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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 11, 1998
CONCENTRA MANAGED CARE, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 000-22751 04-3363415
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(STATE OR OTHER JURISDICTION OF (COMMISSION FILE (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) NUMBER) IDENTIFICATION NUMBER)
312 UNION WHARF
BOSTON, MASSACHUSETTS 02109
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(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
Registrant's telephone number, including area code (617) 367-2163
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ITEM 5. OTHER EVENTS
On March 16, 1998, Concentra Managed Care, Inc., a Delaware corporation
(the "Company"), sold 4.5% Convertible Subordinated Notes due 2003 (the "Notes")
in the aggregate principal amount of $200.0 million, pursuant to a Purchase
Agreement by and among the Company and BT Alex. Brown Incorporated, BancAmerica
Robertson Stephens, Donaldson, Lufkin & Jenrette Securities Corporation and
Piper Jaffrey Inc. (the "Initial Purchasers"), dated as of March 11, 1998. The
Notes were issued under an indenture dated as of March 16, 1998 (the
"Indenture"), between the Company and Chase Bank of Texas, N.A., as Trustee (the
"Trustee"). In connection with the sale of the Notes, the Company entered into a
related registration rights agreement with the Initial Purchasers (the
"Registration Rights Agreement"). The following summaries of certain provisions
of the Notes, the Indenture and the Registration Rights Agreement which are
filed as Exhibits to this Form 8-K do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all the provisions of
the Notes, the Indenture and the Registration Rights Agreement, including the
definitions therein of certain terms which are not otherwise defined in this
Form 8-K. Whenever particular provisions or defined terms of the Indenture (or
of the form of Note which is a part thereof) or the Registration Rights
Agreement are referred to, such provisions or defined terms are incorporated
herein by reference.
GENERAL
The Notes represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company as
described under "-Subordination of Notes," and convertible into Common Stock as
described under "-Conversion of Notes." The Notes are limited to $200.0 million
in aggregate principal amount ($230.0 million if the Initial Purchasers'
exercise in full an over-allotment option), and were issued only in
denominations of $1,000 or any multiple thereof and will mature on March 15,
2003, unless earlier redeemed at the option of the Company or repurchased by the
Company at the option of the Holder upon a Change of Control.
The Indenture does not contain any financial covenants or any restrictions
on the payment of dividends, the incurrence of Senior Indebtedness or the
issuance or repurchase of securities of the Company.
The Notes bear interest at the annual rate of 4.50% on the original date
of issuance, payable on March 15 and September 15, commencing on September 15,
1998, to Holders of record at the close of business on March 1 and September 1,
respectively. Notes called for redemption by the Company shall include accrued
and unpaid interest to, but excluding, the Redemption Date; provided that if the
Redemption Date is after a record date and on or prior to the corresponding
interest payment date, accrued interest shall be payable to the Holder of the
redeemed Notes registered on such record date. Notes repurchased by the Company
at the option of a Holder pursuant to a Change of Control shall include accrued
and unpaid interest to, but excluding, the Repurchase Date; provided that if the
Repurchase Date is after a record date and on or prior to the corresponding
Interest Payment Date and Damage Payment Date, accrued
<PAGE>
interest shall be paid to the registered Holder on the close of business on such
record date and no additional interest will be paid to a Holder who tenders a
Note pursuant to the Repurchase Offer. If a Note is surrendered for conversion
between a record date and the next following interest payment date and the Note
has not been called for redemption on a Redemption Date occurring within such
period (except for the interest payment date occurring on March 15, 2001), then
the surrender of such Note shall be accompanied by a payment of the amount of
interest payable on such interest payment date on the principal amount of the
Note being surrendered for conversion.
Principal of, premium, if any, interest on, and liquidated damages, if
any, with respect to the Notes is payable, and the Notes may be presented
for conversion, registration of transfer and exchange, without service charge,
at the office of the Company maintained for such purpose in New York, New York,
which is initially the office or agency of the Trustee. Principal, premium, if
any, interest and liquidated damages, if any, may, at the Company's option, be
paid at the Trustee's corporate trust office or by check mailed to such Holders
at the addresses set forth upon the registry books of the Company. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
The Indenture and the Registration Rights Agreement are governed by and
construed under the laws of the Commonwealth of Massachusetts.
CONVERSION OF NOTES
Each Holder of Notes has the right at any time on or after the 90th day
following the latest date of initial issuance of the Notes and prior to the
close of business on the Stated Maturity of the Notes, unless previously
redeemed or repurchased, at the Holder's option, to convert any portion of the
principal amount thereof that is an integral multiple of $1,000 into shares of
Common Stock at any time at the Conversion Price of $41.25 per share (subject to
adjustment as described below). The right to convert a Note called for
redemption or delivered for repurchase and not withdrawn will terminate at the
close of business on the Business Day, respectively, immediately prior to the
Redemption Date or Repurchase Date for such Note, unless the Company
subsequently fails to pay the applicable Redemption Price or Repurchase Price,
as the case may be.
In the case of any Note that has been converted after any Record Date, but
on or before the next Interest Payment Date, interest, the stated due date of
which is on such Interest Payment Date, shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest shall be paid to
the Holder of such Note who is a Holder on such Record Date. Any Note converted
after any Record Date but before the next Interest Payment Date must be
accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of Notes being surrendered for
conversion; provided no such payment shall be required with respect to interest
payable on March 15, 2001. No fractional shares will be issued upon conversion
but, in lieu thereof, an appropriate amount will be paid in cash by the Company
based on the market price of Common Stock (determined in accordance with the
Indenture) at the close of business on the day of conversion. As a result of the
foregoing provisions, Holders that surrender Notes for conversion on a date that
is not an Interest Payment Date will not receive any
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interest for the period from the Interest Payment Date next preceding the date
of conversion to the date of conversion or for any later period.
The Conversion Price is subject to adjustment in certain events, including
(a) any payment of a dividend (or other distribution) payable in Common Stock on
any class of Capital Stock of the Company, (b) any issuance to all holders of
Common Stock of rights, options or warrants entitling them to subscribe for or
purchase Common Stock at less than the then current market price of Common Stock
(determined in accordance with the Indenture), provided, however, that if such
rights, options or warrants are only exercisable upon the occurrence of certain
triggering events, then the Conversion Price will not be adjusted until such
triggering events occur, (c) certain subdivisions, combinations or
reclassifications of Common Stock, (d) any distribution to all holders of Common
Stock of evidences of indebtedness, shares of Capital Stock other than Common
Stock, cash or other assets (including securities, but excluding those
dividends, rights, options, warrants and distributions referred to above and
excluding dividends and distributions paid exclusively in cash and in mergers
and consolidations to which the third succeeding paragraph applies), (e) any
distribution consisting exclusively of cash (excluding any cash portion of
distributions referred to in (d) above, or cash distributed upon a merger or
consolidation to which the third succeeding Section applies) to 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 has been made and (ii) any cash and the fair market value
of other consideration paid or payable in respect of any tender or exchange
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 times the number of shares
of Common Stock then outstanding) on the record date of such distribution, and
(f) the completion of a tender or exchange offer made by the Company or any of
its subsidiaries for Common Stock that involves an aggregate consideration that,
together with (i) any cash and other consideration payable in a tender or
exchange offer by the Company or any of its subsidiaries for Common Stock
expiring within the 12 months preceding the expiration of such tender or
exchange offer in respect of which no adjustment has been made and (ii) the
aggregate amount of any such all-cash distributions referred to in (e) above to
all holders of Common Stock within the 12 months preceding the expiration of
such tender or exchange offer in respect of which no adjustments have been made,
exceeds 15% of the Company's market capitalization on the expiration of such
tender offer. No adjustment of the Conversion Price will be required to be made
until the cumulative adjustments amount to 1.0% or more of the Conversion Price
as last adjusted.
Under the terms of the Rights Agreement by and between the Company and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent, dated as of September
29, 1997, upon conversion of any Notes prior to the redemption or expiration of
the Rights (as defined therein), the Holders of such Notes will receive, subject
to certain limited conditions, an appropriate number of Rights with respect to
the shares of Common Stock issued upon such conversion. In addition, the
Indenture provides that if the Company amends the Rights Agreement or
implements a replacement or successor stockholders' rights plan, such rights
plan must provide that upon conversion of the Notes the Holder will receive, in
addition to the Common Stock issuable upon
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such conversion, such rights whether or not such rights have separated from the
Common Stock at the time of such conversion.
SUBORDINATION OF NOTES
The Notes are general, unsecured obligations of the Company, subordinated
in right of payment to all existing and future Senior Indebtedness of the
Company. In addition, the Notes are pari passu with the Company's 6% Convertible
Subordinated Notes due 2001 in the principal amount of $97.75 million. The
Indenture does not restrict the incurrence of Senior Indebtedness or other
indebtedness or liabilities by the Company or its subsidiaries or the ability of
the Company to transfer assets or business operations to its subsidiaries,
subject to the provisions described under "-Repurchase of Notes at the Option of
Holders Upon a Change of Control" and "-Limitation on Merger, Sale or
Consolidation" below.
OPTIONAL REDEMPTION BY THE COMPANY
The Notes are not subject to redemption prior to March 15, 2001 and will
be redeemable thereafter at the option of the Company, in whole or in part, upon
not less than 30 days' notice to each Holder, at the following redemption prices
(expressed as percentages of the principal amount) if redeemed during the
12-month period commencing March 15 of the years indicated below, in each case
(subject to the right of Holders of record on a Record Date to receive interest
due on an Interest Payment Date that is on or prior to such Redemption Date)
together with accrued and unpaid interest and liquidated damages, if any, to,
but excluding, the Redemption Date:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
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<S> <C>
2001........................................... 101.8%
2002........................................... 100.9
</TABLE>
In the case of a partial redemption, the Trustee shall select the Notes or
portions thereof for redemption on a pro rata basis, by lot or in such other
manner it deems fair and appropriate and in such manner as complies with any
applicable depositary, legal and stock exchange or automatic quotation system
requirement. The Notes may be redeemed in part in multiples of $1,000 only.
The Notes do not have the benefit of any sinking fund.
REPURCHASE OF NOTES AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL
The Indenture provides that in the event that a Change of Control has
occurred, each Holder of Notes has the right, at such Holder's option, to
require the Company to offer (the "Repurchase Offer") to repurchase all or any
part of such Holder's Notes (provided that the principal amount of such Notes
must be $1,000 or an integral multiple thereof) on the date (the
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"Repurchase Date") that is no later than 30 Business Days 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. The
Repurchase Offer shall be made within 25 Business Days following a Change of
Control and shall remain open for 20 Business Days following its commencement
except to the extent that a longer period is required by applicable law (the
"Repurchase Offer Period"). Upon expiration of the Repurchase Offer Period, the
Company shall purchase all Notes tendered in response to the Repurchase Offer.
If required by applicable law, the Repurchase Date and the Repurchase Offer
Period may be extended as so required; however, if so extended, it shall
nevertheless constitute an Event of Default if the Repurchase Date does not
occur within 60 Business Days of the Change of Control.
LIMITATION ON MERGER, SALE OR CONSOLIDATION
The Indenture provides that the Company may 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 (other than to its wholly-owned
subsidiaries), whether in a single transaction or a series of related
transactions, to another Person or group of affiliated Persons, 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 Notes and the Indenture; (ii)
no Default or Event of Default shall exist or shall occur immediately after
giving effect to such transaction; and (iii) the Company has delivered to the
Trustee an officer's 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 transaction have been satisfied.
Upon any consolidation or merger or any 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 to the Indenture and the Notes, the Company will be released from its
obligations under the Indenture and the Notes, except as to any obligations that
arise from or as a result of such transaction.
EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an Event of Default as (i) the failure by the
Company to pay any installment of interest on, or liquidated damages with
respect to, the Notes as and when due and payable and the continuance of any
such failure for 30 days, (ii) the failure by the Company to pay all or any part
of the principal of, or premium, if any, on the Notes when and as the same
become due and payable at maturity, redemption, by acceleration or otherwise,
including,
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without limitation, pursuant to any Repurchase Offer or otherwise, (iii) the
failure of the Company to perform any conversion of Notes required under the
Indenture and the continuance of any such failure for 30 days, (iv) the failure
by the Company to observe or perform any other covenant or agreement contained
in the Notes or the Indenture and subject to certain exceptions, the continuance
of such failure for a period of 60 days after written notice is given 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 Notes outstanding, (v) certain
events of bankruptcy, insolvency or reorganization in respect of the Company or
any of its Significant Subsidiaries (as defined), (vi) failure of the Company or
any Significant Subsidiary to pay principal, premium or interest when due at
maturity, including any applicable grace period, in respect of Indebtedness
(other than nonrecourse obligations) in an amount in excess of $10.0 million and
continuance of such failure for 30 days after written notice is given 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 Notes outstanding, (vii) 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 in an amount in excess of $10.0 million without such
Indebtedness having been discharged or such acceleration having been rescinded
or annulled for 30 days after written notice is given 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 Notes outstanding and (vii) final unsatisfied
judgments not covered by insurance aggregating in excess of $10.0 million, at
any one time rendered against the Company or any of its Significant Subsidiaries
and not stayed, bonded or discharged within 60 days. The Indenture provides that
if a default occurs and is continuing and if it is known to the Trustee, the
Trustee must, within 90 days after the occurrence of such default, give to the
Holders notice of such default, but the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the best interest of the Holders, except in the case of a
default in the payment of the principal of, premium, if any, or interest on or
liquidated damages with respect to, any of the Notes when due or in the payment
of any redemption or repurchase obligation.
The Indenture provides that if an Event of Default occurs and is
continuing (other than an Event of Default specified in clause (v) above with
respect to the Company), 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 the Notes then outstanding, by
notice in writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all principal and accrued interest and
liquidated damages, if any, thereon to be due and payable immediately. If an
Event of Default specified in clause (v) above with respect to the Company
occurs, all principal and accrued interest and liquidated damages, if any, will
be immediately due and payable on all outstanding Notes without any declaration
or other act on the part of the Trustee or the Holders. The Holders of no less
than a majority in aggregate principal amount of Notes generally are authorized
to rescind such acceleration if all existing Events of Default, other than the
non-payment of the principal of, premium, if any, and interest on, and
liquidated damages with respect to, the Notes that have become due solely by
such acceleration, have been cured or waived.
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Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in principal amount of the Notes at the time outstanding
may waive on behalf of all the Holders any default, except a default in the
payment of principal of or interest on, or liquidated damages with respect to,
any Note not yet cured, or a default with respect to any covenant or provision
that cannot be modified or amended without the consent of the Holder of each
outstanding Note affected. Subject to the provisions of the Indenture relating
to the duties of the Trustee, the Trustee is under no obligation to exercise any
of its rights or powers under the Indenture at the request, order or direction
of any of the Holders, unless such Holders have furnished to the Trustee
reasonable security or indemnity. Subject to all provisions of the Indenture and
applicable law, the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding 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 on the Trustee.
The Indenture provides that no Holder may pursue any remedy under the
Indenture, except for a default in the payment of principal, premium, if any, or
interest or liquidated damages, if any, on the Notes, unless the Holder gives to
the Trustee written notice of a continuing Event of Default, the Holders of at
least 25% in principal amount of the outstanding Notes make a written request to
the Trustee to pursue the remedy, such Holders furnish to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense, the Trustee
does not comply with the request within 60 days after receipt of the request and
the furnishing of indemnity, and the Trustee shall not have received a contrary
direction from the Holders of a majority in principal amount of the outstanding
Notes.
AMENDMENTS AND SUPPLEMENTS
The Indenture contains provisions permitting the Company and the Trustee
to enter into a supplemental indenture for certain limited purposes without the
consent of the Holders. With the consent of the Holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding, the
Company and the Trustee are permitted to amend or supplement the Indenture or
any supplemental indenture or modify the rights of the Holders; provided, that
no such modification may, without the consent of each Holder affected thereby:
(i) change the Stated Maturity of any Note 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 Note or any premium or the interest
thereon is payable, or impair the right to institute suit for the conversion of
any Note 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 (other than as set
forth herein) or redemption provisions in a manner adverse to the Holders, (ii)
reduce the percentage in principal amount of the outstanding Notes, the consent
of whose Holders is required for any such amendment, supplemental indenture or
waiver provided for in the Indenture, (iii) adversely affect the right of such
Holder to convert Notes, or (iv) provide that other provisions of the Indenture
cannot be modified or waived without the consent of the Holder of each
outstanding Note affected thereby. A supplemental indenture
<PAGE>
entered into in compliance with the "Limitation on Merger, Sale or
Consolidation" covenant does not require the consent of the Note Holders.
REGISTRATION RIGHTS
The Company has agreed to file with the Commission a shelf registration
statement covering resales by holders of Notes and Common Stock issuable upon
conversion of the Notes within 90 days after the latest date of initial issuance
of the Notes and will use its best efforts to cause such registration statement
to be declared effective within 120 days following such filing. The Company will
use all reasonable efforts to cause such registration statement to become
effective as promptly as is practicable and to keep the registration statement
effective for two years from the latest date of initial issuance of Notes. The
Company will be permitted to suspend the use of the prospectus which is a part
of the shelf registration statement during certain periods of time and under
certain circumstances relating to pending corporate developments, public filings
with the Commission and similar events. If a registration statement is not
timely filed or if the prospectus is unavailable for periods in excess of those
permitted under the Registration Rights Agreement, the Company has agreed to pay
liquidated damages to (i) each Holder of Notes at a rate equal to one-quarter of
one percent per annum (25 basis points) on the aggregate principal amount of the
Notes and (ii) each holder of shares of Common Stock issued upon conversion of
the Notes at a rate equal to one-quarter of one percent per annum (25 basis
points) calculated on the product of the then-applicable Conversion Price times
the number of shares of such Common Stock held by such holder. The Company will
pay all expenses of the shelf registration statement, provide to each registered
holder requesting to sell Notes or shares of Common Stock copies of such
prospectus, notify each registered holder when the shelf registration statement
has become effective and take certain other actions as are required to permit,
subject to the foregoing, unrestricted resales of the Securities. A Holder who
sells the Notes pursuant to the shelf registration statement generally will be
required to be named as a selling stockholder in the related prospectus and to
deliver a prospectus to purchasers and will be bound by the provisions of the
Registration Rights Agreement which are applicable to such Holder (including
certain indemnification provisions). If a shelf registration statement covering
the Common Stock issued upon conversion of the Notes is not effective, such
Common Stock may not be sold or otherwise transferred except in accordance with
the transfer restrictions set forth in the legends on the Notes.
The specific provisions relating to the registrations described above are
contained in the Registration Rights Agreement.
THE TRUSTEE
Chase Bank of Texas, N.A., the Trustee under the Indenture, has been
appointed by the Company as the initial paying agent, conversion agent,
registrar and custodian with regard to the Notes. The Company may maintain
deposit accounts and conduct other banking transactions with the Trustee or its
affiliates in the ordinary course of business, and the Trustee and its
affiliates may from time to time in the future provide banking and other
services to the Company in the ordinary course of their business.
<PAGE>
CERTAIN DEFINITIONS
"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 Dallas,
Texas are authorized or obligated by law or executive order to close.
"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.
"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.
"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) is or becomes, directly or indirectly, the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not
applicable) of more than 50% of 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
("Voting Stock"), (ii) the completion of any consolidation with or merger of the
Company into any other Person, or 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 stockholders 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, or (iii) such time as the Continuing Directors (as defined) do
not constitute a majority of the Board of Directors of the Company (or, if
applicable, a successor corporation to the Company); 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.
<PAGE>
"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 date of initial issuance of
the Notes 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.
"Credit Facility" means the Credit Agreement, dated as of September 17,
1997, and as amended and restated on February 20, 1998, among the Company, the
lenders from time to time party thereto, First Union National Bank, as
administrative agent, and Fleet National Bank, as documentation agent, as the
same may from time to time be amended, modified, supplemented, restated,
renewed, refunded, restructured, refinanced, replaced or extended, in whole or
in part, whether with same or different agents or lenders thereunder.
"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 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.
"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 or 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 or a reimbursement obligation of such person
with respect to any letter of credit; (b) all obligations 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.
<PAGE>
"Interest Swap and Hedging Obligations" means the obligations of any
Person under any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement or other interest rate hedge agreement, interest
rate collar agreement or other similar agreement or arrangement to which such
Person is a party or beneficiary.
"Junior Securities" means any Qualified Capital Stock (as defined) and any
Indebtedness of the Company that is fully subordinated in right of payment to
the Notes and has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of the
Notes.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"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 fees, costs,
expenses and other amounts accrued or due on or in connection with, any
Indebtedness of the Company, whether 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 provides
that such Indebtedness is not senior or superior in right of payment to the
Notes or which is pari passu with, or subordinated to, the Notes; provided that
in no event shall Senior Indebtedness include (a) Indebtedness of the Company
owed or owing to any subsidiary of the Company or any officer, director or
employee of the Company or any subsidiary of the Company, (b) Indebtedness
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 or (c) any liability for
taxes owed or owing by the Company or any subsidiary of the Company. The Notes
rank pari passu with the Company's 6% Convertible Subordinated Notes due
2001.
"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.
"Stated Maturity," when used with respect to any Note, means March 15,
2003.
"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
<PAGE>
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 a majority ownership interest.
USE OF PROCEEDS
The net proceeds to the Company from the offering of the Notes (after
deducting discounts and estimated expenses) were approximately $194.65 million
($223.9 million if the overallotment option is exercised in full). The Company
used a portion of such net proceeds to repay all of the outstanding principal
amounts, approximately $122.0 million, under the Credit Facility, and the
commitment under the Credit Facility was decreased to $100.0 million.
The Company will use the remaining net proceeds from the offering of the
Notes to finance the Company's acquisition, joint venture and development
strategy and for other general corporate purposes. Although the Company is in
discussions with numerous potential acquisition and joint venture candidates,
there can be no assurance that such transactions can be consummated on favorable
terms or that any acquisition or joint venture, if completed, will be
successful.
Pending use, the Company has invested the net proceeds from the sale of
the Notes in short-term, investment grade, interest bearing securities.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
4.1 Form of Note (included in Exhibit 4.2 hereto)
4.2 Indenture by and between the Company and Chase Bank of Texas, N.A. dated
as of March 16, 1998
10.1 Purchase Agreement by and among the Company, BT Alex. Brown, Incorporated,
BancAmerica, Robertson Stephens, Donaldson, Lufkin & Jenrette Securities
Corporation and Piper Jaffrey Inc. dated as of March 11, 1998
10.2 Registration Rights Agreement by and among the Company, BT Alex. Brown,
Incorporated, BancAmerica, Robertson Stephens, Donaldson, Lufkin &
Jenrette Securities Corporation and Piper Jaffrey Inc. dated as of March
11, 1998
<PAGE>
SIGNATURES
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.
CONCENTRA MANAGED CARE, INC.
Date: March 30, 1998 By: /c/ Richard A. Parr II
------------------------------------
Richard A. Parr II
Executive Vice President, General Counsel
and Secretary
<PAGE>
CONCENTRA MANAGED CARE, INC.
Issuer,
and
CHASE BANK OF TEXAS, N.A.
Trustee
INDENTURE
Dated as of March 16, 1998
$200,000,000
4.5% Convertible Subordinated Notes due 2003
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.........................1
SECTION 1.1 DEFINITIONS.................................................1
SECTION 1.2 INCORPORATION BY REFERENCE OF TIA...........................9
SECTION 1.3 RULES OF CONSTRUCTION......................................10
ARTICLE II THE SECURITIES..................................................10
SECTION 2.1 FORM AND DATING............................................10
SECTION 2.2 EXECUTION AND AUTHENTICATION...............................11
SECTION 2.3 REGISTRAR AND PAYING AGENT.................................11
SECTION 2.4 PAYING AGENT TO HOLD ASSETS IN TRUST.......................12
SECTION 2.5 SECURITYHOLDER LISTS.......................................12
SECTION 2.6 TRANSFER AND EXCHANGE......................................13
SECTION 2.7 REPLACEMENT SECURITIES.....................................20
SECTION 2.8 OUTSTANDING SECURITIES.....................................20
SECTION 2.9 TREASURY SECURITIES........................................21
SECTION 2.10 TEMPORARY SECURITIES......................................21
SECTION 2.11 CANCELLATION..............................................21
SECTION 2.12 DEFAULTED INTEREST........................................21
ARTICLE III REDEMPTION......................................................22
SECTION 3.1 RIGHT OF REDEMPTION........................................23
SECTION 3.2 NOTICES TO TRUSTEE.........................................23
SECTION 3.3 SELECTION OF SECURITIES TO BE REDEEMED.....................23
SECTION 3.4 NOTICE OF REDEMPTION.......................................23
SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION.............................24
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE................................25
SECTION 3.7 SECURITIES REDEEMED IN PART................................25
SECTION 3.8 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION..............26
ARTICLE IV COVENANTS........................................................26
SECTION 4.1 PAYMENT OF SECURITIES......................................26
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY............................27
SECTION 4.3 CORPORATE EXISTENCE........................................27
SECTION 4.4 PAYMENT OF TAXES AND OTHER CLAIMS..........................27
SECTION 4.5 MAINTENANCE OF PROPERTIES AND INSURANCE....................28
SECTION 4.6 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT..................28
SECTION 4.7 REPORTS....................................................29
SECTION 4.8 LIMITATION ON STATUS AS INVESTMENT COMPANY.................29
SECTION 4.9 WAIVER OF STAY, EXTENSION OR USURY LAWS....................29
SECTION 4.10 RULE 144A INFORMATION REQUIREMENT.........................30
ARTICLE V SUCCESSOR CORPORATION.............................................31
SECTION 5.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION................31
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED..........................31
i
<PAGE>
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES...................................32
SECTION 6.1 EVENTS OF DEFAULT..........................................32
SECTION 6.2 ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT....33
SECTION 6.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE....................................................35
SECTION 6.4 TRUSTEE MAY FILE PROOFS OF CLAIM...........................35
SECTION 6.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES ................................................36
SECTION 6.6 PRIORITIES.................................................36
SECTION 6.7 LIMITATION ON SUITS........................................37
SECTION 6.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM, INTEREST AND LIQUIDATED DAMAGES, AND TO CONVERT...37
SECTION 6.9 RIGHTS AND REMEDIES CUMULATIVE.............................38
SECTION 6.10 DELAY OR OMISSION NOT WAIVER..............................38
SECTION 6.11 CONTROL BY HOLDERS........................................38
SECTION 6.12 WAIVER OF PAST DEFAULT....................................38
SECTION 6.13 UNDERTAKING FOR COSTS.....................................39
SECTION 6.14 RESTORATION OF RIGHTS AND REMEDIES........................39
ARTICLE VII TRUSTEE.........................................................40
SECTION 7.1 DUTIES OF TRUSTEE..........................................40
SECTION 7.2 RIGHTS OF TRUSTEE..........................................41
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE...............................42
SECTION 7.4 TRUSTEE'S DISCLAIMER.......................................42
SECTION 7.5 NOTICE OF DEFAULT..........................................42
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS..............................42
SECTION 7.7 COMPENSATION AND INDEMNITY.................................43
SECTION 7.8 REPLACEMENT OF TRUSTEE.....................................43
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC...........................45
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.............................45
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.........45
ARTICLE VIII SATISFACTION AND DISCHARGE.....................................45
SECTION 8.1 SATISFACTION AND DISCHARGE OF INDENTURE....................45
SECTION 8.2 REPAYMENT TO THE COMPANY...................................46
ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS..............................46
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.........46
SECTION 9.2 AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT
OF HOLDERS.................................................47
SECTION 9.3 COMPLIANCE WITH TIA........................................48
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS..........................48
SECTION 9.5 NOTATION ON OR EXCHANGE OF SECURITIES......................49
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC............................49
ARTICLE X [RESERVED].......................................................49
ARTICLE XI RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL.............49
SECTION 11.1 REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON A
CHANGE OF CONTROL.........................................49
ARTICLE XII SUBORDINATION...................................................52
SECTION 12.1 SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS............52
SECTION 12.2 NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.........52
SECTION 12.3 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION,
<PAGE>
LIQUIDATION OR REORGANIZATION.............................54
SECTION 12.4 SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF
SENIOR INDEBTEDNESS.......................................55
SECTION 12.5 OBLIGATIONS OF THE COMPANY UNCONDITIONAL..................55
SECTION 12.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.........................................56
SECTION 12.7 APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT........56
SECTION 12.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
THE COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS.............56
SECTION 12.9 SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES...............................57
SECTION 12.10 RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.............57
SECTION 12.11 ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT.............58
SECTION 12.12 NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR
INDEBTEDNESS.............................................58
ARTICLE XIII CONVERSION OF SECURITIES.......................................58
SECTION 13.1 CONVERSION PRIVILEGE.......................................58
SECTION 13.2 EXERCISE OF CONVERSION PRIVILEGE..........................59
SECTION 13.3 FRACTIONAL INTERESTS......................................60
SECTION 13.4 CONVERSION PRICE..........................................60
SECTION 13.5 ADJUSTMENT OF CONVERSION PRICE............................60
SECTION 13.6 CONTINUATION OF CONVERSION PRIVILEGE IN CASE OF
RECLASSIFICATION, CHANGE, MERGER, CONSOLIDATION
OR SALE OF ASSETS.........................................65
SECTION 13.7 NOTICE OF CERTAIN EVENTS..................................66
SECTION 13.8 TAXES ON CONVERSION.......................................67
SECTION 13.9 COMPANY TO PROVIDE STOCK..................................67
SECTION 13.10 DISCLAIMER OF RESPONSIBILITY FOR CERTAIN MATTERS.........68
SECTION 13.11 RETURN OF FUNDS DEPOSITED FOR REDEMPTION OF CONVERTED
SECURITIES...............................................68
ARTICLE XIV MISCELLANEOUS...................................................69
SECTION 14.1 TIA CONTROLS..............................................69
SECTION 14.2 NOTICES...................................................69
SECTION 14.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS..............70
SECTION 14.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........70
SECTION 14.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.............70
SECTION 14.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.................71
SECTION 14.7 LEGAL HOLIDAYS............................................71
SECTION 14.8 GOVERNING LAW.............................................71
SECTION 14.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.............71
SECTION 14.10 NO RECOURSE AGAINST OTHERS...............................71
SECTION 14.11 SUCCESSORS...............................................72
SECTION 14.12 DUPLICATE ORIGINALS......................................72
SECTION 14.13 SEVERABILITY.............................................72
SECTION 14.14 TABLE OF CONTENTS, HEADINGS, ETC.........................72
SECTION 14.15 QUALIFICATION OF INDENTURE...............................72
SECTION 14.16 REGISTRATION RIGHTS......................................72
EXHIBITS
EXHIBIT A FORM OF SECURITY...........................................A-1
EXHIBIT B INVESTOR LETTER OF REPRESENTATION..........................B-1
EXHIBIT C FORM OF CONVERSION NOTICE..................................C-1
<PAGE>
INDENTURE, dated as of March 16, 1998, between CONCENTRA MANAGED CARE,
INC., a Delaware corporation (the "Company"), and CHASE BANK OF TEXAS, N.A., a
national banking association, 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 4.5%
Convertible Subordinated Notes due 2003.
ARTICLE I
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 term "control" means 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 any Registrar, Paying Agent or co-Registrar or any
successor thereto.
"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, except that a "person"
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time or upon the occurrence of certain events.
"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 Dallas,
Texas 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) is or becomes, directly or indirectly, the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not
applicable) of more than 50% of 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
("Voting Stock"), (ii) the completion of any consolidation with or merger of the
Company into any other Person, or 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 stockholders 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, or (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); 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, par value $.01 per share,
or as such stock may be reconstituted from time to time.
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<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.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Damage Payment Date" shall have the meaning specified in the Registration
Rights Agreement.
"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 2 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 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.
-3-
<PAGE>
"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.
"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 ("FASB") 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 2 to the form
of Security attached hereto as Exhibit A. There shall be one or more Global
Securities to evidence interests in the Securities held (x) by "qualified
institutional buyers," as defined in Rule 144A under the Securities Act, and (y)
by institutional "accredited investors" as defined in Rule 501(a)(1), (2), (3)
or (7) under Regulation D of the Securities Act.
"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 or 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 or a reimbursement obligation of such person
with respect to any letter of credit; (b) all obligations 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 clause (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
-4-
<PAGE>
and refundings (whether direct or indirect) of, or any indebtedness or
obligations 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 BT Alex. Brown Incorporated, BancAmerica
Robertson Stephens, Donaldson Lufkin & Jenrette Securities Corporation and
Piper Jaffray 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 protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement or other interest rate hedge agreement, interest rate 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 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.
"Loan Agreement" means the Credit Agreement, dated as of September 17,
1997 and amended and restated as of February 20, 1998, among the Company, the
lenders from time to time party thereto and First Union National Bank, as
administrative agent for the lenders thereunder, and Fleet National Bank, as
documentation agent for the lenders thereunder, as the same may from time to
time be amended, modified, supplemented, restated, renewed, refunded,
-5-
<PAGE>
restructured, refinanced, replaced or extended, in whole or in part, whether
with same or different agents or lenders thereunder.
"non-electing share" shall have the meaning specified in Section 13.6.
"Non-Payment Default" shall have the meaning specified in Section 12.2.
"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.
"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 of the Company.
"Officers' Certificate" means, with respect to the Company, a certificate
signed by two Officers or by an Officer and an Assistant Secretary 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.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Payment Blockage Period" shall have the meaning specified in Section
12.2.
"Payment Default" shall have the meaning specified in Section 12.2.
"Payment Notice" shall have the meaning specified in Section 12.2.
"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.
"PORTAL Market" means the private Offerings, Resales and Trading
through Automated Linkages Market operated by the National Association of
Securities Dealers, Inc. or any successor thereto.
"principal" of any Indebtedness means the principal of such Indebtedness
plus, without duplication, any applicable premium, if any, on such Indebtedness.
"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.
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"Purchase Agreement" means that certain Purchase Agreement, dated March
11, 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.
"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.
"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, which shall include, without duplication, in each case,
accrued and unpaid interest and Liquidated Damages, if any, to and including 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.
"Repurchase Offer" shall have the meaning specified in Section 11.1.
"Repurchase Offer Period" shall have the meaning specified in Section
11.1.
"Repurchase Price" shall have the meaning specified in Section 11.1.
"Repurchase Put Date" shall have the meaning specified in Section 11.1.
"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.
"Rights" shall mean "Rights" as such term is defined in the Rights
Agreement.
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"Rights Agreement" means that certain Rights Agreement dated as of
September 29, 1997 between the Company and the Rights Agent (as such term is
defined therein), as amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the 4.5% Convertible Subordinated Notes
due 2003, 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 fees, costs,
expenses and other amounts accrued or due on or in connection with, any
Indebtedness of the Company, whether 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 provides
that such Indebtedness is not senior or superior in right of payment to the
Securities or which 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 or any officer,
director or employee of the Company or any Subsidiary of the Company, (b)
Indebtedness 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 or (c) any
liability for taxes owed or owing by the Company or any Subsidiary of the
Company. The Securities will rank pari passu with the Company's 6% Convertible
Subordinated Notes due 2001.
"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 March 15,
2003.
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"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 ss.ss. 77aaa-
77bbbb) as in effect on the date of the execution of this Indenture unless
otherwise specified herein.
"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 admitted to trading thereon, on the
principal national securities exchange on which the Common Stock is at that time
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.
"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 non-callable 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:
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"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
obligor 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.
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.
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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.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Security for the Company by manual or facsimile signature. The
Company's seal shall 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 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 $230,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Securities to be authenticated and the date on which the
Securities are to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $230,000,000, except as provided in
Section 2.7; provided, that Securities in excess of $200,000,000 shall not be
issued other than pursuant to the over-allotment 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
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the same rights as an Agent to deal with the Company, any Affiliate of the
Company, or any of their respective Subsidiaries.
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 the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer, conversion 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 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,
Paying Agent and conversion 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 and 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 and 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
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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 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) Global Securities. So long as the Securities are eligible for
book-entry settlement with the Depositary, unless otherwise required by law, all
Securities to be traded (i) on the PORTAL Market or (ii) (A) to qualified
institutional buyers as defined in Rule 144A under the Securities Act or (B) to
an institutional accredited investor as defined in Rule 501(a)(1), (2), (3), or
(7) under Regulation D of the Securities Act ("Institutional Accredited
Investor") that, prior to such transfer, is required to furnish to the Trustee a
signed letter containing certain representations and agreements relating to the
restrictions on transfer of the Security ("Investment Letter"), shall be
represented by one or more Global Securities registered in the name of the
Depositary or the nominee of the Depositary. The transfer and exchange of
beneficial interests in Global Security, which does not involve the issuance of
a Security in certificated form, shall be effected through the Depositary, in
accordance with this Indenture (including restrictions on transfer set forth
herein) and the procedures of the Depositary therefor.
At any time at the request of the beneficial Holder of an interest
in Global Security to obtain a Security in certificated form, such beneficial
Holder shall be entitled to obtain a Security in certificated form upon written
request to the Trustee in accordance with the standing instructions and
procedures existing between the Trustee and Depositary for the issuance thereof.
Upon receipt of any such request, the Trustee, will cause, in accordance with
the standing instructions and procedures existing between the Depositary and the
Trustee, the aggregate principal amount of the Global Security, to be reduced by
the principal amount of the Security in certified form issued upon such request
to such beneficial Holder and, following such reduction, the Company will
execute and the Trustee will authenticate and deliver to such beneficial Holder
(or its nominee) a Security or Securities in certificated form in the
appropriate aggregate principal amount in the name of such beneficial Holder (or
its nominee) and bearing such restrictive legends as may be required by this
Indenture.
Any transfer of a beneficial interest in the Global Security which
cannot be effected through book-entry settlement must be effected by the
delivery to the transferee (or its
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nominee) of a Security or Securities in certificated form registered in the name
of the transferee (or its nominee) on the books maintained by the Registrar in
accordance with the transfer restrictions set forth herein. With respect to any
such transfer, the Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Trustee, the
aggregate principal amount of the Global Security to be reduced by the principal
amount of the respective beneficial interest in the Global Security being
transferred and, following such reduction, the Company will execute and the
Trustee will authenticate and deliver to the transferee (or such transferee's
nominee, as the case may be), a Security or Securities in certificated form in
the appropriate aggregate principal amount in the name of such transferee (or
its nominee) bearing such restrictive legends as may be registered by this
Indenture.
(b) Transfer. So long as the Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a Security
in certificated form to a qualified institutional buyer as defined in Rule 144A
under the Securities Act in accordance with Rule 144A or an Institutional
Accredited Investor that is required to deliver an Investment Letter, and upon
receipt of the Security or Securities in certificated form being so transferred,
together with a certification from the transferor that the transferee is a
qualified institutional buyer as defined in Rule 144A under the Securities Act
or an Institutional Accredited Investor (and, in the case of an Institutional
Accredited Investor, that such transferee has delivered an Investment Letter),
the Trustee shall make an endorsement on the Global Security to reflect an
increase in the aggregate principal amount of the Security represented by the
Global Security, and the Trustee shall cancel such Security or Securities in
certificated form and cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Trustee, the aggregate
principal amount of Securities represented by the Global Security to be
increased accordingly provided that no Security in certificated form, or portion
thereof, in respect of which the Company or an Affiliate of the Company held any
beneficial interest shall be included in the Global Security until such Security
in certificated form is freely tradable in accordance with Rule 144(k) provided
further that the Trustee shall issue Securities in certificated form upon any
transfer of a beneficial interest in the Global Security to the Securities or an
Affiliate of the Company.
Any Global Security may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Securities to
be tradable on the PORTAL Market or as may be required for the Securities to be
tradable on any other market developed for trading of securities pursuant to
Rule 144A under the Securities Act or required to comply with any applicable law
or any regulation thereunder or with the rules and regulations of any securities
exchange or automated quotation system upon which the Securities may be listed
or traded or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Securities are
subject.
(c) Legend on Securities. Every Security that bears or is required
under this Section 2.6(c) to bear the legend set forth in this Section 2.6(c)
(together with any Common
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Stock issued upon conversion of the Securities and required to bear the legend
set forth in Section 2.6(d)), shall be subject to the restrictions on transfer
set forth in this Section 2.6(c) (including those set forth in the legend set
forth below) unless such restrictions on transfer shall be waived by written
consent of the Company (with written notice to the Trustee), and the Holder of
each such Restricted Security, by such Securityholder's acceptance thereof,
agrees to be bound by all such restrictions on transfer. As used in Section
2.6(c) and 2.6(d), the term "transfer" encompasses any sale, pledge, transfer or
other disposition whatsoever of any Restricted Security.
Until two (2) years after the original issuance date of any
Security, any certificate evidencing such Security (and all Securities in
exchange therefor or substitution thereof, other than Common Stock, if any,
issued upon conversion thereof, which shall bear the legend set forth in Section
2.6(d), if applicable) shall bear a legend in substantially the following form,
unless otherwise agreed by the Company in writing, with written notice thereof
to the Trustee:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
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 OR
SOLD, EXCEPT AS SET FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT (A) IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"); (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED HEREBY AND
THE LAST DATE ON WHICH CONCENTRA MANAGED CARE, INC. (THE "COMPANY") OR ANY
"AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY WAS
THE OWNER OF THE SECURITY (THE "RESTRICTION TERMINATION DATE") RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE
UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO CHASE BANK OF TEXAS, N.A., AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
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DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY
BEFORE THE RESTRICTION TERMINATION DATE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS SECURITY TO CHASE BANK OF TEXAS, N.A., AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE (C) OR
(D) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO CHASE BANK OF
TEXAS, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
THIS LEGEND WILL BE REMOVED UPON ANY TRANSFER OF THE SECURITY
EVIDENCED HEREBY UPON OR AFTER THE RESTRICTION TERMINATION DATE.
Any Security (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to which the conditions for removal of the
foregoing legend set forth therein have been satisfied may, upon surrender of
such Security for exchange to the Registrar in accordance with the provisions of
this Section 2.6, to be exchanged for a new Security or Securities, of like
tenor and aggregate principal amount and authorized denominations, which shall
not bear the restrictive legend required by this Section 2.6(c).
Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in the second paragraph of Section 2.6(a) and in this
Section 2.6(c), a Global Security may not be transferred as a whole or in part
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depositary Trust Company to act
as Depositary with respect to the Global Securities. Initially, the Global
Security shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Securities
Custodian for Cede & Co.
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The Trustee is hereby authorized and requested to execute and
deliver a Letter of Representation to the Depositary and, in connection with any
successor nominee for the Depositary or any successor Depositary, enter into
comparable arrangements, and shall have the same rights with respect to its
actions thereunder as it has with respect to its action under this Indenture.
If at any time the Depositary for the Global Security notifies the
Company that it is unwilling or unable to continue as Depositary for the
Security, the Company may appoint a successor Depositary with respect to such
Security. If a successor Depositary is not appointed by the Company within 90
days after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Securities, will authenticate and deliver, Securities in
certificated form, in an aggregate principal amount equal to the principal
amount of the Global Security, in exchange for the Global Security.
If a Security in certificated form is issued in exchange for any
portion of a Global Security after the close of business at the office or agency
where such exchange occurs on any Record Date and before the opening of business
at such office or agency on the next succeeding Interest Payment Date, interest
will not be payable on such Interest Payment Date in respect of such Security,
but will be payable on such Interest Payment Date only to the Person to whom
interest in respect of such portion of such Global Security is payable in
accordance with the provisions of this Indenture.
Securities in certificated form issued in exchange for all or a part
of a Global Security pursuant to this Section 2.6 shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instruction from its direct or indirect participants or otherwise, shall
instruct the Trustee in writing. Upon execution and authentication, the Trustee
shall deliver such Securities in certificated form to the Person in whose names
such Securities in certificated form are so registered.
At such time as all interests in a Global Security have been
redeemed, repurchased, converted, canceled, exchanged for Securities in
certificated form, or transferred to a transferee who receives Securities in
certificated form, such Global Security shall, upon receipt thereof, be canceled
by the Trustee. At any time prior to such cancellation, if any interest in a
Global Security is exchanged for Securities in certificated form, redeemed,
converted, repurchased or canceled, or transferred to a transferee who receives
Securities in certificated form therefor or any Security in certificated form is
exchanged or transferred for part of a Global Security, the principal amount of
such Global Security shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Custodian, be appropriately
reduced or increased, as the case may be, and an endorsement shall be made on
such Global Security, by the Trustee, to reflect such reduction or increase. In
the event of any transfer of any beneficial interest between the Global Security
in accordance with the standing procedures and instructions between the
Depositary and the Trustee and the transfer restrictions set forth herein, the
aggregate principal amount of each Global Security shall be appropriately
increased or
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decreased, as the case may be, and an endorsement shall be made on each Global
Security by the Trustee or the Securities Custodian, at the direction of the
Trustee, to reflect such reduction or increase.
(d) Legend on Common Stock. Until two (2) years after the original
issuance date of any Security, any stock certificate representing Common Stock
issued upon conversion of such Security shall bear a legend in substantially the
following form, unless such Common Stock has been transferred pursuant to a
registration statement that has been declared effective under the Securities Act
(and which continues to be effective at the time of such transfer) or such
Common Stock has been issued upon conversion of Securities that have been
transferred pursuant to a registration statement that has been declared
effective under the Securities Act, or unless otherwise agreed by the Company in
writing with written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS 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 OR SOLD, EXCEPT AS SET
FORTH BELOW.
THE HOLDER HEREOF AGREES THAT PRIOR TO THE DATE THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE SECURITY UPON THE CONVERSION OF
WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED AND THE LAST DATE ON WHICH
CONCENTRA MANAGED CARE, INC. (THE "COMPANY") OR ANY "AFFILIATE" (AS DEFINED IN
RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE OWNER OF THE SECURITY
OR THE COMMON STOCK EVIDENCED HEREBY (THE "RESTRICTION TERMINATION DATE"): (1)
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
COMPLIANCE WITH RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS
TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION
PROVIDED UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2)
PRIOR TO SUCH TRANSFER BEFORE THE RESTRICTION TERMINATION DATE (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 1(E)
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ABOVE, IT WILL FURNISH CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS TRANSFER
AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE) A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(E) ABOVE OR UPON THE
RESTRICTION TERMINATION DATE.
Any such Common Stock as to which such restrictions on transfer
shall have expired in accordance with their terms or as to which the conditions
for removal of the foregoing legend set forth therein have been satisfied may,
upon surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.6(d).
(e) [Reserved]
(f) [Reserved]
(g) [Reserved]
(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 cancelled, such Global Security
shall be returned to or retained and cancelled 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 cancelled, 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 direction of the Trustee, to reflect such
reduction.
(i) Obligations with respect to Transfers and Exchanges of Definitive
Securities and Global Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-Registrar's request.
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(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 11.1 (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 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 Trustee to the effect that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee 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 cancelled by
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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), it ceases to be outstanding unless the
Trustee 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,
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shall cancel and, at the written direction of the Company, shall dispose of all
Securities surrendered for transfer, exchange, payment or cancellation. 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 exchange for any Securities cancelled 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 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company 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 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, 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
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Securities may be listed, and upon such notice as may be required by such
exchange, if, after 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.
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 March
15, 2001. On or after March 15, 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 and
the principal amount of Securities to be redeemed and whether it wants the
Trustee to give notice of redemption to the Holders.
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 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 before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee). Any such notice may be cancelled 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.
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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 prior to a Redemption Date, the Company shall send a
notice of redemption to the Trustee and each Holder whose Securities are to be
redeemed. 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 for
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 fifth Business Day prior to the
Redemption Date;
(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, after the Redemption Date, and 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
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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 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.
On or prior to 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 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 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
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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 shall authenticate and deliver 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.
SECTION 3.8. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of the Securities, the Company may
arrange for the purchase and conversion of any of the Securities by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to the Trustee in trust for the Holders, on or before the
date fixed for redemption, an amount not less than the applicable Redemption
Price, together with interest accrued to (but excluding) that date fixed for
redemption, of such Securities. Notwithstanding anything to the contrary
contained in this Article III, the obligation of the Company to pay the
Redemption Price of such Securities, together with interest accrued to (but
excluding) the date fixed for redemption, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into (a copy of which shall be filed with the Trustee prior
to the date fixed for redemption), any Securities not duly surrendered for
conversion by the Holders thereof, may, at the option of the Company, be deemed,
to the fullest extent permitted by law, acquired by such purchasers from such
Holders and surrendered by such purchasers for conversions, all as of
immediately prior to the close of business on the date fixed for redemption (and
the right to convert any such Securities shall be extended through such time),
subject to payment of the above amount as aforesaid. At the written direction of
the Company, the Trustee shall hold and dispose of any such amount paid to it in
the same manner as it would monies deposited with it by the Company for the
redemption the Securities. Without the Trustee's prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any of
the Securities between the Company and such purchasers to which the Trustee has
not consented in writing, including the costs and expenses, including reasonable
legal fees, incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
ARTICLE IV
COVENANTS
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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 10:00 a.m. New York City 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 the Borough of Manhattan, The City of New
York, 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 the Borough of
Manhattan, The City of New York, for such purposes. The Company shall give
prompt 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 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
and the corporate or other existence of each of its Subsidiaries in accordance
with the respective organizational documents of each of them and the rights
(charter and statutory) and corporate franchises of the Company and each of its
Subsidiaries; provided, however, that the Company shall not be required to
preserve, with respect to itself, any right or franchise, and with respect to
any of its Subsidiaries, any such existence, right or franchise, if (a) the
Company shall, in good faith, reasonably
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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, replacements, betterments and
improvements thereof, all as in its reasonable good faith 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) not disadvantageous in any
material respect to the Holders.
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 judgment 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 judgment of the Company and 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.
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SECTION 4.6 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee within 90 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 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 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 and to prospective purchasers of Securities
identified to the Company by an Initial Purchaser, 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 was 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.
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.
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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 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 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.
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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 (other than to a wholly-owned subsidiary or
subsidiaries) whether in a single transaction or a series of related
transactions, to another Person or group of affiliated Persons, 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; and (ii) no Default or Event of Default shall exist or shall occur
immediately 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 transaction 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.
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any 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).
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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 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 $10,000,000 and the continuance of such
failure for 30 days after there has been given, by registered or certified mail,
to the Company or to 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 $10,000,000 without such Indebtedness having been discharged or such
acceleration having been rescinded or annulled for 30 days after
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there has been given, by registered or certified mail, to the Company or to 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, judgment, 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 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 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,
aggregating in excess of $10,000,000 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 (or, in the case of any such final judgment which
provides for payment over time, which shall so remain unstayed, unbonded 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 last Repurchase
Date.
SECTION 6.2 ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT.
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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,
and 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 accrued
interest thereon and Liquidated Damages 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, accrued interest thereon and
Liquidated Damages 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.
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 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
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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.
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 reasonable costs and expenses of collection, including compensation
to, and reasonable 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 (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
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such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable compensation,
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 reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
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, 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.
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 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;
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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: The remainder, if any, shall be repaid to the Company.
SECTION 6.7 LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute or 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 furnished 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 furnishing of indemnity has failed to institute any such proceeding;
and
(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, AND TO CONVERT.
Notwithstanding any other provision of this Indenture but subject to the
provisions of Article XII, 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
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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) and to convert such
Security in accordance with Article XIII and to institute suit for the
enforcement of any such payment and right to convert, 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.
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 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.
The 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
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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, 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 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, or has been determined adversely to the Trustee or
to such Holder, 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
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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.
(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 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 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 financial liability in the performance
of any of its 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 if it shall have reasonable grounds for
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believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(e) 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.
SECTION 7.2 RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may 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.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Sections 14.4 and 14.5. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such certificate
or advice of counsel.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any 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 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 furnished 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) or 6.1(2), or (ii) any Default
or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
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 or the Securities and it shall not be accountable for the Company's
use of the proceeds from the Securities, or the use or application of any funds
received by a Paying Agent other than the Trustee, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. 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 Securityholders.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall, if required by law, mail to each
Securityholder a brief report dated as of such May 15 that complies with TIA ss.
313(a). The Trustee also shall comply with TIA ss.ss. 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.
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A copy of each report at the time of its mailing to Securityholders shall
be mailed to the Company and filed with the SEC, if required by law, 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 as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust). The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances incurred or made by it. Such
expenses shall include the reasonable compensation, disbursements 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, attorneys-in-fact and agents for, and hold
it harmless against, any claim, demand, expense (including but not limited to
reasonable compensation, 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 or in connection with the
administration of this trust and its rights or duties hereunder including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. 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
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Company and the Holders agree that the Trustee shall have a 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 pursuant to Article III.
When the Trustee incurs expenses 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 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.
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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 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.
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 instrument of acceptance by a successor Trustee required by this
Section 7.8 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation or removal, the resigning or removed
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
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. At any time within one year after a successor Trustee appointed by the
Company 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 such successor Trustee as so appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that 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 60 days after the
retiring Trustee resigns or is removed, the Company or any 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 Holder or Holders of
at least 10% in principal amount of then outstanding Securities may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
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Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue 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, provided such
corporation shall be otherwise eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
delivery the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA ss.
310(a)(1), (2) and (5). The Trustee shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA ss. 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
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) 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
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(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 principal, premium, if any, interest or Liquidated Damages
has become due and payable shall be paid to the Company on its 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 rights 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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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 enforcement of any
such payment or the conversion of any Security 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 terms of this Indenture regarding a
Repurchase Offer or redemption provisions in a manner adverse to the Holders;
(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) provide that other provisions of the Indenture cannot be
modified or waived without the consent of the Holder of each outstanding
Security affected thereby.
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.
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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
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. 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 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.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, 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; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal and
premium of and interest on and Liquidated Damages with respect to a Security, on
or after the respective dates set for such amounts to become due and payable as
then expressed in such
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Security, or to bring suit for the enforcement of any such payment on or after
such respective dates.
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 and an Officer's Certificate stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture and that all conditions precedent have
been satisfied.
ARTICLE X
[RESERVED]
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) In the event that a Change of Control occurs, each Holder shall
have the right, at such Holder's option, subject to the terms and conditions of
this Indenture, to require the Company to repurchase all or any part of such
Holder's Securities (provided, that the principal amount of such Securities must
be $1,000 or an integral multiple thereof) on a date to be established by the
Company (the "Repurchase Date") that is no later than 30 Business Days (as such
date may be extended pursuant to clause (2) of subsection (b) of this Section
11.1) 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 to, but excluding, the Repurchase Date.
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(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 11.1
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 the Repurchase Offer must be
completed and the Repurchase Date must occur 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 and Damage
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 notice of the
Repurchase Offer at least 5 Business Days before the commencement of any
Repurchase Offer; and
(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 or accepted for payment will continue to accrue interest and
Liquidated Damages, if any;
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(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
(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 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 will publicly announce the results of the Repurchase Offer
on or as soon as practicable after the Repurchase Date.
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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) 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
of the Company by lapse of time, acceleration (unless waived) or otherwise,
unless and until all principal of, premium, if any, and interest on such Senior
Indebtedness are first paid in full (or such payment is duly provided for), or
(ii) in the event of default in the payment of any principal of, premium, if
any, or interest on any Senior Indebtedness of the Company when it becomes due
and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise (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 or time, (x) the
giving of notice, (y) the making of any payment in respect of the Securities
then required to be made, or (z) any combination thereof (collectively, a
"Non-Payment Default"), the holders of Senior Indebtedness having a principal
amount then outstanding in excess of $3,000,000 (or with respect to which Senior
Indebtedness the holders are obligated to lend the Company in excess of
$3,000,000 principal amount) or their representative immediately to accelerate
its maturity and (ii) written notice of such NonPayment Default given to the
Company and the Trustee by the holders of an aggregate of at least $3,000,000
principal amount outstanding of such Senior Indebtedness (or holders of
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commitments to lend an aggregate of at least $3,000,000 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 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 365-day period,
irrespective of the number of defaults with respect to Senior Indebtedness
during such period. However, if any Payment Notice within such 365-day period is
given by or on behalf of any holders of Senior Indebtedness other than under the
Loan Agreement, the agent under the Loan Agreement shall be permitted to give
another Payment Notice within such 365-day period. In no event, however, may the
total number of days during which any Payment Blockage Period 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 or the Holders or any Paying Agent 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 Section 12.7)
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 unprovided for or their representative or representatives,
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
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bankruptcy, insolvency, receivership or a similar proceeding or upon assignment
for the benefit of creditors or any marshalling 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 such payment duly
provided for) 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 of
the Company 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; 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 or the Holders or any Paying Agent (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 and Liquidated Damages with respect to, the
Securities before all Senior Indebtedness of the Company is paid in full, such
payment or distribution (subject to the provisions of Section 12.7) shall be
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, 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 and all
provisions therefor 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
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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 XII 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 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 Article XII shall apply to the claims of, or
payments to, the Trustee under or pursuant to Sections 6.6 and 7.7.
SECTION 12.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE OF
NOTICE.
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The Trustee 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 received, no later than one Business Day prior to such payment,
written notice thereof 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 12.7 APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.
Amounts deposited in trust with the Trustee pursuant to and in accordance
with this Indenture shall be for the sole benefit of Securityholders and, to the
extent allocated for the payment of Securities, shall not be subject to the
subordination provisions of this Article XII. Otherwise, any deposit of assets
with the Trustee or the Agent (whether or not in trust) for the payment of
principal of or interest on any Securities shall be subject to the provisions of
Sections 12.1, 12.2, 12.3 and 12.4; provided that, if prior to one Business Day
preceding the date on which by the terms of this Indenture any such assets may
become distributable for any purpose (including, without limitation, the payment
of either principal of or interest on any Security) the Trustee or such Paying
Agent shall not have received with respect to such assets the written notice
provided for in Section 12.6, then the Trustee or such Paying Agent shall have
full power and authority to receive such assets and to apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such date.
SECTION 12.8 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 this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. 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 affecting the liabilities and obligations of the parties to
this Indenture or the Holders.
SECTION 12.9 SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION
OF SECURITIES.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs 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
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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 12.10 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 12.11 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 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 12.12 NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness, and shall not be liable to any such holders (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 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.
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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 commencing on
the 90th day following the latest date of the initial issuance of the Securities
under this Indenture and ending as of the close of business on the Stated
Maturity, 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, 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 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. A Holder of Securities is not entitled to any rights
of a Holder of Common Stock until such Holder has converted such Holder's
Securities into Common Stock, and then only to the extent such Securities are
deemed to have been converted into Common Stock under this Article XIII.
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SECTION 13.2 EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise the conversion privilege with respect to any Security
in certificated form, 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 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 which occurs within such period, accompanied (except in the
case of the Interest Payment Date occurring on March 15, 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. In order to exercise the conversion privilege with
respect to any interest in a Security in global form, the beneficial Holder must
complete the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver by book-entry delivery an
interest in such Security in global form, furnish appropriate endorsements and
transfer documents if required by the Company or the Trustee, and pay the funds,
if any, required by this Section 13.2. 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 authenticate and deliver to the Holder thereof, at the expense of the
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Company, a Security or Securities in the aggregate principal amount of the
unconverted portion of the Security surrendered. Upon the conversion of an
interest in a Security in global form, the Trustee shall make a notation of such
Security in global form as to the reduction in the principal amount represented
thereby as a result of such conversion. 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 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 New York Stock Exchange (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 New York
Stock Exchange (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 (herein called the "Conversion Price") shall initially be $41.25
(or $41.25 in principal amount of Securities for each such share of Common
Stock).
SECTION 13.5 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 stockholders entitled to receive such dividend or
other distribution shall be reduced by multiplying such
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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 subsections (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
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 subsections (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
stockholders 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
subsections (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.
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(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, or (y) any dividend or distribution for
which an adjustment is required to be made in accordance with subsection (a) or
(c) above or (z) any distribution of rights or warrants subject to subsection
(l) below) then in each such case the Conversion Price in effect immediately
following the record date fixed for the determination of the stockholders
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 subsections (i) and (j)
below, after the record date for the determination of stockholders 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 or exchange 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 stockholders 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 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 subsections (i) and (j) below, after the
record date for the determination of stockholders entitled to receive such
distribution.
(f) In case the Company or any Subsidiary of the Company shall
complete a tender or exchange offer for all or any portion of the Common Stock
(any such tender or exchange 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
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(i) any cash and the fair market value of any other consideration payable in
respect of any other tender or exchange offer, as of the expiration of such
other tender or exchange 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 stockholders 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 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, 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 New York Stock Exchange (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 applicable Law,
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shall be permitted to reduce the Conversion Price by any amount for any period
of at least 20 Business Days, in which case the Company shall give at least 15
days notice of such reduction, if the Board of Directors has made a
determination that such reduction would be in the best interests of the Company,
which determination shall be conclusive. The Company, at its option, shall be
permitted to make such other reductions in the Conversion Price, in addition to
those set forth above in subsections (a), (b), (c), (d), (e), (f) and the first
sentence of this subsection (h), as the Board of Directors deems advisable to
avoid or diminish any income tax to holders of Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such a dividend or distribution 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 Common Stock and other Capital Stock of the Company issuable on such
conversion.
(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.
(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, the Company shall make proper provision so that the
Holder of any Note surrendered for conversion will be entitled
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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.
(m) In the event the Company amends the Rights Agreement, the Rights
Agreement shall provide that upon conversion of the Securities the Holders will
receive in addition to the Common Stock issuable upon such conversion, the
Rights issued under the Rights Agreement (notwithstanding the occurrence of an
event causing such rights to separate from the Common Stock at or prior to the
time of conversion). In the event the Company implements a replacement or
successor stockholder rights agreement, such rights agreement shall provide that
upon conversion of the Securities the Holders will receive, in addition to the
Common Stock issuable upon such conversion, the rights issued under such rights
plan (notwithstanding the occurrence of an event causing such rights to separate
from the Common Stock at or prior to the time of conversion).
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 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,
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
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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 XIII. 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.
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 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;
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(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 stockholders 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;
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) 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
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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 best 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 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,
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
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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.
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:
Concentra Managed Care, Inc.
312 Union Wharf
Boston, Massachusetts 02109
Attention: General Counsel
Telecopy: (972) 387-1938
if to the Trustee:
Chase Bank of Texas, N.A.
2200 Ross Avenue, 5th Floor
Dallas, Texas 75201
Attention: Global Trust Services
Telecopy: (214) 965-3577
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
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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.
SECTION 14.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA (ss.) 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 (ss.) 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, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) 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 have been complied with.
SECTION 14.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion 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
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(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.
SECTION 14.7 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York or Dallas, Texas are authorized or obligated
by law or executive order to close. 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 Commonwealth of Massachusetts, as applied to
contracts made and performed within the Commonwealth of Massachusetts.
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, stockholder, 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, stockholder, employee, director or officer. Each 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.
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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.
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 OF 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 and expenses (including attorneys' fees for the Company and the Trustee)
incurred in connection therewith, including, but not limited to, costs 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.
CONCENTRA MANAGED CARE, INC., a Delaware
corporation
By:______________________________________________
Name:
Title:
CHASE BANK OF TEXAS, N.A., a national banking
association, as Trustee
By:______________________________________________
Name:
Title:
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EXHIBIT A
[FORM OF SECURITY]
CONCENTRA MANAGED CARE, INC.
4.5% CONVERTIBLE SUBORDINATED NOTE DUE 2003
No.________ CUSIP No.____________
$__________
Concentra Managed Care, Inc., a Delaware 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 March 15, 2003.
Interest Payment Dates: March 15 and September 15; commencing
September 15, 1998.
Record Dates: March 1 and September 1.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
CONCENTRA MANAGED CARE, INC., a Delaware
corporation [Seal]
By:________________________________________
Name:______________________________________
Title:_____________________________________
Attest:__________________________
Secretary
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
CHASE BANK OF TEXAS, N.A., as Trustee
By:______________________________________________
Authorized Signatory
Dated:
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CONCENTRA MANAGED CARE, INC.
4.5% CONVERTIBLE SUBORDINATED NOTE DUE 2003
[For Global Securities Only:]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
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 REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND
ANY PAYMENT HEREIN 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 SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.(1)
[For all Securities:]
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
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 OR
SOLD, EXCEPT AS SET FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT (A) IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"); (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED HEREBY AND
THE LAST DATE ON WHICH CONCENTRA MANAGED CARE, INC. (THE "COMPANY") OR ANY
"AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY WAS
THE OWNER OF THE SECURITY (THE "RESTRICTION TERMINATION DATE") RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE
UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO CHASE BANK OF TEXAS, N.A., AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE
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RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
(D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION PROVIDED UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY
BEFORE THE RESTRICTION TERMINATION DATE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS SECURITY TO CHASE BANK OF TEXAS, N.A., AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE (C) OR
(D) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO CHASE BANK OF
TEXAS, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
THIS LEGEND WILL BE REMOVED UPON ANY TRANSFER OF THE SECURITY
EVIDENCED HEREBY UPON OR AFTER THE RESTRICTION TERMINATION DATE.
1. Interest.
Concentra Managed Care, Inc., a Delaware 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 Security at the rate of 4.5% 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 4.5% per annum compounded semi-annually.
The Company will pay interest semi-annually on March 15 and September 15
of each year (each, an "Interest Payment Date"), commencing September 15, 1998.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
March 16, 1998. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
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2. Method of Payment.
The Company shall pay interest on the Securities (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 Securities 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 Securities 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 the City and
State of New York, 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 payment by wire transfer of immediately available funds will be required
with respect to principal of, premium and interest on and Liquidated Damages
with respect to Global Securities and all other Securities the Holders of which
shall have provided wire transfer instructions to the Company or the Paying
Agent.
3. Paying Agent and Registrar.
Initially, Chase Bank of Texas, N.A. (the "Trustee") will act as Paying
Agent, Registrar and conversion agent. The Company may change any Paying Agent,
Registrar or co-Registrar or conversion agent 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 Securities under an Indenture, dated as of March
16, 1998 (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 Securities 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 Securities are subject to all such
terms, and Holders of Securities are referred to the Indenture and said Act for
a statement of them. The Securities are general unsecured obligations of the
Company limited in aggregate principal amount to $200,000,000 ($230,000,000 if
the over-allotment is exercised in full).
5. Redemption.
The Securities may be redeemed in whole or from time to time in part at
any time on and after March 15, 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,
A-5
<PAGE>
in each case, plus any accrued but unpaid interest and Liquidated Damages to,
but excluding, the Redemption Date. The Securities may not be so redeemed prior
to March 15, 2001.
If redeemed during the 12-month period beginning March 15,
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2001 101.8%
2002 100.9%
</TABLE>
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, postage prepaid, at
least 30 days prior to the Redemption Date to the Holder of each Security to be
redeemed at such Holder's last address as then shown upon the registry books of
the Registrar. Securities may be redeemed in part in 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 Securities called for redemption shall have
been deposited with the Paying Agent on such Redemption Date and payment of the
Securities called for redemption is not prohibited under Article XII of the
Indenture, the Securities called for redemption will cease to bear interest and
the only right of the Holders of such Securities 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 Securities 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 Securities 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
Securities selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of it for
all purposes.
9. Unclaimed Money.
A-6
<PAGE>
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 certain exceptions, the Indenture or the Securities 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 Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Securities 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 Security.
11. Conversion Rights.
Subject to the provisions of the Indenture, the Holders have the right to
convert the principal amount of the Securities into fully paid and nonassessable
shares of Common Stock of the Company at the initial conversion price per share
of Common Stock of $41.25 (or $41.25 in principal amount of Securities for each
such share of Common Stock), or at the adjusted conversion price then in effect,
if adjustment has been made as provided in the Indenture, upon surrender of the
Security 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 Security.
12. Ranking.
Payment of principal, premium, if any, interest on and Liquidated Damages
with respect to the Securities is subordinated, in the manner and to the extent
set forth in the Indenture, to the prior payment in full of all Senior
Indebtedness. The Securities will rank parri passu with the Company's 6%
Convertible Subordinated Notes due 2001.
13. Repurchase at Option of Holder Upon a Change of Control.
If there is a Change of Control, the Company shall be required to offer to
purchase on the Repurchase Date all outstanding Securities 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 Securities will receive a Repurchase Offer from the Company prior to any
related Repurchase Date and may elect to have such Securities purchased by
completing the form entitled "Option of Holder to Elect Purchase" appearing
below.
14. Successors.
A-7
<PAGE>
When a successor assumes all the obligations of its predecessor under the
Securities 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 as Event of
Default relating to certain events of bankruptcy, insolvency or reorganization),
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 25% in
aggregate principal amount of Securities then outstanding may declare all the
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the Securities then outstanding may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
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 stockholder, 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 Securities or
the Indenture by reason of his, her or its status as such stockholder, director,
officer or employee. Each Holder of a Security by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
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).
A-8
<PAGE>
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 Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
21. Additional Rights of Holders of Transfer Restricted Securities.
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities 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:
Concentra Managed Care, Inc.
312 Union Wharf
Boston, Massachusetts 02109
Attention: General Counsel
Telecopy: (972) 387-1938
A-9
<PAGE>
[FORM OF] ASSIGNMENT
I or we assign this Security to
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of
assignee
_______________________________
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Dated: _______________ Signed:
(Sign exactly as name appears on the other side of this Security)
A-10
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security 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 Security 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 Security)
A-11
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES(1)
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
<TABLE>
<CAPTION>
Principal
Amount of Amount of this Signature of
Amount of Increase in Global authorized
decrease in Principal Security officer of
Principal Amount of following such Trustee or
Amount of this this Global decrease (or Securities
Date of Exchange Global Security Security increase) Custodian
================================================================================
<S> <C> <C> <C> <C>
</TABLE>
- ----------
(1) This Schedule should only be added if the Security is issued in global form.
A-12
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003 OF CONCENTRA MANAGED CARE,
INC.
This Certificate relates to $___________ principal amount of
Securities 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 Security held by the Depositary a Security
or Securities in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated above); or
[ ] (b) has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
2. In connection with any such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act because:
*[ ] (a) Such Security is being acquired for the Transferor's own account,
without transfer.
[ ] (b) Such Security 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.
- --------------------
* Check applicable box.
A-13
<PAGE>
[ ] (c) Such 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 which delivers a certificate in the form of Exhibit B
to the Indenture to the Trustee. An Opinion of Counsel, if so requested by the
Company or the Trustee, to the effect that such transfer is in compliance with
the Securities Act accompanies this Certificate.
[ ] (d) Such Security is being transferred in reliance on and in compliance with
another exemption from the registration requirements of the Securities Act. An
Opinion of Counsel, if so requested by the Company or the Trustee, to the effect
that such transfer is in compliance with the Securities Act accompanies this
Certificate.
_________________________________________
[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 Security 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 Security,
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 Security on or prior to the date of
transfer indicate when such purchase price will be paid:
----------------------
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
A-14
<PAGE>
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 Security 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
Security particular, without alteration
or 11 or any change whatsoever.
285171-1
A-15
<PAGE>
EXHIBIT B
INVESTOR LETTER OF REPRESENTATION
Concentra Managed Care, Inc. c/o the Trustee
Ladies and Gentlemen:
This letter is delivered by the undersigned to request a transfer of
$200,000,000 principal amount ($230,000,000 if the over-allotment option is
exercised in full) of the 4.5% Convertible Subordinated Notes due 2003 (the
"Notes") of Concentra Managed Care, Inc. (the "Company"). The Notes are
described in that certain Offering Memorandum (the "Offering Memorandum") dated
March 11, 1998 relating to the offering of the Notes. We acknowledge receipt of
the Offering Memorandum and acknowledge that we have read the Offering
Memorandum, have had access to such financial and other information and have
been afforded the opportunity to ask such questions of representatives of the
Company and receive answers thereto, as we deem necessary in connection with our
decision to purchase the Notes.
Upon transfer the Notes would be registered in the name of the
undersigned:
Name: ____________________________________________________
Address: _________________________________________________
Taxpayer ID Number: ______________________________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Notes for
investment purposes and not with a view to, or for offer or sale in connection
with any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risk of our investment in the Notes and invest in or
purchase securities similar to the Notes in the normal course of our business,
and we, and any accounts for which we are acting, are each able to bear the
economic risk of our or its investment. We confirm that neither the Company nor
any person acting on its behalf has offered to sell the Notes by, and that we
have not been made aware of the offering of the Notes by, any form of general
solicitation or general advertising, including, but not limited to, any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio.
2. We understand that the Notes and the Common Stock issuable upon
conversion of the Notes (the Notes and such Common Stock are collectively
referred to herein as "Restricted
B-1
<PAGE>
Securities") have not been registered under the Securities Act and, unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Notes are "restricted securities" within the meaning of Rule 144
under the Securities Act and to offer, sell or otherwise transfer such Notes
prior to the date which is two years after the later of the date of original
issue (or any predecessor thereto) (the "Resale Restriction Termination Date")
only (a) to the Company, (b) pursuant to a registration statement that has been
declared effective under the Securities Act, (c) pursuant to Rule 144A under the
Securities Act, for so long as it is available, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A under the Securities
Act (a "QIB") that purchases for its own account or for the account of a QIB and
to whom notice is given that the transfer is being made in reliance on Rule
144A, (d) to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its
own account or for the account of an institutional "accredited investor," in
each case, with respect to the Notes, or (e) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Notes is proposed to be made pursuant to clause (d) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
trustee (the "Trustee") under the indenture, dated as of March 16, 1998, between
the Company and the Trustee relating to the Notes, which shall provide, among
other things, that the transferee is an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
and that it is acquiring such Notes for investment purposes and not for
distribution in violation of the Securities Act. Each purchaser acknowledges
that the Company and the Trustee reserve the right prior to any offer, sale or
other transfer, prior to the Resale Restriction Termination Date of the
Restricted Securities pursuant to clause (d) or (e) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
We acknowledge that you, the Initial Purchasers and others will rely upon
our confirmations, acknowledgments and agreements set forth herein, and we agree
to notify you promptly in writing if any of our representations and warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
------------------------
By: _____________________
B-2
<PAGE>
EXHIBIT C
FORM OF CONVERSION NOTICE
To: Concentra Managed Care, Inc.
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 Concentra Managed Care, Inc. 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. 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: (if less than all)
$___________________________________________
285171-1
C-1
<PAGE>
513DAR206/103.486701_5
C-2
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE
TIA SECTION INDENTURE 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) 7.11
(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; 4.7; 14.2
(b) N.A.
(c)(1) 2.2; 7.2; 8.1; 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; 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.
</TABLE>
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
<TABLE>
<S> <C>
(b) 6.7; 6.8; 6.12
316(c) N.A.
317(a)(1) 6.3
(a)(2) 6.4
(b) 2.4
318(a) 14.1
</TABLE>
(1) This paragraph should be added only if the Security is issued in global
form.
<PAGE>
-1-
$200,000,000
4.50% CONVERTIBLE SUBORDINATED NOTES DUE 2003
CONCENTRA MANAGED CARE, INC.
PURCHASE AGREEMENT
March 11, 1998
BT Alex. Brown Incorporated
BancAmerica Robertson Stephens
Donaldson, Lufkin & Jenrette Securities Corporation
Piper Jaffray Inc.
c/o BT Alex. Brown Incorporated
One South Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
Concentra Managed Care, Inc., a Delaware corporation (the "Company"),
confirms its agreement with BT Alex. Brown Incorporated, BancAmerica Robertson
Stephens, Donaldson Lufkin & Jenrette Securities Corporation, Piper Jaffray Inc.
(the "Initial Purchasers") with respect to the sale by the Company and the
purchase by the Initial Purchasers, acting severally and not jointly, of the
respective principal amounts set forth in SCHEDULE A of the $200,000,000
aggregate principal amount of the Company's 4.50% Convertible Subordinated Notes
due 2003 (the "Notes") to be issued pursuant to the provisions of an indenture
to be dated as of March 16, 1998 (the "Indenture") between the Company and Chase
Bank of Texas, N.A., as trustee (the "Trustee"). Such $200,000,000 aggregate
principal amount of Notes are hereafter referred to as the "Firm Notes." Upon
the request of the Initial Purchasers, as provided in Section 2(b) of this
Agreement, the Company shall also issue and sell to the Initial Purchasers up to
an additional
<PAGE>
-2-
$30,000,000 aggregate principal amount of Notes for the purpose of covering
over-allotments, if any. Such $30,000,000 aggregate principal amount of Notes
are hereinafter referred to as the "Option Notes." The Firm Notes and Option
Notes collectively constitute all of the Notes, and, as used herein, the term
"Notes" refers to the Firm Notes and the Option Notes, collectively.
The Notes are convertible into shares of the Company's common stock, par
value $.01 per share (the "Common Stock"), at any time after the 90th day
following the latest date of the original issuance thereof and before the close
of business on the maturity date of the Notes, unless previously redeemed or
repurchased. The Common Stock issuable upon conversion of the Notes is sometimes
hereinafter referred to as the "Underlying Stock." Notes issued in book-entry
form will be issued to Cede & Co. as nominee of The Depository Trust Company
("DTC") pursuant to a letter agreement, to be dated as of the Closing Date (as
defined in Section 3) among the Company, the Trustee and DTC.
The Company understands that the Initial Purchasers propose to make an
offering of the Notes on the terms and in the manner set forth herein and agrees
that the Initial Purchasers may resell, subject to the conditions set forth
herein, all or a portion of the Notes to purchasers ("Subsequent Purchasers") at
any time after the date of this Agreement. The Notes will be offered and sold
through the Initial Purchasers without being registered under the Securities Act
of 1933, as amended (the "Securities Act"), in reliance upon exemption
therefrom. Pursuant to the terms of the Notes and the Indenture, investors that
acquire Notes may only resell or otherwise transfer such Notes if such Notes are
hereafter registered under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the
exemption afforded by Rule 144A ("Rule 144A") of the rules and regulations
promulgated under the Securities Act by the Securities and Exchange Commission
(the "Commission")).
The Company has prepared and will deliver to the Initial Purchasers, on
the date hereof, copies of a final offering memorandum dated March 11, 1998 (the
"Offering Memorandum"), setting forth information regarding the Company, the
Notes and the Underlying Stock. The Offering Memorandum is to be used by the
Initial Purchasers in connection with their solicitation of purchases of, or
offering of, the Notes. "Offering Memorandum," unless stated to the contrary,
include exhibits thereto and any documents incorporated therein by reference.
The Company hereby confirms that it has authorized the use of the Offering
Memorandum in connection with the offering and sale of the Notes.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement"). Pursuant
<PAGE>
-3-
to the Registration Rights Agreement, the Company has agreed to file with the
Commission a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement") to cover public resales of
the Notes and the Underlying Stock by the Holders thereof.
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Offering Memorandum. For purposes hereof,
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), as applicable.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "stated," or "described" 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 is 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 Act or Exchange Act which is incorporated by reference in the
Offering Memorandum.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each of the Initial Purchasers as of the date
hereof, and as of the Closing Date and each Option Closing Date (as defined in
Section 2(b) hereof), if any, as follows:
(a) The Offering Memorandum, as of its date, together with each
amendment or supplement thereto, as of its date, contains all the information
that, if requested by a prospective purchaser, would be required to be provided
pursuant to Rule 144A(d)(4) under the Securities Act. The Offering Memorandum
does not, and at the Closing Date and any Option Closing Date will not, and any
amendment or supplement thereto, if any, as of its date, will not, contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to
information contained in or omitted from the Offering Memorandum (or any
supplement or amendment thereto) in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial Purchaser
specifically for use therein (the "Initial Purchasers' Information"). The
parties acknowledge and agree that the Initial Purchasers' Information consists
solely of the last paragraph at the bottom of the front cover page concerning
the terms of the offering by the Initial Purchasers, the legend
<PAGE>
-4-
concerning overallotment and trading activities of the Initial Purchasers on the
inside front cover page and the paragraphs under the caption "Plan of
Distribution" in the Offering Memorandum. The Company is subject to Sections 13
or 15(d) of the Exchange Act.
(b) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Offering Memorandum. Each of the corporate
subsidiaries of the Company as listed on SCHEDULE B hereto (collectively, the
"Corporate Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with the corporate power and authority to own or lease its
properties and conduct its business as described in the Offering Memorandum. The
Corporate Subsidiaries are the only corporate subsidiaries, direct or indirect,
of the Company. The Company and each of the Corporate Subsidiaries are duly
qualified to transact business in all jurisdictions in which the conduct of
their business requires such qualification except for jurisdictions where
failure to so qualify, together with all other such failures, would not have a
material adverse effect upon the business, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
the Subsidiaries (defined below) taken as a whole. The outstanding shares of
capital stock of each of the Corporate Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and are owned by the
Company or another Corporate Subsidiary free and clear of all liens,
encumbrances and equities and claims, except (i) for encumbrances disclosed in
the Offering Memorandum, and (ii) for encumbrances relating to any indebtedness
disclosed in the Offering Memorandum; and no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in the
Corporate Subsidiaries are outstanding.
(c) Each general partnership and each limited partnership of which
either the Company or a Subsidiary is a general partner, as listed on Schedule B
hereto (collectively, the "Partnerships") has been duly organized and is an
existing general partnership or limited partnership, as the case may be, in good
standing under the laws of the jurisdiction of its organization, with the power
and authority to own or lease its properties and conduct its business as
described in the Offering Memorandum. Each of the Partnerships is duly qualified
to transact business in all jurisdictions in which the conduct of its business
requires such qualification; except for jurisdictions in which the failure to so
qualify, together with all such other failures, would not have a material
adverse effect upon the business, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the
Subsidiaries taken as a whole. The capital contributions with respect to the
outstanding units of each of the Partnerships
<PAGE>
-5-
have been made to the Partnerships. All outstanding limited partnership
interests in the Partnerships were issued and sold in compliance with all
applicable Federal and state securities laws. The general and limited
partnership interests therein held directly or indirectly by the Company are
owned free and clear of all liens, encumbrances and equities and claims, except
(i) for encumbrances disclosed in the Offering Memorandum, and (ii) for
encumbrances relating to any indebtedness disclosed in the Offering Memorandum.
Each partnership agreement pursuant to which the Company or a Subsidiary holds
an interest in a Partnership is in full force and effect and constitutes the
legal, valid and binding agreement of the parties thereto, enforceable against
such parties in accordance with the terms thereof. There has been no material
breach of or default under, and no event which with notice or lapse of time
would constitute a material breach of or default under, such agreements by the
Company or any Subsidiary or, to the Company's knowledge, any other party to
such agreements. Each limited liability company of which either the Company or a
Subsidiary is a member, as listed on SCHEDULE B hereto (collectively, the
"LLCs," and together with the Corporate Subsidiaries and the Partnerships, the
"Subsidiaries") has been duly organized and is an existing limited liability
company in good standing under the laws of the jurisdiction of its organization,
with the power and authority to own or lease its properties and conduct its
business as described in the Offering Memorandum. Each of the LLCs is duly
qualified to transact business in all jurisdictions in which the conduct of its
business requires such qualification; except for jurisdictions in which the
failure to so qualify, together with all such other failures, would not have a
material adverse effect upon the business, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
the Subsidiaries taken as a whole. The capital contributions with respect to the
outstanding membership or other ownership interests of each of the LLCs have
been made to the LLCs. All outstanding membership or other ownership interests
in the LLCs were issued and sold in compliance with all applicable Federal and
state securities laws. The membership or other ownership interests therein held
directly or indirectly by the Company are owned free and clear of all liens,
encumbrances and equities and claims, except (i) for encumbrances disclosed in
the Offering Memorandum, and (ii) for encumbrances relating to any indebtedness
disclosed in the Offering Memorandum. Each operating agreement pursuant to which
the Company or a Subsidiary holds an interest in an LLC is in full force and
effect and constitutes the legal, valid and binding agreement of the parties
thereto, enforceable against such parties in accordance with the terms thereof.
There has been no material breach of or default under, and no event which with
notice or lapse of time would constitute a material breach of or default under,
such agreements by the Company or any Subsidiary or, to the Company's knowledge,
any other party to such agreements.
<PAGE>
-6-
(d) The outstanding shares of Common Stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; and no
preemptive rights of stockholders exist with respect to any of the Common Stock
or the issuance of additional shares Common Stock upon the conversion of the
Notes. The offering or sale of the Notes and the Underlying Stock as
contemplated by this Agreement do not give rise to any rights, other than those
which have been waived or satisfied, for or relating to the registration of any
shares of Common Stock.
(e) Except as disclosed in the Offering Memorandum, and with respect
to any Partnership, as contained in the applicable partnership agreement, and
with respect to any LLC, as contained in the applicable operating agreement,
there are no outstanding warrants, options, convertible securities or other
commitments of sale related to or entitling any person to purchase or otherwise
acquire any securities or interest in any Subsidiary. Except as disclosed in the
Offering Memorandum and, with respect to any Partnership, as contained in the
applicable partnership agreement, and with respect to any LLC, as contained in
the applicable operating agreement, there are no consensual encumbrances or
restrictions on the ability of any Subsidiary (i) to pay any dividends or make
any distributions on such Corporate Subsidiary's capital stock or such
Partnership's partnership interests or such LLC's membership or other ownership
interests or to pay any indebtedness owed to the Company or any other
Subsidiary, (ii) to make any loans or advances to, or investments in, the
Company or any other Subsidiary, or (iii) except as contained in certain
long-term debt agreements relating to indebtedness disclosed in the Offering
Memorandum, to transfer any of its properties or assets to the Company or any
other Subsidiary.
(f) The information set forth under the caption "Capitalization" in
the Offering Memorandum is true and correct. Neither the Company nor any
Subsidiaries is a party to or bound by any instrument, agreement or other
arrangement, including, but not limited to, any voting trust agreement,
stockholders' agreement or other agreement or instrument, affecting the
securities or rights or obligations of securityholders of the Company or of the
Subsidiaries or providing for any of them to issue, sell, transfer or acquire
any capital stock, rights, warrants, options or other securities of the Company
or the Subsidiaries, except for this Agreement, the Indenture, and as set forth
in the Offering Memorandum. The Notes and the Company's capital stock conform in
all material respects to all statements with respect thereto contained in the
Offering Memorandum.
(g) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth in the
Offering Memorandum, present fairly
<PAGE>
-7-
the financial position and the results of operations and cash flows of the
Company and the consolidated Subsidiaries, at the indicated dates and for the
indicated periods. Such financial statements and related schedules have been
prepared in accordance with generally accepted principles of accounting,
consistently applied throughout the periods involved, except as disclosed
therein, and all adjustments necessary for a fair presentation of results for
such periods have been made. The summary financial and statistical data included
in the Offering Memorandum presents fairly the information shown therein and
such data has been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company.
(h) Arthur Andersen LLP, who have certified certain of the financial
statements included as part of the Offering Memorandum, are independent public
accountants as required by the Act and the Rules and Regulations.
(i) There is no action or proceeding pending or, to the knowledge of
the Company, threatened against the Company, any of the Subsidiaries or any of
the medical practice groups, including, without limitation, clinics, IPAs and
other groups and individual practitioners, with which the Company or the
Subsidiaries have service agreements (collectively, the "Practice Groups"), and,
to the knowledge of the Company, there is no action or proceeding pending
against any individual physicians practicing in any Practice Group, before any
court or administrative agency which the Company has reason to believe is likely
to result in any material adverse change in the earnings, business management,
properties, assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and of the Subsidiaries taken as a whole, except as set
forth in the Offering Memorandum.
(j) The Company and the Subsidiaries have good and marketable title
to all of the properties and assets reflected in the financial statements (or as
described in the Offering Memorandum) hereinabove described, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those reflected in
such financial statements (or as described in the Offering Memorandum) or which
are not material in amount. The Company and the Subsidiaries occupy their leased
properties under valid and binding leases conforming in all material respects to
the description thereof set forth in the Offering Memorandum.
(k) The Company and the Subsidiaries have filed all Federal, State,
local and foreign income tax returns which have been required to be filed and
have paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes
<PAGE>
-8-
have become due and are not being contested in good faith. All tax liabilities
have been adequately provided for in the financial statements of the Company.
(l) Since the respective dates as of which information is given in
the Offering Memorandum, as it may be amended or supplemented, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise), or
prospects of the Company and its Subsidiaries taken as a whole, whether or not
occurring in the ordinary course of business, and there has not been any
material transaction entered into or any material transaction that is probable
of being entered into by the Company or the Subsidiaries, other than
transactions in the ordinary course of business and changes and transactions
described in the Offering Memorandum, as it may be amended or supplemented. The
Company and the Subsidiaries have no material contingent obligations which are
not disclosed in the Company's financial statements which are included in the
Offering Memorandum.
(m) Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be, in violation of or in
default under its Charter or By-Laws, partnership agreement, operating agreement
or under any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties, is
bound and which default is of material significance in respect of the condition,
financial or otherwise of the Company and its Subsidiaries taken as a whole or
the business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the Subsidiaries taken
as a whole. The execution and delivery of this Agreement, the Indenture and the
Registration Rights Agreement and the consummation of the transactions herein
and therein contemplated and the fulfillment of the terms hereof and thereof
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a material default under, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any Subsidiary is
a party, or of the Charter or By-Laws of the Company or any order, rule or
regulation applicable to the Company or any Subsidiary of any court or of any
regulatory body or administrative agency or other governmental body having
jurisdiction.
(n) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission,
the National Association of Securities Dealers, Inc. (the "NASD") or such
<PAGE>
-9-
additional steps as may be necessary under state securities or Blue Sky laws)
has been obtained or made and is in full force and effect.
(o) The Company, each of the Subsidiaries and each Practice Group
holds all licenses, certificates, permits and other approvals from governmental
authorities (collectively, "Permits") which are necessary to own their
properties and to conduct their businesses, including, without limitation, such
Permits as are required (i) under such federal and state health care laws as are
applicable to the Company and the Subsidiaries and (ii) with respect to those
facilities operated by the Company or any Subsidiary that participate in
Medicare and/or Medicaid, to receive reimbursement thereunder, except where such
failure to have or hold such Permits, together with all other such failures,
would not have a material adverse effect upon the business, properties, assets,
rights, operations, condition (financial or otherwise) or prospects of the
Company and the Subsidiaries taken as a whole; the Company and each of the
Subsidiaries have fulfilled and performed all of their material obligations with
respect to such Permits, and no event or change in condition has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the holder
of any such Permit, subject in each case to such qualifications as may be set
forth in the Offering Memorandum. During the period for which financial
statements are included in the Offering Memorandum, denials by third-party
payers of claims for reimbursement for services rendered by the Company have not
had a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole, and any such denials are either under appeal or
the Company has ceased seeking reimbursement for the services or supplies to
which they relate.
(p) Neither the Company nor any of the Subsidiaries has infringed
any patents, patent rights, trade names, trademarks or copyrights, which
infringement is material to the business of the Company and the Subsidiaries
taken as a whole. The Company knows of no material infringement by others of
patents, patent rights, trade names, trademarks or copyrights owned by or
licensed to the Company.
(q) Neither the Company, nor any of its affiliates, has taken or may
take, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Notes or otherwise.
(r) Neither the Company nor any Subsidiary is, or as a result of the
consummation of the transactions contemplated by this Agreement and application
of the net
<PAGE>
-10-
proceeds therefrom as described in the Offering Memorandum will become, an
"investment company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the Commission thereunder.
(s) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(t) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar industries.
(u) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) (including,
but not limited to, the filing of Form 5500s for prior periods, if required) has
occurred with respect to any "pension plan" (as defined in ERISA) for which the
Company would have any liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(v) The property, assets and operations of the Company and the
Subsidiaries comply in all respects with all applicable federal, state or local
law, common law, doctrine, rule, order, decree, judgment, injunction, license,
permit or regulation relating to environmental matters (the "Environmental
Laws"), except to the extent that failure to comply with such Environmental Laws
would not have a material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Company and the
<PAGE>
-11-
Subsidiaries taken as a whole. None of the property, assets or operations of
the Company and the Subsidiaries is the subject of any federal, state or
local investigation evaluating whether any remedial action is needed to
respond to a release into the environment of any substance regulated by, or
form the basis of liability under, any Environmental Laws (a "Hazardous
Material"), or is in contravention of any Environmental Law that would have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and
Subsidiaries taken as a whole. Neither the Company nor any Subsidiary has
received any notice or claim, nor are there pending, reasonably anticipated
or, or to the Company's knowledge, threatened lawsuits against them with
respect to violations of an Environmental Law or in connection with the
release of any Hazardous Material into the environment, in each case which,
individually or in the aggregate, would have a material adverse effect on the
condition (financial or other), business, properties, prospects, net worth or
results of operations of the Company and the Subsidiaries taken as a whole.
Neither the Company nor any Subsidiary has any material contingent liability
in connection with any release of Hazardous Material into the environment.
(w) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198,
AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and the Company
further agrees that if it commences engaging in business with the government of
Cuba or with any person or affiliate located in Cuba after the date the Offering
Memorandum becomes or has become effective with the Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever date is
later, or if the information reported or incorporated by reference in the
Offering Memorandum, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the Company
all provide the Department notice of such business or change, as appropriate, in
a form acceptable to the Department.
(x) The Company's Common Stock, $.01 par value per share, is
registered pursuant to Section 12(g) of the Exchange Act and is listed on The
Nasdaq Stock Market, Inc.'s Nasdaq National Market (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 NASD is
contemplating terminating such registration or listing. The Company has filed in
a timely manner all reports and other information required to be filed with the
Commission pursuant to the Exchange Act during the twelve calendar months and
any portion of a month immediately preceding the date of the Offering Memorandum
(or during such shorter period of time that the Company has been
<PAGE>
-12-
subject to the reporting requirements of the Exchange Act). At or prior to the
Closing Date, the Company will file an application to list the Underlying Stock
on the Nasdaq National Market.
(y) The Notes will be issued pursuant to the terms and conditions of
the Indenture, and each of the Indenture and the Registration Rights Agreement
conforms, or will conform, to the description thereof contained in the Offering
Memorandum. The Notes have been duly authorized and, when validly authenticated,
issued, delivered and paid for in the manner contemplated by the Indenture, will
be duly authorized, validly issued and outstanding obligations of the Company
entitled to the benefits of the Indenture. The shares of Common Stock issuable
upon conversion of the Notes will, upon such issuance, be duly authorized,
validly issued, fully paid and non-assessable, and the Company has duly
authorized and reserved for issuance upon conversion of the Notes the shares of
Common Stock issuable upon such conversion. The Notes and the Underlying Stock
are not and will not be subject to any preemptive or other similar rights of any
securityholder of the Company or the Subsidiaries; all corporate action required
to be taken for the authorization, issue and sale of the Notes and the
Underlying Stock has been duly and validly taken; and the certificates
representing the Notes and the Underlying Stock will be in due and proper form.
Upon the issuance and delivery pursuant to the terms of this Agreement and the
Indenture of the Notes to be sold by the Company hereunder and thereunder, the
Initial Purchasers will acquire good and marketable title thereto free and clear
of any lien, charge, claim, encumbrance, pledge, security interest, defect or
other restriction or equity of any kind whatsoever.
(z) (i) The Company has full legal right, power and authority to
authorize, issue, deliver and sell the Notes and the Underlying Stock upon
conversion of the Notes, to enter into this Agreement, the Indenture and the
Registration Rights Agreement and to consummate the transactions provided for in
such agreements; (ii) this Agreement has been duly and properly authorized,
executed and delivered by the Company and, as of the Closing Date, each of the
Indenture and the Registration Rights Agreement will have been duly and properly
authorized, executed and delivered by the Company; and (iii) this Agreement
constitutes, and when the Company has duly executed and delivered the
Registration Rights Agreement and the Indenture such documents will constitute
(assuming the due execution and delivery hereof and thereof by the Trustee and
the Initial Purchasers, as applicable), legal, valid and binding agreements of
the Company enforceable against the Company in accordance with their respective
terms, except to the extent that enforcement hereof or thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and except to the extent that rights to
indemnification and
<PAGE>
-13-
contribution contained in this Agreement may be limited by federal or state
securities laws on public policy relating thereto.
(aa) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act, and the Notes are eligible for trading in
the Private Offerings, Resale and Trading through Automated Linkages ("PORTAL")
market.
(bb) Neither the Company nor any affiliate (as such term is defined
in Rule 501(b) under the Securities Act) of the Company has, directly or through
any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any "security" (as defined in the Securities Act),
which is or could reasonably be expected to be integrated with the sale of the
Notes in a manner that would require the registration of the Notes under the
Securities Act. The Company and the Subsidiaries have not incurred any liability
for a fee, commission, or other compensation on account of the employment of a
broker or finder in connection with the transactions contemplated by this
Agreement other than as contemplated hereby.
(cc) None of the Company, any affiliate (as such term is defined in
Rule 501(b) under the Securities Act) of the Company and any other person acting
on its or their behalf has engaged, in connection with the offering of the
Notes, in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.
SECTION 2. SALE TO THE INITIAL PURCHASERS.
(a) On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions set forth herein, the
Company agrees to issue and sell to each Initial Purchaser, severally and not
jointly, and each Initial Purchaser, severally and not jointly, agrees to
purchase from the Company, the Firm Notes at a purchase price and the aggregate
principal amount as set forth in SCHEDULE A opposite the name of such Initial
Purchaser.
(b) In addition, on the basis of the representations, warranties and
agreements contained herein, and subject to the terms and conditions set forth
herein, the Company hereby grants an option to the Initial Purchasers to
purchase any or all of the Option Notes at a price equal to 97.5% of the
principal amount thereof plus accrued interest from the Closing Date to the
applicable Option Closing Date. Such option will expire thirty days after the
date hereof, and may be exercised in whole or in part from time to time only for
the purpose of covering overallotments which may be made in connection with the
offering and distribution of the Firm Notes upon notice by the Initial
Purchasers to the Company setting forth the aggregate principal
<PAGE>
-14-
amount of Option Notes as to which the Initial Purchasers are then exercising
the option and the time and date of delivery and payment therefor. Any such time
and date of delivery and payment (an "Option Closing Date") shall be determined
by the Initial Purchasers, but shall not be later than five full business days
after the exercise of such option unless otherwise agreed by the Company and the
Initial Purchasers. If the option is exercised as to all or a portion of the
Option Notes, the principal amount of Option Notes to be purchased by each
Initial Purchaser shall be in the same proportion to the total principal amount
of Option Notes being purchased as the total principal amount of Firm Notes set
forth in SCHEDULE A opposite the name of such Initial Purchaser bears to the
total principal amount of Firm Notes.
(c) The Initial Purchasers have advised the Company that it is their
intention, as promptly as they deem appropriate after the Company shall have
furnished the Initial Purchasers with copies of the Offering Memorandum, to
resell the Notes pursuant to the procedures and upon the terms set forth in the
Offering Memorandum, including not to solicit any offer to buy or offer to sell
the Notes by means of any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act. Each of the Initial Purchasers warrant and agree with the Company that it
has solicited and will solicit offers (the "Exempt Resales") for Notes only
from, and will offer Notes only to persons that it reasonably believes to be
"Qualified Institutional Buyers" or "QIBs" in transactions that meet the
requirements for an exemption from the registration requirements of the
Securities Act under Rule 144A. Each of the Initial Purchasers represents and
warrants, severally and not jointly, that it is an Institutional Accredited
Investor with such knowledge and experience in financial and business matters as
are necessary to evaluate the merits and risks of an investment in the Notes,
and is acquiring its interest in the Notes not with a view to the distribution
or resale thereof, except resales in compliance with the registration
requirements or exemption provisions of the Securities Act and that neither it,
nor anyone acting on its behalf, will offer the Notes so as to bring the
issuance and sale of the Notes within the provisions of Section 5 of the
Securities Act. Each of the Initial Purchasers further represents and warrants,
severally and not jointly, that it is not a pension or welfare plan (as defined
in Section 3 of ERISA) and is not acquiring the Notes on behalf of a pension or
welfare plan. The Company acknowledges and agrees that the Initial Purchasers
may sell Notes to any affiliate of the Initial Purchasers and any such affiliate
may sell Notes purchased by it to the Initial Purchasers. The Initial Purchasers
agree that, prior to or simultaneously with the confirmation of sale by it to
any Subsequent Purchaser of any of the Notes purchased from the Company pursuant
hereto, the Initial Purchasers shall furnish to that Subsequent Purchaser a copy
of the Offering Memorandum (and any amendment thereof or supplement thereto that
the Company shall have furnished to the Initial Purchasers prior to the
<PAGE>
-15-
date of such confirmation of sale). In addition to the foregoing, the Initial
Purchasers agree and understand that the Company and, for purposes of the
opinions to be delivered to the Initial Purchasers pursuant to Sections 5(b) and
(d) hereof, counsel to the Company and to the Initial Purchasers, respectively,
may rely upon the accuracy and truth of the foregoing representations,
warranties and covenants in this Section 2 and the Initial Purchasers hereby
consent to such reliance.
(d) Each Initial Purchaser, severally and not jointly, hereby
represents and warrants to, and agrees with, the Company that (i) no form of
general solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) has been or will be used by the Initial Purchasers or
any of their Initial Purchasers in connection with the offer and sale of any of
the Notes including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising except
pursuant to a registered public offering as provided in the Registration Rights
Agreement; and (ii) it will otherwise act in accordance with the terms and
conditions set forth in this Agreement in connection with the placement of the
Notes contemplated hereby.
SECTION 3. DELIVERY OF AND PAYMENT FOR THE NOTES. Delivery of, and payment
for, the Firm Notes shall be made at 9:00 a.m., Baltimore, Maryland time, on
March 16, 1998, or at such other date or time, not later than ten full business
days thereafter, as shall be agreed by the Initial Purchasers and the Company
(such date and time being referred to herein as the "Closing Date"). Delivery
of, and payment for, the Firm Notes and the Option Notes shall be made at the
offices of BT Alex. Brown Incorporated, Baltimore, Maryland, or any such other
place as shall be agreed by the Initial Purchasers and the Company. In addition,
in the event that any or all of the Option Notes are purchased by the Initial
Purchasers, delivery of such Option Notes and payment of the purchase price for
such Option Notes shall be made at the above-mentioned offices of BT Alex. Brown
Incorporated, or any such other place as shall be agreed by the Initial
Purchasers and the Company, on each date of delivery as specified in the notice
from the Initial Purchasers to the Company. Payment shall be made to the Company
by wire transfer of same day funds payable to the order of the Company, against
delivery to the Initial Purchasers of certificates for the Notes to be purchased
by them. On the Closing Date, payment will be made against delivery of one or
more global Notes in registered form to be deposited with, or on behalf of, DTC
and registered in the name of Cede & Co., as nominee of DTC, in such
denominations and registered in such names, or otherwise, as the Initial
Purchasers shall have requested. The Company shall make the certificates for the
Notes available for examination and packaging by the Initial Purchasers not
later than 10:00 a.m. (New York time) on the last business day prior to the
<PAGE>
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Closing Date, or Option Closing Date, as the case may be, at the offices of the
Trustee or its agent in New York City.
SECTION 4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants
and agrees with the Initial Purchasers as follows:
(a) The Company will furnish promptly to the Initial Purchasers and
counsel for the Initial Purchasers, without charge, as many copies of the
Offering Memorandum (and of any amendments or supplements thereto) as may be
reasonably requested; to furnish to the Initial Purchasers on the date hereof a
copy of the independent accountants' report included in the Offering Memorandum
signed by the accountants rendering such report; and the Company hereby consents
to the use of the Offering Memorandum, and any amendments and supplements
thereto, in connection with Exempt Resales of the Notes.
(b) The Company will notify BT Alex. Brown Incorporated promptly,
and confirm such advice in writing, of (x) any filing made by the Company of
information relating to the offering of the Notes with any securities exchange
or any other regulatory body in the United States or any other jurisdiction, and
(y) prior to the completion of the placement of the Notes by the Initial
Purchasers as evidenced by a notice in writing from the Initial Purchasers to
the Company, any material adverse changes or developments involving any material
prospective change in the condition, financial or otherwise, results of
operations or business of the Company or its Subsidiaries taken as a whole, in
or affecting the earnings, business affairs or business prospects of the Company
and its Subsidiaries which (i) make any statement of a material fact made in the
Offering Memorandum false or misleading in any material respect or (ii) if not
disclosed in the Offering Memorandum, would constitute a material omission
therefrom. In such event or if during such time any event shall occur as a
result of which it is necessary, in the reasonable opinion of the Company, its
counsel, the Initial Purchasers or counsel for the Initial Purchasers, to amend
or supplement the Offering Memorandum in order that the Offering Memorandum not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances then existing, the Company will forthwith amend or supplement
the Offering Memorandum by preparing and furnishing to each Initial Purchaser an
amendment or amendments of, or a supplement or supplements to, the Offering
Memorandum (in form and substance satisfactory in the reasonable opinion of
counsel for the Initial Purchasers) so that, as so amended or supplemented, the
Offering Memorandum 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 existing at the time it is delivered to a
Subsequent Purchaser, not misleading.
<PAGE>
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(c) The Company agrees that if the delivery of the Offering
Memorandum is required at any time in connection with the sale of the Notes and
if at such time any events shall have occurred as a result of which the Offering
Memorandum as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when the Offering Memorandum is delivered, not misleading, or if for any
other reason it shall be necessary at such time to amend or supplement the
Offering Memorandum in order to comply with any law, the Company will notify BT
Alex. Brown Incorporated immediately thereof, and to promptly prepare and
furnish to the Initial Purchasers an amended Offering Memorandum or a supplement
to the Offering Memorandum so that statements in the Offering Memorandum, as so
amended or supplemented, will not, in light of the circumstances under which
they were made when it is so delivered, be misleading, or so that the Offering
Memorandum will comply with applicable law. The Initial Purchasers' delivery of
any such amendment or supplement shall not constitute a waiver of any of the
conditions set forth in Section 6 hereof.
(d) The Company agrees to not amend or supplement the Offering
Memorandum without the consent of the Initial Purchasers, which consent shall
not be unreasonably withheld, and to promptly advise the Initial Purchasers when
any document filed under the Exchange Act which is incorporated into the
Offering Memorandum shall have been filed with the Commission.
(e) The Company agrees, during the three-year period following the
Closing Date, to furnish to the Initial Purchasers all reports and other
communications furnished to shareholders and copies of all reports, documents,
information and financial statements filed with the Commission or any national
securities exchange on which any class of securities of the Company shall be
listed.
(f) The Company will use the proceeds from the sale of the Notes in
the manner described in the Offering Memorandum.
(g) The Company will, in connection with the offering of the Notes,
make its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Initial Purchasers.
(h) The Company will use its reasonable best efforts to do and
perform all things required to be done and performed under this Agreement by it
that are within its control prior to
<PAGE>
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or after the Closing Date and to use reasonable efforts to satisfy all
conditions precedent on its part to the delivery of the Notes.
(i) None of the Company, its affiliates (as defined in Rule 501(b)
under the 1933 Act) or any person (other than the Initial Purchasers and their
respective affiliates, as to whom the Company makes no representation) acting on
its behalf will engage, in connection with the offering of the Notes, in any
form of general solicitation or general advertising within the meaning of Rule
502(c) under the 1933 Act, nor will any person acting on its or their behalf,
directly or indirectly, make offers or sales of any security, or solicit offers
to buy any security, under circumstances that would require the registration of
the Notes under the Securities Act. The Company will not permit any of its
affiliates to resell any Notes that have been acquired by any of them.
(j) Until such time as all of the restrictive legends required to be
placed on the Notes and Underlying Stock pursuant to the Indenture have been
removed or are removable, neither the Company nor any of its Affiliates will
purchase any of the Notes and Underlying Stock, other than, in the case of the
Company, Notes and Underlying Stock which upon such purchase are canceled and
not reissued. For purposes of this Section 4(j), the term "affiliate" shall mean
the definition of such term in Rule 144(a)(1) under the Securities Act.
(k) The Company will not, so long as the Notes are outstanding, be
or become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act, and will not be or
become, or be or become owned by, a closed-end investment company required to be
registered, but not registered thereunder.
(l) The Company will cooperate with the Initial Purchasers and
counsel for the Initial Purchasers to qualify the Notes and the shares of Common
Stock issuable upon conversion of the Notes for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as the Initial Purchasers may reasonably designate, and to maintain
such qualifications in effect for as long as is required to complete the sale of
the Notes and the sale of the shares of Common Stock issuable upon conversion of
the Notes; provided, however, that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process or to subject it to taxation in any jurisdiction where it is
not so qualified or so subject. In each jurisdiction in which the Notes or such
shares of Common Stock issuable upon conversion of the Notes have been so
qualified, the
<PAGE>
-19-
Company will file such statements and reports as may be required in connection
with the distribution of the Notes.
(m) The Company agrees that no future offer and sale of debt
securities of the Company of any class will be made if, as a result of the
doctrine of "integration" referred to in Rule 502 under the Securities Act, such
offer and sale would render invalid (for the purpose of (i) the sale of the
Notes by the Company to the Initial Purchasers, (ii) the resale of the Notes by
the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the Notes
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.
(n) So long as any of the Notes or Common Stock issued upon the
conversion of the Notes are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, the Company will, during any period in which
it is not subject to and in compliance with Sections 13 or 15(d) of the Exchange
Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act.
This covenant is intended to be for the benefit of the holders, and prospective
purchasers designated by such holders, from time to time of such restricted
securities.
(o) The Company will use its reasonable best efforts to comply with
the Registration Rights Agreement and all agreements set forth in any
representation letters of the Company to The Depository Trust Company relating
to the approval of the Notes for "book-entry" transfers;
(p) The Company will not take any action prior to the execution and
delivery of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture.
(q) The Company will not take any action prior to the Closing Date
which in the Company's reasonable judgment would require the Offering Memorandum
to be amended or supplemented pursuant to Section 4(c) hereof.
(r) The Company will maintain a transfer agent and, if necessary
under the laws of the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for the Common Stock.
<PAGE>
-20-
(s) The Company will use its reasonable efforts to permit the Notes
to be designated as PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to the PORTAL market.
(t) The Company will cooperate with the Initial Purchasers and use
its reasonable efforts to permit the Notes and the Underlying Stock to be
eligible for clearance and settlement through DTC.
(u) Without the prior written consent of BT Alex. Brown
Incorporated, the Company will not, directly or indirectly, offer to sell, sell,
grant any option for the sale or otherwise dispose of, any Common Stock or
securities convertible into Common Stock, other than (i) the Notes to be sold
hereunder to the Initial Purchasers or Common Stock issued upon conversion of
the Notes, (ii) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof and (iii) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans of the
Company; provided, however that the Company, without the prior written consent
of BT Alex. Brown Incorporated, may issue up to an aggregate of 500,000 shares
of Common Stock in connection with any business acquisition(s) by the Company.
(v) The Company has caused each officer and director of the Company
to furnish you, on or prior to the date of this agreement, a letter or letters,
in form and substance satisfactory to the Initial Purchasers, pursuant to which
each such person shall agree not to offer, sell, sell short or otherwise dispose
of any shares of Common Stock of the Company or other capital stock of the
Company, or any other securities convertible, exchangeable or exercisable for
Common Stock or derivative of Common Stock, owned by such person (or as to which
such person has the right to direct the disposition) or request the registration
for the offer or sale of any of the foregoing for the period of 45 days after
the date of this Agreement, directly or indirectly, except with the prior
written consent of BT Alex. Brown Incorporated (the "Lockup Agreements");
PROVIDED, HOWEVER, such officers, directors and specified shareholders shall be
permitted to make the following transfers: (i) transfers of Common Stock made by
gift, PROVIDED the donee thereof agrees in writing to be bound by the terms
hereof; (ii) transfers to the transferor's affiliates, as such term is defined
in Rule 405 promulgated under the Securities Act, PROVIDED that each transferee
agrees in writing to be bound by the terms hereof and (iii) transfers made with
the prior written consent of BT Alex. Brown Incorporated. The Company's officers
and directors also shall have agreed pursuant to the Lockup Agreements that such
Person will not purchase any of the Notes, other than Notes that have been or
are being sold in a transaction
<PAGE>
-21-
registered under the Act, directly or indirectly until the expiration of two
years after the later to occur of the Closing Date or the later date on which
Option Notes are to be purchased, if any.
SECTION 5. PAYMENT OF EXPENSES.
The Company hereby agrees to pay all of the expenses and fees incident to
the performance of its obligations under this Agreement, the Indenture and the
Registration Rights Agreement, including, regardless of whether any sale of the
Notes to the Initial Purchasers is consummated: (i) the fees and expenses of
accountants and counsel for the Company, (ii) all costs and expenses incurred in
connection with the preparation, duplication, printing (including mailing and
handling charges), and delivery to the Initial Purchasers of the Offering
Memorandum and any amendments and supplements thereto, (iii) all costs and
expenses incurred in connection with the reproduction of this Agreement, the
Registration Rights Agreement, the Indenture and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Notes, (iv) the printing, issuance and delivery of the Notes, (v) costs and
expenses of travel, food and lodging of Company personnel in connection with the
"road show," information meetings and presentations, fees and expenses of the
transfer agent and registrar, (vii) fees and expenses of the Trustee, including
the Trustee's counsel, in connection with the Indenture and the Notes, (viii)
the qualification of the Notes and the shares of Common Stock issuable upon
conversion of the Notes under state securities laws in accordance with the
provisions of Section 4(l), including filing fees and the fees and disbursements
of counsel for the Initial Purchasers, (ix) any fees incurred in connection with
the rating of the Notes and the designation of the Notes as PORTAL securities in
connection with the PORTAL market and designation of the Underlying Stock for
quotation on the Nasdaq National Market, and (x) all other costs and expenses
incident to the performance of its obligations hereunder which are not
specifically otherwise provided for in this Section. The Initial Purchasers
shall pay their own costs and expenses, including costs and expenses of their
counsel, any transfer taxes on Notes which they may sell and expenses incident
to their sale of Notes.
SECTION 6. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers hereunder are subject to the continuing
accuracy of the representations and warranties of the Company herein as of the
date hereof and as of the Closing Date and each Option Closing Date, if any, as
if they had been made on and as of the Closing Date or each Option Closing Date,
as the case may be; and the performance by the Company on and as of the Closing
Date and each Option Closing Date, if any, of its covenants and obligations
hereunder and to the following further conditions:
<PAGE>
-22-
(a) The Company shall not have advised the Initial Purchasers that,
and the Initial Purchasers shall not have otherwise become aware of the fact
that, the Offering Memorandum, or any supplement or amendment thereto, contains
an untrue statement of fact which is material, or omits to state a fact which is
material and is required to be stated therein or is necessary to make the
statements, in light of the circumstances under which they were made, not
misleading. No order suspending the sale of the Notes in any jurisdiction shall
have been issued on either the Closing Date or the relevant Option Closing Date,
if any, and no proceedings for that purpose shall have been instituted or shall
be contemplated.
(b) At Closing Date, and the Option Closing Date, if any, the
Initial Purchasers shall have received the favorable opinion of Hutchins,
Wheeler & Dittmar, A Professional Corporation, counsel to the Company, dated the
Closing Date, addressed to the Initial Purchasers and in form and substance
reasonably satisfactory to Testa, Hurwitz & Thibeault, LLP, to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own or
lease its properties and conduct its business as described in the
Offering Memorandum and is duly qualified to transact business and
is in good standing in the states of Massachusetts and Texas.
(ii) The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Offering
Memorandum as of the date referred to therein; the authorized shares
of the Company's Common Stock have been duly authorized; the
outstanding shares of the Company's Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable;
all of the Common Stock and the Notes conform to the description
thereof contained in the Offering Memorandum; the certificates for
the Common Stock, are in due and proper form; the shares of Common
Stock to be issued by the Company upon conversion of the Notes have
been duly authorized and will be validly issued, fully paid and
non-assessable when issued and paid for as contemplated by this
Agreement; and no preemptive rights of stockholders exist with
respect to any of the shares of Common Stock or the issue or sale
thereof under the Company's charter or by-laws, or to the knowledge
of such counsel, any other agreement binding upon the Company.
<PAGE>
-23-
(iii) Except as described in or contemplated by the Offering
Memorandum, to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or exchangeable
into or evidencing the right to purchase or subscribe for any shares
of capital stock of the Company and there are no outstanding or
authorized options, warrants or rights of any character obligating
the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right
to purchase or subscribe for any shares of such stock.
(iv) The statements under the captions "Management,"
"Description of Credit Facility," "Description of Notes,"
"Description of Capital Stock," "Description of 6% Convertible Notes
due 2001" and "Certain Federal Income Tax Considerations" in the
Offering Memorandum, insofar as such statements constitute a summary
of documents referred to therein or matters of law, are, in all
material respects, fair and accurate summaries of such documents and
matters.
(v) The execution and delivery of this Agreement, the
Indenture, the Notes and the Registration Rights Agreement and the
consummation of the transactions contemplated hereby and thereby do
not and will not (a) conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, the
certificate of incorporation or bylaws of the Company, (b) or any
agreement or instrument known to such counsel to which the Company
is a party or by which the Company may be bound, or (c) violate or
conflict with any applicable law, rule or regulation or any order,
writ or decree of any court or governmental agency or body having
jurisdiction over the Company or its properties.
(vi) This Agreement, the Indenture and the Registration Rights
Agreement have been duly authorized executed and delivered by the
Company.
(vii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the
execution and delivery of this Agreement, the Indenture, the Notes
or the Registration Rights Agreement and the consummation of the
transactions herein contemplated (other than as may be required by
State securities and Blue Sky laws as to which such counsel need
<PAGE>
-24-
express no opinion) except such as have been obtained or made,
specifying the same.
(viii) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the
Offering Memorandum, required to register as an investment company
under the 1940 Act.
(ix) The shares of Common Stock issuable upon conversion of
the Notes (i) have been duly authorized and validly reserved for
issuance upon such conversion, and such shares, when issued and
delivered upon such conversion in the manner provided for by the
Notes and in the Indenture, will be validly issued, fully paid and
non-assessable, and (ii) will conform to the description thereof
contained on the Offering Memorandum.
(x) The issuance of the Notes and the shares of Common Stock
issuable upon conversion of the Notes are not subject to preemptive
or other similar rights binding upon the Company contained in the
Company's certificate of incorporation, by-laws or under applicable
law.
(xi) Assuming the accuracy of the Company's representations
and warranties set forth in subparagraph (x) of Section 1, the
accuracy of the Initial Purchasers' representations and warranties
set forth in subparagraph (d) of Section 2, and compliance with the
procedures set forth in Section 7 hereof, and in reliance upon the
acknowledgments, representations and agreements made, or deemed to
be made, by each purchaser of Notes as set forth in the Offering
Memorandum, it is not necessary in connection with the offer, sale
and delivery of the Notes to the Initial Purchasers or the initial
offer, resale and delivery of the Notes by the Initial Purchasers,
in each case, in the manner contemplated by this Agreement and the
Offering Memorandum to register the Notes under the Securities Act
or to qualify the Indenture under the 1939 Act it being understood
that no opinion is expressed as to any subsequent resale of any such
Note.
(xii) The Notes, the Common Stock issuable upon the conversion
of the Notes, the Registration Rights Agreement and the Indenture
conform in all material respects to the description thereof
contained in the Offering Memorandum, and the form of certificate
used to evidence the Notes and the Underlying Stock are in due and
proper form under applicable law.
<PAGE>
-25-
(xiii) The Notes are in the form contemplated by the
Indenture, have been duly authorized by the Company and assuming
that the Notes have been executed and authenticated by the Trustee
in the manner described in its certificate delivered to you today
(which fact such counsel need not determine by an inspection of the
Notes), the Notes will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited to
bankruptcy, insolvency (including without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in a
proceeding in equity or at laws), and will be entitled to benefits
of the Indenture.
(xiv) Assuming the due authorization, execution and delivery
thereof by the Initial Purchasers, the Registration Rights Agreement
is a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (a) as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganizations, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
laws) and (b) rights to indemnity and contribution thereunder may be
limited by federal or state securities laws or the policies
underlying such laws.
(xv) Assuming the due authorization, execution and delivery
thereof by the Trustee, the Indenture is a legal, valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except to the extent that the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganizations, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at laws) and
(b) rights to indemnity and contribution thereunder may be limited
by federal or state securities laws or the policies underlying such
laws.
<PAGE>
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In rendering such opinion Hutchins, Wheeler & Dittmar, A
Professional Corporation, may rely as to matters governed by the laws of states
other than Massachusetts and Delaware or Federal laws on local counsel licensed
to practice in such jurisdictions, provided that in each case Hutchins, Wheeler
& Dittmar, A Professional Corporation, shall state that they believe that they
and the Initial Purchasers are justified in relying on such other counsel. In
rendering such opinion, such counsel may also rely, as to matters of fact, on
certificates of officers of the Company and of governmental officials, in which
case their opinion shall state that they are so doing. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads them
to believe that the Offering Memorandum as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Hutchins,
Wheeler & Dittmar, A Professional Corporation, may state that their belief is
based upon the procedures set forth therein, but is without independent check
and verification.
(c) The Initial Purchasers shall receive on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Richard A. Parr II,
Esq., General Counsel of the Company, dated the Closing Date or the Option
Closing Date, as the case may be, addressed to the Initial Purchasers (and
stating that it may be relied upon by counsel to the Initial Purchasers) to the
effect that:
(i) Each of the Partnerships is a validly existing partnership
under the laws of the jurisdiction of its organization, with the
power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandum, and is
duly qualified to conduct its business and is in good standing in
each jurisdiction in which the nature of its properties or the
conduct of its business requires such qualification, except where
the failure so to qualify does not have a material adverse effect
upon the business of the Company and the Subsidiaries taken as a
whole; the partnership interests in the Partnerships held directly
or indirectly by the Company are held, to such counsel's knowledge,
free and clear of all liens, encumbrances and equities and claims,
except (a) for those encumbrances disclosed in the Offering
Memorandum, (b) to the extent provided in the applicable partnership
agreement; each partnership agreement pursuant to which the Company
or a Subsidiary holds a partnership interest in a Partnership is in
full force and effect and constitutes the legal, valid and binding
<PAGE>
-27-
agreement of the parties thereto, enforceable against such parties
in accordance with the terms thereof, except as enforcement thereof
may be limited by equitable principles or by bankruptcy, insolvency
or other similar laws affecting creditors' rights generally. To such
counsel's knowledge, there has been no material breach of or default
under, and no event which with notice or lapse of time would
constitute a material breach of or default under, such agreements by
the Company or any Subsidiary or any other party to such agreements.
(ii) Each of the LLCs is a validly existing limited liability
company under the laws of the jurisdiction of its organization, with
the power and authority to own, lease and operate its properties and
to conduct its business as described in the Offering Memorandum, and
is duly qualified to conduct its business and is in good standing in
each jurisdiction in which the nature of its properties or the
conduct of its business requires such qualification, except where
the failure so to qualify does not have a material adverse effect
upon the business of the Company and the Subsidiaries taken as a
whole; the membership or other ownership interests in the LLCs held
directly or indirectly by the Company are held, to such counsel's
knowledge, free and clear of all liens, encumbrances and equities
and claims, except (a) for those encumbrances disclosed in the
Offering Memorandum and (b) to the extent provided in the applicable
operating agreement; each operating agreement pursuant to which the
Company or a Subsidiary holds a membership or other ownership
interest in an LLC is in full force and effect and constitutes the
legal, valid and binding agreement of the parties thereto,
enforceable against such parties in accordance with the terms
thereof, except as enforcement thereof may be limited by equitable
principles or by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally. To such counsel's knowledge,
there has been no material breach of or default under, and no event
which with notice or lapse of time would constitute a material
breach of or default under, such agreements by the Company or any
Subsidiary or any other party to such agreements.
(iii) Each of the Corporate Subsidiaries is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, with corporate power and authority to own or
lease its properties and conduct its business as described in the
Offering Memorandum; each of the Subsidiaries is duly qualified to
transact business and is in good standing in all jurisdictions in
which the conduct of their business requires such qualification,
<PAGE>
-28-
except where the failure so to qualify does not have a material
adverse effect upon the business of the Company and the Subsidiaries
taken as a whole; and the outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the
Company or a Subsidiary; and, to the best of such counsel's
knowledge, the outstanding shares of capital stock of each of the
Subsidiaries is owned free and clear of all liens, encumbrances and
equities and claims (except (i) for encumbrances disclosed in the
Offering Memorandum, and (ii) for encumbrances relating to any
indebtedness disclosed in the Offering Memorandum), and no options,
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into
any shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(iv) None of the Subsidiaries is in violation of its
certificate or articles of incorporation or bylaws, partnership
agreement, operating agreement or other organizational documents
and, to the knowledge of such counsel, neither the Company nor any
of the Subsidiaries (a) is in default in the performance of any
material obligation, agreement or condition contained in any
evidence of indebtedness, or (b) in material breach of any
applicable statute, rule or regulation or any order, writ or decree
of any court or governmental agency or body having jurisdiction over
the Company or any of the Subsidiaries or their respective property.
(v) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries, except as set forth in the Offering Memorandum.
(vi) Except as disclosed in the Offering Memorandum, such
counsel is not aware of any holder of any security of the Company or
any other person who has the right, contractual or otherwise, to
have any securities of the Company included in the Registration
statement to be filed in accordance with the Registration Rights
Agreement, except for any such rights as shall have been waived.
(vii) The statements under the captions "Risk
Factors-Corporate Practice of Medicine and Other Laws and
Regulations," "-Fraud and Abuse Laws," and "-Risks Inherent in
Provision of Medical Services; Possible Litigation
<PAGE>
-29-
and Legal Liability" in the Offering Memorandum, insofar as such
statements constitute a summary of documents referred to therein or
matters of law, are, in all material respects, fair and accurate
summaries of such documents and matters.
(viii) To such counsel's knowledge, the Company and each of
the Subsidiaries has all necessary Permits (except where the failure
to have such Permits, individually or in the aggregate, would not
have a material adverse effect on the business, operations or
financial condition of the Company and the Subsidiaries taken as a
whole), to own their respective properties and to conduct their
respective businesses as now being conducted, and as described in
the Offering Memorandum including, without limitation, such Permits
as are required under such federal and state health care and
workers' compensation laws as are applicable to the Company and the
Subsidiaries, and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination
thereto or results in any other material impairment of the rights of
the holder of any such Permit, subject in each case to such
qualification as may be set forth in the Offering Memorandum; and,
except as described in the Offering Memorandum, such permits contain
no restrictions that are materially burdensome to the Company or any
of the Subsidiaries.
(ix) Except (a) as described in or contemplated by the
Offering Memorandum, (b) with respect to any Partnership, as
contained in the applicable partnership agreement, and (c) with
respect to any LLC, as contained in the applicable operating
agreement, to such counsel's knowledge, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible
securities or commitments of sale related to or entitling any person
to purchase or otherwise acquire any shares of capital stock, or
partnership, membership or other ownership interest in, any
Subsidiary.
(d) The Initial Purchasers shall have received from Testa, Hurwitz &
Thibeault, LLP, counsel for the Initial Purchasers, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, in form and substance
reasonably satisfactory to the Initial Purchasers.
(e) The Initial Purchasers shall have received at or prior to the
Closing Date a memorandum or summary, in form and substance satisfactory to the
Initial Purchasers, with respect to the qualification for offering and sale by
the Initial Purchasers of the Notes under the
<PAGE>
-30-
State securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may reasonably have designated to the Company.
(f) The Initial Purchasers and its counsel shall have received, on
each of the dates hereof, the Closing Date and the Option Closing Date, as the
case may be, a letter dated the date hereof, the Closing Date or the Option
Closing Date, as the case may be, in form and substance satisfactory to you, of
Arthur Andersen LLP confirming that they are independent public accountants
within the meaning of the Act and the applicable published Rules and Regulations
thereunder and stating that in their opinion the financial statements and
schedules examined by them and included in the Offering Memorandum comply in
form in all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations; and containing such other
statements and information as is ordinarily included in accountants' "comfort
letters" to Initial Purchasers with respect to the financial statements and
certain financial and statistical information contained in the Offering
Memorandum.
(g) The Initial Purchasers shall have received on the Closing Date
or the Option Closing Date, as the case may be, a certificate or certificates of
the Chief Executive Officer and the Chief Financial Officer of the Company to
the effect that, as of the Closing Date or the Option Closing Date, as the case
may be, each of them severally represents as follows:
(i) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing
Date or the Option Closing Date, as the case may be, and the Company
has complied with all agreements and covenants and satisfied all
conditions contained in this Agreement, the Indenture and the
Registration Rights Agreement on its parts to be performed or
satisfied at or prior to the Closing Date or the Option Closing
Date, as the case may be;
(ii) The final Offering Memorandum has been printed and copies
thereof have been distributed to the Initial Purchasers and no stop
order suspending the sale of the Notes in any jurisdiction has been
issued and no proceedings for that purpose has been commenced or, to
the knowledge of the Company, is contemplated;
(iii) He or she has carefully examined the Offering Memorandum
and, in his or her opinion, as of the date of the Offering
Memorandum, the statements contained in the Offering Memorandum were
true and correct, and such Offering Memorandum did not omit to state
a material fact
<PAGE>
-31-
required to be stated therein or necessary in order to make the
statements therein not misleading, and since the date of the
Offering Memorandum, no event has occurred which should have been
set forth in a supplement to or an amendment of the Offering
Memorandum which has not been so set forth in such supplement or
amendment; and
(iv) Since the respective dates as of which information is
given in the Offering Memorandum, there has not been any material
adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or
the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company and the Subsidiaries taken as a whole, whether or not
arising in the ordinary course of business.
(h) The Company shall have furnished to the Initial Purchasers such
further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as the
Initial Purchasers may reasonably have requested.
(i) The Notes shall have been approved by the National Association
of Securities Dealers, Inc. for trading in the PORTAL market.
(j) Trading in the Common Stock shall not have been suspended by the
Nasdaq National Market at any time on or after the date of this Agreement.
(k) The Company and the Initial Purchasers shall have executed and
delivered the Registration Rights Agreement on the Closing Date.
(l) The Indenture shall have been duly executed and delivered by the
Company and the Trustee and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(m) If any event shall have occurred that requires the Company under
Section 4(b) or 4(c) hereof to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to comment
thereon, and copies thereof delivered to the Initial Purchasers.
<PAGE>
-32-
(n) There shall not have occurred any invalidation of Rule 144A
under the Securities Act by any court or any withdrawal or proposed withdrawal
of any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the judgment of the Initial Purchasers would materially impair the
ability of the Initial Purchasers to purchase, hold or effect resales of the
Notes as contemplated hereby.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Initial Purchasers and to Testa, Hurwitz &
Thibeault, LLP, counsel for the Initial Purchasers.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the initial Purchasers hereunder may be terminated by the
Initial Purchasers by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be.
In such event, the Company and the Initial Purchasers shall not be under
any obligation to each other (except to the extent provided in Sections 5 and 8
hereof).
SECTION 7. SUBSEQUENT OFFERS AND RESALES OF THE NOTES.
(a) Each of the Initial Purchasers and the Company hereby
establishes and agrees to observe the following procedures in connection with
the offer and sale by the Initial Purchasers of the Notes.
(i) Offers have been and will be, and sales of the Notes will
be, made by the Initial Purchasers only to persons that it
reasonably believes to be "Qualified Institutional Buyers" or "QIBs"
in transactions that meet the requirements for an exemption from the
registration requirements of the Securities Act under Rule 144A.
(ii) The Notes have been and will be offered by the Initial
Purchasers only by approaching prospective Subsequent Purchasers on
an individual basis. No general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act will be
used in connection with the offering of the Notes. Each of the
Initial Purchasers agrees, with respect to resales made in reliance
upon Rule 144A (other than through the PORTAL
<PAGE>
-33-
Market) of any of the Notes purchased from the Company hereunder, to
deliver either with the confirmation of such resale or otherwise
prior to settlement of such resale a notice to the effect that the
resale of such Notes has been made in reliance upon the exemption
from the registration requirements of the Securities Act provided by
Rule 144A.
(iii) In connection with the original distribution of the
Notes, the Company agrees that, prior to any offer or resale of the
Notes by the Initial Purchasers, the Initial Purchasers and their
counsel shall have the right to make reasonable inquiries into the
business of the Company and its Subsidiaries. The Company agrees to
provide answers to each prospective Subsequent Purchaser of Notes
who so requests information concerning the Company and its
Subsidiaries (to the extent such information is 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 Notes, as provided in the
Offering Memorandum.
<PAGE>
-34-
SECTION 8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser (for purposes of this Section 8, "Initial Purchasers" shall include
the officers, directors, partners, employees and agents of such Initial
Purchaser, and each person, if any, who controls such Initial Purchaser
("controlling person") within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act) from and against any and all losses, claims,
damages, expenses or liabilities, joint or several (and actions, proceedings,
suits and litigation in respect thereof), whatsoever, as the same are incurred,
to which the Initial Purchaser or any such officer, director, partner, employee,
agent or controlling person may become subject, under the Securities Act, the
Exchange Act or any other statute or at common law or otherwise, insofar as such
losses, claims, damages, expenses, liabilities, actions, proceedings, suits or
litigation arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum or any
amendment or supplement thereto or (ii) the omission or alleged omission
therefrom of 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; and will reimburse any reasonable legal or other expenses
incurred by the Initial Purchaser or any such officer, director, partner,
employee, agent or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action, proceeding, suit or
litigation; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, expense, liability,
action, proceeding, suit or litigation arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Offering Memorandum or any such amendment or supplement in reliance upon and
in conformity with the Initial Purchasers' Information. The indemnity agreement
shall be in addition to any liability which the Initial Purchasers may have at
common law or otherwise.
(b) Each Initial Purchaser severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its executive
officers and each person, if any, who controls the Company within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several (and actions, proceedings, suits and litigation in respect thereof),
whatsoever, as the same are incurred, to which the Company or any such director,
officer or controlling person may become subject, under the Securities Act, the
Exchange Act or any other statute or at common law or otherwise, insofar as such
losses, claims, damages, liabilities, actions, proceedings, suits or litigation
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Offering Memorandum or any
amendment or supplement thereto, or (ii) the omission or the alleged
<PAGE>
-35-
omission to state therein 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; and will reimburse any reasonable
legal or other expenses incurred by the Company or any such director, officer,
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability, action, proceeding, suit or litigation;
PROVIDED, HOWEVER, that each Initial Purchaser will be liable in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Offering
Memorandum or such amendment or supplement, in reliance upon and in conformity
with Initial Purchasers' Information. This indemnity agreement will be in
addition to any liability which such Initial Purchaser may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 45 days of presentation) the reasonable fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the
<PAGE>
-36-
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 8(a) and by the Company in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party 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 from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) 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 from the offering of the Notes.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Initial Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, (or actions or proceedings in respect thereof),
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
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
commissions received by the Initial Purchasers, in each case as set forth in the
Plan of Distribution Section of the Offering Memorandum. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Initial Purchasers on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
<PAGE>
-37-
The Company and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) 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 above in this Section 8(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 8(d) shall be deemed to include 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 subsection (d), (i) no Initial Purchaser shall be required to
contribute any amount in excess of the commissions applicable to the Notes
purchased by such Initial Purchaser, and (ii) 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 in this
Section 8(d) to contribute are several in proportion to their respective
obligations as Initial Purchasers and not joint.
(e) In any proceeding relating to the Offering Memorandum or any
supplement or amendment thereto, each party against whom contribution may be
sought under this Section 8 hereby consents to the jurisdiction of any court
already having jurisdiction over the Company.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser, the Company, its directors or executive
officers or any persons controlling the Company, (ii) acceptance of any Notes
and payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Initial Purchaser, to the Company, its directors or executive
officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 8.
SECTION 9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto
shall be deemed to be representations, warranties and agreements at the Closing
Date and each Option Closing Date, as the case may be, and the
<PAGE>
-38-
agreements of the Company and the provisions with respect to the payment of
expenses contained in Sections 5 and 10 and the respective indemnity agreements
contained in Section 8 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Initial
Purchasers, the Company, its Subsidiaries or any controlling person, and shall
survive termination of this Agreement or the issuance and delivery of the Notes
to the Initial Purchasers.
SECTION 10. TERMINATION.
(a) Subject to subsection (b) of this Section 10, the Initial
Purchasers shall have the right to terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Date (i) if any domestic or
international event or act or occurrence has disrupted, or in the Initial
Purchasers' opinion will in the immediate future disrupt, the financial markets;
(ii) if the United States shall have become involved in a war or major
hostilities, or there shall have been an escalation in an existing war or major
hostilities, or a national emergency shall have been declared in the United
States; (iii) if the Company or its Subsidiaries shall have sustained a loss
material to the Company or its Subsidiaries by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether or
not such loss shall have been insured, will, in the Initial Purchasers' opinion,
make it inadvisable to proceed with the delivery of the Notes; or (iv) if there
shall have been such a material adverse change in the general market, political
or economic conditions in the United States or elsewhere, as in the Initial
Purchasers' reasonable judgment would make it inadvisable to proceed with the
offering, sale and/or delivery of the Notes.
(b) If this Agreement is terminated by the Initial Purchasers in
accordance with the provisions of Section 10(a), such termination shall be
without liability of any party to any other party provided that Sections 1, 5
and 8 hereof shall survive such termination and remain in full force and effect.
SECTION 11. DEFAULT BY THE COMPANY. If the Company shall fail at the
Closing Date or any Option Closing Date, as applicable, to sell and deliver the
number of Notes which it is obligated to sell hereunder on such date, then this
Agreement shall terminate (or, if such default shall occur with respect to any
Option Notes to be purchased on an Option Closing Date, the Initial Purchasers
may, at their option, by notice from the Initial Purchasers to the Company,
terminate the Initial Purchasers' obligation to purchase Option Notes from the
Company on such date) without any liability on the part of any nondefaulting
party other than pursuant to Section 5,
<PAGE>
-39-
Section 8 and Section 10 hereof. No action taken pursuant to this Section 11
shall relieve the Company from liability, if any, in respect of such default.
SECTION 12. DEFAULT BY INITIAL PURCHASERS. If on the Closing Date or any
Option Closing Date, as the case may be, any Initial Purchaser shall fail to
purchase and pay for the portion of the Notes which such Initial Purchaser has
agreed to purchase and pay for on such date (otherwise than by reason of any
default on the part of the Company), BT Alex. Brown Incorporated shall use its
reasonable efforts to procure within 36 hours thereafter one or more of the
other Initial Purchasers, or any others, to purchase from the Company such
principal amounts as may be agreed upon, and upon the terms set forth herein, of
the Firm Notes or Option Notes, as the case may be, which the defaulting Initial
Purchaser or Initial Purchasers failed to purchase. If during such 36 hours BT
Alex. Brown Incorporated shall not have procured such other Initial Purchasers,
or any others, to purchase the principal amount of Firm Notes or Option Notes,
as the case may be, agreed to be purchased by the defaulting Initial Purchaser
or Initial Purchasers, then (a) if the aggregate principal amount of Firm Notes
or Option Notes, as the case may be, with respect to which such default shall
occur does not exceed 10% of the total principal amount of Firm Notes or Option
Notes, as the case may be, covered hereby, the other Initial Purchasers shall be
obligated, severally, in proportion to the respective principal amounts of Firm
Notes or Option Notes, as the case may be, which they are obligated to purchase
hereunder, to purchase the principal amount of Firm Notes or Option Notes, as
the case may be, which such defaulting Initial Purchaser or Initial Purchasers
failed to purchase, or (b) if the aggregate principal amount of Firm Notes or
Option Notes, as the case may be, with respect to which such default shall occur
exceeds 10% of the total principal amount of Firm Notes or Option Notes, as the
case may be, covered hereby, the Company or BT Alex. Brown Incorporated will
have the right, by written notice given within the next 36-hour period to the
parties to this Agreement, to terminate this Agreement without liability on the
part of the non-defaulting Initial Purchasers or of the Company except to the
extent provided in Sections 5 and 8 hereof. In the event of a default by any
Initial Purchaser or Initial Purchasers, as set forth in this Section 9, the
Closing Date or Option Closing Date, as the case may be, may be postponed for
such period, not exceeding seven days, as BT Alex. Brown Incorporated may
determine in order that the required changes in the Offering Memorandum or in
any other documents or arrangements may be effected. The term "Initial
Purchaser" includes any person substituted for a defaulting Initial Purchaser.
Any action taken under this Section 9 shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of such Initial Purchaser
under this Agreement.
SECTION 13. NOTICES. All notices and communications hereunder, except as
herein otherwise specifically provided, shall be given in writing and shall be
deemed to have been duly
<PAGE>
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given if mailed or transmitted by any standard form of telecommunication.
Notices to the Initial Purchasers shall be directed to them c/o BT Alex. Brown
Incorporated, 1 South Street, Baltimore, Maryland 21202, Attention: General
Counsel, with a copy to Testa, Hurwitz & Thibeault, LLP, Attention: Mitchell S.
Bloom, Esq., High Street Tower, 125 High Street, Boston, Massachusetts 02110.
Notices to the Company shall be directed to the Company, Attention: Donald J.
Larson, President and Chief Executive Officer, 312 Union Wharf, Boston,
Massachusetts 02109, with a copy to Hutchins, Wheeler & Dittmar, A Professional
Corporation, Attention: James Westra, Esq., 101 Federal Street, Boston,
Massachusetts 02110.
SECTION 14. PARTIES. This Agreement shall inure to the benefit of and
shall be binding upon the Initial Purchasers and the Company and their
respective successors. Except as otherwise provided herein, this Agreement is
not intended (nor shall it be construed) to give any person, firm or
corporation, other than the parties hereto and their respective successors,
heirs and legal representatives, and the controlling persons and officers and
directors referred to in Sections 8 and 9 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. Except as otherwise
provided herein, this Agreement and all conditions and provisions hereof is
intended to be for the sole and exclusive benefit of the Initial Purchasers and
the Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Notes from the
Initial Purchasers shall be deemed to be a successor by reason merely of such
purchase.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MARYLAND. SPECIFIED TERMS OF DAY REFER TO BALTIMORE, MARYLAND TIME UNLESS
OTHERWISE SPECIFIED.
SECTION 16. ENTIRE AGREEMENT, AMENDMENTS. This Agreement constitutes the
entire agreement of the parties hereto and supersedes all prior written or oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may not be amended except in a writing signed by the
Initial Purchasers and the Company.
<PAGE>
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
CONCENTRA MANAGED CARE, INC.
By:
Name:
Title:
Confirmed and accepted as of
the date first above written.
BT ALEX. BROWN INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
PIPER JAFFRAY INC.
By: BT ALEX. BROWN INCORPORATED
By:
Authorized Signatory
<PAGE>
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<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
INITIAL PURCHASERS PURCHASE PRICE PRINCIPAL AMOUNT
------------------ -------------- ----------------
<S> <C> <C>
BT Alex. Brown Incorporated $146,250,000 $150,000,000
BancAmerica Robertson Stephens 16,250,325 16,667,000
Donaldson, Lufkin & Jenrette 16,250,325 16,667,000
Securities Corporation
Piper Jaffray Inc. 16,249,350 16,666,000
Total $195,000,000 $200,000,000
============ ============
</TABLE>
<PAGE>
SCHEDULE B
SUBSIDIARIES
------------
Corporate Subsidiaries
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Concentra Health Services, Inc.
OCI Holdings, Inc.
Concentra Management Services, Inc.
Hillman Consulting, Inc.
Concentra Managed Care Services, Inc.
Prompt Associates, Inc.
Concentra Acquisition Sub, Inc.
First Notice Systems, Inc.
CRA Managed Care of Washington, Inc.
QMC3, Inc.
FOCUS HealthCare Management, Inc.
Concentra PPS, Inc.
Partnerships
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OccuCenters I., L.P.
Tucson Occupational Medicine Partnership
Concentra Occupational Healthcare Harrisburg, L.P.
Managed Prescription Program Joint Venture
LLCs
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Concentra Laboratory, L.L.C.
OHC of Oklahoma, L.L.C.
Concentra Iowa, L.L.C.
Concentra Arkansas, L.L.C.
<PAGE>
-1-
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of March 16, 1998, by and among Concentra Managed Care, Inc., a Delaware
corporation (the "Company"), BT Alex. Brown Incorporated, BancAmerica Robertson
Stephens, Donaldson, Lufkin & Jenrette Securities Corporation and Piper Jaffray
Inc., (collectively, the "Initial Purchasers") pursuant to the Purchase
Agreement dated as of March 11, 1998 (the "Purchase Agreement"), between the
Company and the Initial Purchasers. In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.
The Company agrees with the Initial Purchasers, (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the holders from time to time of
the Notes (including the Initial Purchasers) and the holders from time to time
of the Common Stock issued upon conversion of the Notes (each of the foregoing a
"Holder" and together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:
AFFILIATE: With respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person or (ii) any officer or
director of such other Person. For purposes of this definition, the term
"control" of a Person means the possession, direct or indirect, of the power
(whether or not exercised) to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract, or otherwise, and the terms "controlling," "controlled by," and
"under direct or indirect common control with" have meanings correlative
thereto.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
COMMON STOCK: The shares of common stock, $.01 par value, of the
Company and any other shares of common stock as may constitute "Common Stock"
for purposes of the Indenture, in each case, as issuable or issued upon
conversion of the Notes.
<PAGE>
-2-
DAMAGES ACCRUAL PERIOD: See Section 2(d) hereof.
DAMAGES PAYMENT DATE: Each of the semi-annual interest payment
dates provided in the Indenture, whether or not Liquidated Damages are
payable on such date.
EFFECTIVENESS PERIOD: The period commencing with the date hereof and
ending on the earlier of the date that is two years after the latest date of
original issuance of the Notes and the date that all Registrable Securities have
ceased to be Registrable Securities.
EFFECTIVENESS TARGET DATE: See Section 2(a) hereof.
EVENT: See Section 2(d) hereof.
EVENT DATE: See Section 2(d) hereof.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
FILING DATE: See Section 2(a) hereof.
HOLDER: See the second paragraph of this Agreement.
INDEMNIFIED PARTY: See Section 5(c) hereof.
INDEMNIFYING PARTY: See Section 5(c) hereof.
INDENTURE: The Indenture, dated as of March 16, 1998, between the
Company and Chase Bank of Texas, N.A., as trustee, pursuant to which the Notes
are being issued, as amended or supplemented from time to time in accordance
with the terms thereof.
INITIAL PURCHASERS: See the first paragraph of this Agreement.
INITIAL SHELF REGISTRATION: See Section 2(a) hereof.
LIQUIDATED DAMAGES: See Section 2(d) hereof.
LOSSES: See Section 5(a) hereof.
<PAGE>
-3-
MAJORITY OF REGISTRABLE SECURITIES: A majority of the then
outstanding aggregate principal amount of Registrable Securities. For purposes
of this calculation, Registrable Securities which have been converted into
shares of Common Stock shall be deemed to bear the principal amount at which
such Registrable Securities were converted.
MANAGING UNDERWRITERS: The investment banking firm or firms that
shall manage or co-manage an Underwritten Offering.
NOTES: The 4.50% Convertible Subordinated Notes due 2003 of the
Company being issued and sold pursuant to the Purchase Agreement and the
Indenture.
PERSON: Any natural person, corporation, partnership, limited
liability partnership, limited liability company, trust or other legal entity.
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 under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
PURCHASE AGREEMENT: See the first paragraph of this Agreement.
RECORD HOLDER: (i) with respect to any Damages Payment Date relating
to the Notes, each Person who is a registered holder of such Notes on the record
date with respect to the interest payment date under the Indenture on which such
Damages Payment Date shall occur and (ii) with respect to any Damages Payment
Date relating to the Common Stock, each Person who is a registered holder of
such Common Stock 15 days prior to such Damages Payment Date.
REGISTRABLE SECURITIES: Each Note and each share of Common Stock
into which the Notes are convertible or converted upon original issuance
thereof, and at all times subsequent thereto, and any Common Stock issued with
respect thereto upon any stock dividend, split or similar event, until, in the
case of any such Note or share of Common Stock, (i) it is effectively registered
under the Securities Act and disposed of in accordance with the Registration
Statement covering it, (ii) it is salable by the holder thereof pursuant to Rule
144(k) or (iii) it is sold to the public pursuant to Rule 144, and, as a result
of an event or circumstance described in any of the foregoing clauses (i)
through (iii), the legends with respect to transfer restrictions required under
the Indenture (other than any such legends required solely as the consequences
of the fact that the
<PAGE>
-4-
Registrable Securities are owned by, or were previously owned by, the Company or
an Affiliate of the Company) are removed or removable in accordance with the
terms of the Indenture.
REGISTRATION EXPENSES: See Section 4 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
REQUISITE INFORMATION: See Section 3 hereof.
RULE 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
RULE 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
SELLING HOLDER: A Holder offering to sell Registrable Securities.
SHELF REGISTRATION STATEMENT: See Section 2(a) hereof.
SPECIAL COUNSEL: Testa, Hurwitz & Thibeault, LLP, or such other
successor counsel as shall be specified by the Holders of a Majority of
Registrable Securities, the fees and expenses of which will be paid by the
Company pursuant to Section 5 hereof.
SUBSEQUENT SHELF REGISTRATION: See Section 2(b) hereof.
SUSPENSION PERIOD: See Section 2(c).
TIA: The Trust Indenture Act of 1939, as amended.
<PAGE>
-5-
TRUSTEE: The Trustee under the Indenture.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A
registration in which the Registrable Securities are sold by Holders thereof
to an underwriter for reoffering to the public.
2. SHELF REGISTRATION STATEMENT.
(a) The Company shall prepare and file with the SEC, as soon as
practicable but in any event on or prior to the date 90 days following the
latest date of original issuance of the Notes (the "Filing Date"), a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 of the Securities Act (a "Shelf Registration Statement") registering
the resale from time to time by the Holders thereof of all of the Registrable
Securities (the "Initial Shelf Registration"). The Initial Shelf Registration
shall be on Form S-3 under the Securities Act or another appropriate SEC
Registration Statement form permitting registration of such Registrable
Securities for resale by such Holders in the manner or manners designated by
them (including, without limitation, one or more Underwritten Offerings). The
Company shall use its best efforts to cause the Initial Shelf Registration to be
declared effective under the Securities Act as soon as practicable but in any
event on or prior to the date 120 days following the Filing Date (the
"Effectiveness Target Date"), and shall use its reasonable efforts to keep the
Initial Shelf Registration continuously effective under the Securities Act,
subject to the provisions of Section 2(c), until the earlier of the expiration
of the Effectiveness Period or the date a Subsequent Shelf Registration (as
defined below) covering all of the Registrable Securities has been declared
effective under the Securities Act. Subject to the right of the Company to have
the Initial Shelf Registration not be effective, or not to be updated, amended
or supplemented, for periods of time set forth in Section 2(c), the Company
further agrees to use its best efforts to prevent the happening of any event
that would cause the Initial Shelf Registration to contain a material
misstatement or omission or to be not effective and usable for resale of the
Registrable Securities during the Effectiveness Period.
(b) If the Initial Shelf Registration or any subsequent Shelf
Registration Statement ceases to be effective for any reason as a result of the
issuance of a stop order by the SEC at any time during the Effectiveness Period,
the Company shall use its best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof, and in any event shall within 30
days of such cessation of effectiveness amend the Shelf Registration Statement
in a manner reasonably expected to obtain the withdrawal of the order suspending
the effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the Registrable Securities (a "Subsequent Shelf Registration").
If a Subsequent Shelf Registration is filed, the Company shall use its best
efforts to cause the subsequent Shelf Registration to be declared
<PAGE>
-6-
effective as soon as practicable after such filing and to keep such Registration
Statement continuously effective until the end of the Effectiveness Period.
(c) In the event (A) of the happening of any event of the kind
described in Section 3(d)(ii), 3(d)(iii), 3(d)(iv), 3(d)(v) or 3(d)(vi) hereof
or (B) that, in the good faith-judgment of the Company, it is advisable to
suspend the use of the Prospectus for a discrete period of time due to pending
material corporate developments or similar material events that have not yet
been publicly disclosed and as to which the Company reasonably believes public
disclosure will be prejudicial to the Company, the Company shall deliver a
certificate in writing, signed by an authorized executive officer of the
Company, to the Special Counsel, the Initial Purchasers and the Managing
Underwriters, if any, to the effect of the foregoing and thereafter the use of
the Prospectus shall be suspended, and the Company, subject to the terms of this
Section 2(c), shall thereafter not be required to maintain the effectiveness or
update the Shelf Registration Statement. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as soon as practicable,
in the case of suspension under Section 2(c)(A), and, in the case of a pending
development or event referred to in Section 2(c)(B) hereof, as soon as, in the
good faith-judgment of the Company, public disclosure of such material corporate
development or similar material event would not have a material adverse effect
on the Company. Notwithstanding the foregoing, the Company shall not under any
circumstances be entitled to exercise its right under this Section 2(c) to
suspend the use of the Prospectus (whether as a result of events referred to in
Section 2(c)(A) hereof or as a result of the pending development or event
referred to in Section 2(c)(B) hereof) for more than 45 consecutive days in any
one period, and the periods in which the use of the Prospectus is suspended
shall not exceed 100 days in any twelve month period (each a "Suspension
Period"). In addition, a period of at least 15 days must occur between any
Suspension Periods.
(d) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
has not been filed on or prior to the Filing Date, (ii) the Initial Shelf
Registration has not been declared effective by the Effectiveness Target Date,
(iii) prior to the end of the Effectiveness Period, the SEC shall have issued a
stop order suspending the effectiveness of the Shelf Registration Statement or
proceedings have been initiated with respect to the Shelf Registration Statement
under Section 8(d) or 8(e) of the Securities Act, (iv) the aggregate number of
days in any one Suspension Period exceeds the period permitted pursuant to
Section 2(c) hereof or (v) the number of Suspension Periods exceeds the number
permitted pursuant to Section 2(c) hereof (each of the Events of a type
described in any of the foregoing clauses (i) through (v) are individually
referred to herein as an "Event," and the Filing Date in the case of clause (i),
the Effectiveness Target Date in the case of
<PAGE>
-7-
clause (ii), the date on which the effectiveness of the Shelf Registration
Statement has been suspended or proceedings with respect to the Shelf
Registration Statement under Section 8(d) or 8(e) of the Securities Act have
been commenced in the case of clause (iii), the date on which the duration of a
Suspension Period exceeds the period permitted by Section 2(c) hereof in the
case of clause (iv), and the date of the commencement of a Suspension Period
that causes the limit on the number of Suspension Periods under Section 2(c)
hereof to be exceeded in the case of clause (v), being referred to herein as an
"Event Date").
Notwithstanding the foregoing, the parties hereto agree that an Event
shall be deemed not to have occurred to the extent the parties hereto mutually
agree that the direct, proximate cause of said Event was the act or failure to
act of one or more Holders, the Initial Purchasers or the Managing Underwriters.
An Event shall be deemed to continue until the date of the termination of such
Event, which shall be the following dates with respect to the respective types
of Events: the date the Initial Shelf Registration is filed in the case of an
Event of the type described in clause (i), the date the Initial Shelf
Registration is declared effective in the case of an Event of the described in
clause (ii), the date that all stop orders suspending effectiveness of the Shelf
Registration Statement have been removed and the proceedings initiated with
respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the
Securities Act have terminated, as the case may be, in the case of Events of the
types described in clause (iii), termination of the Suspension Period which
caused the aggregate number of days in any one Suspension Period to exceed the
number permitted by Section 2(c) to be exceeded in the case of Events of the
types described in clause (iv), and termination of the Suspension Periods, the
commencement of which caused the number of Suspension Periods permitted by
Section 2(d) to be exceeded in the case of Events of the types described in
clause (v).
Accordingly, upon the occurrence of any Event and until such time as there
are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): (i) to each holder of Notes
that are Registrable Securities, accruing at a rate equal to one-quarter of one
percent per annum (25 basis points) on the aggregate principal amount of Notes
that are Registrable Securities held by such holder and (ii) to each holder of
shares of Common Stock that are Registrable Securities, accruing at a rate equal
to one-quarter of one percent per annum (25 basis points) calculated on an
amount equal to the product of (x) the then-applicable Conversion Price (as
defined in the Indenture), times (y) the number of shares of Common Stock that
are Registrable Securities held by such holder. Notwithstanding the foregoing,
no Liquidated Damages shall accrue as to any Registrable Securities from and
after the earlier of (x) the date such securities are no longer Registrable
Securities, and (y) the expiration of the
<PAGE>
-8-
Effectiveness Period. The rate of accrual of the Liquidated Damages with respect
to any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events.
The Company shall pay the Liquidated Damages due on any Notes or Common
Stock by depositing with the Trustee under the Indenture, in trust, for the
benefit of the holders of Notes or Common Stock, as the case may be, entitled
thereto, at least one Business Day prior to the applicable Damages Payment Date,
sums sufficient to pay the Liquidated Damages accrued or accruing since the last
preceding Damages Payment Date through such Damages Payment Date. The Liquidated
Damages shall be paid by the Company to the Record Holders on each Damages
Payment Date by wire transfer of immediately available funds to the account
specified by them, or if no such accounts have been specified on or before the
Damage Payment Date by mailing checks to their registered addresses as they
appear in the register of the Notes, in the case of the Notes, and in the
register of the Company for the Common Stock, in the case of the Common Stock,
provided, however, that any Liquidated Damages accrued with respect to any Note
or portion thereof called for redemption on a Redemption Date, or repurchased in
connection with a Change of Control (as defined in the Indenture) on a
Repurchase Date (as defined in the Indenture), or converted into Common Stock on
a Date of Conversion (as defined in the Indenture) prior to the Damages Payment
Date, shall, in any such event, be paid instead to the holder who submitted such
Note or portion thereof for redemption, repurchase or conversion on the
applicable Redemption Date, Repurchase Date or Date of Conversion, as the case
may be, on such date (or promptly following the Date of Conversion, in the case
of conversion of a Note). If a holder of a Note submits a Note for conversion
during the period between a record date for the payment of Liquidated Damages
and the related Damages Payment Date, Liquidated Damages for the period from the
Date of Conversion through the next succeeding Damages Payment Date shall accrue
and be payable to the holder of Common Stock received on conversion on the next
succeeding Damages Payment Date, notwithstanding that such holder was not a
Record Holder with respect to such Damages Payment Date. The Trustee shall be
entitled, on behalf of the holders of Notes and Common Stock to seek any
available remedy for the enforcement of this Agreement, including for the
payment of such Liquidated Damages. Nothing shall preclude a Holder of
Registrable Securities from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.
All of the Company's obligations set forth in this Section 2(d) which are
outstanding with respect to any Registrable Securities at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section 7(o)).
<PAGE>
-9-
The parties hereto agree that the Liquidated Damages provided for in this
Section 2(d) constitute a reasonable estimate of the damages that may be
incurred by holders of Registrable Securities (other than the Initial
Purchasers) by reason of the failure of the Shelf Registration Statement to be
filed or declared effective or available (absolutely or as a practical matter)
for effecting resales of Registrable Securities, as the case may be, in
accordance with the provisions hereof.
3. REGISTRATION PROCEDURES. In connection with the Company's registration
obligations under Section 2 hereof, the Company shall effect such registrations
to permit the sale of the Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on Form S-3 or any other appropriate form under the
Securities Act available for the sale of the Registrable Securities by the
Holders thereof in accordance with the intended method or methods of
distribution thereof and shall include all required financial statements, and
use its best efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; provided, that before filing,
any such Registration Statement or Prospectus or any amendments or supplements
thereto the Company shall furnish within a reasonable time period to each
Selling Holder (if requested by such Selling Holder), the Initial Purchasers,
the Special Counsel and the Managing Underwriters of such offering, if any,
copies of all such documents proposed to be filed, which documents will be
subject to the review of each Selling Holder (if requested by such Selling
Holder), the Initial Purchasers, the Special Counsel and such Managing
Underwriters, and the Company shall not file any such Registration Statement or
amendment thereto or any Prospectus or any supplement thereto to which the
Holders of a Majority of Registrable Securities covered by such Registration
Statement, the Initial Purchasers or the Special Counsel shall reasonably object
in writing within five Business Days after the receipt thereof. In addition, the
Company shall use its best efforts to reflect in each such document referenced
in this paragraph so filed with the SEC such comments as the Initial Purchasers,
Special Counsel and the Managing Underwriters, if any, may propose.
(b) Subject to Section 2(c), prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement continuously effective for the
applicable period specified in Section 2; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such Registration Statement
during the applicable period
<PAGE>
-10-
in accordance with the intended methods of disposition by the sellers thereof
set forth in such Registration Statement as so amended or such Prospectus as so
supplemented. The Company shall ensure that (i) any Shelf Registration Statement
and any amendment thereto and any Prospectus forming a part thereof and any
amendment or supplement thereto complies in all material respects with the
Securities Act and the rules and regulations thereunder, (ii) any Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, 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 not misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any amendment or supplement to such Prospectus, does
not include an untrue statement or 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.
(c) Each Holder shall furnish to the Company such information
regarding the distribution of its Registrable Securities as is required by law
to be disclosed in the applicable Registration Statement (the "REQUISITE
INFORMATION") prior to effecting any sale pursuant to such Registration
Statement.
The Company shall file, within two Business Days after the receipt
of notice from any Holder which includes the Requisite Information with respect
to such Holder, a Prospectus supplement pursuant to Rule 424 (or any similar
provision then in force) under the Securities Act or otherwise amend or
supplement such Registration Statement to include in the Prospectus the
Requisite Information as to such Holder (and the Registrable Securities held by
such Holder), and the Company shall provide such Holder and the Special Counsel
within two Business Days after receipt of such notice with a copy of such
Prospectus as so amended or supplemented containing the Requisite Information in
order to permit such Holder to comply with the Prospectus delivery requirements
of the Securities Act in a timely manner with respect to any proposed
disposition of such Holder's Registrable Securities; PROVIDED, HOWEVER, that
notwithstanding the requirements of Section 3(a), the Company shall not be
required to provide any Holder with a copy of such Prospectus as so amended or
supplemented solely to contain the Requisite Information in advance of filing
the same with the SEC.
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, 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 Holder in such
Registration Statement at any time subsequent to the time that such reference
ceases to be required.
<PAGE>
-11-
(d) Notify the Holders, the Initial Purchasers, the Special Counsel
and the Managing Underwriters, if any, promptly, and (if requested by any such
Person) confirm such notice in writing, (i) when a Prospectus, any Prospectus
supplement, a Registration Statement or a post-effective amendment to a
Registration Statement has been filed with the SEC, and, 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 related Prospectus or for additional information, (iii) of the issuance by
the SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation or
threatening of any proceedings for that purpose, (iv) 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 Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceedings for such
purpose, (v) of the existence of any fact or happening of any event which makes
any statement of a material fact in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
Registration Statement or Prospectus in order that the Registration Statement
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 the Prospectus 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 the light of the
circumstances under which they were made, not misleading, and (vi) of the
Company's determination that a post-effective amendment to a Registration
Statement would be appropriate.
(e) Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.
(f) If requested by the Initial Purchasers, the Special Counsel or
the Managing Underwriters, if any, or the Holders of a Majority of the
Registrable Securities being sold, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration Statement such
information as the Initial Purchasers, the Special Counsel, the Managing
Underwriters, if any, or such Holders and the Company mutually agree should be
included therein, 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 proposed to be incorporated in
such Prospectus supplement or post-effective amendment.
<PAGE>
-12-
(g) Furnish to each Selling Holder (if requested by such Selling
Holder), the Special Counsel, the Initial Purchasers, and each Managing
Underwriter, if any, without charge, at least one conformed copy of the
Registration Statement or Registration Statements and any amendment thereto,
including financial statements but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(h) Deliver to each Selling Holder, the Special Counsel, the Initial
Purchasers and each Managing Underwriter, if any, in connection with any
offering of Registrable Securities, without charge, as many copies of the
Prospectus or Prospectuses relating to such Registrable Securities (including
each preliminary prospectus) and any amendment or supplement thereto as such
Persons may reasonably request; and the Company hereby consents to the use of
such Prospectus or each amendment or supplement thereto by each of the Selling
Holders of Registrable Securities and the Underwriters, if any, in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
(i) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the Selling Holders, the Managing
Underwriters, if any, and the Special Counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Selling Holder or Managing Underwriter reasonably requests in writing, keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
applicable Registration Statement, provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it is
not then so qualified (ii) take any action that would subject it to general
service of process in suits or to taxation in any such jurisdiction where it is
not then so subject.
(j) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies in addition to the SEC or authorities within the United
States as may be necessary to enable the Selling Holder or Holders thereof or
the Managing Underwriters, if any, to consummate the disposition of such
Registrable Securities.
(k) During the Effectiveness Period (subject to the provisions of
Section 2(c)), immediately upon the existence of any fact or the occurrence of
any event as a result of which (i)
<PAGE>
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a Registration Statement shall 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, or (ii) a Prospectus shall 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
the light of the circumstances under which they were made, not misleading,
promptly prepare and file a post-effective amendment to each Registration
Statement or a supplement to the related Prospectus or any document incorporated
therein by reference or file any other required document (such as a Current
Report on Form 8-K) that would be incorporated by reference into the
Registration Statement so that the Registration Statement shall 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 so that the Prospectus 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 the light of the circumstances
under which they were made, not misleading, as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder; and in the case
of a post-effective amendment to a Registration Statement, use its best efforts
to cause it to become effective as soon as practicable.
(l) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including, in the event of an the Underwritten Offering,
those reasonably requested by the Managing Underwriters, if any, or the Holders
of a Majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into, and if the
registration is an Underwritten Registration, (i) make such representations and
warranties to the Holders of such Registrable Securities and the underwriters
with respect to the business of the Company and its subsidiaries, the
Registration Statement, Prospectus and documents incorporated by reference or
deemed incorporated by reference, if any, 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 its 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, Special Counsel and the
Holders of a Majority of Registrable Securities being sold) 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 such Special Counsel and Managing Underwriters; (iii) use its reasonable
efforts to obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary, any
other certified public accountants of any subsidiary of the Company or any
business acquired or to be acquired
<PAGE>
-14-
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each of
the Managing Underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with Underwritten Offerings, and (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of the
Registrable Securities being sold, the Special Counsel and the Managing
Underwriters, if any, to evidence the continued validity of the representations
and warranties of the Company and its subsidiaries made pursuant to clause (i)
above and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The above
shall be done at each closing under such underwriting or similar agreement as
and to the extent required thereunder.
(m) Make available for inspection by a representative of the Holders
of Registrable Securities being sold, any Managing Underwriter participating in
any disposition of Registrable Securities, if any, and any attorney or
accountant retained by such Selling Holders or underwriter, financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the executive officers, directors and employees of the
Company and its subsidiaries to supply all information reasonably requested by
any such representative, Managing Underwriter, attorney or accountant in
connection with such disposition; provided, however, 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
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 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.
(n) Comply with all applicable rules and regulations of the SEC in
all material respects and make generally available to its securityholders
earnings statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) 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
Registrable Securities are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of
<PAGE>
-15-
the Company commencing after the effective date of a Registration Statement,
which statements shall cover said 12-month periods.
(o) Cooperate with the Selling Holders of Registrable Securities,
the Initial Purchasers, the Special Counsel and the Managing Underwriters, if
any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends, and enable such Registrable Securities to be in such denominations and
registered in such names as the Holders may request.
(p) Not later than the effectiveness date of the Initial Shelf
Registration hereunder, provide a CUSIP number for the Registrable Securities
registered under such Registration Statement, and provide the Trustee under the
Indenture and the transfer agent for the Common Stock with printed certificates
for the Registrable Securities which are in a form eligible for deposit with The
Depository Trust Company.
(q) Cause all shares of Common Stock covered by the Registration
Statement to be listed on each securities exchange or quotation system on which
the Company's Common Stock is then listed or quoted no later than the date the
Registration Statement is declared effective, and, in connection therewith, to
the extent applicable, to make such filings as are required under the Exchange
Act (e.g., the filing of a Registration Statement on Form 8-A) and to have such
filings declared effective thereunder.
(r) Cooperate and assist in any filing required to be made with the
National Association of Securities Dealers, Inc.
(s) Cause the Indenture to be qualified under the TIA no later than
the date the Initial Shelf Registration is declared effective, and, in
connection therewith, cooperate with the Trustee and the Holders, the Initial
Purchasers, the Special Counsel and the Managing Underwriters, if any, 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 best
efforts to cause the Trustee to execute all documents as may be required to
effect such changes and all other forms and documents required to be filed with
the SEC to enable such Indenture to be so qualified in a timely manner.
4. REGISTRATION EXPENSES. All fees and expenses incident to the Company's
obligations under this Agreement shall be borne by the Company whether or not
any of the Registration Statements become effective. Such fees and expenses
shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses
<PAGE>
-16-
with respect to filings required to be made with the National Association of
Securities Dealers, Inc.), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable 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 Special
Counsel, the Initial Purchasers, the Managing Underwriters or the holders of a
Majority of Registrable Securities included in any Registration Statement),
(iii) reasonable fees and disbursements of counsel for the Company and the
Special Counsel in connection with the Shelf Registration Statement (provided
that the Company shall not be liable for the fees and expenses of more than one
separate firm for all parties (other than the Company) participating in any
transaction hereunder), and (iv) fees and disbursements of all independent
certified public accountants referred to in Section 3(l)(iii) hereof (including
the expenses of any special audits and "cold comfort" letters required by or
incident to such performance). In addition, the Company shall pay the fees and
expenses incurred in connection with the listing or quotation of the securities
to be registered on any securities exchange or quotations system on which
similar securities issued by the Company are then listed and the fees and
expenses of any Person, including special experts, retained by the Company.
5. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and
hold harmless each Holder, the directors, officers, employees and agents of each
such Holder and each Person, if any, who controls any such Holder (within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act) from and against all losses, liabilities, damages and expenses (including
without limitation, any reasonable legal or other expenses incurred in
connection with defending or investigating any such action or claim)
(collectively, "Losses"), arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or in any amendment or supplement thereto, or arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances under which they were
made, except insofar as such losses arise out of or are based upon information
relating to any Holder furnished to the Company in writing by such holder
expressly for use therein; and provided further, that the Company will not be
liable to any Holder with respect to any such untrue statement or omission made
in any preliminary Prospectus that is corrected in a final Prospectus (or any
amendment or supplement thereto) if the person asserting any such loss, claim,
damage or liability purchased Notes or Common Stock but was not sent or given a
copy of the final Prospectus (as amended or supplemented) in any case where such
delivery of the final Prospectus (as amended or supplemented) was required by
the Securities Act, unless such failure to deliver the Prospectus
<PAGE>
-17-
(as amended or supplemented) was a result of noncompliance by the Company with
Section 3 hereof. The Company shall also indemnify each underwriter, their
officers and directors, and each Person who controls such Person (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
to the same extent and with the same limitations as provided above with respect
to the indemnification of the Holders of Registrable Securities.
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. Each
Holder, agrees severally and not jointly to indemnify and hold harmless the
Company, its directors, its officers who sign a Registration Statement and each
Person, if any, who controls the Company (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act), from and against
all Losses arising out of or based upon any untrue statement of a material fact
contained in any Registration Statement or Prospectus or arising out of or based
upon any omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, in light of the circumstances
under which they were made, to the extent, but only to the extent, that such
untrue statement or omission is contained in any information relating to such
Holder furnished in writing by such Holder to the Company expressly for use in
such Registration Statement or Prospectus. In no event shall the liability of
any Selling Holder of Registrable Securities hereunder be greater in amount than
the dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such Person (the "Indemnified Party") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Party") in writing, but failure so to notify an Indemnifying Party shall not
relieve such Indemnifying Party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof. The Indemnifying Party, upon
request of the Indemnified Party, shall retain counsel satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention to such counsel, (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, or (iii) the Indemnifying Party shall not have
employed counsel satisfactory to the Indemnified Party to represent the
<PAGE>
-18-
Indemnified Party within a reasonable time after notice of commencement of the
action. It is understood that the Indemnifying Party shall not, in respect of
the legal expenses of any Indemnified Party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties under Section 5(a) or 5(b) hereof who are parties to
such proceeding or proceedings, and that all such fees and expenses shall be
reimbursed as they are incurred. The Indemnifying Party 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 from and against
any loss or liability 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 the second and third sentences of this paragraph,
such Indemnifying Party agrees that it shall be liable for any settlements of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 45 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 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 includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
proceeding.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 5 is unavailable to an Indemnified Party under Section 5(a) or 5(b)
hereof in respect of any Losses or is insufficient to hold such Indemnified
Party harmless, then each applicable 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, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
or Indemnifying Parties on the one hand and the Indemnified Party or Indemnified
Parties an the other hand 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 Indemnifying Party or Indemnified Parties on the one
hand and of the Indemnified Party or Indemnifying Parties on the other hand in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the initial
placement of the Notes pursuant to the Purchase Agreement. Benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions
<PAGE>
-19-
received by them pursuant to the Purchase Agreement and benefits received by any
other Holders shall be deemed to be equal to the value of receiving Notes
registered under the Securities Act. Benefits received by any underwriter shall
be deemed to be equal to the total underwriting discounts and commissions, as
set forth on the cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. The relative fault of the Holders on
the one hand and the Company on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Holders or by the Company and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this paragraph are several in proportion
to the respective number of Registrable Securities they have sold pursuant to a
Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
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
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 this Section 5(d), an
Indemnifying Party that is a Selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such Indemnifying Party and
distributed to the public were offered to the public exceeds the amount of any
damages which such Indemnifying Party 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
indemnity, contribution and expense reimbursement obligations of the Company
hereunder shall be in addition to any liability the Company may otherwise have
hereunder, under the Purchase Agreement or otherwise.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any Person controlling any Holder, or the Company, its officers or
directors or any Person controlling the Company and (iii) the sale of any
Registrable Securities by any Holder.
<PAGE>
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6. INFORMATION REQUIREMENTS.
(a) The Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act, and if at any time the Company is
not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act.
The Company further covenants that it will cooperate with any Holder
of Registrable Securities and take such further reasonable action as any Holder
of Registrable Securities may reasonably request (including, without limitation,
making such reasonable representations as any such Holder may reasonably
request), all to the extent required from time to enable such Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 and Rule 144A under the
Securities Act. Notwithstanding the foregoing, nothing in this Section 6 shall
be deemed to require the Company to register any of its securities under any
section of the Exchange Act.
(b) The Company shall file the reports required to be filed by it
under the Exchange Act and shall comply with all other requirements set forth in
the instructions to the appropriate SEC Registration Statement form permitting
registration of the Registrable Securities for resale by the Holders thereof in
the manner or manners designated by them.
7. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, 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 agrees 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 CONFLICTING AGREEMENTS. The Company has not entered into as
of the date hereof, and shall not enter into on or after the date hereof, any
agreement with respect to its securities which conflicts with the rights granted
to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of
<PAGE>
-21-
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities under any other agreements.
(c) 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, unless the Company has obtained the written consent of Holders
of a Majority of Registrable Securities. 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 Registrable 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 Registrable
Securities may be given by Holders of at least a majority of the Registrable
Securities being so sold; provided, that the provisions of this sentence may not
be amended, modified, or supplemented except in accordance with the provisions
of the immediately preceding sentence.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing and shall be deemed given (i) when
made, if made by hand delivery, (ii) upon confirmation, if made by telecopier or
(iii) one business day after being deposited with a reputable next day courier,
postage prepaid, to the parties as follows:
(x) if to a holder of Registrable Securities, at the most
current address given by such holder to the Company in accordance with the
provisions of Section 7(e):
(y) if to the Company, to:
Concentra Managed Care, Inc.
312 Union Wharf
Boston, MA 02109
Attention: President
Telecopy No.: (617) 367-8519
with a copy to:
Hutchins, Wheeler & Dittmar, A Professional
Corporation
101 Federal Street
Boston, MA 02110
Attention: James Westra, Esq.
Telecopy No.: (617) 951-1295
<PAGE>
-22-
and
(z) if to the Special Counsel to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, MA 02110
Attention: Mitchell S. Bloom, Esq.
Telecopy No.: (617) 248-7100
or to such other address as such Person may have furnished to the other Persons
identified in this Section 7(d) in writing in accordance herewith.
Copies of all notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in the Indenture.
(e) OWNER OF REGISTRABLE SECURITIES. The Company will maintain, or
will cause its registrar and transfer agent to maintain, a register with respect
to the Registrable Securities in which all transfers of Registrable Securities
of which the Company has received notice will be recorded. The Company may deem
and treat the Person in whose name Registrable Securities are registered in such
register of the Company as the owner thereof for all purposes, including,
without limitation, the giving of notices under this Agreement.
(f) APPROVAL OF HOLDERS. Whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent holders of Registrable Securities if such subsequent holders are
deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(g) SUCCESSORS AND ASSIGNS. Any Person who purchases any Registrable
Securities from an Initial Purchaser shall be deemed, for purposes of this
Agreement to be an assignee of such Initial Purchaser. The Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties and shall inure to the benefit of and be binding upon each holder of any
Registrable Securities.
<PAGE>
-23-
(h) 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 original and all of which taken together
shall constitute one and the same agreement.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE COMMONWEALTH OF MASSACHUSETTS WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
(k) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held 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 thereby, and the parties hereto shall use their best 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 which may be hereafter declared
invalid, illegal, void or unenforceable.
(l) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. Except as provided in the
Purchase Agreement and the Indenture, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the securities sold pursuant to the Purchase Agreement and the Indenture. This
Agreement supersedes all prior agreements and understandings among the parties
with respect to such subject matter.
(m) 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 reasonable attorneys' fees in addition to any other
available remedy.
<PAGE>
-24-
(n) FURTHER ASSURANCES. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
(o) TERMINATION. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Sections 2(d), 4 or 5 hereof, each of which
shall remain in effect in accordance with their terms.
(p) THIRD PARTY BENEFICIARIES. The Company and the Initial
Purchasers agree that each Holder shall be a third party beneficiary of this
Agreement.
<PAGE>
-25-
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
CONCENTRA MANAGED CARE, INC.
By:
Name:
Title:
Accepted as of the date first above written:
BT ALEX. BROWN INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
PIPER JAFFRAY INC.
By: BT Alex. Brown Incorporated
By:
Name:
Title:
