsidiary of the Company shall make
any distribution consisting exclusively of cash (excluding any cash portion of
distributions for which an adjustment is required to be made in accordance with
subsection (d) above, or cash distributed upon a merger or consolidation to
which Section 13.6 applies) to all or substantially all holders of Common Stock
in an aggregate amount that, combined together with (i) all other such all-cash
distributions made within the then preceding 12 months in respect of which no
adjustment pursuant to this subsection (e) has been made and (ii) any cash and
the fair market value of other consideration paid or payable in respect of any
tender offer by the Company or any of its Subsidiaries for Common Stock
concluded within the preceding 12 months in respect of which no adjustment has
been made, exceeds 15% of the Company's market capitalization (defined as being
the product of the then current market price of the Common Stock (determined as
provided in subsection (g) below) times the number of shares of Common Stock
then outstanding) on the record date fixed for the determination of the
shareholders entitled to such distribution, in each such case the Conversion
Price immediately following such record date shall be adjusted so that the same
shall equal the price determined by multiplying such Conversion Price by a
fraction of which the numerator shall be the then current market price per share
of the Common Stock on such record date less the amount
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<PAGE>
of the cash and/or fair market value (as reasonably determined in good faith by
the Board of Directors of the Company) of other consideration so distributed
applicable to one share of Common Stock, and of which the denominator shall be
such current market price per share of the Common Stock. Such adjustment shall
become effective immediately, except as provided in subsection (i) and (j)
below, after the record date for the determination of shareholders entitled to
receive such distribution.
(f) In case the Company or any Subsidiary of the Company shall
complete a tender offer for all or any portion of the Common Stock (any such
tender offer being referred to as an "Offer") that involves an aggregate
consideration having a fair market value as of the expiration of such Offer (the
"Expiration Time") that, together with (i) any cash and the fair market value of
any other consideration payable in respect of any other tender offer, as of the
expiration of such other tender offer, expiring within the 12 months preceding
the expiration of such Offer and in respect of which no Conversion Price
adjustment pursuant to this subsection (f) has been made and (ii) the aggregate
amount of any all-cash distributions referred to in subsection (e) of this
Section 13.5 to all holders of Common Stock within the 12 months preceding the
expiration of such Offer for which no conversion price adjustment pursuant to
such subsection (e) has been made, exceeds 15% of the product of the then
current market price per share (determined as provided in subsection (g) below)
of the Common Stock on the Expiration Time times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time, the
Conversion Price in effect immediately following such Expiration Time shall be
reduced by multiplying such Conversion Price by a fraction of which the
numerator shall be (i) the product of the then current market price per share
(determined as provided in subsection (g) below) of the Common Stock on the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time minus (ii) the fair
market value of the aggregate consideration payable to shareholders based on the
acceptance (up to any maximum specified in the terms of the Offer) of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares deemed
so accepted being referred to as the "Purchased Shares") and the denominator
shall be the product of (i) such current market price per share on the
Expiration Time times (ii) such number of outstanding shares on the Expiration
Time less the number of Purchased Shares, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time.
For purposes of this subsection (f), the fair market value of any
consideration with respect to an Offer shall be reasonably determined in good
faith by the Board of Directors of the Company and described in a Board
Resolution.
(g) For the purpose of any computation under subsections (c), (d),
(e) and (f) above, the current market price per share of Common Stock on any
date shall be
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deemed to be the average of the Last Sale Prices of a share of Common Stock for
the five consecutive Trading Days selected by the Company commencing not more
than 20 Trading Days before, and ending not later than, the earlier of the date
in question and the date before the "'ex' date," with respect to the issuance,
distribution or Offer requiring such computation. If on any such Trading Day the
Common Stock is not quoted by any organization referred to in the definition of
Last Sale Price in Section 13.3 hereof, the fair value of the Common Stock on
such day, as reasonably determined in good faith by the Board of Directors of
the Company, shall be used. For purposes of this paragraph, the term "'ex'
date," when used with respect to any issuance, distribution or payments with
respect to an Offer, means the first date on which the Common Stock trades
regular way on the Nasdaq National Market (or if not listed or admitted to
trading thereon, then on the principal national securities exchange or the
Nasdaq Stock Market's National Market if the Common Stock is listed or admitted
to trading thereon) without the right to receive such issuance, distribution or
Offer.
(h) In addition to the foregoing adjustments in subsections (a), (b),
(c), (d), (e) and (f) above, the Company, from time to time and to the extent
permitted by law, may reduce the Conversion Price by any amount for at least 20
Business Days, if the Board of Directors has made a determination, which
determination shall be conclusive, that such reduction would be in the best
interests of the Company. The Company shall cause notice of such reduction to be
mailed to each Holder of Securities, in the manner specified in Section 13.7, at
least 15 days prior to the date on which such reduction commences. The Company
may, at its option, also make such reductions in the Conversion Price in
addition to those set forth above, as the Board of Directors deems advisable to
avoid or diminish any income tax to holders of shares of Common Stock resulting
from any dividend or distribution of stock (or rights to acquire stock) or from
any event treated as such for United States federal income tax purposes.
(i) In any case in which this Section 13.5 shall require that an
adjustment be made immediately following a record date, the Company may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Company shall, with respect to any Security converted after such record
date and on and before such adjustment shall have become effective (i) defer
paying any Cash payment pursuant to Section 13.3 hereof or issuing to the Holder
of such Security the number of shares of Common Stock and other capital stock of
the Company (or other assets or securities) issuable upon such conversion in
excess of the number of shares of Common Stock and other Capital Stock of the
Company issuable thereupon only on the basis of the Conversion Price prior to
adjustment, and (ii) not later than five Business Days after such adjustment
shall have become effective, pay to such Holder the appropriate Cash payment
pursuant to Section 13.3 hereof and issue to such Holder the additional shares
of
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Common Stock and other Capital Stock of the Company issuable on such conversion.
Notwithstanding the foregoing, no adjustment of the Conversion price shall be
made if the event giving rise to such adjustment does not occur.
(j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1.0% of the
Conversion Price; provided, that any adjustments which by reason of this
--------
subsection (i) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
XIII shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly (i) file with the Trustee and each conversion agent an
Officers' Certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment,
which certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) mail or cause to be mailed a notice of such adjustment to
each holder of Securities at his address as the same appears on the registry
books of the Company. Unless and until a Trust Officer has received an Officers'
Certificate setting forth an adjustment of the Conversion Price, the Trustee may
assume that no such adjustment has been made and that the last Conversion Price
for which the Trustee has received an Officers' Certificate is the current
Conversion Price.
(l) In the event that the Company distributes rights or warrants
(other than those referred to in subsection (c) above) pro rata to holders of
Common Stock, so long as any such rights or warrants have not expired or been
redeemed by the Company, instead of making an adjustment in the Conversion
Price, the Company shall make proper provision so that the Holder of any Note
surrendered for conversion will be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion (the
"Conversion Shares"), a number of rights or warrants to be determined as
follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of rights or warrants of separate certificates
evidencing such rights or warrants (the "Distribution Date"), the same number of
rights or warrants to which a holder of a number of shares of Common Stock equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the rights or
warrants, and (ii) if such conversion occurs after such Distribution Date, the
same number of rights or warrants to which a holder of the number of shares of
Common Stock into which the principal amount of such Note so converted was
convertible immediately prior to such Distribution Date would have been entitled
on such Distribution Date in accordance with the terms and provisions of and
applicable to the rights or warrants.
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Section 13.6. Continuation of Conversion Privilege in Case of
-----------------------------------------------
Reclassification, Change, Merger, Consolidation or Sale of
----------------------------------------------------------
Assets.
------
If any of the following shall occur, namely: (a) any reclassification
or change of outstanding shares of Common Stock issuable upon conversion of the
Securities (other than a change in par value, or from par value to no par value,
or from no par value, to par value, or as a result of a subdivision or
combination), (b) any consolidation or merger of the Company with or into any
other Person, or the consolidation or merger of any other Person with or into
the Company (other than a merger which does not result in any reclassification,
change, conversion, exchange or cancellation of outstanding shares of Common
Stock) or (c) any sale, transfer or conveyance of all or substantially all of
the assets of the Company (computed on a consolidated basis), then the Company,
or such successor or purchasing entity, as the case may be, shall, as a
condition precedent to such reclassification, change, consolidation, merger,
sale or conveyance, execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding shall have the right
to convert such Security only into the kind and amount of shares of stock and
other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance by
a holder of the number of shares of Common Stock issuable upon conversion of
such Security immediately prior to such reclassification, change, consolidation,
merger, sale, transfer or conveyance assuming such holder of Common Stock of the
Company failed to exercise his rights of an election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance
(provided that if the kind or amount of securities, cash, and other property
- ---------
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance is not the same for each share of Common Stock of the
Company held immediately prior to such reclassification, change, consolidation,
merger, sale, transfer or conveyance in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section 13.6 the kind and amount of securities, cash and other property
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance by 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 indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article III. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and property (including cash) of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provisions of this Section 13.6 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
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Notice of the execution of each such supplemental indenture shall be
mailed to each Holder of Securities at his address as the same appears on the
registry books of the Company.
Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, sale or conveyance or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Article VIII hereof, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
Section 13.7. Notice of Certain Events.
------------------------
In case:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of Common Stock (other than cash dividends);
(b) the Company shall authorize the granting to all or substantially all
the holders of Common Stock of rights, warrants or options to subscribe for or
purchase any shares of stock of any class or of any other rights;
(c) the Company shall authorize any reclassification or change of the
Common Stock (including a subdivision or combination of its outstanding shares
of Common Stock), or any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or the
sale or conveyance of all or substantially all the property or business of the
Company;
(d) there shall be proposed any voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(e) the Company or any of its Subsidiaries shall complete an Offer, as
defined in Section 13.5;
then, the Company shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Securities as provided in Section 13.2 hereof,
and shall cause to be mailed to each Holder of Securities, at his address as it
shall appear on the registry books of the Company, at least 20 days before the
date hereinafter specified (or the earlier of the dates hereinafter specified,
in the event that more than one date is specified), a notice stating the date on
which (1)
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a record is expected to be taken for the purpose of such dividend, distribution,
rights, warrants or options or Offer, 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, warrants or options or to participate in such
Offer are to be determined, or (2) such reclassification, change, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding-up is expected to
become effective and the date, if any is to be fixed, 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 or other property deliverable upon such
reclassification, change, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding-up.
Section 13.8. Taxes on Conversion.
--------------------
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant thereto; provided, however,
-------- -------
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the Holder of the Securities to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Company the amount of any such
tax or has established, to the satisfaction of the Company, that such tax has
been paid. The Company extends no protection with respect to any other taxes
imposed in connection with conversion of Securities.
Section 13.9. Company to Provide Stock.
-------------------------
The Company shall reserve, free from pre-emptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Securities from time to time as such Securities are presented for
conversion, provided, that nothing contained herein shall be construed to
--------
preclude the Company from satisfying its obligations in respect of the
conversion of Securities by delivery of repurchased shares of Common Stock which
are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible use its reasonable efforts
to secure such registration or approval, as the case may be, provided, however,
-------- -------
that nothing in this Section 13.9 shall be deemed to limit in any way the
obligations of the Company provided in this Article XIII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take
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all corporate action which may, in the Opinion of Counsel, be necessary in order
that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and non-
assessable by the Company and free of preemptive rights.
Section 13.10. Disclaimer of Responsibility for Certain Matters.
------------------------------------------------
Neither the Trustee nor any agent of the Trustee shall 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
Price, or with respect to the Officers' Certificate referred to in Section 13.5
hereof, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any agent of the Trustee shall be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock, or of any
securities or property (including cash), which may at any time be issued or
delivered upon the conversion of any Security; and neither the Trustee nor any
conversion agent makes any representation with respect thereto. Neither the
Trustee nor any agent of the Trustee shall be responsible for any failure of the
Company to issue, register the transfer of or deliver any shares of Common Stock
or stock certificates or other securities or property (including cash) upon the
surrender of any Security for the purpose of conversion or, subject to Article
VIII hereof, to comply with any of the covenants of the Company contained in
this Article XIII.
Section 13.11. Return of Funds Deposited for Redemption of Converted
-----------------------------------------------------
Securities.
----------
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other Paying Agent for the purpose of
paying the principal of and interest on any of the Securities and which shall
not be required for such purposes because of the conversion of such Securities,
as provided in this Article XIII, shall after such conversion be repaid to the
Company by the Trustee or such other Paying Agent.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1. TIA Controls.
-------------
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, whether or
not this Indenture has been qualified under the TIA, shall control.
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Section 14.2. Notices.
--------
Any notices or other communications to the Company or the Trustee
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Company:
Data Processing Resources Corporation
4400 MacArthur Boulevard, Suite 600
Newport Beach, California 92660
Attention: Michael A. Piraino
Telecopy: (714) 752-1190
if to the Trustee:
State Street Bank and Trust Company of California, N.A.
633 West Fifth Street, 12th Floor
Los Angeles, California 90071
Attention: Corporate Trust Division
Telecopy: (213) 362-7357
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it except for
notices and communications to the Trustee which shall be effective only upon
actual receipt thereof.
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Section 14.3. Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA (S) 312(c).
Section 14.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) An Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) upon the Trustee's request, an Opinion of Counsel (in form and
substance reasonably satisfactory to the Trustee) stating that, in the opinion
of such counsel, all such conditions precedent and covenants have been complied
with.
Section 14.5. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or Opinion of Counsel with respect to compliance with
a condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided, however,
-------- -------
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 14.6. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
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Section 14.7. Legal Holidays.
---------------
A "Legal Holiday" is a Saturday, a Sunday or any day that is not a
Business Day. If a payment date is a Legal Holiday at such place, payment may be
made at such place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
Section 14.8. Governing Law.
--------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. THE COMPANY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION.
Section 14.9. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 14.10. No Recourse Against Others.
--------------------------
No direct or indirect partner, employee, shareholder, director or
officer, as such, past, present or future of the Company or any successor
corporation, shall have any personal liability in respect of the obligations of
the Company under the Securities or this Indenture by reason of his, her or its
status as such partner, shareholder, employee, director or officer. Each
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Securityholder by accepting a Security waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Securities.
Section 14.11. Successors.
-----------
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 14.12. Duplicate Originals.
--------------------
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
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Section 14.13. Severability.
-------------
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
Section 14.14. Table of Contents, Headings, Etc.
---------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 14.15. Qualification Indenture.
-----------------------
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all costs, fees and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs,
fees and expenses of qualification of the Indenture and the Securities and
printing this Indenture and the Securities. The Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel or
other documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
Section 14.16. Registration Rights.
--------------------
Certain Holders of the Securities are entitled to certain registration
rights with respect to such Securities pursuant to, and subject to the terms of,
the Registration Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
DATA PROCESSING RESOURCES CORPORATION,
a Delaware corporation
By: /s/ Michael A. Piraino
------------------------------------------
Name: Michael A. Piraino
--------------------------------------
Title: Executive Vice President,
-------------------------------------
Chief Financial Officer and Secretary
-------------------------------------
State Street Bank and Trust Company of California,
N.A., as Trustee
By: /s/ Scott C. Emmons
--------------------------------------------
Name: Scott C. Emmons
---------------------------------------
Title: Assistant Vice President
--------------------------------------
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EXHIBIT A
---------
[FORM OF SECURITY]
DATA PROCESSING RESOURCES CORPORATION
5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2005
No.A-1 CUSIP No.237 823 AA7
$___________
Data Processing Resources Corporation, a California corporation
(hereinafter called the "Company," which term includes any successors under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ____________________________, or registered assigns, the principal sum of
_________ Dollars, on April 1, 2005.
Interest Payment Dates: April 1 and October 1; commencing October 1,
1998.
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Note hereinafter
set forth, which will, for all purposes, have the same effect as if set forth at
this place.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
DATA PROCESSING RESOURCES CORPORATION, a California
corporation
By: _______________________________________________
Name:
Title:
By: _______________________________________________
Name:
Title:
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<PAGE>
Certificate of Authentification:
This is one of the Notes described in the within-mentioned Indenture.
Dated:___________
State Street Bank and Trust Company of California,
N.A., as Trustee
By: _______________________________________________
Authorized Signatory
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<PAGE>
DATA PROCESSING RESOURCES CORPORATION
5 1/4% Convertible Subordinated Notes due 2005
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by The
Depository Trust Company, a New York corporation ("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. Unless this
certificate is presented by an authorized representative of the Depository 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 the Depositary (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), 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. /1/
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U. S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF U S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A "QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT (AN "IAI"), OR (C) IT IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO
A PERSON WHO THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN IAI THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
SECURITY (THE
______________________
/1/ This paragraph should only be added if the Security is issued in global
form.
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<PAGE>
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF THE COMPANY SO
REQUESTS, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT, (E) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, THE TRUSTEE AND THE
REGISTRAR) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING. /2/
1. Interest.
--------
Data Processing Resources Corporation, a California corporation
(hereinafter called the "Company," which term includes any successors under the
Indenture hereinafter referred to), promises to pay interest on the principal
amount of this Note at the rate of 5 1/4% per annum. To the extent it is lawful,
the Company promises to pay interest on any interest payment due but unpaid on
such principal amount at a rate of 5 1/4% per annum compounded semi-annually.
The Company will pay interest semi-annually in cash in arrears on April 1
and October 1 of each year (each, an "Interest Payment Date"), commencing
October 1, 1998. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid on the Notes, from
March 24, 1998. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment.
-----------------
______________________
2. This paragraph should be included only for the Transfer Restricted
Securities.
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<PAGE>
The Company shall pay interest on the Notes (except defaulted interest) to
the Persons who are the registered Holders at the close of business on the
Record Date immediately preceding the Interest Payment Date. Holders must
surrender Notes to a Paying Agent to collect principal payments. Any such
interest not so punctually paid, and defaulted interest relating thereto, may be
paid to the Persons who are registered Holders at the close of business on a
Special Record Date for the payment of such defaulted interest, as more fully
provided in the Indenture referred to below. Except as provided below, the
Company shall pay principal and interest in such coin or currency of the United
States of America as at the time of payment shall be legal tender for payment of
public and private debts ("U.S. Legal Tender"). The Notes will be payable as to
principal, premium, interest and Liquidated Damages at the office or agency of
the Company maintained for such purpose within or without Los Angeles,
California, or at the option of the Company, payment of principal, premium,
interest and Liquidated Damages may be made by check mailed to the Holders at
their addresses set forth in the registry of Holders, and provided that, upon
the request of The Depository Trust Company, a New York corporation (the
"Depositary"), payment by wire transfer to an account within the United States
of immediately available funds will be required with respect to principal of,
premium and interest on and Liquidated Damages with respect to Global Notes and
all other Notes held of record by the Depositary, or its nominee, if the
Depositary shall have provided wire transfer instructions to the Company or the
Paying Agent.
3. Paying Agent and Registrar.
--------------------------
State Street Bank and Trust Company of California, N.A. (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any of
its Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
4. Indenture.
---------
The Company issued the Notes under an Indenture, dated as of March 24, 1998
(as amended or supplemented from time to time the "Indenture"), between the
Company and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act, as in effect on the date of the Indenture. The Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and said Act for a statement of them. The Notes are general unsecured
obligations of the Company limited in aggregate principal amount to
$115,000,000.
5. Redemption.
----------
The Notes may be redeemed in whole or from time to time in part at any time
on and after April 1, 2001, at the option of the Company, at the Redemption
Price (expressed as a percentage of principal amount) set forth below with
respect to the indicated Redemption Date,
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<PAGE>
in each case, plus any accrued but unpaid interest and Liquidated Damages to,
but excluding the Redemption Date. The Notes may not be so redeemed prior to
April 1, 2001.
If redeemed during
the 12-month period
beginning on April 1 Redemption Price
-------------------- ----------------
2001.............................. 103.00%
2002.............................. 102.25%
2003.............................. 101.50%
2004.............................. 100.75%
2005.............................. 100.00%
Any such redemption will comply with Article III of the Indenture.
6. Notice of Redemption.
--------------------
Notice of redemption will be sent by first class mail, at least 30 days and
not more than 60 days prior to the Redemption Date to the Holder of each Note to
be redeemed at such Holder's last address as then shown upon the registry books
of the Registrar. Notes may be redeemed in part in integral multiples of $1,000
only.
Except as set forth in the Indenture, from and after any Redemption Date,
if monies for the redemption of the Notes called for redemption shall have been
deposited with the Paying Agent on such Redemption Date and payment of the Notes
called for redemption is not prohibited under Article XII of the Indenture, the
Notes called for redemption will cease to bear interest and the only right of
the Holders of such Notes will be to receive payment of the Redemption Price,
plus any accrued and unpaid interest and Liquidated Damages, if any, to the
Redemption Date.
7. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of
or exchange Notes in accordance with, the Indenture. The Registrar may require a
Holder, 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 register the transfer of or exchange any Notes
selected for redemption.
8. Persons Deemed Owners.
---------------------
The registered Holder of a Note may be treated as the owner of it for all
purposes, subject to the provisions of the Indenture and the Notes with respect
to record dates.
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<PAGE>
9. Unclaimed Money.
---------------
If money for the payment of principal, interest or Liquidated Damages
remains unclaimed for two years, the Trustee and the Paying Agent(s) will pay
the money back to the Company at its written request. After that, all liability
of the Trustee and such Paying Agent(s) with respect to such money shall cease.
10. Amendment; Supplement; Waiver.
-----------------------------
Subject to specified exceptions, the Indenture or the Notes may be amended
or supplemented, and any existing Default or Event of Default or compliance with
any provision may be waived, with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, or make any other change that does not adversely affect the
rights of any Holder of a Note.
11. Conversion Rights.
-----------------
Subject to the provisions of the Indenture, the Holders have the right to
convert the principal amount of the Notes into fully paid and nonassessable
shares of Common Stock of the Company at the initial conversion price per share
of Common Stock of $35.50 (which reflects a conversion rate of approximately
28.17 shares of Common Stock per $1,000 in principal amount of Notes), or at the
adjusted conversion price then in effect, if adjustment has been made as
provided in the Indenture, upon surrender of the Note to the Company, together
with a fully executed notice in substantially the form attached hereto and, if
required by the Indenture, an amount equal to accrued interest payable on such
Note.
12. Ranking.
-------
Payment of principal, premium, if any, interest on and Liquidated Damages
with respect to the Notes is subordinated, in the manner and to the extent set
forth in the Indenture, to the prior payment in full of all Senior Indebtedness.
13. Repurchase at Option of Holder Upon a Change of Control.
-------------------------------------------------------
If there is a Change of Control, the Company shall be required, subject to
the provisions of the Indenture, to offer to purchase on the Repurchase Date all
outstanding Notes at a purchase price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to,
but excluding, the Repurchase Date. Holders of Notes will receive a Repurchase
Offer from the Company prior to any related Repurchase Date and may elect to
have such Notes purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
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<PAGE>
14. Successors.
----------
When a successor assumes all the obligations of its predecessor under the
Notes and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing (other than an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization),
then in every such case, unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the Holders of 25% in
aggregate principal amount of Notes then outstanding may declare all the Notes
to be due and payable immediately in the manner and with the effect provided in
the Indenture. Holders of Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal, interest
or Liquidated Damages), if it determines that withholding notice is in their
interest.
16. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company or
its Affiliates, and may otherwise deal with the Company or its Affiliates as if
it were not the Trustee.
17. No Recourse Against Others.
--------------------------
No shareholder, director, officer or employee, as such, past, present or
future, of the Company or any successor corporation shall have any personal
liability in respect of the obligations of the Company under the Notes or the
Indenture by reason of his, her or its status as such shareholder, director,
officer or employee. Each Holder of a Note by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
18. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on this Note.
19. Abbreviations and Defined Terms.
-------------------------------
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<PAGE>
Customary abbreviations may be used in the name of a Holder of a Note or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
20. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
21. Additional Rights of Holders of Transfer Restricted Notes.
---------------------------------------------------------
In addition to the rights provided to Holders of Notes under the Indenture,
Holders of Notes shall have all the rights set forth in the Registration Rights
Agreement.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement. Request
may be made to:
Data Processing Resources Corporation
4400 MacArthur Boulevard, Suite 600
Newport Beach, California 92660
Attention: Secretary
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<PAGE>
FORM OF ASSIGNMENT
I or we assign this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Note or other identifying number of assignee
__________________________
and irrevocably appoint ________ agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
Dated:________________ Signed:_______________________________________________
(Sign exactly as your name appears on the other
side of this Note)
Signature Guaranty:___________________________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guaranty program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Article XI of the Indenture, check the box:
[_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Article XI of the Indenture, state the amount you want to be
purchased: $__________
Date:_______ Signature:___________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Signature Guaranty:________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Note Transfer Agent Medallion Program ("STAMP") or such
other "signature guaranty program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Notes
Exchange Act of 1934, as amended.
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<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES /3/
The following exchanges of a part of this Global Note for Definitive Notes
have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer
Principal Amount Principal Amount Note following of Trustee or
Date of of this Global of this Global such decrease (or Notes
Exchange Note Note increase) Custodian
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
______________________
/3/ This schedule should only be added if the Security is issued in global
form.
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<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: __% CONVERTIBLE SUBORDINATED NOTES DUE 2005 OF DATA PROCESSING RESOURCES
CORPORATION.
This Certificate relates to $____________ principal amount of Notes held in
* ____________ book-entry or * ____________ definitive form by
____________________________ (the "Transferor").
1. The Transferor:*
[_] (a) has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depositary a Note or
Notes in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or
[_] (b) has requested the Trustee by written order to exchange or register
the transfer of a Note or Notes.
2. In connection with any such request and in respect of each such Note,
the Transferor does hereby certify that Transferor is familiar with the
Indenture relating to the above-captioned Notes and as provided in Section 2.6
of such Indenture, the transfer of this Note does not require registration under
the Securities Act because:*
[_] (a) Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
[_] (b) Such Note is being transferred to a person who the Transferor
reasonably believes is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) purchasing for its own account or for the account
of a qualified institutional buyer over which it exercises sole investment
discretion that is aware that the transfer is being made in reliance on Rule
144A (in satisfaction of Section 2.6(a)(ii)(B), Section 2.6(b)(i)(x) or Section
2.6(d)(i)(B) of the Indenture).
[_] (c) Such Note is being transferred in accordance with Regulation S under
the Securities Act (in satisfaction of Section 2.6(a)(ii)(D), Section
2.6(b)(i)(y) or Section 2.6(d)(i)(D) of the Indenture). If requested by either
the Company or the Trustee, an Opinion of Counsel to
______________________
* Check applicable box.
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<PAGE>
the effect that such transfer does not require registration under the Securities
Act accompanies this Certificate (in satisfaction of Section 2.6(a)(ii)(D) or
Section 2.6(d)(i)(D) of the Indenture).
[_] (d) Such Note is being transferred to an institutional investor that is an
"accredited investor" within the meaning of Rule 501(a)(1),(2),(3) or (7) under
the Securities Act which delivers a certificate in the form of Exhibit B to the
Indenture to the Trustee (in satisfaction of Section 2.6(a)(ii)(C) or Section
2.6(d)(i)(C) of the Indenture), and an opinion of counsel, if the Company or the
Trustee so requests.
[_] (e) Such Note is being transferred in reliance on and in compliance with
another exemption from the registration requirements of the Securities Act. If
requested by either the Company or the Trustee, an Opinion of Counsel to the
effect that such transfer does not require registration under the Securities Act
accompanies this Certificate (in satisfaction of Section 2.6(a)(ii)(E) or
Section 2.6(d)(i)(E) of the Indenture).
__________________________________________________
[INSERT NAME OF TRANSFEROR]
By:_______________________________________________
Date:_______________________
3. Affiliation with the Company [check if applicable]:
[_] (a) The undersigned represents and warrants that it is, or at some
time during which it held this Note was, an Affiliate of the Company.
(b) If 3(a) above is checked and if the undersigned was not an Affiliate
---
of the Company at all times during which it held this Note, indicate
the periods during which the undersigned was an Affiliate of the
Company:
_____________________________________________.
(c) If 3(a) above is checked and if the Transferee will not pay the full
---
purchase price for the transfer of this Note on or prior to the date
of transfer indicate when such purchase price will be paid:
B-2
<PAGE>
_____________________________________________.
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<PAGE>
TO BE COMPLETED BY TRANSFEREE IF 2(b) ABOVE IS CHECKED AND THE TRANSFEROR IS NOT
A QUALIFIED INSTITUTIONAL BUYER:
The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933,
as amended, and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information.
Dated:__________________________ ________________________________________
NOTICE: To be executed by an officer.
TO BE COMPLETED BY TRANSFEREE IF 2(c) ABOVE IS CHECKED:
The undersigned represents and warrants that it is not a "U.S. Person" (as
defined in Regulation S under the Securities Act of 1933, as amended).
Dated:__________________________ ________________________________________
NOTICE: To be executed by an officer.
If none of the boxes under Section 2 of this certificate is checked or if any of
the above representations required to be made by the Transferee is not made, the
Registrar shall not be obligated to register this Note in the name of any person
other than the Holder hereof.
THE UNDERSIGNED HEREBY AGREES THAT, UNLESS THE BOX ABOVE UNDER ITEM 3(a) IS
CHECKED, THE UNDERSIGNED SHALL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT NOR
HAS IT BEEN AT ANY TIME DURING WHICH IT HELD THIS SECURITY AN AFFILIATE, AS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE
COMPANY.
Dated:__________________________ ________________________________________
NOTICE: The signature of the Holder to
this assignment must correspond
with the name as written upon
the face of this Note
particular, without alteration
or enlargement or any change
whatsoever.
B-4
<PAGE>
EXHIBIT B
---------
FORM OF CONVERSION NOTICE
-------------------------
TO: Data Processing Resources Corporation
The undersigned owner of this Security hereby: (i) irrevocably exercises
the option to convert this Security, or the portion hereof below designated, for
shares of Common Stock of Data Processing Resources Corporation in accordance
with the terms of this Indenture referred to in this Security and (ii) directs
that such shares of Common Stock deliverable upon the conversion, together with
any check in payment for fractional shares and any Security(ies) representing
any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
shares are to be delivered registered in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and deliver the Certificate to be delivered upon Exchange or
Registration of Transfer of Notes. Any amount required to be paid by the
undersigned on account of interest accompanies this Security.
Dated:__________________________
________________________________________
Signature
Fill in for registration of shares if to be delivered, and of Securities if
to be issued, otherwise than to and in the name of the registered holder.
________________________________________
Social Security or other
Taxpayer Identifying Number
________________________________
(Name)
________________________________
(Street Address)
________________________________
City, State and Zip Code)
(Please print name and address)
Principal amount to be converted
<PAGE>
(if less than all)
$_______________________________________
<PAGE>
EXHIBIT 4.2
51/4% CONVERTIBLE SUBORDINATED NOTES DUE 2005
REGISTRATION RIGHTS AGREEMENT
DATED AS OF MARCH 24, 1998
BY AND AMONG
DATA PROCESSING RESOURCES CORPORATION
AS THE COMPANY
AND
NATIONSBANC MONTGOMERY SECURITIES LLC,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
ROBERT W. BAIRD & CO. INCORPORATED
AND
LEHMAN BROTHERS INC.
AS PURCHASERS
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of
March 24, 1998, by and among Data Processing Resources Corporation, a California
corporation (the "Company"), and NationsBanc Montgomery Securities LLC,
Donaldson, Lufkin & Jenrette Securities Corporation, Robert W. Baird & Co.
Incorporated and Lehman Brothers Inc. (the "Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated March
18, 1998, by and among the Company and the Purchasers (the "Purchase
Agreement"). In order to induce the Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights provided
for in this Agreement to the Purchasers and their respective direct and indirect
transferees. The execution and delivery of this Agreement is a condition to the
closing of the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
-----------
As used in this Agreement, the following terms shall have the
following meanings:
Affiliate: As defined in Rule 144 of the Securities Act.
---------
Agreement: This Registration Rights Agreement, as the same may be
---------
amended, supplemented or modified from time to time in accordance with the terms
hereof.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
------------
that is not a day on which banking institutions in New York, New York or Los
Angeles, California are authorized or obligated by law or executive order to
close.
Closing Date: The Closing Date as defined in the Purchase Agreement.
------------
Common Stock: Common Stock, no par value, of the Company.
------------
Company: Data Processing Resources Corporation, a California
-------
corporation, and any successor corporation thereto.
controlling person: As defined in Section 6(a) hereof.
------------------
Damage Payment Date: Each of the semi-annual interest payment dates
-------------------
provided in the Indenture.
Effectiveness Period: As defined in Section 2(a) hereof.
--------------------
Effectiveness Target Date: The 120th day following the Closing Date.
-------------------------
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
------------
rules and regulations promulgated by the SEC thereunder.
Filing Date: The 60th day after the Closing Date.
-----------
Holder: Each registered holder of any Transfer Restricted Securities.
------
Indemnified Person: As defined in Section 6(a) hereof.
------------------
Indenture: The Indenture, dated the date hereof, between the Company
---------
and the Trustee thereunder, pursuant to which the Notes are being issued, as
amended, modified or supplemented from time to time in accordance with the terms
thereof.
Liquidated Damages: As defined in Section 3(a) hereof.
------------------
-2-
<PAGE>
Notes: The 5 1/4% Convertible Subordinated Notes due 2005 of the
-----
Company issued pursuant to the Indenture (including any such Notes issued
pursuant to the exercise of the over-allotment option provided in the Purchase
Agreement).
Proceeding: An action, claim, suit or proceeding (including, without
----------
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
Prospectus: The prospectus included in any Registration Statement
----------
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Transfer Restricted Securities
covered by such Registration Statement, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
Purchasers: As defined in the preamble hereof.
----------
Registration Default: As defined in Section 3(a) hereof.
--------------------
Registration Statement: Any registration statement of the Company that
----------------------
covers any of the Transfer Restricted Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the SEC pursuant to the Securities
--------
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the Securities
---------
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the Securities
--------
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 174: Rule 174 promulgated by the SEC pursuant to the Securities
--------
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the Securities
--------
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 424: Rule 424 promulgated by the SEC pursuant to the Securities
--------
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
SEC: The Securities and Exchange Commission.
---
Securities Act: The Securities Act of 1933, as amended, and the rules
--------------
and regulations promulgated by the SEC thereunder.
Shelf Registration: As defined in Section 2 hereof.
------------------
-3-
<PAGE>
Special Counsel: Any special counsel to the holders of Transfer
---------------
Restricted Securities, for which holders of Transfer Restricted Securities will
be reimbursed pursuant to Section 5(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
----
Transfer Restricted Securities: The Notes and the shares of Common
------------------------------
Stock into which the Notes are convertible, upon original issuance thereof, and
at all times subsequent thereto, until, in the case of any such Note or share
the earlier of, (i) the date on which it has been registered effectively
pursuant to the Securities Act and disposed of in accordance with the
Registration Statement relating to it, (ii) the date on which either such Note
or the shares of Common Stock issued upon conversion of such Note are
distributed to the public pursuant to Rule 144 or are saleable pursuant to Rule
144(k) or (iii) the date on which it ceases to be outstanding.
Trustee: State Street Bank and Trust of California, N.A., the trustee
-------
under the Indenture.
underwritten registration or underwritten offering: A registration in
--------------------------------------------------
connection with which securities of the Company are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
2. Shelf Registration
------------------
(a) The Company agrees to file with the SEC on or prior to the Filing
Date, a Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Transfer Restricted Securities held by
Holders who have either provided the Company with the questionnaires attached to
the Offering Memorandum as Annex A fully completed (the "Questionnaire"), or
have provided the Company with the information requested by such questionnaire;
it being understood that the Company hereby acknowledges receipt of the
Questionnaire for the purchasers set forth on Exhibit A to this Agreement (the
"Shelf Registration"). The Shelf Registration shall be on Form S-3 under the
Securities Act or another appropriate form permitting registration of such
Transfer Restricted Securities for resale by the Holders in the manner or
manners reasonably designated by them (including, without limitation, one or
more underwritten offerings). The Company shall use its reasonable efforts, as
described in Section 4, to cause the Shelf Registration to be declared effective
pursuant to the Securities Act on or prior to the Effectiveness Target Date, and
to keep the Shelf Registration continuously effective under the Securities Act
for 24 months after the latest date of initial issuance of the Notes (the
"Effectiveness Period"), or such shorter period ending when either (1) all
Transfer Restricted Securities covered by the Shelf Registration have been sold
in the manner set forth and as contemplated in the Shelf Registration or (2)
there cease to be outstanding any Transfer Restricted Securities.
(b) The Company shall use all reasonable efforts to keep the Shelf
Registration continuously effective, for the period described in Section 2(a)
hereof, by supplementing and amending the Shelf Registration if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration, if required by the Securities Act or if reasonably
requested by the holders of a majority in amount of the Transfer Restricted
Securities (determined on a fully converted basis) covered by such Registration
Statement or by any underwriter of such Transfer Restricted Securities.
(c) Notwithstanding anything to the contrary in this Section 2, but
subject to compliance with Section 3, the Company may, by delivering written
notice to the Holders, prohibit offers and sales of Transfer Restricted
Securities pursuant to the Shelf Registration at any time if (A)(i) the Company
is in possession of material non-public information relating to the Company,
(ii) the Company determines (based on advice of counsel) that such prohibition
is necessary in order to avoid a requirement to disclose such material non-
public information to the public and (iii) the Company determines in good faith
that public disclosure of such material non-public information would not be in
the best interests of the Company and its stockholders or (B)(i) the Company has
made a public announcement relating to an acquisition or business combination
transaction including the Company and/or one or more of its subsidiaries that is
material to the Company and its subsidiaries taken as a whole and (ii) the
Company determines in good faith that (x) offers and sales of Transfer
Restricted Securities pursuant to the Shelf Registration prior to the
consummation of such transaction (or such earlier date as the Company shall
determine) is not in the best interests of the Company and its stockholders or
(y) it would be impracticable at the time to obtain any financial statements
relating to such acquisition or business combination transaction that would be
required to be set forth in
-4-
<PAGE>
the Shelf Registration; provided, however, that upon (i) the public disclosure
-------- -------
by the Company of the material non-public information described in clause (A) of
this paragraph or (ii) the consummation, abandonment or termination of, or the
availability of the required financial statements width respect to, a
transaction described in clause (B) of this paragraph, the suspension of the use
of the Shelf Registration pursuant to this Section 2(c) shall cease and the
Company shall promptly comply with Section 4(b) hereof and notify Holders that
dispositions of Transfer Restricted Securities may be resumed.
3. Liquidated Damages
------------------
(a) The Company and the Purchasers agree that the Holders of Transfer
Restricted Securities will suffer damages if the Company fails to fulfill its
obligations pursuant to Sections 2 and 4(b) hereof and that it would not be
possible to ascertain the extent of such damages. Accordingly, in the event of
such failure by the Company to fulfill such obligations, the Company hereby
agrees to pay liquidated damages ("Liquidated Damages") to each Holder of
Transfer Restricted Securities under the circumstances and to the extent set
forth below.
If (i) the Shelf Registration has not been filed with the SEC on or
prior to the Filing Date; or (ii) the Shelf Registration is not declared
effective by the SEC on or prior to the Effectiveness Target Date; or (iii) the
Shelf Registration has been declared effective by the SEC and such Shelf
Registration ceases to be effective or the Prospectus contained herein ceases to
be usable (including as a result of a prohibition against sales of Transfer
Restricted Securities pursuant to Section 2(c) hereof or a suspension of the use
of the Prospectus as described in the last paragraph of Section 4 hereof) at any
time during the Effectiveness Period for a period of time which shall exceed 90
days in the aggregate during any 365-day period (any of the foregoing, a
"Registration Default"), then the Company shall pay Liquidated Damages in cash
to each Holder of Transfer Restricted Securities following the occurrence of
such Registration Default in an amount equal to $.05 per week per $1,000
principal amount of Notes and, if applicable, $0.001775 per week per share
(subject to adjustment in the event of stock splits, stock recombinations, stock
dividends and the like) of Common Stock, constituting Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues. The amount of such Liquidated Damages will
increase by an additional $.05 per week per $1,000 principal amount of Notes
and, if applicable, $0.001775 per week per share (subject to adjustment as set
forth above) of Common Stock constituting Transfer Restricted Securities for
each subsequent 90-day period until all Registration Defaults have been cured;
provided, however, that Liquidated Damages shall not at any time exceed $.25 per
- -------- -------
week per $1,000 principal amount of Notes or $0.001775 per week per share
(subject to adjustment as set forth above) of Common Stock constituting Transfer
Restricted Securities. Following the cure of all Registration Defaults relating
to any Transfer Restricted Securities, the accrual of Liquidated Damages with
respect to such Transfer Restricted Securities will cease. A Registration
Default under clause (i) above shall be cured on the date that the Shelf
Registration is filed with the SEC; a Registration Default under clause (ii)
above shall be cured on the date that the Shelf Registration is declared
effective by the SEC; and a Registration Default under clause (iii) above shall
be cured on the date the Shelf Registration is declared effective or the
Prospectus contained therein again becomes usable.
(b) The Company shall notify the Trustee as promptly as possibly, but
in no event more than three Business Days after each and every date on which a
Registration Default occurs. Liquidated Damages shall be paid on each Payment
Date by the Company to the Holders of Transfer Restricted Securities as of the
immediately preceding Record Date (as defined in the Indenture) in the same
manner interest is paid to Holders of Notes pursuant to the Indenture. Each
obligation to pay Liquidated Damages shall be deemed to commence accruing on the
date of the applicable Registration Default and to cease accruing when all
Registration Defaults have been cured. In no event shall the Company pay
Liquidated Damages in excess of the applicable maximum weekly amount set forth
above, regardless of whether one or multiple Registration Defaults exist (e.g.,
subject to increase as set forth above for each subsequent 90-day period,
Liquidated Damages shall equal $.05 per week per $1,000 principal amount of
Notes during the first 90-day period immediately following the occurrence of the
first Registration Default regardless of whether additional Registration
Defaults occur during such 90-day period).
4. Registration Procedures
-----------------------
In connection with the Company's registration obligations hereunder,
the Company shall effect such registrations on the appropriate form available
for the sale of the Transfer Restricted Securities to permit the sale of
Transfer Restricted Securities in accordance with the method or methods of
disposition thereof specified by
-5-
<PAGE>
the holders of a majority in amount of Transfer Restricted Securities
(determined on a fully converted basis), and pursuant thereto the Company shall
as expeditiously as possible:
(a) No fewer than five Business Days prior to the initial filing of a
Registration Statement or Prospectus and no fewer than two Business Days prior
to the filing of any amendment or supplement thereto (other than any document
that would be incorporated or deemed to be incorporated therein by reference),
furnish to the Holders of the Transfer Restricted Securities, their Special
Counsel and the managing underwriters, if any, copies of all such documents
proposed to be filed, which documents (other than those incorporated or deemed
to be incorporated by reference) will be subject to the review of such Holders,
their Special Counsel and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent certified
public accountants to the Company to respond to such inquiries as shall be
necessary in connection with such Registration Statement, in the opinion of
respective counsel to such Holders and such underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act. The Company
shall not file any such Registration Statement or related Prospectus or any
amendments or supplements thereto (other than any document that would be
incorporated or deemed to be incorporated in the Registration Statement by
reference) to which the Holders of a majority of the Transfer Restricted
Securities (determined on a fully converted basis), their Special Counsel, or
the managing underwriters, if any, shall reasonably object on a timely basis;
provided, that the Company may assume, for the purposes of this subparagraph
(a), that objections to the inclusion of information specifically requested to
be included in the Registration Statement by the staff of the SEC, or in the
opinion of counsel to the Company required to be in the Registration Statement,
or specifically required by the Securities Act or other applicable law, shall
not be deemed to be reasonable;
(b) Prepare and file with the SEC such amendments, including post-
effective amendments, to each Registration Statement as may be necessary to keep
such Registration Statement continuously effective for the applicable time
period; cause, subject to Section 2(c) hereof, the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424; and comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or in such Prospectus as so supplemented;
(c) Notify the Holders of Transfer Restricted Securities to be sold or
their Special Counsel and the managing underwriters, if any, promptly (and in
the case of an event specified by clause (i)(A) of this paragraph, in no event
fewer than two Business Days prior to such filing), and (if requested by any
such person) confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment is proposed to be filed, and
(B) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any other
Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information, (iii) of the
issuance by the SEC, any state securities commission, any other governmental
agency or any court of any stop order, order or injunction suspending or
enjoining the use or the effectiveness of a Registration Statement or the
initiation of any Proceeding for that purpose, (iv) if at any time any of the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 4(m) hereof cease
to be true and correct in all material respects, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Transfer Restricted Securities for
sale in any jurisdiction, or the initiation or threatening of any Proceeding for
such purpose, and (vi) of the happening of any event that makes any statement
made in such Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, not misleading, and that, in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(d) Use all reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of a Registration Statement or the lifting of any
-6-
<PAGE>
suspension of the qualification (or exemption from qualification) of any of the
Transfer Restricted Securities for sale in any jurisdiction, at the earliest
practicable moment;
(e) If requested by the managing underwriters, if any, or the Holders
of a majority in amount of the Transfer Restricted Securities (determined on a
fully converted basis) being sold in connection with such offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such Holders agree should
be included therein relating to the terms of the sale of the Transfer Restricted
Securities of such Holder in the Prospectus, and (ii) make all required filings
of such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
- -------- -------
pursuant to this Section 4(e) that would, in the opinion of counsel for the
Company, violate applicable law;
(f) Furnish to each Holder of Transfer Restricted Securities, their
Special Counsel and each managing underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and each amendment thereto,
including financial statements (but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits,
unless requested in writing by such Holder, counsel or managing underwriter);
(g) Deliver to each Holder of Transfer Restricted Securities, their
Special Counsel, and the underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such persons reasonably request; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Transfer Restricted
Securities and the underwriters, if any, in connection with the offering and
sale of the Transfer Restricted Securities covered by such Prospectus and any
amendment or supplement thereto;
(h) Prior to any public offering of Transfer Restricted Securities,
use all reasonable efforts to register or qualify or cooperate with the Holders
of Transfer Restricted Securities to be sold, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Transfer
Restricted Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder or underwriter
reasonably requests in writing; use all reasonable efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and use all
reasonable efforts to do any and all other acts or things necessary or advisable
to enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Registration Statement; provided, however, that the
-------- -------
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or subject the Company to any tax in any such jurisdiction
where it is not then so subject;
(i) In connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold, which certificates shall
not bear any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company and to enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or Holders may request at least two Business Days
prior to any sale of Transfer Restricted Securities;
(j) Use all reasonable efforts to cause the offering of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities within the
United States as may require such registration or approval, except as may be
required as a consequence of the nature of such selling Holder's business, in
which case the Company will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Transfer Restricted Securities; provided,
--------
however, that the Company shall not be required to register the Transfer
- -------
Restricted Securities in any jurisdiction that would subject it to general
service of process in any such jurisdiction
-7-
<PAGE>
where it is not then so subject or subject the Company to any tax in any such
jurisdiction where it is not then so subject or to require the Company to
qualify to do business in any jurisdiction where it is not then so qualified;
(k) Upon the occurrence of any event contemplated by Section 4(c)(vi)
hereof, as promptly as practicable, prepare a supplement or amendment,
including, if appropriate, a post-effective amendment, to each Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(l) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, to provide a CUSIP number for
the Transfer Restricted Securities;
(m) Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and take
all such other reasonable actions in connection therewith (including those
reasonably requested by the managing underwriters, if any, or the Holders of a
majority in amount of the Transfer Restricted Securities being sold (determined
on a fully converted basis)) in order to expedite or facilitate the disposition
of such Transfer Restricted Securities, and, in such connection, if an
underwriting agreement is entered into (i) make such representations and
warranties to the underwriters with respect to the business of the Company and
its subsidiaries (including with respect to businesses or assets acquired or to
be acquired by any of them), and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings, and confirm the same if and
when requested; (ii) use all reasonable efforts to obtain opinions of counsel to
the Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters, if
any), addressed to each of the underwriters, covering the matters customarily
covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by the underwriters; (iii) use all reasonable
efforts to obtain customary "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data is, or is required to be, included in the Registration
Statement), addressed (where reasonably possible) to each selling Holder of
Transfer Restricted Securities and each of the underwriters, such letters to be
in customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings; (iv) the
underwriting agreement shall contain indemnification provisions and procedures
no less favorable to the selling Holders of Transfer Restricted Securities and
the underwriters than those set forth in Section 6 hereof (or such other
provisions and procedures acceptable to Holders of a majority in amount of the
Transfer Restricted Securities (determined on a fully converted basis) covered
by such Registration Statement and the managing underwriters); and (v) deliver
such documents and certificates as may be reasonably requested by the managing
underwriters, if any, to evidence the continued validity of the representations
and warranties made pursuant to clause (i) of this Section 4(m) and to evidence
compliance with any customary conditions contained in the underwriting
agreement;
(n) Make available for inspection by a representative of the Holders
of not less than 50% of the Transfer Restricted Securities (determined on a
fully converted basis) being sold, any underwriter participating in any such
disposition of Transfer Restricted Securities, if any, and any Special Counsel,
consultant or accountant retained by such selling Holders or underwriter, at the
offices where normally kept, during reasonable business hours, all financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries as they may reasonably request (including with respect to
businesses and assets acquired or to be acquired to the extent that such
information is available to the Company), and cause the officers, directors,
agents and employees of the Company and its subsidiaries (including with respect
to businesses and assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information in each case
reasonably requested by any such representative, underwriter, attorney,
consultant or accountant in connection with such Registration Statement,
provided, however, that such persons shall first agree in writing with the
- -------- -------
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons, unless (i) disclosure of
such information is
-8-
<PAGE>
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of any Registration Statement or
the use of any Prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement;
(o) Cause the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement relating to the Transfer
Restricted Securities; and in connection therewith, cooperate with the trustee
under the Indenture and the holders of the Transfer Restricted Securities to
effect such changes to the Indenture as may be required for such Indenture to be
so qualified in accordance with the terms of the TIA; and execute, and use its
reasonable best efforts to cause such trustee to execute, all customary
documents as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(p) Comply with applicable rules and regulations of the SEC and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158, no later than 45
days after the end of any 12-month period (or 90 days after the end of any 12-
month period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to underwriters
in a firm commitment or reasonable efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first day of the
first fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of Rule 158;
and
(q) Use all reasonable efforts to (i) list all Shares of Common Stock
covered by such Shelf Registration Statement on any securities exchange on which
the Common Stock is then listed or (ii) authorize for quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or the
National Market System of NASDAQ all Shares of Common Stock covered by such
Shelf Registration Statement if the Common Stock is then so authorized for
quotation.
The Company may require each seller of Transfer Restricted Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Transfer Restricted Securities as
is required by law to be disclosed in the applicable Registration Statement and
the Company may exclude from such registration the Transfer Restricted
Securities of any seller who unreasonably fails to furnish such information
within a reasonable time after receiving such request and the Transfer
Restricted Securities of such seller shall not be entitled to Liquidated Damages
as a result of the Company's exclusion from such registration. Each such Holder
agrees, by the acquisition of Transfer Restricted Securities, and agrees to
confirm such agreement in writing upon request of the Company, to notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Holder to the Company or of the occurrence of any
event as a result of which any Prospectus relating to such registration contains
or would contain an untrue statement of a material fact regarding such Holder or
such Holder's intended method of distribution of such Transfer Restricted
Securities, or omits to state any material fact regarding such Holder or such
Holder's intended method of distribution of such Transfer Restricted Securities,
necessary to make the statements therein, in light of the circumstances then
existing, not misleading and promptly to furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
Holder or the distribution of such Transfer Restricted Securities, an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances then existing, not
misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such
-9-
<PAGE>
Holder in any amendment or supplement to the Registration Statement filed or
prepared subsequent to the time that such reference ceases to be required.
Each Holder of Transfer Restricted Securities agrees by acquisition of
such Transfer Restricted Securities that, upon receipt of any notice from the
Company pursuant to Section 2(c) hereof or of the happening of any event of the
kind described in Section 4(c)(ii), 4(c)(iii), 4(c)(v) or 4(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Transfer Restricted
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(k) hereof, or until it is advised in writing by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus, and,
if so directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Transfer Restricted
Securities at the time of receipt of such notice.
5. Registration Expenses
---------------------
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by it whether or not any
Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to any Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc. and (B) in compliance with
securities or Blue Sky laws (including, without limitation and in addition to
that provided for in (b) below, reasonable fees and disbursements of counsel for
the underwriters or Special Counsel for the Holders in connection with Blue Sky
qualifications of the Transfer Restricted Securities and determination of the
eligibility of the Transfer Restricted Securities for investment under the laws
of such jurisdictions as the managing underwriters, if any, or Holders of a
majority in amount (determined on a fully converted basis) of Transfer
Restricted Securities may designate)), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Transfer Restricted
Securities in a form eligible for deposit with The Depository Trust Company and
of printing Prospectuses if the printing of Prospectuses is requested by the
managing underwriters, if any), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company and Special
Counsel for the Holders (plus any local counsel deemed appropriate by the
Holders of a majority in amount of the Transfer Restricted Securities
(determined on a fully converted basis)), in accordance with the provisions of
Section 5(b) hereof, (v) fees and disbursements of all independent certified
public accountants referred to in Section 4(m)(iii) hereof (including, without
limitation, the expenses of any special audit and cold comfort" letters required
by or incident to such performance), (vi) Securities Act liability insurance, if
the Company so desires such insurance, and (vii) fees and expenses of all other
persons retained by the Company. In addition, the Company shall pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange or on
NASDAQ. Notwithstanding the foregoing or anything in this Agreement to the
contrary, each Holder of the Transfer Restricted Securities being registered
shall pay all commissions, placement agent fees and underwriting discounts and
commissions with respect to any Transfer Restricted Securities sold by it and
the fees and disbursements of any counsel or other advisors or experts retained
by such Holders (severally or jointly), other than Special Counsel and local
counsel referred to in clause (iv) above.
(b) In connection with any registration hereunder, the Company shall
reimburse the Holders of the Transfer Restricted Securities being registered in
such registration for the reasonable fees and disbursements of not more than one
firm of attorneys representing the selling Holders (in addition to any local
counsel), which firm shall be chosen by the Holders of a majority in amount of
the Transfer Restricted Securities (determined on a fully converted basis).
6. Indemnification
---------------
(a) The Company agrees to indemnify and hold harmless (i) each of the
Purchasers, (ii) each Holder of Transfer Restricted Securities, (iii) each
person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) any of the foregoing (any of the persons
referred to in this
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<PAGE>
clause (iii) being hereinafter referred to as a "controlling person"), and (iv)
the respective officers, directors, partners, employees, representatives and
agents of the Purchasers, each Holder of Transfer Restricted Securities, or any
controlling person (any person referred to in clause (i), (ii), (iii) or (iv)
may hereinafter be referred to as an "Indemnified Persons"), from and against
-------------------
any and all losses, claims, damages, liabilities and judgments caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or form of Prospectus or in any amendment or
supplement thereto or in any preliminary Prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of Prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Indemnified Person furnished in writing to the
Company by or on behalf of such Indemnified Person expressly for use therein;
provided that the foregoing indemnity with respect to any preliminary or other
- --------
Prospectus shall not inure to the benefit of any Indemnified Person from whom
the person asserting such losses, claims, damages, liabilities and judgments
purchased securities if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary or other Prospectus is eliminated
or remedied in a subsequent Prospectus or amendment or supplement, and a copy of
such amended or supplemented Prospectus shall not have been furnished to such
person in a timely manner due to the wrongful action or wrongful inaction of
such Indemnified Person (provided that the Company has delivered the Prospectus
--------
to such Indemnified Person in requisite quantity on a timely basis to permit
such delivery or sending) and such amended or supplemented Prospectus would have
corrected such omission or alleged untrue statement.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement or any such Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person and
payment of all fees and expenses. Any Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel or (iii) the named parties
to any such action (including any impleaded parties) include both such
Indemnified Person and the Company and such Indemnified Person shall have been
advised in writing by counsel that the representation of such Indemnified Person
and the Company by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to an actual or reasonably anticipated
material conflict of interest between them (in which case the Company shall not
have the right to assume the defense of such action on behalf of such
Indemnified Person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Indemnified Persons, which firm shall be designated in writing by such
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred). The Company shall not be liable for any settlement of any
such action effected without its written consent but if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless any
Indemnified Person from and against any loss or liability by reason of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement (i) includes an unconditional release of such indemnified
party from all liability on claims that are or could have been the subject
matter of such proceeding and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(c) In connection with any Registration Statement in which a Holder of
Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers and any person controlling the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
each Indemnified Person but only with reference to information relating to such
Indemnified Person furnished in writing by or on behalf of such Indemnified
Person expressly for use in such
-11-
<PAGE>
Registration Statement. In case any action shall be brought against the Company,
any of its directors, any such of officer or any person controlling the Company
based on such Registration Statement and in respect of which indemnity may be
sought against any Indemnified Person, the Indemnified Person shall have the
rights and duties given to the Company (except that if the Company shall have
assumed the defense thereof, such Indemnified Person shall not be required to do
so, but may employ separate counsel therein and participate in defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Person), and the Company, its directors, any such officers and any
person controlling the Company shall have the rights and duties given to the
Indemnified Person, by Section 6(b) hereof.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and each
Indemnified Person on the other hand from the offering of the Notes or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
each such Indemnified Person in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative fault of the
Company and each such Indemnified Person shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Company or such Indemnified Person and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
---
rata allocation (even if the Indemnified Persons were treated as one entity for
- ----
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Indemnified Person shall be
required to contribute any amount in excess of the amount by which the proceeds
received by it in connection with the sale of the Transfer Restricted Securities
pursuant to this Agreement exceeds the amount of any damages which such
Indemnified Person has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Indemnified Persons'
obligations to contribute pursuant to this Section 6(d) are several in
proportion to the respective amount of Notes included in any such Registration
Statement by each Indemnified Person and not joint.
7. Rules 144 and 144A
------------------
The Company shall use all reasonable efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act in a
timely manner and, if at any time it is not required to file such reports but in
the past had been required to or did file such reports, it will, upon the
request of any holder of Transfer Restricted Securities, make available other
information as required by, and so long as necessary to permit, sales of its
Transfer Restricted Securities pursuant to Rule 144 and Rule 144A.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
8. Underwritten Registrations
--------------------------
(a) If any of the Transfer Restricted Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will administer the offering
will be selected by the Holders of a majority in amount of such Transfer
Restricted Securities (determined on a fully converted basis) included in such
offering, subject to the consent of the Company (which will not be unreasonably
withheld or delayed).
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<PAGE>
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
(b) Each Holder of Transfer Restricted Securities agrees, if requested
(pursuant to a timely written notice) by the managing underwriters in an
underwritten offering, not to effect any private sale or distribution (including
a sale pursuant to Rule 144(k) and Rule 144A, but excluding non-public sales to
any of its affiliates, officers, directors, employees and controlling persons)
of any of the Notes, in the case of an offering of the Company's debt
securities, or the Common Stock, in the case of an offering of the Company's
equity securities, during the period beginning 10 days prior to, and ending 90
days after, the closing date of the underwritten offering.
The foregoing provisions of this Section 8(b) shall not apply to any
Holder of Transfer Restricted Securities if such Holder is prevented by
applicable statute or regulation from entering into any such agreement.
(c) The Initial Purchasers and all Holders of Transfer Restricted
Securities agree that, notwithstanding any other term or provision hereof, the
Company shall not be required to enter into any agreements (including
underwriting agreements) or take any other actions contemplated by Section 4(m)
hereof unless requested in writing by the holders of at least 50% of the
Transfer Restricted Securities (determined on a fully converted basis) sold to
the Initial Purchasers pursuant to the Purchase Agreement.
9. Miscellaneous
-------------
(a) Remedies. In the event of a breach by the Company, or by a holder
--------
of Transfer Restricted Securities, of any of their obligations under this
Agreement, each holder of Transfer Restricted Securities or the Company, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company and each holder of Transfer Restricted
Securities agree that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company shall not enter into any
--------------------------
agreement with respect to its securities that is inconsistent with the rights
granted to the holders of Transfer Restricted Securities in this Agreement or
otherwise conflicts with the provisions hereof.
(c) No Piggyback on Registrations. The Company shall not grant to any
-----------------------------
of its security holders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in any
Shelf Registration other than Transfer Restricted Securities for a six month
period commencing on the date of the Purchase Agreement.
(d) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, without the written consent of the Holders of a majority of
the then outstanding Transfer Restricted Securities (determined on a fully
converted basis); provided, however, that, for the purposes of this Agreement,
-------- -------
Transfer Restricted Securities that are owned, directly or indirectly, by either
the Company or an Affiliate of the Company are not deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Transfer Restricted Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders of Transfer Restricted Securities may be
given by Holders of a majority of the Transfer Restricted Securities (determined
on a fully converted basis) being sold by such Holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
-------- -------
may not be amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.
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<PAGE>
(e) Notices. All notices and other communications provided for herein
-------
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy:
(i) if to the Company, as provided in the Purchase Agreement,
(ii) if to the Purchasers, as provided in the Purchase
Agreement, or
(iii) if to any other person who is then the registered Holder of
any Transfer Restricted Securities, to the address of such Holder as it appears
in the Note or Common Stock register of the Company.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a
next-day air courier; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(f) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder of Transfer Restricted
Securities. The Company may not assign its rights or obligations hereunder
without the prior written consent of each Holder of Transfer Restricted
Securities. Notwithstanding the foregoing, no transferee shall have any of the
rights granted under this Agreement until such transferee shall acknowledge its
rights and obligations hereunder by a signed written statement of such
transferee's acceptance of such rights and obligations.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement
(h) Governing Law: Submission to Jurisdiction.
-----------------------------------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(i) Severability. The remedies provided herein are cumulative and not
------------
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof. All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(k) Attorneys' Fees. In any action or proceeding brought to enforce
---------------
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court, shall
be entitled to recover its reasonable attorneys' fees in addition to any other
available remedy.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
DATA PROCESSING RESOURCES CORPORATION
By: /s/ MICHAEL A. PIRAINO
----------------------------------
Name: Michael A. Piraino
Title: Executive Vice President
and Chief Financial Officer
The foregoing Registration Rights
Agreement is hereby confirmed
and accepted as of the date
first above written.
NATIONSBANC MONTGOMERY SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ROBERT W. BAIRD & CO. INCORPORATED
LEHMAN BROTHERS INC.
By: NationsBanc Montgomery Securities LLC
By: /s/ REVELL HORSEY
---------------------------------
Name: Revell Horsey
Title: Senior Managing Director
By: Donaldson, Lufkin & Jenrette Securities Corporation
By: /s/ JAMES T. SINGTON
-----------------------------------------------
Name: James T. Sington
Title: Managing Director
-15-
