<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For transition period from _________________ to ____________________
Commission file number: 1-1969
CERIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-0278528
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
8100 34th Avenue South, Minneapolis, Minnesota 55425
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 853-8100
Former name, former address and former fiscal year if changed from last
report: Not Applicable
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- ----
The number of shares of registrant's Common Stock, par value $.50 per share,
outstanding as of July 31, 1999, was 144,744,484.
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Pages
-----
Part I. Financial Information
Item 1. Financial Statements
<S> <C>
Consolidated Statements of Operations
for the three and six month periods ended
June 30, 1999 and 1998..........................................................3
Consolidated Balance Sheets as of
June 30, 1999 and December 31, 1998.............................................4
Consolidated Statements of Cash Flows for the six
month periods ended June 30, 1999 and 1998......................................5
Notes to Consolidated Financial Statements......................................6
In the opinion of Ceridian Corporation ("Ceridian" or the
"Company"), the unaudited consolidated financial statements reflect all
adjustments (consisting only of normal recurring accruals, except as
set forth in the notes to consolidated financial statements) necessary
to present fairly the Company's financial position as of June 30, 1999,
and results of operations for the three and six month periods and cash
flows for the six month periods ended June 30, 1999 and 1998.
The results of operations for the six month period ended June
30, 1999, are not necessarily indicative of the results to be expected
for the full year.
The consolidated financial statements should be read in
conjunction with the notes to consolidated financial statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...............................10
Item 3. Quantitative and Qualitative Disclosure of Market Risk................14
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders...................15
Item 6. Exhibits and Reports on Form 8-K......................................16
Signature...............................................................................17
</TABLE>
- 2 -
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS Ceridian Corporation
(Unaudited) and Subsidiaries
(Dollars in millions, except per share data)
- ----------------------------------------------------------------------------------------------------------------------------------
For Periods Ended June 30,
Three Months Six Months
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $ 322.2 $ 284.1 $ 643.6 $ 566.4
Costs and Expenses
Cost of revenue 151.3 135.0 296.1 263.9
Selling, general and administrative 93.5 79.3 186.1 159.8
Research and development 18.5 20.3 37.1 37.7
Other expense (income) 1.1 1.2 1.7 1.8
-------------- -------------- -------------- --------------
Total costs and expenses 264.4 235.8 521.0 463.2
-------------- -------------- -------------- --------------
Earnings before interest and taxes 57.8 48.3 122.6 103.2
Interest income 2.1 2.5 3.8 5.2
Interest expense (3.2) (1.5) (4.1) (2.2)
-------------- -------------- -------------- --------------
Earnings before income taxes 56.7 49.3 122.3 106.2
Income tax provision 21.0 18.0 44.8 39.1
-------------- -------------- -------------- --------------
Net earnings $ 35.7 $ 31.3 $ 77.5 $ 67.1
============== ============== ============== ==============
Basic earnings per share $ 0.25 $ 0.22 $ 0.54 $ 0.46
Diluted earnings per share $ 0.24 $ 0.21 $ 0.52 $ 0.45
Shares used in calculations (in 000's)
Weighted average shares (basic) 144,590 144,931 144,338 144,521
Other dilutive securities 4,265 3,670 4,643 3,409
-------------- -------------- -------------- --------------
Total (diluted) 148,855 148,601 148,981 147,930
============== ============== ============== ==============
- -----------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
- 3 -
<PAGE>
FORM 10-Q
CONSOLIDATED BALANCE SHEETS Ceridian Corporation
(Unaudited) and Subsidiaries
(Dollars in millions, except per share data)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
June 30, December 31,
Assets 1999 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and equivalents $ 105.9 $ 101.8
Short-term investments 25.3 -
Trade receivables, less allowance of $23.4 and $21.7 388.7 343.4
Other receivables 46.3 41.1
Current portion of deferred income taxes 125.2 127.8
Other current assets 21.6 19.6
---------------- ---------------
Total current assets 713.0 633.7
Property, plant and equipment, net 164.0 91.3
Goodwill and other intangibles, net 1,031.2 377.5
Software and development costs, net 49.8 26.1
Prepaid pension cost 107.3 103.4
Deferred income taxes, less current portion 17.2 53.4
Other noncurrent assets 7.0 4.3
---------------- ---------------
Total assets $ 2,089.5 $ 1,289.7
================ ===============
- ---------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
- ---------------------------------------------------------------------------------------------------------------------
Short-term debt and current
portion of long-term obligations $ 0.2 $ 0.3
Accounts payable 57.4 65.0
Drafts and settlements payable 122.9 111.0
Customer advances 45.0 13.6
Deferred income 30.5 25.4
Accrued taxes 77.0 76.2
Employee compensation and benefits 57.5 74.4
Other accrued expenses 134.7 70.8
---------------- ---------------
Total current liabilities 525.2 436.7
Long-term obligations, less current portion 648.9 54.2
Deferred income taxes 11.5 3.6
Restructure reserves, less current portion 28.0 29.0
Employee benefit plans 74.4 74.1
Other noncurrent liabilities 41.5 41.5
Stockholders' equity 760.0 650.6
---------------- ---------------
Total liabilities and
stockholders' equity $ 2,089.5 $ 1,289.7
================ ===============
- ---------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
- 4 -
<PAGE>
FORM 10-Q
CONSOLIDATED STATEMENT OF CASH FLOWS Ceridian Corporation
(Unaudited) and Subsidiaries
(Dollars in millions)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
For Periods Ended June 30,
Six Months
1999 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 77.5 $ 67.1
Adjustments to reconcile net earnings (loss) to net cash
provided by (used for) operating activities:
Deferred income tax provision 40.0 33.3
Depreciation and amortization 32.2 24.9
Other (1.4) (1.0)
Net change in working capital items:
Trade and other receivables (34.3) (19.7)
Accounts payable (2.4) (10.6)
Drafts and settlements payable 11.9 32.6
Employee compensation and benefits (16.7) (11.2)
Accrued taxes (3.4) (13.3)
Other current assets and liabilities (2.6) (9.2)
------------------ -------------------
Net cash provided by (used for) operating activities 100.8 92.9
- -------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Expended for property, plant and equipment (23.9) (22.5)
Expended for software and development costs (17.3) (10.4)
Expended for investments in and advances
to businesses, less cash acquired (672.0) (154.6)
Proceeds from sales of businesses and assets 3.3 38.1
------------------ -------------------
Net cash provided by (used for) investing activities (709.9) (149.4)
- -------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Revolving credit and overdrafts, net 143.4 77.4
Borrowings of other debt 450.0 -
Repayment of other debt (0.2) (0.2)
Repurchase of stock - (113.3)
Exercise of stock options and other 20.0 27.0
------------------ -------------------
Net cash provided by (used for) financing activities 613.2 (9.1)
- -------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) 4.1 (65.6)
Cash and equivalents at beginning of period 101.8 268.0
------------------ -------------------
Cash and equivalents at end of period $ 105.9 $ 202.4
================== ===================
- -------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
- 5 -
<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1999
(Dollars in millions, except per share data)
(Unaudited)
INVESTING ACTIVITY
On May 3, 1999, Ceridian and ABR Information Services, Inc. ("ABR") jointly
announced that they had entered into a definitive merger agreement providing for
Ceridian's acquisition of ABR at a price of $25.50 per share for a total cash
payment for all ABR shares of $744.2. ABR is a provider of comprehensive
benefits administration, payroll and human resource services to employers of all
sizes. The agreement provided for a tender offer for all outstanding ABR shares,
followed by a merger of a wholly owned subsidiary of Ceridian into ABR, and the
exchange of Ceridian stock options for certain unexercised ABR stock options.
As of June 4, 1999, the expiration date of the tender offer, 28,271,063
shares, or 98.3% of the outstanding shares of ABR, had been validly tendered
and $720.9 was paid for the tendered shares. On July 22, 1999, the effective
date of the merger of a wholly owned subsidiary of Ceridian and ABR, Ceridian
deposited $12.7 with a paying agent for distribution to the holders of the
497,788 ABR shares that were converted into the right to receive $25.50 per
share in cash pursuant to the terms of the merger agreement. Also in July,
Ceridian made payments totaling $10.6 to holders who exercised ABR stock
options subsequent to the date of the tender offer, representing the
aggregate excess of the $25.50 per share tender price over the option
exercise price. Ceridian stock options were issued in exchange for the
remaining ABR stock options, resulting in an increase in the acquisition
price of $11.7 and an equal increase in additional paid-in capital. Direct
acquisition costs amounted to $6.8, bringing the equity purchase cost to
$762.7. The valuation of net tangible assets of ABR received amounted to
$110.7 and the total goodwill and other intangibles of $652.0 is expected to
be amortized on average over a 30 year period. The allocation of purchase
price to specific assets has not been completed. Included in the acquired
assets and liabilities are $77.4 of cash and equivalents, $25.3 of short-term
investments, $65.6 of net property, plant and equipment, $12.8 of net other
software development costs, $30.3 of customer account deposits and $36.2 of
other accrued expenses. Payments for shares of $720.9 and direct costs of
$.5, reduced by $77.4 of cash and equivalents acquired, resulted in an
investing cash outflow of $644.0. Also included in other accruals at June 30,
1999 is $29.6, representing the amounts then remaining to be paid for the
additional ABR share purchases and direct acquisition costs.
The following unaudited pro forma information presents the results of operations
of the Company for the six-month periods ended June 30, 1999 and 1998 as if the
acquisition of ABR had taken place on January 1, 1998. ABR earnings for the
1998 period includes a $11.0 write-off of purchased in-process research and
development.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------- --- ---------- -- ----------
1999 1998
- ---------------------------------------------------------------- --- ---------- -- ----------
<S> <C> <C>
Pro forma revenue $ 701.7 $ 601.7
- ---------------------------------------------------------------- --- ---------- -- ----------
Pro forma earnings from continuing operations $ 63.9 $ 38.8
- ---------------------------------------------------------------- --- ---------- -- ----------
Diluted shares used in calculations (in thousands) 148,981 147,930
- ---------------------------------------------------------------- --- ---------- -- ----------
Pro forma diluted earnings per share $ .43 $ .26
- ---------------------------------------------------------------- --- ---------- -- ----------
Historical diluted earnings per share as reported $ .52 $ .45
- ---------------------------------------------------------------- --- ---------- -- ----------
</TABLE>
During first quarter 1999, Comdata Network, Inc., a wholly owned subsidiary of
Ceridian, acquired a majority interest in Stored Value Systems, Inc. ("SVS").
Comdata has the option to purchase the remainder of SVS from
- 6 -
<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1999
(Dollars in millions, except per share data)
(Unaudited)
the investor group at a later date. The acquisition required payments by
Comdata of $7.3 to SVS to retire an amount due to its former parent company
and $13.0 to the investor group. Revenue of SVS was approximately $15.0 in
1998.
FINANCING ACTIVITY
On June 10, 1999, Ceridian completed a Rule 144A private debt offering with
registration rights of senior notes with a face amount of $450.0. The debt
offering was sold through initial purchasers led by Banc of America
Securities LLC. Chase Securities Inc., BNY Capital Markets, Inc., TD
Securities and U.S. Bancorp Piper Jaffray served as co-managers for the
offering. Pursuant to the terms of this private debt offering, Ceridian is
required to register the senior notes with the SEC by January 6, 2000 in
order to avoid paying certain penalties to the initial purchasers. The debt
offering net proceeds of $445.6 was applied to the payment of a $450.0 short
term loan with Bank of America National Trust and Savings Association that,
along with Company funds and an advance of $210.0 on the Company's $250.0
domestic revolving credit agreement, provided funding for the acquisition of
ABR. The original issue discount plus capitalizable issue costs amounted to
$5.1 and will be amortized to interest expense over the term of the senior
notes. The senior notes have a five-year term, a coupon interest rate of
7.25% per annum, are payable semiannually beginning December 1, 1999 and
mature on June 1, 2004. Early in the second quarter of 1999, Standard &
Poor's raised Ceridian's corporate credit rating to "BBB." Standard and
Poor's and Moody's affirmed Ceridian's corporate credit ratings of "BBB" and
"Baa3," respectively, after the acquisition of ABR. At June 30, 1999, the
amount of advances outstanding under the $250.0 domestic revolving credit
agreement had been reduced to $150.0, along with $4.9 of letters of credit.
Borrowings under the Canadian revolving credit agreements aggregated $48.7 at
the same date.
STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock
Par value - $.50
Shares authorized - 500,000,000
Shares issued - 161,685,596 and 161,685,596 $ 80.8 $ 80.8
Shares outstanding - 144,725,633 and 143,513,976
Additional paid-in capital 1,116.4 1,110.5
Accumulated deficit (59.3) (136.8)
Treasury stock, at cost (16,959,963 and
18,171,620 common shares) (364.7) (390.8)
Accumulated other comprehensive income:
Cumulative translation adjustment (3.7) (3.6)
Pension liability adjustment (9.5) (9.5)
------------------ ----------------
Total stockholders' equity $ 760.0 $ 650.6
================== ================
</TABLE>
- 7 -
<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1999
(Dollars in millions, except per share data)
(Unaudited)
SHORT-TERM INVESTMENTS
Short-term investments of $25.3 consist of marketable securities, primarily
issued by U.S. government agencies, acquired with the purchase of ABR. These
securities are considered available-for-sale and are reported at fair value.
Any unrealized gain or loss on these securities is included in other
comprehensive income and held separately in stockholders' equity as
accumulated other comprehensive income until the securities are disposed. For
the period subsequent to the acquisition of ABR and ending June 30, 1999,
there was no material unrealized gain or loss nor any disposition of these
securities. The Company uses the specific identification method to determine
the cost of securities sold.
OTHER EXPENSE (INCOME)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
For Periods Ended June 30,
Three Months Six Months
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Foreign currency translation expense (income) $ - $ - $ 0.1 $ 0.1
Loss (gain) on sale of businesses and assets (1.0) - (1.0) -
Minority interest in operations of consolidated affiliates 1.6 1.3 2.3 1.8
Other expense (income) 0.5 (0.1) 0.3 (0.1)
------------ ------------ ------------- -------------
Total $ 1.1 $ 1.2 $ 1.7 $ 1.8
============ ============ ============= =============
COMPREHENSIVE INCOME (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
For Periods Ended June 30,
Three Months Six Months
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Net income $ 35.7 $ 31.3 $ 77.5 $ 67.1
Items of other comprehensive income:
Change in foreign currency translation adjustment 0.1 (0.2) (0.1) (1.6)
------------ ------------- ------------- -------------
Comprehensive income $ 35.8 $ 31.1 $ 77.4 $ 65.5
============ ============= ============= =============
</TABLE>
- 8 -
<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1999
(Dollars in millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
CAPITAL ASSETS
- ------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1999 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Property, Plant and Equipment
Land $ 15.2 $ 1.2
Machinery and equipment 223.2 189.8
Buildings and improvements 79.2 42.1
Construction in progress 20.0 4.0
----------------------- -----------------------
337.6 237.1
Accumulated depreciation (173.6) (145.8)
----------------------- -----------------------
Property, plant and equipment, net $ 164.0 $ 91.3
======================= =======================
- ------------------------------------------------------------------------------------------------------------------------
Goodwill and Other Intangibles
Goodwill $ 1,022.6 $ 358.4
Accumulated amortization (47.8) (36.4)
----------------------- -----------------------
Goodwill, net 974.8 322.0
----------------------- -----------------------
Other intangible assets 75.2 77.0
Accumulated amortization (18.8) (21.5)
----------------------- -----------------------
Other intangibles, net 56.4 55.5
----------------------- -----------------------
Goodwill and other intangibles, net $ 1,031.2 $ 377.5
======================= =======================
- -------------------------------------------------------------------------------------------------------------------------
Software and Development Costs
Purchased software $ 30.6 $ 31.9
Other software development cost 48.6 24.5
----------------------- -----------------------
79.2 56.4
Accumulated amortization (29.4) (30.3)
----------------------- -----------------------
Software and development costs, net $ 49.8 $ 26.1
======================= =======================
- ------------------------------------------------------------------------------------------------------------------------
For Periods Ended June 30,
Depreciation and Amortization Six Months
1999 1998
- ------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization of property, plant and equipment $ 17.6 $ 16.6
Amortization of goodwill 11.4 7.6
Amortization of other intangibles 3.9 2.3
Amortization of software and development costs 3.3 2.4
Pension credit (4.0) (4.0)
----------------------- -----------------------
Total $ 32.2 $ 24.9
======================= =======================
</TABLE>
- 9 -
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1999
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE
STATEMENTS REGARDING CERIDIAN CORPORATION CONTAINED IN THIS REPORT THAT ARE
NOT HISTORICAL IN NATURE, PARTICULARLY THOSE THAT UTILIZE TERMINOLOGY SUCH AS
"MAY," "WILL," "SHOULD," "EXPECTS," "ANTICIPATES," "ESTIMATES," "BELIEVES" OR
"PLANS, "OR COMPARABLE TERMINOLOGY, ARE FORWARD-LOOKING STATEMENTS BASED ON
CURRENT EXPECTATIONS AND ASSUMPTIONS, AND ENTAIL VARIOUS RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS KNOWN TO
CERIDIAN THAT COULD CAUSE SUCH MATERIAL DIFFERENCES ARE IDENTIFIED AND
DISCUSSED FROM TIME TO TIME IN CERIDIAN'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING THOSE FACTORS DISCUSSED ON PAGES 15 THROUGH 17
OF CERIDIAN'S 1998 ANNUAL REPORT TO STOCKHOLDERS, WHICH IS INCORPORATED BY
REFERENCE INTO PART II, ITEM 7 OF CERIDIAN'S ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1998, WHICH DISCUSSION IS ALSO INCORPORATED
HEREIN BY REFERENCE. SUCH IMPORTANT FACTORS INCLUDE INTEREST RATE CHANGES AND
INVESTMENT INCOME FROM CUSTOMER DEPOSITS, EFFORTS TO EXPAND THE FLEET
SERVICES (LOCAL FUELING) MARKET, ABILITY TO INCREASE REVENUE FROM
CROSS-SELLING EFFORTS AND NEW PRODUCTS, ABILITY TO IMPROVE OPERATING MARGINS
IN HUMAN RESOURCE SERVICES ("HRS"), CUSTOMER RETENTION (PARTICULARLY IN HRS),
EFFECTING SYSTEM UPGRADES AND CONVERSIONS, REQUIRED YEAR 2000 EFFORTS,
ABILITY TO ADAPT TO CHANGING TECHNOLOGY, ACQUISITION RISKS (INCLUDING
INTEGRATION OF RECENT AND FUTURE ACQUISITIONS AND OBTAINING ANTICIPATED
REVENUE SYNERGIES OR COST REDUCTIONS), COMPETITIVE CONDITIONS AND OTHER
FACTORS SUCH AS TRADE, MONETARY AND FISCAL POLICIES AND POLITICAL AND
ECONOMIC CONDITIONS.
RESULTS OF OPERATIONS
For the second quarter of 1999, Ceridian reported net earnings of $35.7
million, or $ .24 per diluted share of common stock, on revenue of $322.2
million. For the second quarter of 1998, Ceridian reported net earnings of
$31.3 million, or $ .21 per diluted share of common stock, on revenue of
$284.1 million. All share and per share figures reflect a stock split
announced on January 20, 1999 for holders of record on February 10, 1999 and
distributed in the form of a 100% stock dividend on February 26, 1999.
In June 1999, Ceridian acquired ABR Information Services, Inc. ("ABR"), a
provider of comprehensive benefits administration, payroll and human resource
services, as a result of a tender offer for all the shares of ABR. Further
information about the acquisition appears in the accompanying notes to the
consolidated financial statements.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS SECOND QUARTER COMPARISONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------------------
Amount Inc (Dec) % of Revenue
- -------------------------------------------------------------------------------------------
1999 1998 $ % 1999 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ 322.2 $ 284.1 38.1 13.4 100.0 100.0
- -------------------------------------------------------------------------------------------
Cost of revenue 151.3 135.0 16.3 12.1 47.0 47.5
- -------------------------------------------------------------------------------------------
SG&A expense 93.5 79.3 14.2 17.6 29.0 27.9
- -------------------------------------------------------------------------------------------
R&D expense 18.5 20.3 (1.8) (8.9) 5.7 7.2
- -------------------------------------------------------------------------------------------
Other expense 1.1 1.2 (0.1) (8.3) 0.3 0.4
- -------------------------------------------------------------------------------------------
Total costs 264.4 235.8 28.6 12.1 82.0 83.0
- -------------------------------------------------------------------------------------------
EBIT 57.8 48.3 9.5 20.0 18.0 17.0
- -------------------------------------------------------------------------------------------
Interest income, net (1.1) 1.0 (2.1) NC (0.4) 0.3
- -------------------------------------------------------------------------------------------
Income taxes 21.0 18.0 3.0 16.8 6.5 6.3
- -------------------------------------------------------------------------------------------
Net earnings $ 35.7 $ 31.3 4.4 14.0 11.1 11.0
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Diluted EPS $ 0.24 $ 0.21 0.03 14.3
- -------------------------------------------------------------------------------------------
</TABLE>
- 10 -
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1999
For the first half of 1999, Ceridian reported net earnings of $77.5 million,
or $ .52 per diluted share, on revenue of $643.6 million. For the first half
of 1998, net earnings totaled $67.1 million, or $ .45 per diluted share, on
revenue of $566.4 million.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS YEAR-TO-DATE JUNE 30 COMPARISONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------------------------------------------
Amount Inc (Dec) % of Revenue
- -------------------------------------------------------------------------------------------
1999 1998 $ % 1999 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ 643.6 $ 566.4 77.2 13.6 100.0 100.0
- -------------------------------------------------------------------------------------------
Cost of revenue 296.1 263.9 32.2 12.2 46.0 46.6
- -------------------------------------------------------------------------------------------
SG&A expense 186.1 159.8 26.3 16.5 28.9 28.2
- -------------------------------------------------------------------------------------------
R&D expense 37.1 37.7 (0.6) (1.7) 5.8 6.7
- -------------------------------------------------------------------------------------------
Other expense 1.7 1.8 (0.1) (5.6) 0.2 0.3
- -------------------------------------------------------------------------------------------
Total costs 521.0 463.2 57.8 12.5 80.9 81.8
- -------------------------------------------------------------------------------------------
EBIT 122.6 103.2 19.4 18.9 19.1 18.2
- -------------------------------------------------------------------------------------------
Interest income, net (0.3) 3.0 (3.3) NC (0.1) 0.5
- -------------------------------------------------------------------------------------------
Income taxes 44.8 39.1 5.7 14.6 7.0 6.9
- -------------------------------------------------------------------------------------------
Net earnings $ 77.5 $ 67.1 10.4 15.5 12.0 11.9
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Diluted EPS $ 0.52 $ 0.45 0.07 15.6
- -------------------------------------------------------------------------------------------
</TABLE>
CONSOLIDATED RESULTS
Revenue growth from acquisitions more than offset the effect of
business dispositions, contributing about one-third of the increase in both
the second quarter and year-to-date comparisons. Lower yields on tax filing
balances and the weakening of the Canadian dollar against the U.S. dollar
continued to adversely effect both revenue comparisons. Without regard to
these factors, sales of products and services increased approximately 10
percent in both periods. Costs directly related to revenue showed some
improvement in both comparisons, largely as a result of the integration of
acquired businesses into existing operations and the benefit of cost
reduction programs. Selling, general and administrative expense increased in
both comparisons due principally to the acquisition of LifeWorks in November
1998. Research and development decreased in total and as a percentage of
revenue in both comparisons as a result of the disposition of Resumix in May
1998. Interest income fell from $2.5 million to $2.1 million in the quarterly
comparison and from $5.2 million to $3.8 million in the year-to-date
comparison as a result of lower yields and lower average cash balances.
Interest expense increased from $1.5 million to $3.2 million in the second
quarter comparison and from $2.2 million to $4.1 million in the year-to-date
comparison as a result of the financing requirements of the ABR acquisition
in June 1999. The effective rate for the income tax provision increased from
36.4% to 37.0% in the second quarter comparison, due to the non-deductibility
of goodwill and intangibles arising from the ABR acquisition, and may
increase additionally in the second half of 1999 for the same reason. While
the acquisition of ABR is expected to be slightly dilutive to Ceridian's
earnings per share in 1999 and 2000, it will be accretive to cash flow during
these periods.
- 11 -
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1999
BUSINESS SEGMENT RESULTS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
SEGMENT SECOND QUARTER COMPARISONS (DOLLARS IN MILLIONS)
- -------------------------------------------------------------------------------------------
Amount Inc (Dec) % of Revenue
- -------------------------------------------------------------------------------------------
1999 1998 $ % 1999 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REVENUE
- -------------------------------------------------------------------------------------------
HRS $ 193.0 $ 169.6 23.4 13.8 59.9 59.7
- -------------------------------------------------------------------------------------------
Comdata 74.7 65.5 9.2 14.1 23.2 23.0
- -------------------------------------------------------------------------------------------
Arbitron 54.5 49.0 5.5 11.2 16.9 17.3
- -------------------------------------------------------------------------------------------
Total $ 322.2 $ 284.1 38.1 13.4 100.0 100.0
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
EBIT
- -------------------------------------------------------------------------------------------
HRS $ 21.3 $ 19.3 2.0 11.2 11.1 11.4
- -------------------------------------------------------------------------------------------
Comdata 17.8 12.7 5.1 39.4 23.8 19.5
- -------------------------------------------------------------------------------------------
Arbitron 18.7 16.3 2.4 15.4 34.4 33.2
- -------------------------------------------------------------------------------------------
Total $ 57.8 $ 48.3 9.5 20.0 18.0 17.0
- -------------------------------------------------------------------------------------------
SEGMENT YEAR-TO-DATE JUNE 30 COMPARISONS (DOLLARS IN MILLIONS)
- -------------------------------------------------------------------------------------------
Amount Inc (Dec) % of Revenue
- -------------------------------------------------------------------------------------------
1999 1998 $ % 1999 1998
- -------------------------------------------------------------------------------------------
REVENUE
- -------------------------------------------------------------------------------------------
HRS $ 397.3 $ 343.0 54.3 15.9 61.7 60.6
- -------------------------------------------------------------------------------------------
Comdata 142.2 133.1 9.1 6.8 22.1 23.5
- -------------------------------------------------------------------------------------------
Arbitron 104.1 90.3 13.8 15.3 16.2 15.9
- -------------------------------------------------------------------------------------------
Total $ 643.6 $ 566.4 77.2 13.6 100.0 100.0
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
EBIT
- -------------------------------------------------------------------------------------------
HRS $ 58.0 $ 52.2 5.8 11.4 14.6 15.2
- -------------------------------------------------------------------------------------------
Comdata 30.1 22.8 7.3 31.5 21.1 17.2
- -------------------------------------------------------------------------------------------
Arbitron 34.5 28.2 6.3 22.5 33.2 31.2
- -------------------------------------------------------------------------------------------
Total $ 122.6 $ 103.2 19.4 18.9 19.1 18.2
- -------------------------------------------------------------------------------------------
</TABLE>
HUMAN RESOURCE SERVICES ("HRS")
The acquisitions of the LifeWorks employee assistance business in November 1998
and ABR in June 1999 contributed significantly to the revenue increase in the
second quarter comparison and the year-to-date revenue comparison also benefited
from the acquisitions of two Canadian payroll businesses during the first
quarter of 1998. The benefit of these four acquisitions more than offset the
effect of the dispositions of Resumix in May 1998 and Tesseract at the end of
1998 in both comparisons. Increases in sales of software, particularly the
Source 500 software product, payroll and consulting services and employee
assistance programs contributed to the revenue increase in the both comparisons
as did price increases in payroll services early in 1999 and 1998. Lower yields
on tax filing balances and lower than planned customer retention, along with the
effect of exchange rate changes on the Canadian dollar, restrained revenue
growth in both comparisons. The time periods for implementation of the Source
500 software product decreased during the second quarter of 1999, while still
limiting revenue growth in both comparisons. Costs and expenses increased in
both the second quarter and year-to-date comparisons largely due to
acquisitions, Year 2000 efforts, and training and implementation efforts
associated with the Source 500 product and new internal operating systems,
offsetting the benefit of cost reduction programs. During the second quarter of
1999, management identified approximately 100 HRS employment positions as
redundant and furnished termination notices to those employees. The related cost
is estimated to be $1.9 million and is recorded in other expense (income). Also,
during the second quarter of 1999, HRS returned to income by crediting other
expense (income) $2.0 million of accruals established as a result of unusual
charges recorded in the fourth quarter of 1997 after determining that amount to
be in excess of actual needs. The Company anticipates that
- 12 -
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1999
HRS resources utilized in Year 2000 efforts will be reduced or redirected to
billable customer software remediation efforts and product development during
the third quarter of 1999.
COMDATA
Revenue increased in both the second quarter and year-to-date
comparisons primarily as a result of the acquisition of a majority interest
in SVS in the first quarter of 1999, increased sales of product and software
upgrades and growth in the fleet services (local fueling) business. The sale
of a telephone debit card business in the second quarter of 1999 reduced the
revenue improvement in both comparisons, and the disposition of the gaming
services business in January 1998 reduced revenue improvement in the
year-to-date comparison. As expected, the loss of certain NTS customers upon
completion of the conversion of NTS customers to Comdata systems in January
1999 adversely affected revenue comparisons for both periods. An increase in
fuel prices in the second quarter of 1999, after declining prices in previous
quarters, benefited both comparisons. The integration of NTS accounts into
the Comdata transaction processing system reduced costs and expenses for the
second quarter and year-to-date comparisons through elimination of redundant
processes. Selling costs decreased in both comparisons due to the conclusion
in mid-1998 of a customer acquisition program for the fleet services
business. Increased Year 2000 costs and an increase in provisions for fleet
services bad debts reduced the benefit of these cost reductions in both
comparisons.
ARBITRON
The second quarter and year-to-date revenue comparisons benefited from the
acquisition of Tapscan in May 1998 and delays in revenue recognition from first
and second quarters to third quarter 1998 related to the timing of major
contract renewals. Without regard to these factors, revenue for the year-to-date
comparison increased about 8%, due largely to price escalators in multi-year
customer contracts, increased software product and report sales, and an
increased number of rating subscribers. Cost synergies with Tapscan improved
gross margin performance while other costs remained consistent with or below the
level of revenue growth. Delays in recognition of revenue related to the timing
of major contract renewals in 1998 added to the improvement in operating margins
in both comparisons since the timing of revenue recognition did not effect the
incurrence of cost.
FINANCIAL CONDITION
Cash balances increased during the first half of 1999 by $4.1 million as
operating cash inflows of $100.8 million and net inflows from financing
activities of $613.2 million exceeded investing outflows of $709.9 million.
During the comparable 1998 period, operations provided cash inflows of $92.9
million, while investing outflows of $149.4 million and financing outflows of
$9.1 million reduced cash balances. Investing outflows during the 1999 period
principally involved the acquisitions of ABR for $644.0 million in June 1999
and SVS for $20.3 million in February 1999, both amounts net of cash
acquired. Capital expenditures increased to $41.2 million during the first
half of 1999, compared with $32.9 million in the 1998 period, primarily for
hardware and software to be used in internal financial systems and for a new
Ceridian headquarters building. Expenditures for the headquarters building
totaled $11.7 million at June 30, 1999, including $9.2 million incurred in
1999. The Company expects to spend approximately an additional $23.3 million
in preparing the building for occupancy in June 2000. Financing cash inflows
during the first half of 1999 resulted primarily from financing arrangements
related to the acquisition of ABR as described in the accompanying notes to
consolidated financial statements. Proceeds from stock option exercises and
employee stock plan purchases provided $20.0 million of financing cash
inflows during 1999 to date. Ceridian made no open market purchases of its
common stock during the first half of 1999. The major factors affecting
investing and financing cash flows in the comparable 1998 period included
repurchases of Ceridian common stock and the net effect of acquisitions and
dispositions. Significant changes in balance sheet amounts since December 31,
1998 are due principally to the ABR acquisition. Ceridian remains in
compliance with all financial covenant tests in its credit agreements and met
the debt-to-capitalization test with a margin of $118.1 million as of June 30,
1999. Ceridian expects to meet its liquidity needs from existing cash
balances, cash flow from operations and borrowings under existing credit
facilities.
-13-
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1999
YEAR 2000 MATTERS
Ceridian's Year 2000 efforts, including status, costs, issues, risks and
contingency plans, are described on pages 14 through 15 of its 1998 Ceridian
Annual Report to Stockholders under the heading "Year 2000 Matters," which is
incorporated by reference into Part II, Item 7 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1998, which discussion is also
incorporated herein by reference.
Year 2000 remediation costs for Ceridian's systems, software and products,
which were expensed as incurred, amounted to $5.5 million in the second
quarter of 1999, compared to $2.4 million in the second quarter of 1998.
Year-to-date remediation costs amounted to $13.3 million in 1999, compared to
$3.4 million in the 1998 period. Project-to-date Year 2000 remediation costs
incurred through June 30, 1999 amounted to $31.0 million. Such remediation
costs are estimated to be approximately $18.0 million for 1999, inclusive of
costs associated with the remediation of systems, software and products of
ABR. Year 2000 capitalizable replacement costs to date increased from $3.7
million at December 31, 1998 to $3.8 million at June 30, 1999. Capital
expenditures of $2.4 million incurred during the first quarter of 1999 are no
longer being characterized as Year 2000 capitalizable replacement costs after
the remediation of an existing system during the second quarter of 1999 was
accomplished prior to the completion of the capital project. Year 2000
capitalizable replacement costs are now estimated to be less than $5 million
for all of 1999. Ceridian has not yet completed its estimate of Year 2000
costs for periods after 1999.
The Year 2000 remediation of customer's customized software that facilitates the
use of Ceridian's payroll services is the customer's responsibility. As part of
Ceridian's customer service efforts, it is assisting these customers in their
remediation efforts. These assistance efforts are expected to continue into the
first half of 2000 due to the delay by some customers in making their customized
software available for remediation. Ceridian's costs, and the related amount and
percentage of cost recoveries for these efforts, will be highly dependent on a
number of factors, including the extent to which customers utilize these
services, the nature of the required remediation, the cooperation of customers
in making their customized software available for remediation, the timing of
these remediation efforts and other alternatives available to the customer.
There has been much speculation as to whether technology-related companies will
experience a slowdown in sales or installations in the latter part of 1999 and
early 2000 due to Year 2000 matters. Although Ceridian's revenue would obviously
be impacted if companies reduce or halt installation and implementation of new
services during this period, Ceridian does not believe it will be impacted
differently than its competitors or other information services businesses in
general.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the Company's market risk during the
three and six month periods ended June 30, 1999. For additional information on
market risk, refer to page 13 of the Company's 1999 Annual Report to
Stockholders under the heading "Market Risk Disclosure" (which is incorporated
by reference into Part II, Item 7A of the Company's Annual Report on Form 10-K
for the year ended December 31, 1998) and page 11 of the Company's Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 1999 under the
heading "Financial Condition".
-14-
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1999
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Ceridian's annual meeting of stockholders was held on May 20, 1999. Of the
144,182,032 shares of Ceridian common stock entitled to vote at the meeting,
123,009,315 shares were present at the meeting in person or by proxy.
The eleven people designated by Ceridian's Board of Directors as nominees for
director were elected, with voting as follows:
<TABLE>
<CAPTION>
Nominee Total Votes For Total Votes Withheld
------- --------------- --------------------
<S> <C> <C>
Bruce R. Bond 122,466,208 543,107
Nicholas D. Chabraja 122,420,254 589,061
Ruth M. Davis 122,393,199 616,116
Robert H. Ewald 122,425,887 583,428
Richard G. Lareau 122,445,455 563,860
Ronald T. LeMay 94,774,746 28,234,569
George R. Lewis 122,436,430 572,885
Lawrence Perlman 122,444,615 564,700
Ronald L. Turner 122,457,137 552,178
Carole J. Uhrich 122,463,513 545,802
Paul S. Walsh 97,616,479 25,392,836
</TABLE>
Stockholders also voted to amend Ceridian's Restated Certificate of
Incorporation to increase the number of authorized shares of common stock
Ceridian is authorized to issue from 200,000,000 to 500,000,000. The number of
votes FOR approval of this amendment was 88,064,639; the number AGAINST was
34,566,514; and the number ABSTAINING was 378,162.
In addition, stockholders approved the new Ceridian 1999 Stock Incentive Plan.
The number of votes FOR approval of this plan was 76,716,469; the number AGAINST
was 38,553,370; and the number ABSTAINING was 430,973.
-15-
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1999
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
2.01 Agreement and Plan of Merger dated as of April 30,
1999 among Ceridian Corporation, Spring Acquisition
Corporation and ABR Information Services, Inc.
(incorporated by reference to Exhibit (c)(1) to
Ceridian's Schedule 14D-1 dated May 7, 1999 (File No.
005-44917)).
2.02 Amendment No. 1 to Agreement and Plan of Merger dated
as of June 2, 1999 among Ceridian Corporation, Spring
Acquisition Corporation and ABR Information Services,
Inc. (incorporated by reference to Exhibit (c)(3) to
Amendment No. 2 to Ceridian's Schedule 14D-1 dated
June 3, 1999 (File No. 005-44917)).
3.01 Certificate of Amendment of Restated Certificate of
Incorporation of Ceridian Corporation.
4.01 Indenture, dated as of June 10, 1999, among Ceridian
Corporation and The Bank of New York, as trustee.
4.02 Registration Rights Agreement, dated as of June 10,
1999, among Ceridian Corporation and Banc of America
Securities LLC, Chase Securities Inc., Bank of New
York Capital Markets, Inc., TD Securities (USA) Inc.
and U.S. Bancorp Piper Jaffray Inc.
10.01 Purchase Agreement, dated June 8, 1999, among
Ceridian Corporation and Banc of America Securities
LLC, Chase Securities Inc., Bank of New York Capital
Markets, Inc., TD Securities (USA) Inc. and U.S.
Bancorp Piper Jaffray Inc.
10.02 Ceridian Corporation 1999 Stock Incentive Plan.
27.01 Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K.
On June 21, 1999 Ceridian filed a Form 8-K, dated June 7,
1999, under Item 2, concerning the acquisition of ABR
Information Services, Inc.
-16-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Quarterly Report on Form 10-Q for the period
ended June 30, 1999, to be signed on its behalf by the undersigned thereunto
duly authorized.
CERIDIAN CORPORATION
Registrant
Date: August 11, 1999 /s/ L. D. Gross
---------------------------------------
L. D. Gross
Vice President and Corporate Controller
(Principal Accounting Officer)
-17-
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1999
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
2.01 Agreement and Plan of Merger dated as Incorporated by reference to Exhibit
of April 30, 1999 among Ceridian (c)(1) to Ceridian's Schedule 14D-1
Corporation, Spring Acquisition dated May 7, 1999 (File No.
Corporation and ABR Information 005-44917).
Services, Inc.
- ---------------------------------------------------------------------------------------------------
2.02 Amendment No. 1 to Agreement and Plan of Incorporated by reference to Exhibit
Merger dated as of (c)(3) to Amendment No. 2 to
June 2, 1999 among Ceridian Ceridian's Schedule 14D-1 dated June
Corporation, Spring Acquisition 3, 1999 (File No. 005-44917).
Corporation and ABR Information
Services, Inc.
- ---------------------------------------------------------------------------------------------------
3.01 Certificate of Amendment of Restated Filed electronically herewith.
Certificate of Incorporation of Ceridian
Corporation.
- ---------------------------------------------------------------------------------------------------
4.01 Indenture, dated as of June 10, 1999, Filed electronically herewith.
among Ceridian Corporation and The Bank
of New York, as trustee.
- ---------------------------------------------------------------------------------------------------
4.02 Registration Rights Agreement, dated as Filed electronically herewith.
of June 10, 1999, among Ceridian
Corporation and Banc of America
Securities LLC, Chase Securities Inc.,
Bank of New York Capital Markets, Inc.,
TD Securities (USA) Inc. and U.S.
Bancorp Piper Jaffray Inc.
- ---------------------------------------------------------------------------------------------------
10.01 Purchase Agreement, dated June 8, 1999, Filed electronically herewith.
among Ceridian Corporation and Banc of
America Securities LLC, Chase Securities
Inc., Bank of New York Capital Markets,
Inc., TD Securities (USA) Inc. and U.S.
Bancorp Piper Jaffray Inc.
- ---------------------------------------------------------------------------------------------------
10.02 Ceridian Corporation 1999 Stock Filed electronically herewith.
Incentive Plan.
- ---------------------------------------------------------------------------------------------------
27.01 Financial Data Schedule Filed electronically herewith.
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 3.01
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CERIDIAN CORPORATION
Ceridian Corporation, a corporation organized and existing under and by
virtue of the laws of the State of Delaware (the "Corporation"), pursuant to the
provisions of the General Corporation Law of the State of Delaware (the "DGCL"),
DOES HEREBY CERTIFY that:
FIRST: The Restated Certificate of Incorporation of the Corporation is
hereby amended by deleting Paragraph A of Article IV of the Restated Certificate
of Incorporation in its present form and substituting therefor a new Paragraph A
of Article IV in the following form:
A. THE TOTAL NUMBER OF SHARES OF ALL CLASSES OF STOCK WHICH THE
CORPORATION SHALL HAVE AUTHORITY TO ISSUE IS FIVE HUNDRED MILLION, SEVEN
HUNDRED FIFTY THOUSAND (500,750,000), CONSISTING OF SEVEN HUNDRED FIFTY
THOUSAND (750,000) SHARES OF PREFERRED STOCK OF THE PAR VALUE OF ONE
HUNDRED DOLLARS ($100.00) PER SHARE (THE "PREFERRED STOCK"), HAVING A
TOTAL PAR VALUE OF SEVENTY-FIVE MILLION DOLLARS ($75,000,000), AND FIVE
HUNDRED MILLION (500,000,000) SHARES OF COMMON STOCK OF THE PAR VALUE
OF FIFTY CENTS ($.50) PER SHARE (THE "COMMON STOCK"), HAVING A TOTAL
PAR VALUE OF TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000).
SECOND: The amendment to the Restated Certificate of Incorporation of the
Corporation set forth in this Certificate of Amendment has been duly adopted in
accordance with the provisions of Section 242 of the DGCL; (a) the Board of
Directors of the Corporation having duly adopted resolutions on February 3, 1999
setting forth such amendment, declaring its advisability and directing that such
amendment be submitted to the stockholders of the Corporation for their
consideration and approval at the next
<PAGE>
annual meeting of stockholders, and (b) the stockholders of the Corporation
having duly approved and adopted such amendment by a vote of the holders of a
majority of the shares of outstanding stock of the Corporation entitled to
vote thereon at the Corporation's 1999 annual meeting of stockholders duly
held on May 20, 1999, upon notice in accordance with Section 222 of the DGCL.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by A. Reid Shaw, its Vice President, there unto duly
authorized, and attested by David T. Moen, its Assistant Secretary, this twenty
fifth day of May, 1999.
CERIDIAN CORPORATION
BY:/s/ A. Reid Shaw
-----------------------------------
A. Reid Shaw
Vice President
ATTEST:
/s/ David T. Moen
- --------------------------------
David T. Moen
Assistant Secretary
2
<PAGE>
EXHIBIT 4.01
CERIDIAN CORPORATION
(as Issuer)
7.25% SENIOR NOTES DUE 2004
_____________
INDENTURE
DATED AS OF JUNE 10, 1999
_____________
THE BANK OF NEW YORK
(as Trustee)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . . . . . . . . . .1
SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2 OTHER DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. . . . . . . 16
SECTION 1.4 RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE II
THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.1 FORM AND DATING. . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.2 EXECUTION AND AUTHENTICATION . . . . . . . . . . . . . . . . . 18
SECTION 2.3 REGISTRAR, PAYING AGENT AND DEPOSITARY . . . . . . . . . . . . 19
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST. . . . . . . . . . . . . . 19
SECTION 2.5 HOLDER LISTS . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.6 TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.7 REPLACEMENT NOTES. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.8 OUTSTANDING NOTES. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.9 TREASURY NOTES . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.10 TEMPORARY NOTES. . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.11 CANCELLATION . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.12 DEFAULTED INTEREST . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.13 CUSIP NUMBERS. . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE III
REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.1 NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED. . . . . . . . . . . . . . . 38
SECTION 3.3 NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . 39
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . . . . . 39
SECTION 3.6 NOTES REDEEMED IN PART . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.7 OPTIONAL REDEMPTION. . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.8 NO MANDATORY REDEMPTION. . . . . . . . . . . . . . . . . . . . 40
ARTICLE IV
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.1 PAYMENT OF NOTES . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . . . . 41
ii
<PAGE>
SECTION 4.3 SEC REPORTS AND REPORTS TO HOLDERS . . . . . . . . . . . . . . 42
SECTION 4.4 COMPLIANCE CERTIFICATE . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.5 STAY, EXTENSION AND USURY LAWS . . . . . . . . . . . . . . . . 43
SECTION 4.6 LIMITATION ON LIENS SECURING INDEBTEDNESS. . . . . . . . . . . 44
SECTION 4.7 LIMITATION ON TRANSACTIONS WITH AFFILIATES . . . . . . . . . . 44
SECTION 4.8 REPURCHASE OF NOTES AT THE OPTION OF THE
HOLDER IF THE ABR MERGER HAS NOT BEEN CONSUMMATED. . . . . . . 45
SECTION 4.9 CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . . . . . . 47
SECTION 4.10 LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS . . . . . . . . 48
ARTICLE V
SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS . . . . . . . . . . . 48
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED. . . . . . . . . . . . . . . 49
ARTICLE VI
DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.2 ACCELERATION . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.3 OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.4 WAIVER OF PAST DEFAULTS. . . . . . . . . . . . . . . . . . . . 52
SECTION 6.5 CONTROL BY MAJORITY. . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.6 LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT. . . . . . . . . 54
SECTION 6.8 COLLECTION SUIT BY TRUSTEE . . . . . . . . . . . . . . . . . . 54
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM . . . . . . . . . . . . . . . 54
SECTION 6.10 PRIORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.11 UNDERTAKING FOR COSTS. . . . . . . . . . . . . . . . . . . . . 55
ARTICLE VII
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.1 DUTIES OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.2 RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . 58
SECTION 7.4 TRUSTEE'S DISCLAIMER . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.5 NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES . . . . . . . . . . 59
SECTION 7.7 COMPENSATION AND INDEMNITY . . . . . . . . . . . . . . . . . . 59
SECTION 7.8 REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.. . . . . . . . . . . . . . . 62
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION. . . . . . . . . . . . . . . . . 62
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. . . . . . . 62
iii
<PAGE>
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE;
SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR
COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE . . . . . . . . . . . . . . . . 62
SECTION 8.3 COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE . . . . . . . . . . 64
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES
TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. . . . . . 65
SECTION 8.6 REPAYMENT TO COMPANY . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.7 REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.8 SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . 67
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER. . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES. . . . . . . . . . . . . . 68
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES . . . . . . . . . . . . . . . 69
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT. . . . . . . . . . . . . . 70
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS. . . . . . . . . . . . . . . 70
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES . . . . . . . . . . . . . . . 71
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC. . . . . . . . . . . . . . . . 71
SECTION 9.7 HOLDERS OF NOTES TO VOTE AS A SINGLE CLASS . . . . . . . . . . 72
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.1 TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . . . . . . 72
SECTION 10.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.3 COMMUNICATION BY HOLDERS OF NOTES WITH
OTHER HOLDERS OF NOTES. . . . . . . . . . . . . . . . . . . . 73
SECTION 10.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT . . . . . . 73
SECTION 10.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. . . . . . . . . 73
SECTION 10.6 RULES BY TRUSTEE AND AGENTS . . . . . . . . . . . . . . . . . 74
SECTION 10.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS . . . . . . . . . . . . . . . . . . 74
SECTION 10.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 10.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS . . . . . . . . 75
SECTION 10.10 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 10.11 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 10.12 COUNTERPART ORIGINALS. . . . . . . . . . . . . . . . . . . . . 75
Section 10.13 Table of Contents, Headings, Etc.. . . . . . . . . . . . . . . 75
iv
<PAGE>
EXHIBIT A
FORM OF NOTE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER . . . . . . . . . . . . . . . . . . . . . . .B-1
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE . . . . . . . . . . . . . . . . . . . . . . .C-1
EXHIBIT D
FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . .D-1
</TABLE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
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). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.8; 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.8; 7.10; 10.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6; 10.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3; 4.4; 10.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
v
<PAGE>
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.5; 10.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.4
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.7
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.8
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1
</TABLE>
______________________________
N.A. means not applicable
*This Cross-Reference table shall not, for any purpose, be deemed to be part of
the Indenture.
vi
<PAGE>
INDENTURE, dated as of June 10, 1999, among Ceridian Corporation,
a Delaware corporation (the "Company"), and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of each other and for
the equal and ratable benefit of the Holders of the 7.25% Series A Senior Notes
due 2004 (the "Series A Notes") and the 7.25% Series B Senior Notes due 2004
(the "Series B Notes" and together with the Series A Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions
"144A GLOBAL NOTE" means one or more Global Notes bearing the
Private Placement Legend, that will be issued in an aggregate amount of
denominations equal in total to the outstanding principal amount of the Notes
sold in reliance on Rule 144A.
"ABR" means ABR Information Services, Inc., a Florida corporation.
"ABR MERGER AGREEMENT" means that certain Agreement and Plan of
Merger, dated as of April 30, 1999, by and among ABR, the Company, and Spring
Acquisition Corp., a Florida corporation and a wholly-owned subsidiary of the
Company.
"ACCRUED BANKRUPTCY INTEREST" means, with respect to any
Indebtedness, all interest accruing thereon after the filing of a petition by or
against the Company or any of its Subsidiaries or any Parent under any
Bankruptcy Law, in accordance with and at the rate (including any rate
applicable upon any default or event of default, to the extent lawful) specified
in the documents evidencing or governing such Indebtedness, whether or not the
claim for such interest is allowed as a claim after such filing in any
proceeding under such Bankruptcy Law.
"ADJUSTED TREASURY RATE" means, with respect to any redemption
date, the date per annum equal to the semi-annual equivalent yield to maturity
of the Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue, which is expressed as a percentage of its principal amount,
equal to the Comparable Treasury Price for such redemption date, calculated on
the third business day preceding the redemption date, plus in each case 25 basis
points.
1
<PAGE>
"AFFILIATE" of any specified Person means any other person,
directly or indirectly, controlling or controlled by, or under direct or
indirect common control with, such specified person. For the purposes of this
definition, "control" when used with respect to any specified person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange at the relevant time.
"ATTRIBUTABLE DEBT" in respect of a Sale/Leaseback Transaction
means, at the time of determination, the present value (discounted at the
interest rate implicit in such transaction in accordance with GAAP) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"BANKRUPTCY CODE" means the United States Bankruptcy Code,
codified at 11 U.S.C. Section 101-1330, as amended.
"BENEFICIAL OWNER" or "BENEFICIAL OWNER" for purposes of the
definition of Affiliate has the meaning attributed to it in Rules 13d-3 and
13d-5 under the Exchange Act (as in effect on the Issue Date), whether or not
applicable.
"BOARD OF DIRECTORS" means the Company's Board of Directors or any
committee thereof duly authorized to act on behalf of such Board.
"BROKER-DEALER" means any broker-dealer that receives Exchange
Notes for its own account in the Exchange Offer in exchange for Notes that were
acquired by such broker-dealer as a result of market-making or other trading
activities.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"CAPITAL LEASE OBLIGATION" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP.
2
<PAGE>
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"CEDEL" means Cedel Bank, S.A. or its successors.
"COMMODITY PRICE PROTECTION AGREEMENT" means any forward contract,
commodity swap, commodity option or other similar financial agreement or
arrangement relating to, or the value of which is dependent upon, fluctuations
in commodity prices.
"COMPARABLE TREASURY ISSUE" means the United States Treasury
security selected by the Quotation Agent as having a maturity comparable to the
remaining term from the redemption date to the stated maturity of the Notes that
would be utilized, at the time of selection and in accordance with customary
financial practice in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Notes.
"COMPARABLE TREASURY PRICE" means, with respect to any redemption
date: (1) the average of the bid and asked prices for the Comparable Treasury
Issue, which is expressed in each case as a percentage of its principal amount,
on the third business day preceding such redemption date, as set forth in the
daily statistical release, or any successor release, published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities;" or (2) if such release is not published or does not
contain such prices on such business day, (A) the average of the Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Quotation
Agent obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such quotations.
CONSOLIDATED TANGIBLE ASSETS" means Total Assets less the sum of
(a) the total book value of all of the Company's assets and the
assets of the Company's Subsidiaries properly classified as intangible
assets under GAAP, including such items as goodwill, the purchase price
of acquired assets in excess of the fair market value thereof,
trademarks, trade names, service marks, customer lists, brand names,
copyrights, patents and licenses, and rights with respect to the
foregoing; and
(b) all amounts representing any write-up in the book value of
any of the Company's assets or the assets of the Company's Subsidiaries
resulting from a revaluation thereof subsequent to the date of the
Company's then most recent audited financial statements.
3
<PAGE>
"CORPORATE TRUST OFFICE" shall be at the address of the Trustee
specified in Section 12.2 hereof or such other address as to which the Trustee
may give notice to the Company; PROVIDED that such address shall be in the
Borough of Manhattan, The City of New York. All notices by the Company sent to
the Trustee at its Corporate Trust Office in the Borough of Manhattan, The City
of New York shall also be sent to the Trustee at: The Bank of New York, 101
Barclay, Floor 21W, New York, NY 10286, attention: Corporate Trust Trustee
Administration.
"CURRENCY AGREEMENT" means, with respect to any Person, any
foreign exchange contract, currency swap agreement or other similar agreement to
which such person is a party or of which such Person is a beneficiary.
"DEFAULT" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"DEFINITIVE NOTE" means one or more certificated Notes registered
in the name of the Holder thereof and issued in accordance with Section 2.6
hereof, in the form of Exhibit A hereto except that such Note shall not include
the information called for by footnotes 3, 4 and 7 thereof.
"DEPOSITARY" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.3 hereof
as the Depositary with respect to the Notes, until a successor will have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" will mean or include such successor.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any Person,
Capital Stock of such Person that, by its terms or by the terms of any security
into which it is convertible or exchangeable or for which it is exercisable, is,
or upon the happening of an event or the passage of time or both would be,
required to be redeemed or repurchased (including at the option of the holder
thereof) by such Person or any of its Subsidiaries, in whole or in part, on or
prior to the Stated Maturity Date of the Notes.
"DISTRIBUTION COMPLIANCE PERIOD" means the 40-day restricted
period as defined in Regulation S.
"EUROCLEAR" means Morgan Guaranty Trust Company of New York,
Brussels office, or its successor, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.
4
<PAGE>
"EXCHANGE NOTES" means Series B Notes issued pursuant to an
Exchange Offer.
"EXCHANGE OFFER" means an offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Exchange Notes for
Series A Notes.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall have the meaning set
forth in the Registration Rights Agreement.
"FAIR MARKET VALUE" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Company.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as are in effect on the Issue
Date of the Notes.
"GLOBAL NOTES" means one or more Notes in the form of Exhibit A
hereto that includes the information referred to in footnotes 3, 4, and 7 to the
form of Note, attached hereto as Exhibit A, issued under this Indenture, that is
deposited with or on behalf of and registered in the name of the Depositary or
its nominee.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.6(g)(ii), which is required to be placed on all Global Notes issued under this
Indenture.
"HEDGING OBLIGATIONS" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity
Price Protection Agreement.
"HOLDER" means a Person in whose name a Note is registered on the
Registrar's books.
"INCUR" means issue, assume, guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
person existing at the time such Person becomes a Subsidiary of another Person
(whether by merger, consolidation, acquisition or otherwise) will be deemed to
be Incurred by such Person at the time it becomes such a Subsidiary; PROVIDED
FURTHER, HOWEVER, that in the case of a discount security, neither the accrual,
of interest nor the accretion of original issue discount will be considered an
Incurrence of Indebtedness, but the entire face amount of such security will be
deemed Incurred upon the
5
<PAGE>
issuance of such security. The term "Incurrence" when used as a noun will
have a correlative meaning.
"INDEBTEDNESS" means, with respect to any Person on any date of
determination (without duplication): (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all Capital
Lease Obligations of such Person and all Attributable Debt in respect of
Sale/Leaseback Transactions entered into by such Person; (iii) the amount of all
obligations of such Person with respect to the redemption, repayment or other
repurchase of any Disqualified Capital Stock or, with respect to any Subsidiary
of such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends); and (iv) all obligations of the type referred to in clauses (i) and
(iii) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise. The amount of Indebtedness of
any Person at any date will be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations as described above at such date; PROVIDED, HOWEVER, that the amount
outstanding at any time of any Indebtedness issued with original issue discount
will be deemed to be the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"INDIRECT PARTICIPANT" means an entity that, with respect to DTC,
clears through or maintains a direct or indirect, custodial relationship with a
Participant.
"INITIAL PURCHASERS" mean the initial purchasers of the Series A
Notes under the Purchase Agreement, dated June 8, 1999, with respect to the
Series A Notes.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"INTEREST PAYMENT DATE" means the stated due date of an
installment of interest on the Notes.
"INTEREST RATE AGREEMENT" means any interest swap agreement,
interest rate cap agreement or other financial agreement or arrangement designed
to protect the Company or any of its Subsidiaries against fluctuations in
interest rates.
6
<PAGE>
"ISSUE DATE" means the date of first issuance of the Notes under
the Indenture.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
PROVIDED, HOWEVER, that, as to any such arrangement in corporate form, such
corporation will not, as to any person of which such corporation is a
Subsidiary, be considered to be a Joint Venture to which such Person is a party.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in The City of New York, or the city in which the principal
corporate trust office of the Trustee is located, or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"LIEN" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof and any Sale/Lease-back
Transaction other than a Sale/Lease-back Transaction permitted pursuant to
clause (a) or (c) of Section 4.10.
"LIQUIDATED DAMAGES" means all Liquidated Damages, if any, then
owing pursuant to the Registration Rights Agreement.
"MAKE-WHOLE AMOUNT" means, in connection with any optional
redemption of any Notes, the excess, if any, of (1) the sum, as determined by a
Quotation Agent of the present values of the principal amount of such Notes,
together with scheduled payments of interest from the redemption date to the
stated maturity of the Notes, in each case discounted to the redemption date on
a semi-annual basis, which assumes a 360-day year consisting of twelve 30-day
months, at the Adjusted Treasury Rate over (2) 100% of the principal amount of
the Notes to be redeemed.
"NOTES CUSTODIAN" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"OBLIGATION" means any principal, premium or interest payment, or
monetary penalty, or damages, due by the Company under the terms of the Notes or
the Indenture, including any Liquidated Damages, if any, due pursuant to the
terms of the Registration Rights Agreement.
7
<PAGE>
"OFFERING MEMORANDUM" means the final Offering Memorandum, dated
June 8, 1999, relating to the offer and sale of the Series A Notes.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice President of such
Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of
the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company, that meets the requirements of Sections 10.4 and 10.5
hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Sections
10.4 and 10.5 hereof. The counsel may be an employee of or counsel to the
Company or any Subsidiary of the Company.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and with respect to The Depository Trust Company, shall include
Euroclear and Cedel.
"PERMITTED LIEN" means any
(1) Liens arising by reason of
(x) operation of law in favor of carriers, warehousemen,
landlords, mechanics, materialmen, laborers, employees or
suppliers in existence for less than 120 days or for more than 120
days which are not yet delinquent or are being contested in good
faith by negotiations or by appropriate proceedings which suspend
the collection thereof; or
(y) any interest or title of a lessor under any lease;
(2) Liens in favor of the Company or (other than in the case of
Liens securing the Company's Indebtedness or Indebtedness of any of the
Company's Subsidiaries) its Subsidiaries;
(3) Liens on property of a Person existing at the time such
Person is acquired by, merged into or consolidated with the Company or
any of its Subsidiaries; provided that such Liens were not incurred in
contemplation of such acquisition, merger or
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consolidation and do not extend to any assets other than those of the
Person acquired by, merged into or consolidated with the Company or
any such Subsidiary;
(4) Liens on property existing at the time of acquisition
thereof by the Company or any of its Subsidiaries provided that such
Liens were not incurred in contemplation of such acquisition;
(5) Liens existing on the date of the Indenture;
(6) Liens to secure taxes, assessments and other government
charges or claims for labor, material or supplies
(x) in respect of obligations which are not overdue, or
(y) which are currently being contested in good faith by
appropriate proceedings if the Company has set aside on its books
adequate reserves with respect thereto, if required, and if no
proceedings have been commenced to foreclose any such Lien;
(7) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(8) Liens in respect of judgments or awards which have been in
force for less than the applicable period for taking an appeal, so long
as execution is not levied thereunder, or in respect of which the Company
or one of its Subsidiaries, as the case may be, at the time in good faith
are prosecuting an appeal or proceedings for review and in respect of
which the Company and its Subsidiaries have maintained reserves in an
amount satisfactory to the Company;
(9) encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's Liens under
leases to which the Company or any of its Subsidiaries is a party, and
other minor liens or encumbrances none of which in the Company's opinion
or in the opinion of such Subsidiary interferes materially with the use
of the property affected in the ordinary conduct of the Company's
business or the business of such Subsidiary and which defects do not
individually or in the aggregate have a material adverse effect on the
Company's business and the business of its Subsidiaries on a consolidated
basis;
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(10) Liens securing Indebtedness in respect of performance
bonds, bankers' acceptances, and surety or appeal bonds entered into by
the Company or its Subsidiaries in the ordinary course of business;
(11) Liens securing Hedging Obligations consisting of Interest
Rate Agreements, Commodity Price Protection Agreements and Currency
Agreements entered into in the ordinary course of business and not for
the purpose of speculation;
(12) Liens securing Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight overdrafts)
drawn against insufficient funds in the ordinary course of business;
provided that such Indebtedness is extinguished within five business days
of Incurrence;
(13) Liens securing the Company's Indebtedness and that of its
Subsidiaries arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, in any case Incurred
in connection with the disposition of any of the Company's assets or
those of any such Subsidiary (other than guarantees of Indebtedness
Incurred by any Person acquiring all or any portion of such assets for
the purpose of financing such acquisition), in a principal amount not to
exceed the gross proceeds actually received by the Company or any such
Subsidiary in connection with such disposition;
(14) Liens arising in the ordinary course of business in
connection with obligations (other than obligations for borrowed money)
that are not overdue or which are being contested in good faith and by
appropriate proceedings, including, but not limited to Liens under bid,
performance and other surety bonds, supersedeas and appeal bonds, Liens
on advance or progress payments received from customers under contracts
for the sale, lease or license of goods, software or services and upon
the products being sold or licensed, in each case securing performance of
the underlying contract or the repayment of such advances in the event
final acceptance of performance under such contracts does not occur, and
Liens upon funds collected temporarily from others pending payment or
remittance on their behalf;
(15) purchase money security interests on any property acquired
or held by the Company or its Subsidiaries in the ordinary course of
business securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such property;
PROVIDED, HOWEVER, that
(A) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition
thereof,
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(B) such Lien attaches solely to the property so
acquired in such transaction, and
(C) the principal amount of the debt secured thereby
does not exceed 100% of the cost of such property.
(16) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with
a creditor depository institution; PROVIDED, HOWEVER, that
(A) such deposit account is not a dedicated cash
collateral account and is not subject to
restrictions against access by the Company in excess
of those set forth by regulations promulgated by the
Federal Reserve Board, and
(B) such deposit account is not intended by the Company
or any of its Subsidiaries to provide collateral to
the depository institution;
(17) rights of holders of notes or debentures issued by the
Company or of its Subsidiaries in deposits placed in trust to legally or
"in substance" defease such notes or debentures;
(18) Any Lien deemed to be created in connection with the
securitization of accounts, receivables, instruments, chattel paper or
other rights to payment of the Company or its Subsidiaries, (a) to the
extent (i) such assets are transferred to a special purpose entity,
(which may be owned by the Company or any Subsidiary but is not
consolidated for accounting purposes with such transferor or owner) where
such transfer is a "true sale" for accounting purposes, and (ii) the face
principal amount of such assets at any time outstanding is not more than
$150,000,000 or (b) which is granted by any such special purpose entity
in the assets so transferred to it; and
(19) Liens securing Indebtedness in an aggregate principal
amount together with all Liens securing other of the Company's
Indebtedness and that of its Subsidiaries outstanding on the date of such
Incurrence (other than Liens described in clauses (1) through (18) above)
not exceeding 15% of Consolidated Tangible Assets.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
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"PREFERRED STOCK" as applied to the Capital Stock of any
corporation or the equity securities of any trust, means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation or trust
over shares of Capital Stock of any other class of such corporation or trust.
"PRINCIPAL" of any Indebtedness (including the Notes) means the
principal of such Indebtedness plus the premium, if any, payable on such
Indebtedness which is due or overdue or is to become due at the relevant time.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.6(g)(i) to be placed on all Notes issued under this Indenture except where
specifically stated otherwise by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"QUOTATION AGENT" means the Reference Treasury Dealer appointed by
the Company.
"RECORD DATE" means a Record Date specified in the Notes, whether
or not such date is a Business Day.
"REFERENCE TREASURY DEALER" means: (1) Banc of America Securities
LLC and its respective successors and two additional Primary Treasury Dealers
selected by the Company; PROVIDED, HOWEVER, that if any of the foregoing cease
to be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company will substitute therefor another Primary Treasury
Dealer; and (2) any other Primary Treasury Dealer selected by the Company.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Quotation Agent, of the bid and asked prices for the Comparable Treasury
Issue, which is expressed in each case as a percentage of its principal amount,
quoted in writing to the Trustee by such quotation agent at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from time
to time.
"REG S PERMANENT GLOBAL NOTE" means one or more permanent Global
Notes bearing the Private Placement Legend, that will be issued in an aggregate
amount of
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denominations equal in total to the outstanding principal amount of the Reg S
Temporary Global Note upon expiration of the Distribution Compliance Period.
"REG S TEMPORARY GLOBAL NOTE" means one or more temporary Global
Notes bearing the Private Placement Legend and the Reg S Temporary Global Note
Legend, issued in an aggregate amount of denominations equal in total to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
"REG S TEMPORARY GLOBAL NOTE LEGEND" means the legend set forth in
Section 2.6(g)(iii), which is required to be placed on all Reg S Temporary
Global Notes issued under this Indenture.
"REGULATION S" means Regulation S promulgated under the Securities
Act, as it may be amended from time to time, and any successor provision
thereto.
"REGULATION S GLOBAL NOTE" means a Reg S Temporary Global Note or
a Reg S Permanent Global Note, as the case may be.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"RESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes
bearing the Private Placement Legend, issued under this Indenture.
"RESTRICTED GLOBAL NOTE" means one or more Global Notes bearing
the Private Placement Legend, issued under this Indenture; PROVIDED, that in no
case shall an Exchange Note issued in accordance with this Indenture and the
terms of the Registration Rights Agreement be a Restricted Global Note.
"RULE 144A" means Rule 144A promulgated under the Securities Act,
as it may be amended from time to time, and any successor provision thereto.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or one of its
Subsidiaries transfers such property to a person and the Company or any of its
Subsidiaries leases it from such person under an operating lease.
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"SEC" means the United States Securities and Exchange Commission,
or any successor agency.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC thereunder.
"SHELF REGISTRATION STATEMENT" shall have the meaning set forth in
the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" shall have the meaning provided under
Regulation S-X of the Securities Act, as in effect from time to time.
"SPECIAL RECORD DATE" means, for payment of any Defaulted
Interest, a date fixed by the Paying Agent pursuant to Section 2.12.
"STATED MATURITY" or "STATED MATURITY" means, with respect to any
instrument, the date specified in such instrument as the fixed date on which the
final payment of principal of such instrument is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision
providing for the repurchase, redemption or repayment of such instrument at the
option of the holder thereof upon the happening of any contingency unless such
contingency has occurred).
"SUBSIDIARY" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by
(1) such Person,
(2) such Person and one or more Subsidiaries of such Person, or
(3) one or more Subsidiaries of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in Section 9.3.
"TRANSFER RESTRICTED NOTES" means Global Notes and Definitive
Notes that bear or are required to bear the Private Placement Legend, issued
under this Indenture.
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"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means such successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend,
issued under this Indenture.
"UNRESTRICTED GLOBAL NOTE" means one or more permanent Global
Notes representing a series of Notes that does not bear and is not required to
bear the Private Placement Legend, issued under this Indenture.
"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.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o) under
the Securities Act.
Section 1.2 Other Definitions
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Affiliate Transaction" 4.7
"Authentication Order" 2.2
"Bankruptcy Law" 6.1
"Covenant Defeasance" 8.3
"Custodian" 6.1
"Defaulted Interest" 2.12
"DTC" 2.3
"Legal Defeasance" 8.2
"Paying Agent" 2.3
"Registrar" 2.3
</TABLE>
Section 1.3 Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
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<PAGE>
The following TIA terms used in this Indenture have the following
meanings:
"COMMISSION" means the Securities and Exchange Commission;
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.4 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 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 of or rules under the Securities Act
and the Exchange Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time.
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ARTICLE II
THE NOTES
Section 2.1 Form and Dating
(a) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and 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. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) GLOBAL NOTES. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Notes Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.6 hereof.
(c) EUROCLEAR AND CEDEL PROCEDURES APPLICABLE. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank in effect at the relevant time shall be
applicable to transfers of beneficial interests in the Regulation S Global Notes
that are held by Participants through Euroclear or Cedel Bank.
Section 2.2 Execution and Authentication
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Two officers shall sign the Notes for the Company by manual or
facsimile signature. In the case of Definitive Notes, such signatures may be
imprinted or otherwise reproduced on such Notes. If an Officer whose signature
is on a Note no longer holds that office at the time a Note is authenticated,
the Note shall nevertheless be valid. A Note shall not be valid until
authenticated by the manual signature of the Trustee. The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an Officer (an
"Authentication Order"), authenticate Notes for issuance up to the aggregate
principal amount stated in such Authentication Order; PROVIDED that Notes
authenticated for issuance on the Issue Date shall not exceed $450,000,000 in
aggregate principal amount. The aggregate principal amount of Notes outstanding
at any time may not exceed $450,000,000, except in accordance with Section 2.8,
unless the Company delivers to the Trustee an additional Authentication Order
for issuance of up to the aggregate principal amount stated in such
Authentication Order which amount may be unlimited. The Trustee may appoint an
authenticating agent acceptable to the Company to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with Holders or an Affiliate of the Company.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the Issue Date
pursuant to the preceding paragraph, the Company shall use its best efforts to
obtain the same "CUSIP" number for such Notes as is printed on the Notes
outstanding at such time; PROVIDED, HOWEVER, that if any series of Notes issued
under this Indenture subsequent to the Issue Date is determined, pursuant to an
Opinion of Counsel of the Company in a form reasonably satisfactory to the
Trustee to be a different class of security than the Notes outstanding at such
time for federal income tax purposes, the Company may obtain a "CUSIP' number
for such Notes that is different than the "CUSIP" number printed on the Notes
then outstanding. Notwithstanding the foregoing, all Notes issued under this
Indenture shall vote and consent together on all matters as one class and no
series of Notes will have the right to vote or consent as a separate class on
any matter.
Section 2.3 Registrar, Paying Agent and Depositary
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Notes may be presented for registration
of transfer or for exchange ("Registrar") and an office or agency where Notes
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents. The
term "Registrar" includes any co-registrar and the term "Paying Agent" includes
any additional paying agent. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company shall notify the Trustee in
writing of the name and
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address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act as Paying
Agent or Registrar. The Company initially appoints The Depository Trust
Company ("DTC") to act as Depositary with respect to the Global Notes.
Neither the Company nor the Trustee shall have any responsibility or
liability for any aspect of the records relating to or payments made on
account of Notes by the Depositary, or for maintaining, supervising or
reviewing any records of the Depositary relating to such Notes. The Company
initially appoints the Trustee to act as the Registrar and Paying Agent and
to act as Notes Custodian with respect to the Global Notes.
Section 2.4 Paying Agent to Hold Money in Trust
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
Section 2.5 Holder 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
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish, or shall cause the Registrar
(if other than the Company) to furnish, to the Trustee at least seven Business
Days before 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
may reasonably require of the names and addresses of the Holders of Notes and
the Company shall otherwise comply with TIA Section 312(a).
Section 2.6 Transfer and Exchange
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor
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Depositary. All Global Notes will be exchanged by the Company for Definitive
Notes if (I) the Company delivers to the Trustee notice from the Depositary
that (x) the Depositary is unwilling or unable to continue to act as
Depositary for the Global Notes and the Company thereupon fails to appoint a
successor Depositary within 90 days or (y) the Depositary is no longer a
clearing agency registered under the Exchange Act, (ii) the Company in its
sole discretion determines that the Global Notes (in whole but not in part)
should be exchanged for Definitive Notes and delivers a written notice to
such effect to the Trustee or (iii) upon request of the Trustee or Holders of
a majority of the aggregate principal amount of outstanding Notes if there
shall have occurred and be continuing a Default or Event of Default with
respect to the Notes; PROVIDED that in no event shall the Reg S Temporary
Global Note be exchanged by the Company for Definitive Notes prior to (x) the
expiration of the Distribution Compliance Period and (y) the receipt by the
Registrar of any certificate identified by the Company and its counsel to be
required pursuant to Rule 903 or Rule 904 under the Securities Act. Upon the
occurrence of any of the preceding events in (I), (ii) or (iii) above,
Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.7 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or
any portion thereof, pursuant to this Section 2.6 or Section 2.7 or 2.10
hereof, shall be authenticated and delivered in the form of, and shall be, a
Global Note. A Global Note may not be exchanged for another Note other than
as provided in this Section 2.6(a), however, beneficial interests in a Global
Note may be transferred and exchanged as provided in Section 2.6(b), (c) or
(f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
NOTES. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (I) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL
NOTE. Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Restricted Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; PROVIDED, HOWEVER, that prior to the
expiration of the Distribution Compliance Period, transfers of beneficial
interests in the Reg S Temporary Global Note may not be made to a U.S. Person or
for the account or benefit of a U.S. Person (other than an Initial Purchaser).
Beneficial interests in any Unrestricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be required
to be delivered to the Registrar to effect the transfers described in this
Section 2.6(b)(I).
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(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL
INTERESTS IN GLOBAL NOTES. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.6(b)(I) above, the
transferor of such beneficial interest must deliver to the Registrar either (A)
(1) an order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such increase
or (B) (1) an order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the transfer or exchange
referred to in (B)(1) above; PROVIDED, that in no event shall Definitive Notes
be issued upon the transfer or exchange of beneficial interests in the Reg S
Temporary Global Note prior to (x) the expiration of the Distribution Compliance
Period and (y) the receipt by the Registrar of any certificates identified by
the Company or its counsel to be required pursuant to Rule 903 and Rule 904
under the Securities Act. Upon consummation of an Exchange Offer by the Company
in accordance with Section 2.6(f) hereof, the requirements of this Section
2.6(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar
of the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.6(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER
RESTRICTED GLOBAL NOTE. A beneficial interest in any Restricted Global Note may
be transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer complies
with the requirements of Section 2.6(b)(ii) above and the Registrar receives the
following:
(A) if the transferee will take delivery in the
form of a beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee will take delivery in the
form of a beneficial interest in the Reg S Temporary Global Note or the Reg S
Permanent Global Note, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (2) thereof.
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(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE.
A beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note if the exchange or transfer complies
with the requirements of Section 2.6(b)(ii) above and:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the Registration Rights
Agreement and Section 2.6(f) hereof, and the holder of the beneficial interest
to be transferred, in the case of an exchange, or the transferee, in the case of
a transfer, certifies in the applicable Letter of Transmittal that it is not (1)
a Broker-Dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof; or (2) if the holder of
such beneficial interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate from such
holder in the form of Exhibit B hereto, including the certifications in item (4)
thereof; and, in each such case set forth in this subparagraph (D), an Opinion
of Counsel in form, and from legal counsel, reasonably acceptable to the
Registrar and the Company to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global
Note cannot be exchanged for, or
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transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than those listed
in subparagraphs (B) through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being
transferred to the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
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(G) if such beneficial interest is being
transferred pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2, the Trustee shall authenticate and deliver to the
Person designated in the instructions a Restricted Definitive Note in the
appropriate principal amount. Any Restricted Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this Section
2.6(c) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Restricted
Definitive Notes to the Persons in whose names such Notes are so registered.
Any Restricted Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.6(c)(I) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained
therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an Unrestricted
Definitive Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the Registration Rights
Agreement and Section 2.6(f) hereof, and the holder of such beneficial
interest, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not
(1) a Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(b) thereof;
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or (2) if the holder of such beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof; and, in
each such case set forth in this subparagraph (D), an Opinion of Counsel in
form, and from legal counsel, reasonably acceptable to the Registrar and the
Company to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note, then,
upon satisfaction of the conditions set forth in Section 2.6(b)(ii) hereof, the
Trustee shall cause the aggregate principal amount of the applicable
Unrestricted Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2, the Trustee shall authenticate and deliver to the
Person designated in the instructions an Unrestricted Definitive Note in the
appropriate principal amount. Any Unrestricted Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.6(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Unrestricted Definitive
Notes to the Persons in whose names such Notes are so registered. Any
Unrestricted Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.6(c)(iii) shall not bear the Private Placement
Legend.
(iv) TRANSFER OR EXCHANGE OF REG S TEMPORARY GLOBAL
NOTES. Notwithstanding the other provisions of this Section 2.6, a beneficial
interest in the Reg S Temporary Global Note may not be (A) exchanged for a
Definitive Note prior to (x) the expiration of the Distribution Compliance
Period (unless such exchange is effected by the Company, does not require an
investment decision on the part of the holder thereof and does not violate the
provisions of Regulation S) and (y) the receipt by the Registrar of any
certificates identified by the Company or its counsel to be required pursuant to
Rule 903(c)(3)(B) under the Securities Act or (B) transferred to a Person who
takes delivery thereof in the form of a Definitive Note prior to the events set
forth in clause (A) above or unless the transfer is pursuant to an exemption
from the registration requirements of the Securities Act other than Rule 903 or
Rule 904.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
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(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted Global
Note or to transfer such Restricted Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted Global
Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof; or
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, and in the case of clause (C) above, the Regulation S Global
Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Restricted Definitive Note to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the Registration Rights
Agreement and Section 2.6(f) hereof, and the Holder, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Registration Rights
Agreement;
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(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes
for a beneficial interest in the Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or (2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof; and, in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form, and from legal counsel, reasonably acceptable to
the Registrar and the Company to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act. Upon satisfaction of the
conditions of any of the subparagraphs in this Section 2.6(d)(ii), the Trustee
shall cancel the Restricted Definitive Notes so transferred or exchanged and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL
INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any time.
Upon receipt of a request for such an exchange or transfer, the Trustee shall
cancel the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes. If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) of this
Section 2.6(d) at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.6(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any
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additional certifications, documents and information, as applicable, required
pursuant to the following provisions of this Section 2.6(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule
903 or Rule 904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the Securities Act, then
the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
DEFINITIVE NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted Definitive Note
if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the Registration Rights
Agreement and Section 2.6(f) hereof, and the Holder, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes
for an Unrestricted
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Definitive Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or (2) if the
Holder of such Restricted Definitive Notes proposes to transfer such Notes to
a Person who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof; and, in each such
case set forth in this subparagraph (D), an Opinion of Counsel in form, and
from legal counsel, reasonably acceptable to the Registrar and the Company
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
DEFINITIVE NOTES. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.2 and
an Opinion of Counsel for the Company as to certain matters discussed in this
Section 2.6(f), the Trustee shall authenticate (I) one or more Unrestricted
Global Notes in an aggregate principal amount equal to the sum of (A) the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not Broker-Dealers, (y) they are not participating
in a distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the Exchange
Offer and (B) the principal amount of Definitive Notes exchanged or transferred
for beneficial interests in Unrestricted Global Notes in connection with the
Exchange Offer pursuant to Section 2.6(d)(ii), (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer (other than
Definitive Notes described in clause (I)(B) immediately above) and (iii)
Restricted Definitive Notes in an aggregate principal amount equal to the
principal amount of Restricted Definitive Notes accepted for exchange in a
private exchange offer pursuant to the terms of the Registration Rights
Agreement. Concurrently with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted Global Notes
to be reduced accordingly, and the Company shall execute and, upon receipt of an
Authentication Order pursuant to Section 2.2, the Trustee shall authenticate and
deliver to the Persons designated by the Holders of Definitive Notes so accepted
Definitive Notes in the appropriate principal amount.
The Opinion of Counsel for the Company referenced above shall
state that: the issuance and sale of the Exchange Notes by the Company have been
duly authorized and, when
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executed and authenticated in accordance with the provisions of this
Indenture and delivered in exchange for Series A Notes in accordance with
this Indenture and the Exchange Offer, will be entitled to the benefits of
this Indenture and will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except as the
enforceability thereof may be limited by (x) bankruptcy, fraudulent transfer,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (y) equitable principles of general applicability
(regardless of whether enforceability is considered at equity or in law).
(g) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE
DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED UNDER THE INDENTURE PURSUANT
TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(1)(A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM
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THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), AS LONG AS THE REGISTRAR
RECEIVES A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL AND EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTION SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global
Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii), (f)(I) or (f)(ii) to this
Section 2.6 (and all Notes issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
(ii) GLOBAL NOTE LEGEND. To the extent required by the
Depositary, each Global Note shall bear legends in substantially the following
forms:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.6(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY."
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY
THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
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CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(iii) REG S TEMPORARY GLOBAL NOTE LEGEND. To the extent
required by the Depositary, each Reg S Temporary Global Note shall bear a legend
in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
NOTE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE
PERIOD WHICH SUCH HOLDER HOLDS THIS NOTE. NOTHING IN THIS LEGEND SHALL
BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS NOTE."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or cancelled in whole and not in part, each such Global Note shall be returned
to or retained and cancelled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement may be made on such Global Note
by the Trustee or by the Depositary at the direction of the Trustee to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement may be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order.
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(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10
and 3.6 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon
any registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same Indebtedness,
and entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of mailing of a notice of
redemption under Section 3.2 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a Record Date and the next succeeding Interest Payment
Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on such
Notes and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.2 hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this Section 2.6
to effect a registration of transfer or exchange may be submitted by facsimile.
(ix) Each Holder of a Note agrees to indemnify the
Company and the Trustee against any liability that may result from the transfer,
exchange or assignment of
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such Holder's Note in violation of any provision of this Indenture and/or
applicable United States Federal or state securities law.
(x) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or among
Depositary Participants or beneficial owners of interests in any Global Note)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
Notwithstanding anything herein to the contrary, as to any
certifications and certificates delivered to the Registrar pursuant to this
Section 2.6, the Registrar's duties shall be limited to confirming that any such
certifications and certificates delivered to it are in the form of Exhibits A,
B, C and D attached hereto. The Registrar shall not be responsible for
confirming the truth or accuracy of representations made in any such
certifications or certificates.
Section 2.7 Replacement Notes
If any mutilated Note is surrendered to the Trustee or the Company
and the Trustee and the Company receive evidence (which evidence may be from the
Trustee) to their satisfaction of the destruction, loss or theft of any Note,
the Company shall issue and the Trustee, upon receipt of an Authentication
Order, shall authenticate a replacement Note if the Trustee's requirements are
met. An indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if
a Note is replaced. The Company may charge for its expenses in replacing a
Note. Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.8 Outstanding Notes
The Notes outstanding at any time are all the Notes authenticated
by the Trustee (including any Note represented by a Global Note) except for
those cancelled by it or at its direction, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.9 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note. If a Note is replaced pursuant to Section 2.7 hereof,
such Note ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a BONA FIDE purchaser.
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If the principal amount of any Note is considered paid under Section 4.1
hereof, it ceases to be outstanding and interest on it ceases to accrue. If
the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any
thereof) holds, on a redemption date or the maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes
shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.9 Treasury Notes
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Affiliate of the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded.
Section 2.10 Temporary Notes
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of Definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Definitive Notes in exchange for temporary Notes. Holders of
temporary Notes shall be entitled to all of the benefits of this Indenture.
Section 2.11 Cancellation
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent (other than the Company or an Affiliate of the Company), and no one else
shall cancel all Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall dispose of cancelled Notes in
accordance with its customary procedures (subject to the record retention
requirement of the Exchange Act). The Trustee shall provide the Company a list
of all Notes that have been cancelled from time to time as requested by the
Company. The Company may not issue new Notes to replace Notes that it has paid
or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest
Any interest on any Note 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
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the defaulted interest at the rate and in the manner provided in Section 4.1
hereof and in the Note (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 Notes 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 and the Paying Agent in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the
date of the proposed payment, and at the same time the Company shall
deposit with the Paying Agent an amount of cash equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements reasonably satisfactory to the Paying Agent 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
Paying Agent 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 Paying Agent of the notice of the proposed
payment. The Paying Agent shall promptly notify the Company and the
Trustee 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 its address as it appears
in the Note register maintained by the Registrar 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 Notes (or their respective predecessor Notes) 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 Notes may be listed,
and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee and the Paying Agent of the
proposed payment pursuant to this clause, such manner shall be deemed
practicable by the Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
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Section 2.13 CUSIP NUMBERS
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION
Section 3.1 Notices to Trustee
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at
least 40 days (unless a shorter period is acceptable to the Trustee) but not
more than 60 days (unless a longer period is acceptable to the Trustee) before a
redemption date, an Officers' Certificate setting forth (I) the clause of this
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption
price.
Section 3.2 Selection of Notes to Be Redeemed
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
PRO RATA basis, by lot or in accordance with any other method the Trustee in its
sole discretion considers fair and appropriate. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes in denominations of larger than $1,000 selected shall be in amounts of
$1,000 or integral multiples of $1,000; except that if all of the Notes of a
Holder are to be redeemed, the entire outstanding amount of Notes held by such
Holder, even if not an integral multiple of $1,000, shall be redeemed. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption also apply to portions of Notes called for
redemption.
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Section 3.3 Notice of Redemption
Subject to the provisions of Section 3.7 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed (including the
CUSIP numbers) and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to accrue
on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 10 days prior to the date
that notice of the redemption is to be mailed, an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the preceding paragraph.
Section 3.4 Effect of Notice of Redemption
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Once notice of redemption is mailed in accordance with Section 3.3
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.5 Deposit of Redemption Price
Prior to 11:00am, New York time, on the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent immediately
available funds sufficient to pay the redemption price of and accrued and unpaid
interest (and Liquidated Damages, if any) on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued and unpaid
interest (and Liquidated Damages, if any) on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest Record Date but on or prior to the related Interest
Payment Date, then any accrued and unpaid interest (and Liquidated Damages, if
any) shall be paid to the Person in whose name such Note was registered at the
close of business on such Record Date. If any Note called for redemption shall
not be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the redemption date until such principal is paid, and to
the extent lawful on any interest not paid on such unpaid principal compounded
as of each Interest Payment Date, in each case at the rate provided in the Notes
and in Section 4.1 hereof.
Section 3.6 Notes Redeemed in Part
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
Section 3.7 Optional Redemption
(a) The Company will have the right to redeem the Notes, in
whole or in part, at any time and from time to time, upon not less than 30
nor more than 60 days prior notice mailed by first class mail to each Holder
at its last registered address, at a redemption price equal to the sum of (1)
100% of the principal amount of the Notes being redeemed, plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the redemption
date, and (2) the Make-Whole Amount, if any, with respect to such Notes.
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(b) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Sections 3.1 through 3.6 hereof.
Section 3.8 No Mandatory Redemption
The Company shall not be required to make mandatory redemption
payments with respect to the Notes (however, the Company is required to offer to
repurchase Notes in accordance with the provisions of Section 4.8 below). The
Notes shall not have the benefit of any sinking fund.
ARTICLE IV
COVENANTS
Section 4.1 Payment of Notes
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 12:00 noon Eastern time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due.
The Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement and
herein. Principal of and any interest or Liquidated Damages on the Notes will
be payable, subject to any applicable laws and regulations, at the offices of
the Paying Agent, except that, at the Company's option, payment of any interest
or Liquidated Damages may be made by check mailed to the address of the person
entitled thereto as such address appears in the Security Register.
Any payment due on any day that is not a Business Day need not be
made on such day, but may be made on the next succeeding Business Day, with the
same force and effect as if made on the due date, and no interest or Liquidated
Damages will be payable on the date of payment for the period from and after the
due date.
The Company shall pay interest (including Accrued Bankruptcy
Interest in any proceeding under any Bankruptcy Law) on overdue principal at the
then applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including Accrued Bankruptcy Interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any, compounded as of each Interest Payment Date (without regard to any
applicable grace period) at the same rate to the extent lawful.
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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 (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes 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 Corporate Trust
Office.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such additional
designations; PROVIDED that no such designation or recission 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. 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 designates the Corporate Trust Office as one
such office or agency of the Company in accordance with Section 2.3 hereof.
Section 4.3 SEC Reports and Reports to Holders
(a) Regardless of whether required by the rules and regulations
of the SEC, so long as any Notes are outstanding, the Company will furnish to
the Trustee and each Holder of Notes, within 15 days after the Company is or
would have been required to file with the SEC:
(1) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such forms, including for
each a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information only,
a report thereon by the Company's independent certified public
accountants; and
(2) all information that would be required to be
contained in a filing with the SEC on Form 8-K if the Company were
required to file such reports.
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From and after the time the Company files a registration statement with
the SEC with respect to the Notes, the Company will file the above information
with the SEC so long as the SEC will accept such filings.
(b) For so long as any Notes remain outstanding and during any
period in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company
shall make available (which shall include filings by EDGAR) to all Holders and
to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(c) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.4 Compliance Certificate
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and 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 and its Subsidiaries
have kept, observed, performed and fulfilled their obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company and its
Subsidiaries are not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred and be continuing, describing all such Defaults or
Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to the best
of his or her knowledge no event has occurred and remains in existence by reason
of which payments on account of the principal of or interest, if any, on the
Notes is prohibited or if such event has occurred, a description of the event
and what action the Company is taking or proposes to take with respect thereto.
The Company shall provide the Trustee with timely written notice of any change
in its fiscal year end, which is currently December 31.
(b) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, within five Business Days of any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section 4.5 Stay, Extension and Usury Laws
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The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.6 Limitation on Liens Securing Indebtedness
So long as any of the Notes remain outstanding, the Company will
not, and will not permit any of its Subsidiaries to, create or assume any
Indebtedness which is secured by a Lien, other than Permitted Liens, of or upon
any of its assets or those of its Subsidiaries, whether now owned or hereafter
acquired, without equally and ratably securing the Notes by a Lien ranking
ratably with and equal to (or, at the Company's option or in the case of liens
securing Indebtedness ranked subordinate to the Notes, senior to) such secured
Indebtedness.
Section 4.7 Limitation on Transactions with Affiliates
The Company will not, and will not permit any of its Subsidiaries
to, enter into or permit to exist any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property,
employee compensation arrangements or the rendering of any service) with any of
its Affiliates (an "Affiliate Transaction") unless the terms thereof
(1) are materially no less favorable to the Company or its
Subsidiary than those that could be obtained at the time of such
transaction in arm's-length dealings with a Person who is not an
Affiliate;
(2) if such Affiliate Transaction (or series of related
Affiliate Transactions) involve aggregate payments in an amount in excess
of $10 million in any one year, (x) comply with the terms described in
clause (1) and (y) have been approved by a majority of the disinterested
members of the Board of Directors; and
(3) if such Affiliate Transaction (or series of related
Affiliate Transactions) involve aggregate payments in an amount in excess
of $20 million in any one year, (x) comply with the terms described in
clause (2) and (y) have been determined by a nationally recognized
investment banking, accounting or qualified appraisal firm to be fair,
from a financial standpoint, to the Company and its Subsidiaries.
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The provisions described above will not prohibit
(1) any issuance of securities or any payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock option and stock ownership plans and other
stock-based employee compensation in the ordinary course of business and
approved by the Board of Directors,
(2) the grant of stock options or similar rights to the
Company's employees, officers and directors or those of any of its
Subsidiaries in the ordinary course of business and pursuant to plans
approved by the Board of Directors,
(3) loans or advances to the Company's employees, officers or
directors or those of any of its Subsidiaries in the ordinary course of
business,
(4) fees, compensation or employee benefit arrangements paid to
and indemnity provided for the benefit of the Company's directors,
officers or employees or those of any of its Subsidiaries in the ordinary
course of business,
(5) any Affiliate Transaction between the Company and its
Subsidiary or Joint Venture, or between any of its Subsidiaries or Joint
Ventures (so long as the other stockholders or partners of any
participating Subsidiaries or Joint Ventures which are not the Company's
wholly owned Subsidiaries are not themselves the Company's Affiliates)
and
(6) any transactions effected pursuant to agreements in effect
on the Issue Date; PROVIDED, that such transactions are effected pursuant
to terms substantially similar to the terms of such agreements as in
effect on the Issue Date.
Section 4.8 Repurchase of Notes at the Option of the Holder if the ABR Merger
Has Not Been Consummated
If the merger of Spring Acquisition Corp., a Florida corporation
and a wholly-owned subsidiary of the Company into ABR has not been consummated
on or before December 31, 1999 on terms substantially similar to those contained
in the ABR Merger Agreement, except for such changes therein as would not
materially adversely affect the Holders of the Notes (the "ABR Event"), each
Holder of Notes will have the right (the "Repurchase Right"), at such holder's
option, subject to the terms and conditions of this Indenture, to require the
Company to repurchase all of such Holder's Notes, or any portion thereof which
equals $1,000 or any integral multiple thereof, on the date (the "Repurchase
Date") fixed by the Company that is not less than 45 days nor more than 75 days
after the date of the Company Notice (as defined) at a price equal to 100% of
the principal amount of the Notes validly tendered and not
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withdrawn, plus accrued and unpaid interest, if any, to the Repurchase Date (the
"Repurchase Price").
Within 30 days after the occurrence of the ABR Event, the Company
is obligated to send, by first class mail, to the Trustee and to each Holder of
the Notes a notice (the "Company Notice") of the occurrence of the ABR Event and
the Repurchase Right arising as a result, thereof, setting forth, among other
things, the terms and conditions of, and the procedures required for the
exercise of, the Repurchase Right (the "Repurchase Offer"). Such Company Notice
shall contain all instructions and materials necessary to enable the Holders to
tender Notes pursuant to the Repurchase Offer. Such Notice shall state:
(1) that the Repurchase Offer is being made pursuant to this
Section 4.8 and that all Notes validly tendered and not withdrawn will be
accepted for payment;
(2) the Repurchase Price and the Repurchase Date;
(3) that any Notes not tendered will continue to accrue
interest if interest is then accruing;
(4) that, unless the Company defaults in making payment
therefor, any Notes accepted for payment pursuant to the Repurchase Offer
shall cease to accrue interest after the Repurchase Date;
(5) that Holders electing to have Notes purchased pursuant to
the Repurchase Offer will be required to deliver at or before the close
of business on the Repurchase Date a written notice either to the Company
or an agent designated by the Company for such purpose (the "Offer
Agent") and the Trustee of the Holder's exercise of the Repurchase Right
specifying the Notes with respect to which such right is being exercised;
(6) that Holders will be entitled to withdraw their election if
the Offer Agent receives, not later than close of business on the
Business Day immediately prior to the Repurchase Date, a written notice
setting forth the name of the Holder, the principal amount of the Notes
the Holder delivered for repurchase and a statement that such Holder is
withdrawing its election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased part or
of the Notes surrendered; and
(8) the circumstances and relevant facts regarding such ABR
Event.
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To exercise the Repurchase Right, a Holder of Notes must deliver
at or before the close of business on the Business Day immediately prior to the
Repurchase Date written notice to the Company (or an agent designated by the
Company for such purpose) and the Trustee of the Holder's exercise of the
Repurchase Right specifying the Notes with respect to which the right is being
exercised. A notice of exercise may be withdrawn by the Holder by a written
notice of withdrawal delivered to the Company or its agent at any time at or
before the close of business on the Business Day immediately prior to the
Repurchase Date.
On or before the Repurchase Date, the Company shall (I) accept for
payment Notes or portions thereof tendered pursuant to the Repurchase Offer,
(ii) deposit with the Offer Agent U.S. Dollars sufficient to pay the Repurchase
Price of all Notes or portions thereof so tendered and accepted and (iii)
deliver to the Trustee Notes so accepted together with an Officers' Certificate
stating the Notes or portions thereof being purchased by the Company. The
Offer Agent shall promptly mail or deliver to the Holders of Notes so accepted
payment in an amount equal to the Repurchase Price and the Company shall execute
and issue, and the Trustee shall promptly authenticate and mail or deliver to
such Holders, new Notes equal in principal amount to any unpurchased portion of
the Notes surrendered. Any Notes not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Repurchase Offer as soon as practicable after the
Repurchase Date.
The Company will comply with Rule 14e-1 under the Exchange Act to
the extent applicable at that time and with all other applicable federal and
state securities laws in connection with the Repurchase Right and in the event
compliance with such laws would conflict with the terms of this covenant,
compliance with such laws shall not be declared a breach of this covenant.
This Section 4.8 does not permit the Board of Directors to waive
or otherwise amend the Company's obligation to repurchase the Notes at the
option of the Holders pursuant to the Repurchase Right upon the occurrence of
the ABR Event without the consent of each such Holder.
Section 4.9 Corporate Existence
Subject to Article V hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (I) its
corporate existence in accordance with its organizational documents (as the same
may be amended from time to time) and (ii) its rights (charter and statutory);
PROVIDED, HOWEVER, that the Company shall not be required to preserve any such
right if the Board of Directors shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Company and
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its Subsidiaries, taken as a whole, and that the loss thereof would not have a
material adverse effect on the ability of the Company to satisfy its obligations
under the Notes and this Indenture.
Section 4.10 Limitation on Sale and Lease-Back Transactions
So long as any of the Notes remain outstanding, the Company will
not, and will not permit any Subsidiary to, enter into any sale and lease-back
transactions with respect to any assets (other than any sale leaseback
transaction involving leases for a term of not more than three years), unless
either
(a) it relates to the Company's headquarters building now under
construction or any real property now owned by ABR,
(b) the Company or such Subsidiary would be entitled to incur
Indebtedness secured by a Permitted Lien on the assets to be leased in an
amount at least equal to the Attributable Debt in respect of such
transaction, or
(c) the proceeds of the sale of the assets to be leased are at
least equal to their fair market value (as determined by the Company's
Board of Directors) and the proceeds are applied to the purchase or
acquisition (or, in the case of real property, the construction) of
tangible assets or to the retirement (other than at maturity or pursuant
to a mandatory sinking fund or mandatory redemption provision) of the
Company's Indebtedness for money borrowed which ranks PARI PASSU to the
Notes.
ARTICLE V
SUCCESSORS
Section 5.1 Merger, Consolidation and Sale of Assets
The Company shall not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or, directly
or indirectly, sell, assign, transfer, lease, convey or otherwise dispose of (or
cause or permit any of its Subsidiaries to sell, assign, transfer, lease, convey
or otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis) to any Person, unless:
(1) either (a) the Company is the surviving or continuing
corporation or (b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition all or substantially all of the Company's assets (the
"Surviving Entity") (x) is a corporation organized and validly existing
under
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the laws of the United States or any state thereof or the District
of Columbia and (y) expressly assumes, by supplemental indenture (in form
and substance satisfactory to the Trustee) executed and delivered to the
Trustee, the due and punctual payment of the principal of, and Liquidated
Damages, if any, and interest on, all of the Notes and the performance of
every covenant of the Notes, the Indenture and the Registration Rights
Agreement on the part of the Company to be performed or observed by the
Company;
(2) immediately before and immediately after giving effect to
the transaction and the assumption described in clause (1)(b)(y) above,
no Default or Event of Default has occurred and is continuing; and
(3) the Company or the Surviving Entity has delivered to the
Trustee an officers' certificate and an opinion of counsel, each stating
that the consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture, comply with the applicable provisions of this Indenture and
that all conditions precedent in this Indenture relating to the
transaction have been satisfied.
For purposes of the foregoing description, the transfer (by lease,
assignment, sale or otherwise in a single transaction or series of transactions)
of all or substantially all of the assets of one or more of the Company's
Subsidiaries, the Capital Stock of which constitutes all or substantially all of
the Company's assets, will be deemed to be the transfer of all or substantially
all of the Company's assets.
Section 5.2 Successor Corporation Substituted
Upon any consolidation combination or merger or any transfer of
all or substantially all of the assets of the Company in accordance with Section
5.1 hereof, in which the Company is not the continuing corporation, the
Surviving Entity formed by such consolidation or into which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to and be substituted for, and may exercise
every right and power of, the Company under this Indenture and the Notes with
the same effect as if such Surviving Entity had been named therein as the
Company, and (except in the case of a lease) the Company shall be released from
the obligations under the Notes and this Indenture except with respect to any
obligations that arise from, or are related to, such transaction.
ARTICLE VI
DEFAULTS AND REMEDIES
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Section 6.1 Events of Default
"Event of Default," wherever used herein, means any one of the
following events:
(a) the failure by the Company to pay any installment of
interest (or Liquidated Damages, if any) on the Notes as and when the same
becomes due and payable and the continuance of any such failure for 30 days;
(b) the failure by the Company or any Subsidiary of the Company
to pay all or any part of the principal, or premium, if any, on the Notes when
and as the same becomes due and payable at maturity, redemption, by acceleration
or otherwise;
(c) failure by the Company or any Subsidiary of the Company to
perform any other covenant in this Indenture, continued for 30 days after notice
from the Trustee or Holders of at least 25% in principal amount of the Notes
then outstanding;
(d) (x) the Company or any of its Subsidiaries fails to pay
any of the Company's Indebtedness under one or more agreements or instruments
evidencing an aggregate principal amount of Indebtedness equal to at least $15
million (or its equivalent in any other currency or currencies) as and when that
Indebtedness becomes due and payable, after the expiration of any applicable
grace period, or
(y) any other event occurs which, under one or more
agreements or instruments evidencing the Company's Indebtedness of or that of
any Subsidiary, obligates the Company or its Subsidiary to pay an aggregate
principal amount of Indebtedness equal to at least $15 million (or its
equivalent in any other currency or currencies) prior to the date on which it
otherwise would have become due and payable; and
(e) a court having jurisdiction enters a decree or order for
(A) relief in respect of the Company or any Significant Subsidiary in an
involuntary case under any applicable Bankruptcy Law now or hereafter in effect,
(B) appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs of
the Company or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or
(f) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable Bankruptcy Law now or hereafter in effect,
or consents to the entry of an order for relief in an involuntary case under any
such law, (B) consents to the appointment of or taking possession by a receiver,
liquidator, custodian, trustee, sequestrator
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or similar official of the Company or any Significant Subsidiary or for all
or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) effects any general assignment for the benefit
of creditors.
The term "Bankruptcy Law" means the Bankruptcy Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, liquidator or similar official under any Bankruptcy Law.
Section 6.2 Acceleration
If an Event of Default (other than an Event of Default specified
in clause (e) or (f) of Section 6.1 that occurs with respect to the Company)
occurs and is continuing under this Indenture, 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 at least 25% in aggregate principal amount
of the Notes then outstanding by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest of all of the Notes to be due and payable immediately. If an
Event of Default described in clause (e) or (f) of Section 6.1 occurs, all
unpaid principal of, premium, if any, and accrued interest and Liquidated
Damages on the Notes then outstanding will ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder.
At any time after such a declaration of acceleration with respect
to the Notes has been made, but before a judgment or decree based on such
acceleration has been obtained, the Holders of not less than a majority in
aggregate principal amount of then outstanding Notes, by written notice to the
Company and the Trustee, may rescind and annul, on behalf of all Holders, any
such acceleration if:
(1) the Company has paid or deposited with the Trustee cash sufficient
to pay: (a) all overdue interest and Liquidated Damages, if any,
on all Notes; (b) the principal of (and premium, if any,
applicable to) any Notes which would become due other than by
reason of such declaration of acceleration, and interest thereon
at the rate borne by the Notes; (c) to the extent that payment of
such interest is lawful, interest upon overdue interest at the
rate borne by the Notes compounded as of each Interest Payment
Date; (d) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee and its agents and counsel, and all other amounts
due the Trustee under Section 7.7; and
(2) all Events of Default, other than the non-payment of the principal
of, premium, if any, and interest (and Liquidated Damages, if any)
on the Notes
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which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section
6.4.
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 (i) any covenant or provision which cannot be modified or amended
without the consent of the Holder of each outstanding Note affected thereby,
unless all such affected Holders agree, in writing, to waive such Event of
Default or other event and (ii) any provision or covenant requiring
supermajority approval to amend, unless such default has been waived by such a
supermajority. No such waiver shall cure or waive any subsequent default or
impair any right consequent thereon.
Section 6.3 Other Remedies
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.4 Waiver of Past Defaults
Subject to Section 6.7, the Holders of at least a majority in
principal amount of the outstanding Notes by written notice to the Company and
to the Trustee, may, on behalf of all Holders, waive any existing or past
Default or Event of Default hereunder and its consequences under this Indenture,
except a default:
(1) in the payment of principal of, premium, if any, or
interest on any Note not yet cured as specified in clauses
(a) and (b) of Section 6.1 hereof;
(2) 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 Note affected,
unless all such affected Holders agree, in writing, to
waive such default; or
(3) the rescission of which would conflict with any judgment or
decree of a court of competent jurisdiction.
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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 any right arising therefrom.
Section 6.5 Control by Majority
Holders of at least a majority in aggregate principal amount of
the then outstanding Notes may direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, that the Trustee
determines in good faith may be unduly prejudicial to the rights of other
Holders of Notes not joining in the giving of such direction or that may involve
the Trustee in personal liability and the Trustee may take any other action it
deems proper that is not inconsistent with any such direction received from
Holders of the Notes.
Section 6.6 Limitation on Suits
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of
a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
of the then outstanding Notes make a written request to the Trustee to pursue
the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any costs, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
Section 6.7 Rights of Holders of Notes to Receive Payment
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Notwithstanding any other provision of this Indenture, except as
permitted by Section 9.2, the right of any Holder of a Note to receive payment
of the principal of, premium and Liquidated Damages, if any, and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase) or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 6.8 Collection Suit by Trustee
If an Event of Default specified in Section 6.1 occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest compounded as of each Interest Payment Date and such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim
The Trustee is authorized to file such proofs of claim and 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 agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian 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 to
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 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. 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 Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
PROVIDED, HOWEVER that the Trustee may, on behalf of the Holders, vote for the
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election of a trustee in bankruptcy or similar official and may be a member of
the creditor's committee.
Section 6.10 Priorities
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection (including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel);
SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any, and interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a Record Date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs
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 or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.7 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee
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(a) If an Event of Default of which the Trustee has knowledge
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 its exercise, as a prudent man would exercise or use under the
circumstances in the conduct of its own affairs.
(b) Except during the continuance of an Event of Default of
which the Trustee has knowledge:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) 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 liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by an Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) 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 6.5 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
Sections 7.1 and 7.2.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
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(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.2 Rights of Trustee
(a) In connection with the Trustee's rights and duties under
this Indenture, the Trustee may conclusively rely upon 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 under this
Indenture, it may require an Officers' Certificate or an Opinion of Counsel or
both. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
The Trustee may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(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 taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(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 or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) Except with respect to Section 4.1 hereof, 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(a), 6.1(b) and 4.1 or (ii) any Default or
Event of Default of which a Responsible Officer of the Trustee shall have
received
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written notification in the manner set forth in this Indenture or an
officer in the corporate trust department of the Trustee shall have obtained
actual knowledge.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee may, in its discretion, make such further inquiry or investigation
into such facts or matters as it may see fit.
(i) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys.
(j) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
Section 7.3 Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the TIA) it must eliminate such conflict within 90 days,
apply to the SEC for permission to continue as trustee or resign. Any Agent may
do the same with like rights and duties. The Trustee is also subject to
Sections 7.10 and 7.11 hereof.
Section 7.4 Trustee's Disclaimer
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.5 Notice of Defaults
If a Default or Event of Default occurs and is continuing and if
it is actually known to a Responsible Officer of the Trustee, the Trustee shall
mail to Holders of Notes a
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notice in the manner and to the extent provided by Section 313-C- of the TIA
of the Default or Event of Default within 90 days after it occurs. Except in
the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice
if and so long as, in good faith, it determines that withholding the notice
is in the interests of the Holders of the Notes.
Section 7.6 Reports by Trustee to Holders of the Notes
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the 12
months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall
also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange and of any delisting thereof.
Section 7.7 Compensation and Indemnity
The Company shall 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 its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses
incurred or made by it in addition to the compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee or any predecessor
Trustee and their agents for, and hold them harmless against, any and all
losses, liabilities, damages, claims or expenses (including reasonable
attorneys' fees and taxes (other than taxes based upon, measured by or
determined by the income or revenue of the Trustee) incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.7) and defending
itself against any claim (whether asserted by the Company or any Holder or
any other Person) or liability in connection with the exercise or performance
of any of its powers or duties hereunder, except to the extent any such loss,
liability, damages, claims or expense may be attributable to its negligence,
bad faith or willful misconduct. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations
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hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel but shall
not be indemnified by the Company for the fees and expenses of such counsel
except to the extent that a conflict exists with respect to the
representation of both parties by the same counsel. The Company need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section
which become past due, the Trustee shall have a Lien prior to the Notes on
all money or property held or collected by the Trustee, except that held in
trust to pay principal and interest on particular Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Sections 6.1(e) or 6.1(f) hereof occurs, the
expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.8 Replacement of Trustee
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of
Notes of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of
a successor Trustee, at the expense of the Company.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, 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. The successor Trustee shall mail a notice of
its succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee;
PROVIDED all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.7 hereof. Notwithstanding replacement
of the Trustee pursuant to this Section 7.8, the Company's obligations under
Section 7.7 hereof shall continue for the benefit of the retiring Trustee.
Section 7.9 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall
be the successor Trustee.
Section 7.10 Eligibility; Disqualification
There shall at all times be a Trustee hereunder that is a
corporation or trust company (or a member of a bank holding company)
organized and doing business under the laws of the United States of America
or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has (or the bank holding company of
which it is a member has) a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
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This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject
to TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE;
SATISFACTION AND DISCHARGE
Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article
VIII.
Section 8.2 Legal Defeasance and Discharge
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.2, the Company shall, subject to the
satisfaction of the applicable conditions set forth in Section 8.4 hereof, be
deemed to have been discharged from its obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.5 hereof and
the other Sections of this Indenture referred to in (a) and (b) below, and to
have satisfied all its other obligations under such Notes and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Notes to receive solely
from the trust fund described in Section 8.4 hereof, and as more fully set
forth in such Section, payments in respect of the principal of, premium, if
any, and interest and Liquidated Damages, if any, on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes
under Article II and Section 4.2 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations
in connection therewith and (d) this Article VIII. Subject to compliance with
this Article VIII,
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the Company may exercise its option under this Section 8.2 notwithstanding
the prior exercise of its option under Section 8.3 hereof.
Section 8.3 Covenant Defeasance
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, subject to the satisfaction of the
applicable conditions set forth in Section 8.4 hereof, the Company shall be
released from its obligations under Sections 4.3, 4.4, 4.6, 4.7, 4.8 and 4.10
hereof on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall
not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event of Default under Section 6.1 hereof,
but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.1 hereof of the option applicable to this Section 8.3 hereof,
subject to the satisfaction of the applicable conditions set forth in Section
8.4 hereof, (x) Sections 6.1-C- and 6.1(d) hereof shall not constitute Events
of Default and (y) Sections 6.1(e) and 6.1(f) shall not constitute Events of
Default as of the 91st day following the occurrence of the Company's exercise
of Covenant Defeasance; PROVIDED, HOWEVER that for all other purposes as set
forth herein, such Covenant Defeasance provisions shall be effective.
Section 8.4 Conditions to Legal or Covenant Defeasance
The following shall be the conditions to the application of
either Section 8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) The Company must make an irrevocable deposit (a
"Deposit") with the Trustee, in trust, for the benefit of the Holders, of
U.S. Dollars or U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium, if
any, and interest on such Notes on the stated date for payment thereof or on
the applicable redemption date, as the case may be, of such principal or
installment of principal of or interest on such Notes; provided, that the
Trustee shall have received an irrevocable written
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order from the Company instructing the Trustee to apply such U.S. Dollars or
the proceeds of such U.S. Government Obligations to said payments with
respect to such Notes.
(b) In the case of an election under Section 8.2 hereof, the
Company shall have delivered to the Trustee an opinion of nationally
recognized tax counsel confirming that (A) the Company has received from, or
there has been published by, the U.S. Internal Revenue Service a ruling or
(B) since the date of the Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and
based thereon such opinion of nationally recognized tax counsel shall confirm
that the Holders will not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
(c) In the case of an election under Section 8.3 hereof, the
Company shall have delivered to the Trustee an opinion of nationally
recognized tax counsel confirming that the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) No Default or Event of Default shall have occurred and
be continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this Article
VIII concurrently with such incurrence);
(e) Such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of or constitute a default under this
Indenture or any other material agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company of any of its
Subsidiaries is bound;
(f) The Company shall have delivered to the Trustee an
Officers' Certificate stating that (I) the Deposit was not made with intent
to hinder, delay, or defraud any of the Company's creditors;
(g) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent (other than, in the case of such legal opinion,
paragraph (f) as to which such counsel need express no opinion) provided for
or relating to the Legal Defeasance or the Covenant Defeasance have been
complied with; and
(h) The Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that on and after the 90th day after the
Deposit, and assuming that no
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Holder is a Company "insider," as that term is defined in Section 101 of
title 11, United States Code (the "Bankruptcy Code"), the cash or securities
so deposited will not be subject to avoidance and repayment under Sections
547 and 550 of the Bankruptcy Code.
If all conditions in clauses (a) through (h) have been satisfied, the
Legal or Covenant Defeasance (as the case may be) shall occur and be
effective for all purposes on the 91st day after the date of a Deposit,
unless on and as of the date of the Deposit, a Default or Event of Default
has occurred and is continuing (other than one resulting from the borrowing
of funds used to make the Deposit), or unless an Event of Default under
Section 6.1(e) or (f) herein occurs on or before and continues through the
90th day after the date of the Deposit.
Section 8.5 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions
Subject to Section 8.6 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as Paying Agent) as
the Trustee may determine, to the Holders of such Notes of all sums due and
to become due thereon in respect of principal, premium, if any, and interest
(and Liquidated Damages, if any), but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or U.S.
Government Obligations deposited pursuant to Section 8.4 hereof or the
principal and interest received in respect thereof, other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or U.S. Government Obligations held by it as
provided in Section 8.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.6 Repayment to Company
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of,
premium, if any, Liquidated Damages,
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if any, or interest on any Note and remaining unclaimed for two years after
such principal, and premium, if any, Liquidated Damages, if any, or interest
has become due and payable shall be paid to the Company on its written
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as a creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee
or such Paying Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not
be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.7 Reinstatement
If the Trustee or Paying Agent is unable to apply any United
States legal tender or U.S. Government Obligations in accordance with Section
8.2 or 8.3 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.2 or 8.3 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.2 or 8.3 hereof, as the case may be; PROVIDED, HOWEVER, that,
if the Company makes any payment of principal of, premium, if any, or
interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
Section 8.8 SATISFACTION AND DISCHARGE
Upon the direction of the Company, this Indenture will be
discharged and will cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Notes as expressly provided
for herein) as to all outstanding Notes, and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when
(1) either
(a) all the Notes theretofore authenticated and
delivered (except lost, stolen or destroyed Notes which have been
replaced or paid and Notes for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter been repaid to the Company or discharged
from such trust) have been delivered to the Trustee for
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cancellation, or
(b) all Notes not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee
in the name, and at the expense, of the Company, and
the Company, in the case of (I), (ii) or (iii)
above, has irrevocably deposited or caused to be
deposited with the Trustee funds in trust in an
amount sufficient to pay and discharge the entire
Indebtedness on such Notes not theretofore delivered
to the Trustee for cancellation, including the
principal of and any Liquidated Damages and interest
on such Notes to the date of deposit or to the
Stated Maturity or Redemption Date thereof;
(2) the Company has paid all other sums payable hereunder by
the Company in respect of the outstanding Notes; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel satisfactory to the Trustee, each
stating that all conditions precedent hereunder relating to the
satisfaction and discharge of this Indenture in respect of the Notes of
such series have been complied with.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1 Without Consent of Holders of Notes
Notwithstanding Section 9.2 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes, without the consent
of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
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(c) to provide for the assumption of the Company's
obligations to the Holders of the Notes in the case of a merger or
consolidation pursuant to Article V hereof;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely
affect the rights hereunder of any Holder of the Notes in any material
respect;
(e) to comply with the provisions of the Depositary,
Euroclear or Cedel or the Trustee with respect to the provisions of this
Indenture or the Notes relating to transfers and exchanges of Notes or
beneficial interests therein; or
(f) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof, the Trustee shall join with the Company in
the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental Indenture
that adversely affects its own rights, duties or immunities under this
Indenture or otherwise.
Section 9.2 With Consent of Holders of Notes
Except as expressly stated otherwise in this Section 9.2, and
subject to Sections 6.4 and 6.7 hereof, the Company and the Trustee may amend
or supplement this Indenture and the Notes, with the consent of the Holders
of a majority in aggregate principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, the Notes), and, subject
to Sections 6.4 and 6.7 hereof, any existing Default or Event of Default
(other than a Default or Event of Default in the payment of the principal of,
premium, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Notes (other than a provision which cannot
be modified or amended under this Indenture without the consent of the Holder
of each outstanding Note affected) may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Notes (including consents obtained in connection with a purchase of, or
tender offer or exchange offer for, the Notes).
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 to all
Holders, consideration for such Holder's
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consent to such amendment, supplement or waiver.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.6 hereof, the Trustee shall join with the Company in the execution
of such amended or supplemental Indenture unless such amended or supplemental
Indenture adversely affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.2 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes 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 amended or
supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes, except a default in the payment
of the principal or interest on any Notes or in respect of a provision which
cannot be modified or amended under this Indenture without the consent of the
Holder of each outstanding Note affected. An amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder):
(a) change the final Stated Maturity on 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 pursuant
to Article III hereof, 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 enforcement of any
such payment on or after the Stated Maturity thereof (or in the case of
redemption pursuant to Article III hereof, on or after the redemption date),
or alter the provisions (including the defined terms used herein) of Article
III of this Indenture in a manner adverse to the Holders; or
(b) reduce the percentage in principal amount of the outstanding
Notes, the consent of whose Holders is required for modification or amendment
of the Indenture or for waiver of compliance with the Indenture or for waiver
of defaults provided for in this Indenture; or
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(c) change the Company's obligation to maintain an office or agency
in the places and for the purposes specified in this Indenture; or
(d) waive or otherwise amend the Company's obligation to repurchase
the Notes at the option of the Holders pursuant to the Repurchase Right upon
the occurrence of the ABR Event pursuant to Section 4.8 hereof.
Section 9.3 Compliance with Trust Indenture Act
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents
Until an amendment, supplement or waiver becomes effective (as
determined by the Company and which may be prior to any such amendment,
supplement or waiver becoming operative), a consent to it by a Holder of a
Note is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same Indebtedness as
the consenting Holder's Note, even if notation of the consent is not made on
any Note. However, any such Holder of a Note or subsequent Holder of a Note
may revoke the consent as to its Note if the Trustee receives written notice
of revocation before the date the waiver, supplement or amendment becomes
effective (as determined by the Company).
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver, which record date shall be the date so fixed
by the Company notwithstanding the provisions of the TIA. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date, and only those
Persons (or their duly designated proxies), shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder unless it makes a change described in any of clauses
(a) through (d) of Section 9.2 hereof, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Note who has consented
to it and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note; 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 (and Liquidated Damages, if
any) on a Note, on or after the respective dates set for such amounts to
become due and payable expressed in such Note, 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 Notes
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The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall
authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.6 Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article IX if the amendment or supplement does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amendment or supplemental Indenture
until the Board of Directors approves it. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive and (subject to Section 7.1)
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.
Section 9.7 Holders of notes to vote as a single class
For all purposes under this Indenture, the Holders of the
Series A Notes and the Holders of the Series B Notes shall vote together as a
single class, unless otherwise required by law.
ARTICLE X
MISCELLANEOUS
Section 10.1 Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by the TIA, the imposed duties shall
control.
Section 10.2 Notices
Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested),
telecopier (promptly confirmed in writing) or overnight air courier
guaranteeing next day delivery, to the others' address:
If to the Company:
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Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425-1640
Telephone No.: (612) 853-8100
Telecopier No.: (612)
Attention: Chief Financial Officer
If to the Trustee:
The Bank of New York
101 Barclay, Floor 21W
New York, NY 10286
Telephone No.: (212) 815-6285
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications;
PROVIDED, that until such time, all notices under this Indenture to the
Trustee shall be sent to both of the Trustee's addresses set forth above.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; when receipt acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice or communication shall also
be so mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other
Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the
addressee receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 10.3 Communication by Holders of Notes with Other Holders of Notes
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the
71
<PAGE>
Registrar and anyone else shall have the protection of TIA Section 312(c).
Section 10.4 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:
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the statements
set forth in Section 10.5 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.5 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied.
Section 10.5 Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the
provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or
she 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 satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied; PROVIDED, HOWEVER,
that with respect to matters of fact, an Opinion of Counsel may rely on an
Officers' Certificate or certificate of public officials.
Section 10.6 Rules by Trustee and Agents
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The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
Section 10.7 No Personal Liability of Directors, Officers, Employees and
Stockholders
No past, present or future director, officer, employee,
incorporator or stockholder (direct or indirect) of the Company (or any such
successor entity), as such, shall have any liability for any Obligations of
the Company under the Notes or this Indenture or for any claim based on, in
respect of, or by reason of, such Obligations or their creation, except in
their capacity as an obligor of the Notes in accordance with this Indenture.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
Section 10.8 Governing Law
THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION,
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE
327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES.
The Company appoints The Bank of New York as its authorized
agent upon which process may be served in any action or proceeding arising
out of or based upon the Indenture or the Notes which may be instituted in
any federal or state court having subject matter jurisdiction in the Borough
of Manhattan, The City of New York, New York and will irrevocably submit to
the jurisdiction of such courts in any such action or proceeding.
Section 10.9 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of
any other Person. Any such indenture, loan or debt agreement may not be used
to interpret this Indenture.
Section 10.10 Successors
All agreements of the Company in this Indenture and the Notes
shall bind their successors. All agreements of the Trustee in this Indenture
shall bind its successors.
Section 10.11 Severability
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In case any one or more of the provisions of this Indenture or
in the Notes 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 10.12 Counterpart Originals
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 10.13 Table of Contents, Headings, Etc.
The Table of Contents and headings of the Articles and Sections
of this Indenture have been inserted for convenience of reference only, are
not to be considered a part of this Indenture and shall in no way modify or
restrict any of the terms or provisions hereof.
[SIGNATURES ON FOLLOWING PAGE]
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<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Indenture as
of the date first written above.
THE COMPANY:
CERIDIAN CORPORATION
By: /s/J. R. Eickhoff
-----------------
Name: John R. Eickhoff
Title: Executive Vice President
and Chief Financial Officer
THE TRUSTEE:
THE BANK OF NEW YORK
By: /s/Michael Cuchane
------------------
Name: Michael Cuchane
Title: Vice President
<PAGE>
Exhibit A
[FORM OF NOTE]
CERIDIAN CORPORATION
7.25% [SERIES A] [SERIES B](1) SENIOR NOTE
DUE 2004
CUSIP: 15677TAB2
No. $_______________
Ceridian Corporation, a Delaware corporation (hereinafter called the
"Company" which term includes any successors under this Indenture hereinafter
referred to), for value received, hereby promises to pay to __________, or
registered assigns, the principal sum of __________ Dollars, on June 1, 2004.
Interest Payment Dates: June 1 and December 1; commencing December 1,
1999.
Record Dates: May 15 and November 15.
Reference is made to the further provisions of this Note on the reverse
side, which will, for all purposes, have the same effect as if set forth at
this place.
- -------------------
(1) Series A should be replaced with Series B in the Exchange Notes.
A-1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
CERIDIAN CORPORATION
a Delaware corporation
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Indenture.
THE BANK OF NEW YORK
By: ____________________________
Authorized Signatory
Dated: June , 1999
<PAGE>
(Back of Note)
7.25% [Series A] [Series B](2) Senior Notes due 2004
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.](3)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
- -------------------
(2) Series A should be replaced with Series B in the Exchange Notes.
(3) To be included only on Global Notes deposited with DTC as Depositary.
A-3
<PAGE>
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](4)
- -------------------
(3) To be included only on Global Notes deposited with DTC as Depositary.
A-4
<PAGE>
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.](5)
[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), AS LONG AS THE REGISTRAR RECEIVES A CERTIFICATION OF THE TRANSFEROR
AND AN OPINION OF COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
- -------------------
(5) To be included only on Reg S Temporary Global Notes.
A-5
<PAGE>
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HERBY OF THE RESALE
RESTRICTION SET FORTH IN (A) ABOVE.]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Ceridian Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
7.25% per annum from June 10, 1999 until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 2(e) of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, semi-annually on June 1 and December 1 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the Issue Date; PROVIDED that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a Record Date
(defined below) referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; PROVIDED, FURTHER, that the first Interest Payment Date shall be December
1, 1999] The Company shall pay interest (including Accrued Bankruptcy Interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at the rate then in effect; it shall pay
interest (including Accrued Bankruptcy Interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any, (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the May 15 or
November 15 next preceding the Interest Payment Date (each a "Record Date"),
even if such Notes are cancelled after such Record Date and on or before such
Interest Payment Date, and as provided in Section 2.12 of the Indenture (as
defined below) with respect to defaulted interest. The Notes will be payable as
to principal, premium, interest and Liquidated Damages, if any, at the office or
agency of the Company maintained within the City and State of New York for such
purpose, or, at the option of the Company, payment of
A-6
<PAGE>
interest and Liquidated Damages, if any, may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and PROVIDED
that payment by wire transfer of immediately available funds to an account
within the United States will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on all Global Notes. Such
payment shall be in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private
debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated
as of June 10, 1999 ("Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms.
5. OPTIONAL REDEMPTION.
(a) The Company shall have the right to redeem the Notes, in
whole or in part, at any time and from time to time, upon not less than 30 nor
more than 60 days prior notice mailed by first class mail to each Holder at its
last registered address, at a redemption price equal to the sum of (1) 100% of
the principal amount of the Notes being redeemed, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the redemption date, and (2)
the Make-Whole Amount, if any, with respect to such Notes.
(b) Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in integral
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date, interest ceases to accrue on Notes
or portions thereof called for redemption unless the Company defaults in such
payments due on the redemption date.
A-7
<PAGE>
6. MANDATORY REDEMPTION. The Company shall not be required to make
mandatory redemption payments with respect to the Notes. The Notes shall not
have the benefit of any sinking fund.
7. OFFERS TO PURCHASE.
If the merger of Spring Acquisition Corp., a Florida corporation
and a wholly-owned subsidiary of the Company into ABR has not been consummated
on or before December 31, 1999 on terms substantially similar to those contained
in the ABR Merger Agreement, except for such changes therein as would not
materially adversely affect the Holders of the Notes (the "ABR Event"), each
Holder of Notes will have the right (the "Repurchase Right"), at such holder's
option, subject to the terms and conditions of the Indenture, to require the
Company to repurchase all of such Holder's Notes, or any portion thereof which
equals $1,000 or any integral multiple thereof, on the date (the "Repurchase
Date") fixed by the Company that is not less than 45 days nor more than 75 days
after the date of the Company Notice (as defined) at a price equal to 100% of
the principal amount of the Notes validly tendered and not withdrawn, plus
accrued and unpaid interest, if any, to the Repurchase Date (the "Repurchase
Price").
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before
the day of mailing of a notice of redemption of the Notes to be redeemed or
during the period between a Record Date and the corresponding Interest Payment
Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the
A-8
<PAGE>
Holders of at least a majority in principal amount of the then outstanding
Notes, and most existing Defaults or compliance with most provisions of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
materially adversely affect the rights under the Indenture of any such Holder,
to comply with the provisions of the Depositary, Euroclear or Cedel or the
Trustee with respect to the provisions of the Indenture or the Notes relating to
transfers and exchanges of Notes or beneficial interests therein, or to comply
with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.
11. DEFAULTS AND REMEDIES. The Indenture provides that each of the
following constitutes an Event of Default: (a) the failure by the Company to pay
any installment of interest (or Liquidated Damages, if any) on the Notes as and
when the same becomes due and payable and the continuance of any such failure
for 30 days; (b) the failure by the Company or any Subsidiary of the Company to
pay all or any part of the principal, or premium, if any, on the Notes when and
as the same becomes due and payable at maturity, redemption, by acceleration or
otherwise; (c) failure by the Company or any Subsidiary of the Company to
perform any other covenant in this Indenture, continued for 30 days after notice
from the Trustee or Holders of at least 25% in principal amount of the Notes
then outstanding; (d) (x) the Company or any of its Subsidiaries fails to pay
any of the Company's Indebtedness under one or more agreements or instruments
evidencing an aggregate principal amount of Indebtedness equal to at least $15
million (or its equivalent in any other currency or currencies) as and when that
Indebtedness becomes due and payable, after the expiration of any applicable
grace period, or (y) any other event occurs which, under one or more agreements
or instruments evidencing the Company's Indebtedness of or that of any
Subsidiary, obligates the Company or its Subsidiary to pay an aggregate
principal amount of Indebtedness equal to at least $15 million (or its
equivalent in any other currency or currencies) prior to the date on which it
otherwise would have become due and payable; (e) a court having jurisdiction
enters a decree or order for (A) relief in respect of the Company or any
Significant Subsidiary in an involuntary case under any applicable
A-9
<PAGE>
Bankruptcy Law now or hereafter in effect, (B) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company or any Significant Subsidiary or for all or substantially all of
the property and assets of the Company or any Significant Subsidiary or (C)
the windng up or liquidation of the affairs of the Company or any Significant
Subsidiary and, in each case, such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or (f) the Company or any
Significant Subsidiary (A) commences a voluntary case under any applicable
Bankruptcy Law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (B) consents to
the appointment of or taking possession by a receiver, liquidator, custodian,
trustee, sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of the
Company or any Significant Subsidiary or (C) effects any general assignment
for the benefit of creditors.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, 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.
13. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder (direct or indirect) of the
Company (or any such successor entity), as such, shall have any liability for
any Obligations of the Company under the Notes, or the Indenture or for any
claim based on, in respect of, or by reason of, such Obligations or their
creation, except in their capacity as an obligor of the Notes in accordance with
the Indenture. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
14. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder 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-10
<PAGE>
16. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED NOTES.(6) In
addition to the rights provided to Holders of Notes under the Indenture,
Holders of Transferred Restricted Notes shall have all the rights set forth
in the Registration Rights Agreement dated as of the date of the Indenture,
among the Company and the Initial Purchasers.
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon, and any such redemption shall not
be affected by any defect in or omission of such numbers.
18. GOVERNING LAW. THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425-1640
Attention: Chief Financial Officer
Telephone No.: (612) 853-8100
- --------------------
(6) To be included only on Transfer Restricted Notes.
A-11
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-----------------------
Your Signature:
-----------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*
- -------------------------------------------------------------------------------
*NOTICE: The Signature must be guaranteed by an Institution which is a member
of one of the following recognized signature Guarantee Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock
Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program
(SEMP); or (iv) in such other guarantee program acceptable to the Trustee.
A-12
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.8 of the Indenture, check the box below:
/ / Section 4.8
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.8 of the Indenture, state the amount you elect to
have purchased (in denominations of $1,000 only, except if you have elected to
have all of your Notes purchased): $___________
Date: Your Signature:
------------------------ -------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:
------------
Signature Guarantee*
- -------------------------------------------------------------------------------
*NOTICE: The Signature must be guaranteed by an Institution which is a member
of one of the following recognized signature Guarantee Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock
Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program
(SEMP); or (iv) in such other guarantee program acceptable to the Trustee.
A-13
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE (7)
THE FOLLOWING EXCHANGES OF A PART OF THIS GLOBAL NOTE FOR AN INTEREST IN
ANOTHER GLOBAL NOTES OR FOR A DEFINITIVE NOTE, OR EXCHANGES OF A PART OF ANOTHER
GLOBAL NOTE OR DEFINITIVE NOTE FOR AN INTEREST IN THIS GLOBAL NOTE, HAVE BEEN
MADE:
<TABLE>
<CAPTION>
Amount of Amount of Signature
Date of decrease Increase Principal of authorized
Exchange in Principal in Principal Amount of this signatory
-------- Amount of this Amount of this Global of Trustee or
Global Note Global Note Note following Note Custodian
-------------- -------------- such --------------
decrease (or
increase)
--------------
<S> <C> <C> <C> <C>
</TABLE>
- --------------------
(7) This should be included only if the Note is issued in global form
A-14
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425-1640
Attention: Chief Financial Officer
The Bank of New York
101 Barclay, Floor 21W
New York, NY 10286
Attention: Corporate Trust Trustee Administration
Re: 7.25% Senior Notes due 2004
Dear Sirs:
Reference is hereby made to the Indenture, dated as of June 10, 1999 (the
"Indenture"), between Ceridian Corporation, as issuer (the "Company") and The
Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture. ______________, (the
"Transferor") owns and proposes to transfer the Note[s] or interest in such
Note[s] specified in Annex A hereto, in the principal amount of $___________ in
such Note[s] or interests (the "Transfer"), to __________ (the "Transferee"),
as further specified in Annex A hereto. In connection with the Transfer, the
Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
/1./ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any State of the
United States. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or
B-1
<PAGE>
Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the 144A Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
/2./ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Distribution
Compliance Period, the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser) and the
interest transferred will be held immediately thereafter through Euroclear or
Cedel. Upon consummation of the proposed transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note and/or the Definitive Note and in
the Indenture and the Securities Act.
/3./ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE
SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any State of the United States, and accordingly the
Transferor hereby further certifies that (check one):
/ / (a) Such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act; or
/ / (b) Such Transfer is being effected to the Company; or
/ / (c) Such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery
B-2
<PAGE>
requirements of the Securities Act; or
/ / (d) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904, and the Transferor hereby further certifies that it
has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies
with the transfer restrictions applicable to beneficial interests
in a Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in a form
of Exhibit D to the Indenture and (2) if such Transfer is in
respect of a principal amount of Notes at the time of transfer of
less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification and provided to the Company, which
has confirmed its acceptability), to the effect that such Transfer
is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture,
the Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the
Definitive Notes and in the Indenture and the Securities Act.
/4./ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
/ / (a) CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes and in
the Indenture and the Securities Act.
/ / (b) CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or
B-3
<PAGE>
Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture and the Securities Act.
/ / (c) CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other
than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.
B-4
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
Dated:
--------------------------------- ----------------------------
[Insert Name of Transferor]
By:
-----------------------------
Name:
Title:
B-5
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
/ / (a) a beneficial interest in the:
/ / (i) 144A Global Note (CUSIP ), or
-----------------
/ / (ii) Regulation S Global Note (CUSIP ), or
-----------
/ / (b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
/ / (a) a beneficial interest in the:
/ / (i) 144A Global Note (CUSIP ), or
---------------
/ / (ii) Regulation S Global Note (CUSIP ), or
----------
/ / (iii) Unrestricted Global Note (CUSIP ); or
----------
/ / (b) a Restricted Definitive Note; or
/ / (c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-6
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Ceridian Corporation
8100 34th Avenue south
Minneapolis, MN 55425-1640
Attention: Chief Financial Officer
The Bank of New York
101 Barclay, Floor 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: 7.25% Senior Notes due 2004
Dear Sirs:
Reference is hereby made to the Indenture, dated as of June
10, 1999 (the "Indenture"), between Ceridian Corporation, as issuer (the
"Company") and The Bank of New York, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the
Indenture.
____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange").
In connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE.
/ / (a) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL
NOTE. In connection with the Exchange of the Owner's beneficial interest
in a Restricted Global Note for a beneficial interest in an Unrestricted
Global Note in an equal principal amount, the Owner hereby certifies (i)
the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act and
(iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky
C-1
<PAGE>
securities laws of any State of the United States.
/ / (b) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of
any State of the United States.
/ / (c) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Owner's Exchange of a Restricted Definitive Note for a
beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities
laws of any State of the United States.
/ / (d) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's
Exchange of a Restricted Definitive Note for an Unrestricted Definitive
Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is
being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and
(iv) the Unrestricted Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any State of the United
States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
/ / (a) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with
the Exchange of
C-2
<PAGE>
the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Note is being acquired
for the Owner's own account without transfer. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the
Restricted Definitive Note issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Definitive Note and in the Indenture and the
Securities Act.
/ / (b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with
the Exchange of the Owner's Restricted Definitive Note for a beneficial
interest in the: [CHECK ONE] 144A Global Note or Regulation S Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account
without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes
and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any State of
the United States. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the relevant Restricted Global Note
and in the Indenture and the Securities Act.
C-3
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-----------------------------
[Insert Name of Owner]
By:
--------------------------
Name:
Title:
Dated:
-----------------------
C-4
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
Ceridian Corporation
8100 34th Avenue South
Minneapolis, MN 55425-1640
Attention: Chief Financial Officer
The Bank of New York
101 Barclay, Floor 21W
New York, NY 10286
Attention: Corporate Trust Trustee Administration
Re: 7.25% Senior Notes due 2004
Dear Sirs:
Reference is hereby made to the Indenture, dated as of June
10, 1999 (the "Indenture"), between Ceridian Corporation, as issuer (the
"Company") and The Bank of New York, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of: (a) a beneficial interest in a Global
Note, or (b) a Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by,
and not to resell, pledge or otherwise transfer the Notes or any
interest therein except in compliance with, such restrictions and
conditions and the United States Securities Act of 1933, as amended (the
"Securities Act").
2. We understand that the offer and sale of the Notes have
not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we
should sell the Notes or any interest therein, we will do so only (A) to
the Company or any of its respective subsidiaries, (B) in accordance
with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or
has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the
D-1
<PAGE>
form of this letter and, if the proposed transfer is in respect of an
aggregate principal amount of Notes of less than $250,000, an Opinion of
Counsel in form reasonably acceptable to the Company to the effect that
such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the provisions of Rule 144 under the
Securities Act, (F) in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an
opinion of counsel acceptable to the Company) or (G) pursuant to an
effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing the Definitive Note
from us in a transaction meeting the requirements of clauses (A) through
(F) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and
the Company such certifications, legal opinions and other information as
you and the Company may reasonably require to confirm that the proposed
sale complies with the foregoing restrictions. We further understand
that the Notes purchased by us will bear a legend to the foregoing
effect. We further understand that any subsequent transfer by us of the
Notes or beneficial interest therein acquired by us must be effected
through one of the Initial Purchasers.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting
are each able to bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
D-2
<PAGE>
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Dated:
------------------------------------ --------------------------
[Insert Name of Accredited Investor]
By:
-----------------------------
Name:
Title:
D-3
<PAGE>
EXHIBIT 4.02
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of June 10, 1999 among Ceridian Corporation, a Delaware
corporation (the "COMPANY"), and Banc of America Securities LLC ("Banc of
America"), Chase Securities Inc., Bank of New York Capital Markets, Inc., TD
Securities (USA) Inc. and U.S. Bancorp Piper Jaffray Inc. (collectively, the
"INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement, dated
as of June 8, 1999 (the "PURCHASE AGREEMENT"), between the Company, as issuer of
the 7.25% Senior Notes due June 1, 2004 (the "NOTES"), and the Initial
Purchasers, which provides for, among other things, the sale by the Company to
the Initial Purchasers of the aggregate principal amount of Notes specified
therein. In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide to the Initial Purchasers and their
direct and indirect transferees the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closings under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"ADVICE" shall have the meaning set forth in the last paragraph of
Section 3(u) hereof.
"AFFILIATE" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"APPLICABLE PERIOD" shall have the meaning set forth in Section
3(u) hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in the City of New York, New York are
authorized or required by law or executive order to remain closed.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
<PAGE>
"CONSUMMATION DATE" shall have the meaning set forth in Section
2(a) hereof.
"DEPOSITARY" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; PROVIDED that such depositary must have an
address in the Borough of Manhattan, in The City of New York, New York.
"EFFECTIVE DATE" shall have the meaning set forth in Section 2(a)
hereof.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(b) hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"EXCHANGE NOTES" shall mean the 7.25% Senior Notes due June 1,
2004 issued by the Company under the Indenture containing terms identical to the
Notes (except that (x) interest thereon shall accrue from the last date on which
interest has been paid on the Notes or, if no such interest has been paid, from
the date of the original issue of the Notes and (y) they will not contain terms
with respect to transfer restrictions under the Securities Act and will not
provide for any Liquidated Damages thereon). Unless the context otherwise
indicates, the term Exchange Notes shall include Private Exchange Notes.
"EXCHANGE OFFER" shall mean the offer by the Company to the
Holders to exchange all of the Registrable Notes for a like amount of Exchange
Notes pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all exhibits
thereto and all documents incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section 2(a)
hereof.
2
<PAGE>
"FILING DATE" shall have the meaning set forth in Section 2(a)
hereof.
"HOLDER" shall mean any Initial Purchaser, for so long as it owns
any Registrable Notes, and each of its respective successors, assigns and direct
and indirect transferees who become registered owners of Registrable Notes under
the Indenture.
"INDEMNIFIED PERSON" shall have the meaning set forth in Section
4(a) hereof.
"INDEMNIFIED PERSON INFORMATION" shall have the meaning set forth
in Section 4(a) hereof.
"INDENTURE" shall mean the Indenture, dated as of June 10, 1999,
between the Company, as issuer, and The Bank of New York, as trustee, as the
same may be amended or supplemented from time to time in accordance with the
terms thereof.
"INITIAL PURCHASERS" shall have the meaning set forth in the
preamble.
"INSPECTORS" shall have the meaning set forth in Section 3(o)
hereof.
"ISSUE DATE" shall mean June 10, 1999, the date of delivery of the
Notes from the Company to the Initial Purchasers.
"LIQUIDATED DAMAGES" shall have the meaning set forth in Section
2(e) hereof.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Notes.
"NOTES" shall have the meaning set forth in the preamble to this
Agreement.
"PARTICIPATING BROKER-DEALER" shall have the meaning set forth in
Section 3(u) hereof.
"PERSON" shall mean an individual, partnership, corporation, trust
or unincorporated organization, limited liability company or a government or
agency or political subdivision thereof.
3
<PAGE>
"PRIVATE EXCHANGE" shall have the meaning set forth in Section
2(b) hereof.
"PRIVATE EXCHANGE NOTES" shall have the meaning set forth in
Section 2(b) hereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Notes covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective amendments,
and in each case including all documents incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
preamble to this Agreement.
"RECORDS" shall have the meaning set forth in Section 3(o) hereof.
"REGISTRABLE NOTES" shall mean all Notes and Private Exchange
Notes; PROVIDED, HOWEVER, that Notes shall cease to be Registrable Notes when
the earlier of the following occurs: (i) a Registration Statement with respect
to such Notes or Private Exchange Notes for the exchange or resale thereof shall
have been declared effective under the Securities Act and such Notes or Private
Exchange Notes shall have been exchanged or disposed of pursuant to such
Registration Statement, (ii) such Notes or Private Exchange Notes shall have
been sold pursuant to Rule 144(k) (or any similar provision then in force, but
not Rule 144A) under the Securities Act or are eligible to be sold without
restriction as contemplated by Rule 144(k), (iii) such Notes or Private Exchange
Notes shall have ceased to be outstanding, (iv) no Shelf Registration Event has
occurred and the Exchange Offer has concluded in accordance with the provisions
hereof, or (v) upon consummation of the Exchange Offer but only with respect to
Notes held by a Holder that are eligible to receive fully tradeable Exchange
Notes in connection with the Exchange Offer.
"REGISTRATION EXPENSES" shall mean any and all expenses incident
to performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder
4
<PAGE>
of Registrable Notes in accordance with the rules and regulations of the NASD,
(ii) all fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of one
counsel for all underwriters or Holders as a group in connection with blue sky
qualification of any of the Exchange Notes or Registrable Notes) and compliance
with the rules of the NASD, (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and distributing
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) all fees and expenses incurred in connection with the
listing, if any, of any of the Exchange Notes on any securities exchange or
exchanges, (vi) the fees and disbursements of counsel for the Company and of the
independent certified public accountants of the Company, including the expenses
of any "cold comfort" letters required by or incident to the performance of and
compliance with this Agreement, (vii) the reasonable fees and expenses of the
Trustee and its counsel and any exchange agent, escrow agent or custodian, and
(viii) any fees and disbursements of the underwriters customarily required to be
paid by issuers or sellers of securities and the reasonable fees and expenses of
any special experts retained by the Company in connection with any Registration
Statement, but excluding fees of counsel to the underwriters and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Notes by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement of
the Company which covers any Exchange Notes or Registrable Notes pursuant to the
provisions of this Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
"REPRESENTATIVE" shall have the meaning set forth in Section 3(a)
hereof.
"RULE 144(k) PERIOD" shall mean the period of two years (or such
other period as may hereafter be referred to in Rule 144(k) under the Securities
Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
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"SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.
"SHELF REGISTRATION" shall mean a registration effected pursuant
to Section 2(b) hereof.
"SHELF REGISTRATION EVENT" shall have the meaning set forth in
Section 2(b) hereof.
"SHELF REGISTRATION EVENT DATE" shall have the meaning set forth
in Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) hereof which
covers all of the Registrable Notes on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all documents incorporated by reference therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"TRUSTEE" shall mean the trustee under the Indenture.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) EXCHANGE OFFER. Except as set forth in Section 2(b) below,
the Company shall, for the benefit of the Holders, at the Company's cost (i)
cause to be filed with the SEC an Exchange Offer Registration Statement on an
appropriate form under the Securities Act relating to the Exchange Offer within
120 calendar days after the Issue Date (the "FILING DATE"), (ii) use its
reasonable best efforts to cause such Exchange Offer Registration Statement to
be declared effective under the Securities Act by the SEC within 210 calendar
days after the Issue Date (the"EFFECTIVE DATE"), (iii) use its reasonable best
efforts to keep such Exchange Offer Registration Statement effective for not
less than 20 Business Days (or longer if required by applicable law) after the
date notice of the Exchange Offer is mailed to the Holders and (iv) use its
reasonable best efforts to cause the Exchange Offer to be consummated within 35
calendar days after the date that the Exchange Offer Registration Statement is
declared effective (the "CONSUMMATION DATE"). Promptly after the effectiveness
of the Exchange Offer Registration Statement, the Company shall commence the
Exchange Offer, it
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being the objective of such Exchange Offer to enable each eligible Holder to
exchange Registrable Notes for a like principal amount of Exchange Notes
(PROVIDED that such Holder (i) is not an Affiliate of the Company, (ii) is
not a broker-dealer tendering Registrable Notes acquired directly from the
Company, (iii) acquires the Exchange Notes in the ordinary course of such
Holder's business and (iv) has no arrangements or understandings with any
Person to participate in the Exchange Offer for the purpose of distributing
Exchange Notes).
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of
not less than 20 Business Days after the date notice thereof is mailed to
the Holders (or longer if required by applicable law) (such period
referred to herein as the "EXCHANGE PERIOD");
(iii) utilize the services of the Depositary for the Exchange
Offer with respect to Notes represented by a global certificate;
(iv) permit each Holder to withdraw tendered Notes at any time
prior to the close of business, New York City time, on the last Business
Day of the Exchange Period, by sending to the institution specified in
the notice to Holders, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the series and amount of
Notes delivered for exchange, and a statement that such Holder is
withdrawing its election to have such Notes exchanged;
(v) notify each Holder that any Notes not tendered by such
Holder in the Exchange Offer will remain outstanding and continue to
accrue interest but will not retain any rights under this Agreement
(except in the case of the Initial Purchasers and Participating Broker-
Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
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As soon as practicable after the close of the Exchange Offer, the
Company shall:
(1) accept for exchange all Notes or portions thereof tendered
and not validly withdrawn pursuant to the Exchange Offer;
(2) deliver, or cause to be delivered, to the Trustee for
cancellation all Notes or portions thereof so accepted for exchange by the
Company; and
(3) issue, and cause the Trustee under the Indenture to
promptly authenticate and deliver to each Holder, Exchange Notes equal in
principal amount to the principal amount of the Notes surrendered by such
Holder.
Interest on each of the Exchange Notes issued pursuant to the
Exchange Offer will accrue from the last date on which interest was paid on the
Notes surrendered in exchange therefor or, if no interest has been paid on such
Notes, from the Issue Date. To the extent not prohibited by any law or
applicable interpretation of the staff of the SEC, the Company shall use its
reasonable best efforts to complete the Exchange Offer as provided above, and
shall comply with the applicable requirements of the Securities Act, the
Exchange Act and other applicable laws in connection with the Exchange Offer.
The Exchange Offer shall not be subject to any conditions other than the
conditions referred to in Section 2(b)(i) below and those conditions that are
customary in similar exchange offers. Each Holder of Registrable Notes who
wishes to exchange such Registrable Notes for Exchange Notes in the Exchange
Offer will be required to make certain customary representations in connection
therewith, including representations that (i) it is not an Affiliate of the
Company, (ii) it is not a broker-dealer tendering Registrable Notes acquired
directly from the Company, (iii) the Exchange Notes to be received by it are
being acquired in the ordinary course of its business and (iv) at the time of
the Exchange Offer, it has no arrangements or understandings with any Person to
participate in the distribution (within the meaning of the Securities Act) of
Exchange Notes. The Company shall inform the Initial Purchasers, after
consultation with the Trustee, of the names and addresses of the Holders to whom
the Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders in order to facilitate the tender of Registrable Notes in
the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, MUTATIS
MUTANDIS, solely with respect to Exchange Notes held by Participating Broker-
Dealers to the extent of any prospectus delivery requirement for a period of 60
days after the Exchange Offer
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<PAGE>
is consummated, and the Company shall not have any further obligation to
register the Registrable Notes held by any Holder (other than any Initial
Purchaser) pursuant to Section 2(b) of this Agreement.
(b) SHELF REGISTRATION. In the event that (i) the Company
reasonably determines, after conferring with counsel (which may be in-house
counsel), that the Exchange Offer Registration provided in Section 2(a) above is
not available under applicable law and regulations and currently prevailing
interpretations of the staff of the SEC, (ii) the Exchange Offer is not
consummated within 245 calendar days after the Issue Date or (iii) upon the
request of any Initial Purchaser with respect to any Registrable Notes held by
it, if such Initial Purchaser is not permitted, in the written opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, pursuant to applicable law or
applicable interpretations of the staff of the SEC, to participate in the
Exchange Offer and thereby receive securities that are freely tradeable without
restriction under the Securities Act and applicable blue sky or state securities
laws (any of the events specified in (i), (ii) or (iii) being a "SHELF
REGISTRATION EVENT", and the date of occurrence thereof being the "SHELF
REGISTRATION EVENT DATE"), then in addition to or in lieu of conducting the
Exchange Offer contemplated by Section 2(a), as the case may be, the Company
shall promptly notify the Holders and shall, at its cost, use its reasonable
best efforts to cause to be filed as promptly as practicable after such Shelf
Registration Event Date, a Shelf Registration Statement providing for the sale
by the Holders of such Registrable Notes, and shall use its reasonable best
efforts to have such Shelf Registration Statement declared effective by the SEC
as soon as practicable. No Holder of Registrable Notes shall be entitled to
include any of its Registrable Notes in any Shelf Registration pursuant to this
Agreement unless and until such Holder agrees in writing to be bound by all of
the provisions of this Agreement applicable to such Holder and furnishes to the
Company in writing, within 10 days after receipt of a request therefor, such
information as the Company may, after conferring with counsel with regard to
information relating to Holders that would be required by the SEC to be included
in such Shelf Registration Statement or Prospectus included therein, reasonably
request for inclusion in any Shelf Registration Statement or Prospectus included
therein. Each Holder as to which any Shelf Registration is being effected
agrees to furnish to the Company all information with respect to such Holder
necessary to make the information previously furnished to the Company by such
Holder not materially misleading.
In the case of a Shelf Registration Event arising under clause
(iii) of the prior paragraph, the Company, upon request of such Initial
Purchaser, and to the extent
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<PAGE>
permitted by applicable law, shall, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to the Initial
Purchaser, in exchange (the "PRIVATE EXCHANGE") for such Notes held by the
Initial Purchaser, a like principal amount of debt securities of the Company
that are identical in all material respects to the Exchange Notes other than
transfer restrictions (the "PRIVATE EXCHANGE NOTES") and which are issued
pursuant to the same indenture as the Exchange Notes. The term Exchange Notes
shall include the Private Exchange Notes unless the context otherwise requires
and the Private Exchange Notes shall have such rights in addition to the rights
granted under this Section 2(b). To the extent permitted the Private Exchange
Notes shall bear the same CUSIP number as the Exchange Notes.
The Company agrees to use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective and the Prospectus usable
for resales until the earlier of: (a) the end of the Rule 144(k) Period or (b)
such time as all of the Registrable Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement or cease
to be Registrable Notes (the "EFFECTIVENESS PERIOD"). The Company shall not
permit any securities other than (i) the Company's issued and outstanding
securities currently possessing incidental registration rights and (ii)
Registrable Notes to be included in the Shelf Registration. The Company will,
in the event a Shelf Registration Statement is declared effective, provide to
each Holder a reasonable number of copies of the Prospectus which is a part of
the Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective and take any other action required to permit
unrestricted resales of the Registrable Notes. The Company further agrees, if
necessary, to supplement or amend the Shelf Registration Statement, if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement or by the Securities
Act or by any other rules and regulations thereunder for shelf registrations,
and the Company agrees to furnish to the Holders of Registrable Notes copies of
any such supplement or amendment promptly after it has been filed with the SEC.
(c) EXPENSES. The Company shall pay all Registration Expenses in
connection with any Registration Statement filed pursuant to Section 2(a) or
2(b) hereof. Except as provided herein, each Holder shall pay all expenses of
its counsel, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Notes pursuant
to the Shelf Registration Statement.
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<PAGE>
(d) EFFECTIVE REGISTRATION STATEMENT. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; PROVIDED, HOWEVER,
that if, after it has been declared effective, the Exchange Offer or the
offering of Registrable Notes pursuant to such Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, the Exchange Offer
Registration Statement or Shelf Registration Statement will be deemed not to
have been effective during the period of such interference, until the Exchange
Offer or the offering of Registrable Notes pursuant to such Registration
Statement may legally resume. The Company will not be deemed to have used its
reasonable best efforts to cause the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, to become or to remain
effective during the requisite period if it voluntarily takes any action that
would result in any such Registration Statement not being declared effective or
that would result in the Holders of Registrable Notes covered thereby not being
able to exchange or offer and sell such Registrable Notes during that period,
unless such action is required by applicable law.
(c) LIQUIDATED DAMAGES. In the event that:
(i) the Exchange Offer Registration Statement is not
filed with the Commission by the Filing Date, the Exchange Offer
Registration Statement is not declared effective by the Commission
by the Effective Date or the Exchange Offer is not consummated on
or prior to the Consummation Date (unless changes in law or the
applicable interpretation of the staff does not permit the Company
to effect the Exchange Offer, in which case clause (ii) shall
apply); or
(ii) any Shelf Registration Statement with respect to the
Registrable Notes required to be filed pursuant to clause (i) or (iii) of
Section 2(b) is not declared effective (or shall thereafter cease to be
effective, except for a 60-day grace period within any 12 month period as the
result of the occurrence of an event specified in Section 3(e)(iii), 3(e)(iv),
3(e)(v) or 3(e)(vi), prior to the earlier of the second anniversary of the Issue
Date or until all Registrable Notes have been sold thereunder) under the
Securities Act on or prior to the later of the 245th calendar day after the date
of the original issuance of such Notes and the 60th calendar day after the
publication of the change in law or interpretation;
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<PAGE>
then Liquidated Damages shall accrue on the principal amount of the Notes at a
rate of 0.50% per annum for the first 90 days immediately following each such
date and such Liquidated Damages rate shall increase to 1.0% per annum
commencing on the 91st day following each such date; PROVIDED, HOWEVER, that
upon (1) filing of the Exchange Offer Registration Statement after the Filing
Date or the declaration of the Effectiveness of the Exchange Offer Registration
Statement after the Effective Date or the consummation of the Exchange Offer
after the Consummation Date, as applicable as described in clause (i) above or
(2) the effectiveness of a Shelf Registration Statement after the 245th or 60th
calendar day, as applicable, described in clause (ii) above (or if the Shelf
Registration Statement ceased to be effective as described above, once the Shelf
Registration Statement again becomes effective), such Liquidated Damages shall
cease to accrue.
Any amounts of Liquidated Damages due pursuant to Section 2(e)(i)
or (ii) above will be payable in cash on the next succeeding June 1 or December
1, as the case may be, to Holders on the relevant record dates for the payment
of interest pursuant to the Indenture.
3. REGISTRATION PROCEDURES. In connection with the obligations
of the Company pursuant to Sections 2(a) and 2(b) hereof, the Company shall use
its reasonable best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof within
the relevant time periods specified in Section 2 hereof on the appropriate form
under the Securities Act, (x) which form shall (i) be selected by the Company
and (ii) in the case of a Shelf Registration, be available for the sale of the
Registrable Notes by the selling Holders thereof and, in the case of an Exchange
Offer, be available for the exchange of Registrable Notes, and (y) comply as to
form in all material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed therewith; and
to cause such Registration Statement to become effective and remain effective
(and, in the case of a Shelf Registration Statement, the Prospectus to remain
usable for resales) in accordance with Section 2 hereof; PROVIDED, HOWEVER, that
if (1) such filing is pursuant to Section 2(b) or (2) a Prospectus contained in
an Exchange Offer Registration Statement filed pursuant to Section 2(a) is
required to be delivered under the Securities Act by any Participating Broker-
Dealer who seeks to sell Exchange Notes, before filing any such Registration
Statement or Prospectus or any amendments or supplements thereto, the Company
shall furnish to a representative designated by the Majority Holders (the
"REPRESENTATIVE") which, unless other notice is given to the
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Company, shall be the Initial Purchasers and their counsel and afford such
Persons a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference therein and
all exhibits thereto which have been previously filed with the SEC) proposed to
be filed; and the Company shall not file any such Registration Statement or
Prospectus or any amendments or supplements thereto in respect of which the
Representative must be afforded an opportunity to review prior to the filing of
such document if the Representative and their counsel shall reasonably object in
a timely manner unless required by law;
(b) 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 effective for the Exchange Period, the Effectiveness
Period or the Applicable Period, as the case may be, and cause each Prospectus
to be supplemented, if determined by the Company or requested by the SEC, by any
required prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities Act, and
comply with the provisions of the Securities Act, the Exchange Act and the rules
and regulations promulgated thereunder applicable to it with respect to the
disposition of all securities covered by a Registration Statement during the
Effectiveness Period or the Applicable Period, as the case may be, in accordance
with the intended method or methods of distribution by the selling Holders
thereof described in this Agreement (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder
of Registrable Notes, at least three Business Days prior to filing, that the
Shelf Registration Statement with respect to the Registrable Notes is being
filed and advising such Holder that the distribution of Registrable Notes will
be made in accordance with the method selected by the Majority Holders, (ii)
furnish to each Holder of Registrable Notes included in the Shelf Registration
Statement and to each underwriter of an underwritten offering of Registrable
Notes, if any, without charge, as many copies of each Prospectus, including each
preliminary prospectus, and any amendment or supplement thereto, and such other
documents as such Holder or underwriter may reasonably request, in order to
facilitate the public sale or other disposition of the Registrable Notes and
(iii) consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable Notes included in the
Shelf Registration Statement in connection with the offering and sale of the
Registrable Notes covered by the Prospectus or any amendment or supplement
thereto;
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(d) in the case of a Shelf Registration, register or qualify
the Registrable Notes under all applicable state securities or "blue sky" laws
of such jurisdictions by the time the Shelf Registration Statement is declared
effective by the SEC as any Holder of Registrable Notes covered by such
Registration Statement and each underwriter of an underwritten offering of
Registrable Notes shall reasonably request in writing in advance of such date of
effectiveness, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Holder and underwriter to consummate the
disposition in each such jurisdiction of such Registrable Notes owned by such
Holder; PROVIDED, HOWEVER, that the Company shall not be required to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(d), (ii)
file any general consent to service of process in any jurisdiction where it
would not otherwise be subject to such service of process or (iii) subject
itself to taxation in any such jurisdiction if it is not then so subject;
(e) (1) in the case of the Shelf Registration or (2) if
Participating Broker-Dealers, from whom the Company has received prior written
notice that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(u) hereof, are seeking to
sell Exchange Notes and are required to deliver Prospectuses, promptly notify
each Holder of Registrable Notes or such Participating Broker-Dealers, as the
case may be, their counsel and the managing underwriters, if any, and promptly
confirm such notice in writing (i) when the applicable Registration Statement
has become effective and when any post-effective amendments thereto become
effective, (ii) of any request by the SEC or any state securities authority for
amendments and supplements to the applicable Registration Statement or
Prospectus or for additional information after such Registration Statement has
become effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of the applicable
Registration Statement or the qualification of the Registrable Notes or the
Exchange Notes to be offered or sold by any Participating Broker-Dealer in any
jurisdiction described in Section 3(d) hereof or the initiation of any
proceedings for that purpose, (iv) in the case of a Shelf Registration, if,
between the effective date of the Registration Statement and the closing of any
sale of Registrable Notes covered thereby, the representations and warranties of
the Company contained in any underwritten or other similar agreement cease to be
true and correct in all material respects, (v) of the happening of any event or
the failure of any event to occur or the discovery of any facts during the
Effectiveness Period, which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or which
causes such Registration Statement or Prospectus to 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,
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<PAGE>
as well as any other corporate developments, public filings with the SEC or
similar events causing such Registration Statement not to be effective or the
Prospectus not useable for resales and (vi) of the reasonable determination
of the Company that a post-effective amendment to the applicable Registration
Statement would be appropriate;
(f) obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible moment;
(g) in the case of the Shelf Registration, furnish to each
Holder of Registrable Notes included within the coverage of the Shelf
Registration Statement, without charge, at least one conformed copy of such
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of the Shelf Registration, cooperate with the
selling Holders of Registrable Notes to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold and not
bearing any restrictive legends and in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling Holders
or the underwriters may reasonably request at least two Business Days prior to
the closing of any sale of Registrable Notes pursuant to such Shelf
Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, promptly after the occurrence of any event specified in Section
3(e)(iii), 3(e)(v) (subject to a 60-day grace period within any 12-month
period) or 3(e)(vi) hereof, prepare a supplement or post-effective amendment to
such Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Registrable Notes, such Prospectus
will not include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to notify each
Holder to suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and each Holder hereby agrees to suspend use of the
Prospectus until the Company has so amended or supplemented the Prospectus;
(j) in the case of the Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated by reference
into the Shelf
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Registration Statement or the Prospectus after the initial filing of the Shelf
Registration Statement, provide a reasonable number of copies of such document
to the Representative and make such of the representatives of the Company as
shall be reasonably requested by the Representative on behalf of such Holders
available for discussion of such document;
(k) obtain a CUSIP number and ISIN for the Exchange Notes not
later than the effective date of the Exchange Offer Registration Statement, and
provide the Trustee with certificates for the Exchange Notes in a form eligible
for deposit with the Depositary;
(l) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Notes or Registrable Notes, as the case may be,
and effect such changes to such document as may be required for it to be so
qualified in accordance with the terms of the TIA and execute, and 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 documents to be so qualified in a timely manner;
(m) in the case of the Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in underwritten
offerings and take all such other appropriate actions in connection therewith as
are reasonably requested by the Holders of at least 25% in aggregate principal
amount of the Registrable Notes in order to facilitate the disposition of the
Registrable Notes;
(n) in the case of the Shelf Registration, whether or not an
underwriting agreement is entered into and whether or not the registration is an
underwritten registration, if requested by an Initial Purchaser, in the case
where such Initial Purchaser holds Notes acquired by it as part of its initial
placement or Private Exchange Notes: (i) make such representations and
warranties to Initial Purchasers and the underwriters (if any) with respect to
the business of the Company and the subsidiaries of the Company as then
conducted and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, as
are customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) obtain opinions of counsel to the
Company and updates thereof (which may be in the form of a reliance letter) in
form and substance reasonably satisfactory to the managing underwriters (if any)
and the Initial Purchasers, addressed to the Initial Purchasers and the
underwriters (if any) covering the matters customarily covered in opinions
requested in underwritten
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offerings and such other matters as may be reasonably requested by such
underwriters (it being agreed that the matters to be covered by such opinion
may be subject to customary qualifications and exceptions); (iii) obtain
"cold comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriters from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any business acquired 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
underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by such
underwriters in accordance with Statement on Auditing Standards No. 72; and
(iv) provide indemnification provisions and procedures no less favorable than
those set forth in Section 4 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal amount of
Registrable Notes covered by such Registration Statement and the managing
underwriters) customary for such agreements with respect to all parties to be
indemnified pursuant to said Section (including, without limitation, such
underwriters and selling Holders);
(o) if (i) the Shelf Registration is filed pursuant to Section
2(b) or (ii) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, make reasonably available for inspection by any selling
Holder of Registrable Notes in such offering or Participating Broker-Dealer, as
applicable, any underwriter participating in any such disposition of Registrable
Notes, if any, and any attorney, accountant or other agent retained by any such
selling Holder, Participating Broker-Dealer, or underwriter (collectively, the
"INSPECTORS") at the offices where normally kept, during the Company's normal
business hours, all financial and other records, pertinent organizational and
operational documents and properties of the Company and its subsidiaries
(collectively, the "RECORDS") as shall be reasonably necessary to enable them to
exercise any applicable due diligence responsibilities, and cause the officers,
trustees and employees of the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any such Person in
connection with such Registration Statement; and any Records and information
which the Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed to any Inspector
except where (i) the disclosure of such Records or information is necessary to
avoid or correct a material misstatement or omission in such Registration
Statement, (ii) the release of such Records or information is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction
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or is necessary in connection with any action, suit or proceeding or (iii) such
Records or information previously has been made generally available to the
public; and each such selling Holder of Registrable Notes, Participating
Broker-Dealer and underwriter will be required to agree in writing that
Records and information obtained by it as a result of such inspections shall
be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company unless and until such is
made generally available to the public through no fault of an Inspector; and
each such selling Holder, Participating Broker-Dealer and underwriter will be
required to further agree in writing that it will, upon learning that
disclosure of such Records or information is sought in a court of competent
jurisdiction or in connection with any action, suit or proceeding, give
notice to the Company and allow the Company at its expense to undertake
appropriate action to prevent disclosure of the Records and information
deemed confidential;
(p) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement hereof shall be applicable and
make generally available to its securityholders earning statements 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 Notes 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 the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;
(q) upon consummation of the Exchange Offer, if requested by
the Trustee, obtain an opinion of counsel to the Company addressed to the
Trustee for the benefit of all Holders of Registrable Notes participating in
the Exchange Offer, substantially to the effect that (i) the Company has duly
authorized, executed and delivered the Exchange Notes, and (ii) each of the
Exchange Notes constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company, in accordance with its respective
terms (in each case, with customary exceptions);
(r) if the Exchange Offer is to be consummated, upon
delivery of the Registrable Notes by Holders to the Company (or to such other
Person as directed by the Company) in exchange for Exchange Notes, the
Company shall mark, or cause to be marked, on such Registrable Notes
delivered by such Holders that such Registrable Notes are being cancelled in
exchange for Exchange Notes; it being understood that in no event shall such
Registrable Notes be marked as paid or otherwise satisfied;
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<PAGE>
(s) cooperate with each seller of Registrable Notes covered
by any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Notes and their respective counsel in
connection with any filings required to be made with the NASD;
(t) take all other steps necessary to effect the registration
of the Registrable Notes covered by the Shelf Registration Statement
contemplated hereby;
(u) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," which section shall be reasonably acceptable
to the Representative and which shall contain a summary statement of the
positions taken or policies made by the staff of the SEC with respect to the
potential "underwriter" status of any broker-dealer that holds Registrable
Notes acquired for its own account as a result of market-making activities or
other trading activities (a "PARTICIPATING BROKER-DEALER") and that will be
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Notes to be received by such broker-dealer in the Exchange Offer,
whether such positions or policies have been publicly disseminated by the
staff of the SEC or such positions or policies, in the reasonable judgment of
the Representatives or such other representative, represent the prevailing
views of the staff of the SEC, including a statement that any such
broker-dealer who receives Exchange Notes for Registrable Notes pursuant to
the Exchange Offer may be deemed a statutory underwriter and must deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resale of such Exchange Notes, (ii) furnish to each Participating
Broker-Dealer who has delivered to the Company the notice referred to in
Section 3(e), without charge, as many copies of each Prospectus included in
the Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request (the Company hereby consents to the use
of the Prospectus forming part of the Exchange Offer Registration Statement
or any amendment or supplement thereto by any Person subject to the
prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Notes covered by the Prospectus or any amendment or supplement
thereto), (iii) keep the Exchange Offer Registration Statement effective and
to amend and supplement the Prospectus contained therein in order to permit
such Prospectus to be lawfully delivered by all Persons subject to the
prospectus delivery requirements of the Securities Act for such period of
time as such Persons must comply with such requirements under the Securities
Act and applicable rules and regulations in order to resell the Exchange
Notes; PROVIDED, HOWEVER, that such period shall not be required to exceed
60 days (or such longer period if extended pursuant to the last sentence of
Section 3 hereof) (the
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<PAGE>
"APPLICABLE PERIOD"), and (iv) include in the transmittal letter or similar
documentation to be executed by an exchange offeree in order to participate
in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Notes acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection
with any resale of Exchange Notes received in
respect of such Registrable Notes pursuant to the
Exchange Offer";
and (y) a statement to the effect that, by making the acknowledgment
described in clause (x) and by delivering a Prospectus in connection with the
exchange of Registrable Notes, the broker-dealer will not be deemed to admit
that it is an underwriter within the meaning of the Securities Act; and
(B) in the case of the Exchange Offer Registration
Statement, the Company agrees to deliver to the Initial Purchasers, if
reasonably requested by an Initial Purchaser on behalf of the Participating
Broker-Dealers upon consummation of the Exchange Offer (i) an opinion of
counsel in form and substance reasonably satisfactory to such Initial
Purchaser covering the matters customarily covered in opinions requested in
connection with exchange offer registration statements and such other matters
as may be reasonably requested (it being agreed that the matters to be
covered by such opinion may be subject to customary qualifications and
exceptions), (ii) an officers' certificate containing certifications
substantially similar to those set forth in Section 5(c) of the Purchase
Agreement and such additional certifications as are customarily delivered in
a public offering of debt securities and (iii) upon the effectiveness of the
Exchange Offer Registration Statement, comfort letter(s), in each case, in
customary form if permitted by Statement on Auditing Standards No. 72.
The Company may require each seller of Registrable Notes as to
which any registration is being effected to furnish to the Company such
information regarding such seller as may be required by the staff of the SEC
to be included in a Registration Statement. The Company may exclude from
such registration the Registrable Notes of any seller who unreasonably fails
to furnish such information within a reasonable time after receiving such
request. The Company shall not have any obligation to register
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<PAGE>
under the Securities Act the Registrable Notes of a seller who so fails to
furnish such information.
In the case of the Shelf Registration Statement, or if
Participating Broker-Dealers who have notified the Company that they will be
utilizing the Prospectus contained in the Exchange Offer Registration
Statement as provided in this Section 3(u) hereof are seeking to sell
Exchange Notes and are required to deliver Prospectuses, each Holder agrees
that, upon receipt of any notice from the Company of the occurrence of any
event specified in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof,
such Holder will forthwith discontinue disposition of Registrable Notes or
Exchange Notes, as the case may be, pursuant to a Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(i) hereof or until it is advised in
writing (the "ADVICE") by the Company that the use of the applicable
Prospectus may be resumed, and, if so directed by the Company, such Holder
will deliver to the Company (at the Company's expense) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Notes or Exchange
Notes, as the case may be, current at the time of receipt of such notice. If
the Company shall give any such notice to suspend the disposition of
Registrable Notes or Exchange Notes, as the case may be, pursuant to a
Registration Statement, the Company shall use its reasonable best efforts to
file and have declared effective (if an amendment) as soon as practicable
after the resolution of the related matters an amendment or supplement to the
applicable Registration Statement and shall extend the period during which
such Registration Statement is required to be maintained effective and the
Prospectus usable for resales pursuant to this Agreement by the number of
days in the period from and including the date of the giving of such notice
to and including the date when the Company shall have made available to the
Holders (x) copies of the supplemented or amended Prospectus necessary to
resume such dispositions or (y) the Advice.
4. INDEMNIFICATION AND CONTRIBUTION.
(a) In connection with any Registration Statement, the
Company shall indemnify and hold harmless the Initial Purchasers, each
Holder, each underwriter who participates in an offering of Registrable
Notes, each Participating Broker-Dealer, each Person, if any, who controls
any of such parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and each of their respective directors,
officers, employees and agents (each, an "INDEMNIFIED PERSON"), against any
and all losses, claims, damages, liabilities, judgments, actions and expenses
(including without limitation and as incurred, reimbursement of all
reasonable costs of investigating,
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1. preparing, pursuing or defending any claim or action, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Person) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment or supplement thereto) or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or omission or
alleged untrue statement or omission that is (i) made in reliance upon and in
conformity with information ("INDEMNIFIED PERSON INFORMATION") relating to
any Holder or any other Indemnified Person furnished in writing to the
Company by such Indemnified Person expressly for use in a Registration
Statement or any Prospectus or (ii) with respect to the Indemnified Person
from whom the person asserting the loss, claim, damage or liability purchased
Notes or Private Exchange Notes, made in any preliminary prospectus if a copy
of the Prospectus (as amended or supplemented) shall have been furnished to
the Indemnified Person by the Company with such amendments or supplements
thereto on a timely basis and such Prospectus (as amended or supplemented)
was not delivered by or on behalf of the Indemnified Person to the person
asserting the claim or action, if required by law to have been so delivered
by the Indemnified Person seeking indemnification, at or prior to the written
confirmation of the sale of such Notes or Private Exchange Notes, and it
shall be finally determined by a court of competent jurisdiction, by a
judgment not subject to appeal or review, that the Prospectus (as amended or
supplemented) would have corrected such untrue statement or omission. The
Company shall notify any applicable Indemnified Party promptly of the
institution, threat or assertion of any claim, proceeding (including any
governmental investigation) or litigation, of which it has knowledge, in
connection with the matters addressed by this Agreement which involves the
Company or an Indemnified Person.
In case any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Indemnified Person
with respect to which indemnity may be sought against an indemnifying party
(or indemnifying parties), such Indemnified Person shall promptly notify the
indemnifying party (or indemnifying parties) in writing (PROVIDED that the
failure to give such notice shall not relieve the indemnifying party (or
indemnifying parties) of its obligations pursuant to this Agreement unless
and only to the extent such failure to give notice results in the loss or
compromise of any material rights or defenses of the indemnifying party (or
indemnifying parties) as determined by a court of competent jurisdiction by a
final
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<PAGE>
judgment no longer subject to appeal or review). Upon receiving such notice,
the indemnifying party (or indemnifying parties) shall be entitled to
participate in any such action or proceeding and to assume, at their sole
expense, the defense thereof, with counsel reasonably satisfactory to such
Indemnified Person (who shall not, except with the consent of the Indemnified
Person, be counsel to the indemnifying party (or indemnifying parties) or an
affiliate thereof) and, after written notice from the indemnifying party (or
indemnifying parties) to such Indemnified Person of their election so to
assume the defense thereof within 15 business days after receipt of the
notice from the Indemnified Person of such action or proceeding, the
indemnifying party (or indemnifying parties) shall not be liable to such
Indemnified Person hereunder for legal expenses of other counsel subsequently
incurred by such Indemnified Person in connection with the defense thereof,
other than reasonable costs of investigation, unless (i) the indemnifying
party (or indemnifying parties) agrees in writing to pay such fees and
expenses, or (ii) the indemnifying party (or indemnifying parties) fails to
assume such defense within the 15 business days specified above or fails to
employ counsel reasonably satisfactory to such Indemnified Person, or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include both such Indemnified Person and the indemnifying
party (or indemnifying parties) or its (or their) affiliates, and such
Indemnified Person shall have been advised by counsel that a conflict (actual
or potential) of interest exists between such Indemnified Person and the
indemnifying party (or indemnifying parties) or its affiliates, in which
case, if such Indemnified Person notifies the indemnifying party (or
indemnifying parties) in writing, neither the indemnifying party (or
indemnifying parties) nor its affiliates shall have the right to assume the
defense thereof, it being understood, however, that te indemnifying party (or
indemnifying parties) shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all Indemnified Persons. No indemnifying party
shall be liable for any settlement of any such action or proceeding effected
without its prior written consent. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested the indemnifying
party (or indemnifying parties) to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, the indemnifying party (or indemnifying parties) agrees that it
(or they) shall be liable for any settlement of any proceeding effected
without its (or their) written consent if (i) such settlement is entered into
more than 60 business days after receipt by the indemnifying party (or
indemnifying parties) of the aforesaid request and (ii) the indemnifying
party (or indemnifying parties) shall not have reimbursed the Indemnified
Person in accordance with such request prior to the date of such settlement.
The
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<PAGE>
indemnifying party (or indemnifying parties) shall not, without the prior
written consent of each Indemnified Person, settle or compromise or consent
to the entry of judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Person is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Person from all liability arising out of such action, claim, litigation or
proceeding.
(b) Each of the Indemnified Persons agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, its
officers, and any person controlling (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) the Company, to the same extent as the
foregoing indemnity from the Company to each of the Indemnified Persons, but
only with respect to claims and actions based on any Indemnified Person
Information provided by such Indemnified Person.
(c) If the indemnification provided for in this Section 4 is
for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then the Company or the Indemnified Persons, as
applicable, in lieu of indemnifying such indemnified party, shall contribute
to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities and expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying parties and the
indemnified party, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand, and the indemnified party,
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 related to information
supplied by the Company, on the one hand, or the Indemnified Persons, on the
other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The indemnity and contribution obligations of the Company set forth in this
Section 4 shall be in addition to any liability or obligation that the
Company may otherwise have (other than with respect to the matters covered by
this Section 4) to any Indemnified Person.
(d) The Company and the Indemnified Persons agree that it
would not be just and equitable if contribution pursuant to this Section 4
were determined by PRO RATA allocation (even if the Indemnified Persons were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The
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<PAGE>
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph 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. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Indemnified Persons' obligations to
contribute pursuant to this Section 4 are several not joint. In no event
shall any Holder, its directors, officers or any Person who controls such
Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Registrable Notes pursuant to a Registration Statement exceeds (i) the amount
paid by such Holder for such Registrable Notes and (ii) the amount of any
damages that such Holder, its directors, officers or any Person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
5. PARTICIPATION IN AN UNDERWRITTEN REGISTRATION. No Holder
may participate in an underwritten registration hereunder unless such Holder
(a) agrees to sell such Holder's Registrable Notes on the basis provided in
the underwriting arrangement approved by the Persons entitled hereunder to
approve such arrangements; (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of
such underwriting arrangements.
6. SELECTION OF UNDERWRITERS. The Holders of Registrable
Notes covered by the Shelf Registration Statement who desire to do so may
sell the Notes covered by such Shelf Registration in an underwritten
offering, subject to the provisions of Section 3(m) hereof. In any such
underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount, as applicable, of the Registrable
Notes included in such offering; PROVIDED, HOWEVER, that such underwriters
and managers must be reasonably satisfactory to the Company.
7. MISCELLANEOUS.
(a) RULE 144 AND RULE 144A. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Notes remain outstanding, the Company will file the
reports required to be filed by it under the Securities Act and Section 13(a)
or 15(d) of the Exchange Act and the rules
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<PAGE>
and regulations adopted by the SEC thereunder; PROVIDED, HOWEVER, that if the
Company ceases to be so required to file such reports, it will, upon the
request of any Holder of Registrable Notes (a) make publicly available such
information as is necessary to permit sales of its securities pursuant to
Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales of its securities
pursuant to Rule 144A under the Securities Act, and (c) take such further
action that is reasonable in the circumstances, in each case, to the extent
required from time to time to enable such Holder to sell its Registrable
Notes without registration under the Securities Act within the limitation of
the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended from time to time, (ii) Rule 144A under the Securities
Act, as such rule may be amended from time to time, or (iii) any similar
rules or regulations hereafter adopted by the SEC. Upon the request of any
Holder of Registrable Notes, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.
(b) NO INCONSISTENT AGREEMENTS. The Company has not
entered into, nor will the Company on or after the date of this Agreement
enter into, any agreement which is inconsistent with the rights granted to
the Holders of Registrable Notes in this Agreement or otherwise conflicts
with the provisions hereof, except to the extent that the other party to any
such agreement has waived such conflict. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's other issued and outstanding
securities under any such 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 in aggregate principal amount of the
outstanding Registrable Notes affected by such amendment, modification,
supplement, waiver or departure; PROVIDED that no amendment, modification or
supplement or waiver or consent to departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Notes unless consented to in writing by such Holder of Registrable Notes.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended,
without the consent of any Holder of Registrable Notes, by written agreement
signed by the Company and the Initial Purchasers, to cure any ambiguity, to
correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this
27
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Agreement, (ii) this Agreement may be amended, modified or supplemented, and
waivers and consents to departures from the provisions hereof may be given,
by written agreement signed by the Company and the Initial Purchasers to the
extent that any such amendment, modification, supplement, waiver or consent
is, in their reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the Staff of the SEC) or any
change therein and (iii) to the extent any provision of this Agreement
relates to an Initial Purchaser, such provision may be amended, modified or
supplemented, and waivers or consents to departures from such provisions may
be given, by written agreement signed by such Initial Purchaser and the
Company.
(d) NOTICES. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Company by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to
each Initial Purchaser, the address set forth in the Purchase Agreement; and
(ii) if to the Company, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee,
at the address specified in the Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and transferees of
the Initial Purchasers, including, without limitation and without the need
for an express assignment, subsequent Holders; PROVIDED, HOWEVER, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Notes in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Registrable Notes, in any manner, whether by operation of law or otherwise,
such Registrable Notes shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Notes, such Person
shall be
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conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) THIRD PARTY BENEFICIARIES. Each Holder and any
Participating Broker-Dealer shall be third party beneficiaries of the
agreements made hereunder among the Initial Purchasers and the Company, and
the Initial Purchasers shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE
BEEN MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND RULE 327(B) OF THE NEW YORK CIVIL PRACTICE LAWS
AND RULES.
(j) JURISDICTION, ETC.
(i) The Company hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of
any New York State court or federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or
the Notes, Exchange Notes or the Private Exchange Notes, or for
recognition or enforcement of any judgment, and the Company hereby
irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New
York State court or, to the extent permitted by law, in such federal
court. The Company hereby agrees that service of process in any such
action or proceeding brought in any such New York State court or in such
federal court
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may be made upon the Company at its offices at 8100 34th Avenue South,
Minneapolis, MN 55425-1640, Attention: Corporate Secretary (the "PROCESS
AGENT") and hereby further agrees that the failure of the Process Agent
to give any notice of any such service to the Company shall not impair or
affect the validity of such service or of any judgment rendered in any
action or proceeding based thereon. The Company agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right
that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes, the Exchange Notes or the
Private Exchange Notes in the courts of any jurisdiction.
(ii) The Company irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection
that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the
Notes, the Exchange Notes or the Private Exchange Notes in any New York
State or federal court. The Company hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(iii) To the extent that the Company has or hereafter may
acquire any immunity from the jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to
itself or its property, the Company hereby irrevocably waives such
immunity in respect of its obligations under this Agreement and the
Notes, the Exchange Notes or the Private Exchange Notes.
(k) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(l) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the
Company or its Affiliates shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
CERIDIAN CORPORATION
By: /s/ John R. Eickhoff
--------------------------------
Name: John R. Eickhoff
Title: Executive Vice President and
Chief Financial Officer
Confirmed and accepted as of
the date first above
written:
BANC OF AMERICA SECURITIES LLC
By: /s/ Lynn T. McConnell
--------------------------------
Name: Lynn T. McConnell
Title: Managing Director
CHASE SECURITIES INC.
By: /s/ Melanie Shugart
--------------------------------
Name: Melanie Shugart
Title: Managing Director
BNY CAPITAL MARKETS, INC.
By: /s/ Daniel Klinger
--------------------------------
Name: Daniel Klinger
Title: Vice President
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TD SECURITIES (USA) INC.
By: /s/ Gordon A. Paris
--------------------------------
Name: Gordon A. Paris
Title: Managing Director & Head
U.S. BANCORP PIPER JAFFRAY INC.
By: */s/ Stuart C. Harvey
--------------------------------
Name: Stuart C. Harvey
Title: Managing Director
<PAGE>
EXHIBIT 10.01
______________________________________________________________________________
CERIDIAN CORPORATION
$450,000,000
7.25% Senior Notes
Due June 1, 2004
PURCHASE AGREEMENT
Dated: June 8, 1999
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
CERIDIAN CORPORATION
$450,000,000
7.25% Senior Notes
Due June 1, 2004
PURCHASE AGREEMENT
June 8, 1999
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
BNY CAPITAL MARKETS, INC.
TD SECURITIES (USA) INC.
U.S. BANCORP PIPER JAFFRAY INC.
as the Initial Purchasers
c/o Banc of America Securities LLC
100 North Tryon Street
Charlotte, North Carolina 28255
Ladies and Gentlemen:
Ceridian Corporation, a Delaware corporation (the "Company"), confirms
its agreement with Banc of America Securities LLC ("BofA"), Chase Securities
Inc. ("Chase"), BNY Capital Markets, Inc. ("BONY"), TD Securities (USA) Inc.
("TD") and U.S. Bancorp Piper Jaffray Inc. ("Piper Jaffray" and, together
with BofA, Chase, BONY and TD, the "Initial Purchasers", which term shall
also include any initial purchaser substituted as hereinafter provided in
Section 11 hereof), with respect to the issue and 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 hereto of $450,000,000
aggregate principal amount of the Company's 7.25% Senior Notes due June 1,
2004 (the "Notes"). The Notes are to be issued pursuant to an indenture (the
"Indenture") dated as of June 10, 1999 between the Company and The Bank of
New York, as trustee (the "Trustee").
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 are to
be offered and sold through the Initial Purchasers without such transactions
being registered under the U.S. Securities Act of 1933, as amended (the "1933
Act"), in reliance upon exemptions
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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
transactions are hereafter registered under the 1933 Act or if an exemption
from the registration requirements of the 1933 Act is available (including
the exemptions afforded by Rule 144A ("Rule 144A") or Regulation S
("Regulation S") of the rules and regulations promulgated under the 1933 Act
by the U.S. Securities and Exchange Commission (the "Commission")).
Subsequent Purchasers of the Notes will have the registration rights
set forth in the registration rights agreement (the "Registration Rights
Agreement"), to be dated the date of the Closing Time referred to in Section
2(b) hereof, in substantially the form of Annex 1 hereto, for so long as such
Notes constitute "Registrable Notes" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to, among other things, file with the Commission under the
circumstances set forth therein, a registration statement under the 1933 Act
(the "Registration Statement") relating to an exchange offer for the
outstanding Notes (the "Exchange Offer") pursuant to which securities (the
"Exchange Notes") that will have terms identical in all material respects to
the Notes (except with respect to liquidated damages or transfer
restrictions) will be offered in exchange for the then outstanding Notes
tendered at the option of the holders thereof. This Agreement, the
Indenture, the Notes and the Registration Rights Agreement, are hereinafter
sometimes referred to collectively as the "Operative Documents."
The Company has prepared and delivered to each Initial Purchaser
copies of a preliminary offering memorandum dated May 26, 1999 (the
"Preliminary Offering Memorandum") and has prepared and will deliver to each
Initial Purchaser, on the date hereof or the next succeeding day, copies of a
final offering memorandum dated June 8, 1999 (the "Final Offering
Memorandum"), each for use by such Initial Purchaser in connection with its
solicitation of purchases of, or offering of, Notes. "Offering Memorandum"
means, with respect to any date or time referred to in this Agreement, the
most recent offering memorandum (whether the Preliminary Offering Memorandum
or the Final Offering Memorandum, or any amendment or supplement to either
such document), including exhibits thereto and any documents incorporated
therein by reference, which has been prepared and delivered by the Company to
the Initial Purchasers in connection with their solicitation of purchases of,
or offering of, the Notes.
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information that are incorporated by reference in the Offering Memorandum;
and all references in this Agreement to amendments or supplements to the
Offering Memorandum shall be deemed to mean and include the filing of any
document under the U.S. Securities Exchange Act of 1934, as amended (the
"1934 Act"), that is incorporated by reference in the Offering Memorandum.
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SECTION 1. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company, as to
itself and its subsidiaries, represents and warrants to each Initial
Purchaser as of the date hereof and as of the Closing Time referred to in
Section 2(b) hereof, and agrees with each Initial Purchaser, as follows:
(a) Neither the Company nor any of its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), has,
directly or indirectly, solicited any offer to buy, sold or offered to sell
or otherwise negotiated in respect of, or will solicit any offer to buy or
offer to sell or otherwise negotiate in respect of, in the United States or
to any United States citizen or resident, any security, if such transaction
is or would be integrated with the sale of the Notes in a manner that would
require the offer and sale of the Notes to be registered under the 1933 Act.
(b) The Offering Memorandum (including the information incorporated
by reference therein (the "Incorporated Documents")) does not, and any
supplement or amendment to it will not, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (b) shall not
apply to statements in or omissions from the Offering Memorandum (or any
supplement or amendment thereto) based upon information relating to the
Initial Purchasers furnished to the Company in writing by or on behalf of the
Initial Purchasers expressly for use therein. The Incorporated Documents, at
the time they were or hereafter are filed or last amended, as the case may
be, with the Commission, complied and will comply in all material respects
with the requirements of the 1934 Act.
(c) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as it is currently being conducted and to
own, lease and operate its properties, and each is duly qualified and is in
good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing
of property requires such qualification, except where the failure to be so
qualified or in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, cash flow, business
affairs or business prospects of the Company and its subsidiaries, taken as a
whole (the foregoing exception herein defined as a "Material Adverse Effect").
(d) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and nonassessable, and are
owned by the Company, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature, except with respect to
subsidiaries that, when taken as a whole, do not account for a material
proportion of the Company's business, operations or assets, and the loss of
which would not result in a Material Adverse Effect.
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(e) The Indenture has been duly authorized by the Company and, when
duly executed and delivered in accordance with its terms (assuming the due
execution and delivery thereof by the Trustee), will be a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity) and except to the extent that a waiver of rights under any usury laws
may be unenforceable. At the Closing Time, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "1939 Act"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(f) The Notes and the issuance and sale of the Notes to the Initial
Purchasers pursuant to the Indenture and this Agreement have been duly
authorized by the Company and at the Closing Time the Notes will have been
duly executed by the Company and will, when issued, executed, authenticated
and delivered in accordance with the Indenture and paid for in accordance
with the terms of this Agreement, constitute legal, valid and binding
obligations of the Company, enforceable against the Company according to
their terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws affecting creditors' rights
and remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and except
to the extent that a waiver of rights under any usury laws may be
unenforceable, will be entitled to the benefits of the Indenture and will
conform in all material respects to the description thereof in the Offering
Memorandum.
(g) The Exchange Notes have been duly authorized by the Company and
when executed, authenticated and delivered in accordance with the Indenture
and the Registration Rights Agreement will constitute legal, valid and
binding obligations of the Company, enforceable against the Company according
to their terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws affecting creditors' rights
and remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and except
to the extent that a waiver of rights under any usury laws may be
unenforceable, and will be entitled to the benefits of the Indenture.
(h) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or other equivalent instruments, as the
case may be, or, except such as would not have a Material Adverse Effect, in
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness
or in any other agreement, lease, contract, indenture or instrument to which
the Company or any of its subsidiaries is a party or by which it or any of
its subsidiaries or their respective property is bound, and there exists no
condition which, with the passage of time or otherwise, would constitute such
a default under any such document or instrument, except such as would not
have a Material Adverse Effect.
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(i) The execution, delivery and performance of the Operative
Documents, compliance by the Company with all the provisions thereof and the
consummation of the transactions contemplated thereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except such as may be
required under the securities or blue sky laws of the various states and,
with respect to the Registration Rights Agreement, the Commission) and will
not conflict with or constitute a breach of any of the terms or provisions
of, or a default (with the passage of time or otherwise) under, (i) the
charter or by-laws or other equivalent instruments, as the case may be, of
the Company or any of its subsidiaries, (ii) the Agreement and Plan of
Merger, dated as of April 30, 1999 (the "Merger Agreement"), by and among the
Company, Spring Acquisition Corp., a Florida corporation, and ABR Information
Services, Inc., a Florida corporation (together with its subsidiaries,
"ABR"), or (iii) except such as would not have a Material Adverse Effect, any
agreement, lease, contract, indenture or other instrument to which it or any
of its subsidiaries is a party or by which it or any of its subsidiaries or
their respective property is bound, or violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to the
Company, any of its subsidiaries or their respective property.
(j) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any of their
respective property is subject, and, to the best of the Company's knowledge,
no such proceedings are threatened except as disclosed or incorporated by
reference in the Offering Memorandum and except such as would not result in a
Material Adverse Effect or, in the case of governmental proceedings, would
not otherwise require disclosure in the Offering Memorandum.
(k) Except as disclosed or incorporated by reference in the
Offering Memorandum, neither the Company nor any of its subsidiaries nor, to
the best knowledge of the Company, any other person or entity for whom any of
them is or may be liable is in violation of any Federal, state, local,
provincial or foreign laws or regulations relating to pollution or protection
of human health or the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata),
including, without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products, asbestos or asbestos-containing materials, or
polychlorinated biphenyls ("Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), which violation
would have a Material Adverse Effect. "Violation" includes, but is not
limited to, noncompliance with any permit or other governmental authorization
required under applicable Environmental Laws and noncompliance with the terms
and conditions of any such permit or authorization.
(l) Neither the Company nor any of its subsidiaries has received
any communication (written or oral), whether from a governmental authority,
citizens' group, employee or otherwise, asserting that the Company or any of
its subsidiaries or any other person or entity for whom any of them is or may
be liable is not in compliance with any Environmental Laws or permit or
authorization required under applicable Environmental Laws where such failure
to comply would
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<PAGE>
have a Material Adverse Effect, and there are no circumstances that may
prevent or interfere with such full compliance in the future, except where
failure so to comply would not have a Material Adverse Effect.
(m) Except as disclosed or incorporated by reference in the
Offering Memorandum, there is no claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, natural resources damages, property damages, personal
injuries or penalties) arising out of, based on or resulting from (i) the
presence in or release into the environment of any Materials of Environmental
Concern at any location owned, leased or operated, now or in the past, by the
Company or any of its subsidiaries or, to the best knowledge of the Company,
any other person or entity for whom any of them is or may be liable, or (ii)
circumstances forming the basis of any violation or alleged violation of any
Environmental Law (collectively, "Environmental Claims") pending or
threatened against the Company or any of its subsidiaries or, to the best
knowledge of the Company, any other person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law, except any such matter
that would not have a Material Adverse Effect.
(n) Except as disclosed or incorporated by reference in the
Offering Memorandum, to the best of the Company's knowledge, there are no
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Materials of Environmental Concern, that could
form the basis of any Environmental Claim against the Company or any of its
subsidiaries with respect to property owned, leased or operated by or for the
Company or any of its subsidiaries, now or in the past, or against any person
or entity whose liability for any Environmental Claim the Company or any of
its subsidiaries has retained or assumed either contractually or by operation
of law, except any such matter that would not have a Material Adverse Effect.
(o) Except for liabilities pursuant to Environmental Laws reflected
in the Company's financial statements as set forth or incorporated by
reference in the Offering Memorandum, the Company has reasonably concluded
that no such liabilities of which it is currently aware would, singly or in
the aggregate, have a Material Adverse Effect.
(p) Except such as would not, singly or in the aggregate, have a
Material Adverse Effect, the Company and each of its subsidiaries has good
and marketable title, free and clear of all liens, claims, encumbrances and
restrictions, except liens for taxes not yet due and payable and restrictions
on the Company's and its subsidiaries' ability to encumber their assets
contained in (i) the Amended and Restated Credit Agreement, dated as of
December 12, 1995, Amended and Restated as of July 31, 1997, among the
Company, Bank of America National Trust and Savings Association, as Agent,
and the financial institutions party thereto, (ii) the Credit Agreement,
dated as of March 2, 1998, between Ceridian Canada Ltd. and Canadian Imperial
Bank of Commerce and (iii) the Credit Agreement, dated as of January 30,
1998, between
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Ceridian Canada Ltd. and The Toronto-Dominion Bank, to all property and
assets described in the Offering Memorandum as being owned by it. All leases
to which the Company or any of its subsidiaries is a party are valid and
binding and, except such as would not have a Material Adverse Effect, no
default has occurred or is continuing thereunder; and, with respect to real
property leases, the Company and its subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which any of them is a party
as lessee.
(q) The Company and each of its subsidiaries maintains insurance in
amounts and with limits and coverage which the Company in good faith deems
appropriate.
(r) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the Offering
Memorandum are independent public accountants with respect to the Company as
required by the 1933 Act.
(s) The financial statements, together with related schedules and
notes, set forth or incorporated by reference in the Offering Memorandum (and
any amendment or supplement thereto) present fairly the consolidated
financial position, results of operations and changes in financial position
of the Company and its subsidiaries at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial information and data of the
Company and its subsidiaries set forth in the Offering Memorandum (and any
amendment or supplement thereto) is, in all material respects, fairly
presented and prepared on a basis consistent with such financial statements
and the books and records of the Company. The PRO FORMA financial
information included in the Offering Memorandum presents fairly the
information shown therein and has been prepared in accordance with the
relevant accounting requirements of Regulation S-X. In the opinion of the
Company, the assumptions used in the preparation of such pro forma financial
information are reasonable and the adjustments used therein are appropriate
to give effect to the transactions or circumstances referred to therein.
(t) Except such as would not result in a Material Adverse Effect,
(i) the Company and each of its subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("Authorizations") as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described or
incorporated by reference in the Offering Memorandum; (ii) the Company and
each of its subsidiaries has fulfilled and performed all of its obligations
with respect to such Authorizations and no event has occurred which allows,
or after notice or lapse of time or both would allow, revocation or
termination thereof or results in any other impairment of the rights of the
holder of any such Authorizations; and (iii) except as described or
incorporated by reference in the Offering Memorandum, such Authorizations
contain no restrictions that are burdensome to the Company or any of its
subsidiaries.
(u) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
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(v) No holder of any security of the Company has any right to
require registration of any security of the Company on the Registration
Statement.
(w) Except as disclosed or incorporated by reference in the
Offering Memorandum and except such as would not, singly or in the aggregate,
have a Material Adverse Effect, neither the Company nor any of its
subsidiaries has (A) violated any applicable federal, state, local or foreign
law relating to employment or employment practices or the terms and
conditions of employment, including, without limitation, discrimination in
the hiring, promotion or pay of employees, wages, hours of work, plant
closings and layoffs, collective bargaining, and occupational safety and
health, or any provisions of the Worker Adjustment and Retraining
Notification Act of 1988 or the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the rules and regulations promulgated
thereunder or any other applicable law, rule or regulation (whether foreign
or domestic) relating to or governing the operation or maintenance of any
plan or arrangement falling within the definition of an "employee benefit
plan" (as such term is defined in Section 3(3) of ERISA) or any other
employee pension or benefit plan or arrangement, or (B) engaged in any unfair
labor practice. Except as disclosed or incorporated by reference in the
Offering Memorandum and except such as would not, singly or in the aggregate,
result in any Material Adverse Effect, there is (i) no charge pending or, to
the best of the Company's knowledge, threatened against the Company or any of
its subsidiaries before the Equal Employment Opportunity Commission or any
other federal, state, local or foreign agency responsible for the enforcement
of labor or employment laws and, to the best of the Company's knowledge, no
such agency is conducting or has threatened to initiate an investigation of
or relating to the Company or any of its subsidiaries; (ii) no complaint,
lawsuit or other proceeding pending or, to the best of the Company's
knowledge, threatened against the Company or any of its subsidiaries in which
any current or former employee, applicant for employment or class of the
foregoing is alleging breach of any express or implied contract of employment
of other violation of any federal, state, local or foreign law relating to
employment or employment practices or the terms and conditions of employment;
(iii) no unfair labor practice charge or complaint pending or, to the best of
the Company's knowledge, threatened against the Company or any of its
subsidiaries before the National Labor Relations Board or any corresponding
state, local, provincial or foreign agency, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is
pending or, to the best of the Company's knowledge, threatened against the
Company or any of its subsidiaries; (iv) to the best of the Company's
knowledge, no union representation claim or question existing with respect to
the employees of the Company or any of its subsidiaries and no union
organizing activities taking place; and (v) except as disclosed, no claim,
proceeding, action, audit or investigation pending, filed or reasonably
anticipated with respect to any employee pension or benefit plan. Except
foran immaterial agreement in connection with the Company's United Kingdom
operations, neither the Company nor any of its subsidiaries is a party to or
bound by any collective bargaining or similar agreement with any labor
organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of the Company
or any of its subsidiaries. Except as disclosed or incorporated by reference
in the Offering Memorandum and except such as would not, singly or in the
aggregate, result in any Material Adverse Effect, (i) no labor dispute
involving the employees of the Company or any of its subsidiaries exists or,
to the
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knowledge of the Company, is threatened or imminent; and (ii) the Company is
not aware of any existing, threatened labor disturbance by the employees of
any principal suppliers, manufacturers or contractors of the Company or any
of its subsidiaries.
(x) The books, records and accounts of the Company and its
subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in and dispositions of the assets of the Company and its
subsidiaries. The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (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 the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(y) All material tax returns required to be filed by the Company
and each of its subsidiaries have been filed and all such returns are true,
complete, and correct in all material respects. All material taxes that are
due or claimed to be due from the Company and each of its subsidiaries have
been paid other than those (i) currently payable without penalty or interest
or (ii) being contested in good faith and by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP. There
are no proposed tax assessments against the Company or any of its
subsidiaries that could singly or in the aggregate have a Material Adverse
Effect. The accruals and reserves on the books and records of the Company
and its subsidiaries in respect of any material tax liability for any taxable
period not finally determined are adequate to meet any assessments of tax for
any such period.
(z) The Company and its subsidiaries own, license or possess the
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks
and trade names presently employed by them in connection with the businesses
now operated by them, except such as to which the failure so to own, license
or possess would not, singly or in the aggregate, have a Material Adverse
Effect, and neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing, which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(aa) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
as rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
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(ab) The Company has full power, authority and legal capacity to
enter into and perform its obligations under this Agreement; and the Company
has taken all necessary corporate action to authorize the execution and the
performance of its obligations under this Agreement.
(ac) Each of the Company and its subsidiaries is in compliance with
all laws, ordinances and regulations (domestic and foreign) applicable to its
properties (whether owned or leased) and its business, as described in the
Offering Memorandum, except where noncompliance with such laws, ordinances
and regulations would not, singly or in the aggregate, have a Material
Adverse Effect.
(ad) The Registration Rights Agreement has been duly authorized by
the Company and, at the Closing Time, will have been duly executed and
delivered by the Company. When the Registration Rights Agreement has been
duly executed and delivered, such agreement will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws and subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity), and will conform in all material respects
to the description thereof in the Offering Memorandum.
(ae) Other than as described in the Offering Memorandum, no
"nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the 1933 Act (i) has imposed (or
has informed the Company that it is considering imposing) any condition
(financial or otherwise) on the Company's retaining any rating assigned to
any securities of the Company or (ii) has indicated to the Company that it is
considering (x) the downgrading, suspension, or withdrawal of, or any review
for a possible change that does not indicate the direction of the possible
change in, any rating so assigned or (y) any change in the outlook for any
rating of the Company or any securities of the Company.
(af) Since the respective dates as of which information is given in
the Offering Memorandum, other than as disclosed in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or
any development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole (a "Material
Adverse Change"), (ii) there has not been any Material Adverse Change in the
capital stock or in the long-term debt of the Company or any of its
subsidiaries.
(ag) Each of the Preliminary Offering Memorandum and the Final
Offering Memorandum, as of its date, contains all the information specified
in, and meeting the requirements of, Rule 144A(d)(4) under the Act.
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(ah) When the Notes are issued and delivered by the Company pursuant
to this Agreement, the Notes will not be of the same class (within the
meaning of Rule 144A) as any security of the Company that is listed on a
national securities exchange registered under Section 6 of the 1934 Act or
that is quoted in a United States automated interdealer quotation system.
(ai) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company or any of its
representatives (other than the Initial Purchasers, as to whom the Company
makes no representation) in connection with the offer and sale of the Notes
contemplated hereby, 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 at any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Notes have been issued
and sold by the Company within the six-month period immediately prior to the
date hereof.
(aj) With respect to those Notes sold in reliance on Regulation S,
(i) none of the Company, its Affiliates or any person acting on its or their
behalf (other than the Initial Purchasers, as to whom the Company makes no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S and (ii) each of the Company and its
Affiliates and any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation) has
complied and will comply with the offering restrictions requirement of
Regulation S.
(ak) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the 1939 Act, assuming the
accuracy of the Initial Purchasers' representations and warranties set forth
in Section 2(c) hereof and that there has been no breach by the Initial
Purchasers of their agreements pursuant to Section 6(a) hereof.
(al) No registration under the 1933 Act is required for the sale of
the Notes to the Initial Purchasers as contemplated hereby or for the offers
(the "Exempt Resales") of the Notes purchased hereunder on the terms set
forth in the Offering Memorandum, as amended or supplemented, (A) to persons
each of whom the applicable Initial Purchaser reasonably believes to be a
"qualified institutional buyer" within the meaning of Rule 144A (a "Qualified
Institutional Buyer") or (B) in offshore transactions meeting the
requirements of Regulations S under the 1933 Act ("Regulation S"), assuming
the accuracy of the Initial Purchasers' representations and warranties set
forth in Section 2(c) hereof and that there has been no breach by the Initial
Purchasers of their agreements pursuant to Section 6(a) hereof.
(am) Each certificate signed by any officer of the Company and
delivered to the Initial Purchasers or counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company to the
Initial Purchasers as to the matters covered thereby.
(an) The Company has no knowledge that (i) the consolidated
financial statements of ABR, together with related notes and schedules, do
not present fairly the financial position and
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the results of operations of ABR at the indicated dates and for the indicated
periods, or (ii) that such financial statements have not been prepared in
accordance with generally accepted accounting principles, consistently
applied throughout the periods involved except as set forth in the notes
thereto, and that all adjustments necessary for a fair presentation of
results for such periods have not been made, or (iii) that the financial
information regarding ABR included in the Offering Memorandum does not
present fairly the information shown therein or that such information has not
been compiled on a basis consistent with the financial statements presented
therein.
(ao) The Tender Offer Statement that was filed with the Commission
on May 7, 1999 pursuant to Section 14(d)(1) of the 1934 Act complies, and any
amendments or supplements thereto will comply, as to form in all material
respects with the requirements of Schedule 14D-1 of the 1934 Act and the
applicable rules and regulations thereunder; and insofar as the Tender Offer
Statement contains a summary of the documents referred to therein, to the
best knowledge of the Company, such summaries are fair and accurate and
correctly present the information called for with respect thereto.
(ap) The Company has no knowledge that the representations and
warranties of ABR set forth in the Merger Agreement are not true, accurate
and complete, except for such matters which in the aggregate would not have a
material adverse effect upon the Company, its subsidiaries and ABR, taken as
a whole.
(aq) None of the Company or any of its subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock
(as defined in Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time).
(ar) Following consummation of the transactions contemplated by the
Merger Agreement and application of the net proceeds of the Offering, not
more than 25% of the fair value of the assets of the Company or of the
Company and its subsidiaries on a consolidated basis will be Margin Stock.
The Company acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 5 hereof, counsel to the Company and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance. The Initial Purchasers
acknowledge that the Company makes no representation or warranty regarding
ABR or its subsidiaries except as set forth in Section 1(an) and 1(ap) hereof.
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SECTION 2. SALE AND DELIVERY TO INITIAL PURCHASERS; CLOSING.
(a) NOTES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth,
the Company agrees to sell to each Initial Purchaser, severally and not
jointly, and each Initial Purchaser, severally and not jointly, agrees to
purchase from the Company, at the prices set forth in SCHEDULE B, the
aggregate principal amount of each series of Notes set forth in SCHEDULE A
opposite the name of such Initial Purchaser, plus any additional principal
amount of such series of Notes that such Initial Purchaser may become
obligated to purchase pursuant to the provisions of Section 11 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Notes shall be made at the office of Skadden, Arps,
Slate, Meagher & Flom LLP, New York, New York, or at such other place as
shall be agreed upon by the Initial Purchasers and the Company, at 10:00 A.M.
(eastern time) on the third business day after the date hereof (unless
postponed in accordance with the provisions of Section 11), or such other
time not later than ten business days after such date as shall be agreed upon
by the Initial Purchasers and the Company (such time and date of payment and
delivery being herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the Initial Purchasers of certificates for the Notes to be purchased by
them.
(c) QUALIFIED INSTITUTIONAL BUYE.R Initial Purchaser severally and
not jointly represents and warrants to, and agrees with, the Company that it
is a Qualified Institutional Buyer and an "accredited investor" within the
meaning of Rule 501(a) under the 1933 Act (an "Accredited Investor").
(d) INTERESTS IN GLOBAL NOT . The Company will cause the Trustee
to authenticate and issue one or more certificates evidencing the Notes to
DTC registered in the name of Cede & Co., as nominee of DTC or such other
Persons as the Initial Purchases shall inform the Company in writing. The
certificates representing the Notes shall be made available for examination
by the Initial Purchasers in The City of New York not later than 10:00 a.m.
on the last business day prior to Closing Time.
SECTION 3. COVENANTS. The Company covenants with each Initial
Purchaser as follows:
(a) OFFERING MEMORANDUM. The Company, as promptly as possible,
will furnish to each Initial Purchaser, without charge, such number of copies
of the Final Offering Memorandum and any amendments and supplements thereto
and documents incorporated by reference therein as such Initial Purchaser may
reasonably request.
(b) NOTICE AND EFFECT OF MATERIAL EVENTS. The Company will
immediately notify each Initial Purchaser, and confirm such notice 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
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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 changes in or affecting the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company and
its subsidiaries that (i) make any statement in the Offering Memorandum false
or misleading or (ii) are not disclosed or incorporated in the Offering
Memorandum. 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 Final Offering Memorandum in order that the Final
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 Final Offering Memorandum by
preparing and furnishing to each Initial Purchaser an amendment or amendments
of, or a supplement or supplements to, the Final 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 Final
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.
(c) AMENDMENT TO OFFERING MEMORANDUM AND SUPPLEMENT. The Company
will advise each Initial Purchaser promptly of any proposal to amend or
supplement the Offering Memorandum and will not effect such amendment or
supplement without the consent of the Initial Purchasers. Neither the
consent of the Initial Purchasers, nor an Initial Purchaser's delivery of any
such amendment or supplement, shall constitute a waiver of any of the
conditions set forth in Section 5 hereof.
(d) QUALIFICATION OF NOTES FOR OFFER AND SALE. The Company will
use its reasonable best efforts, in cooperation with the Initial Purchasers,
to qualify the Notes for offering and sale under the applicable securities
laws of such jurisdictions as the Initial Purchasers may designate and will
maintain such qualifications in effect as long as required for the sale of
the Notes; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation or as a dealer in Notes in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject.
(e) RATING OF NOTES. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Service, a division of the
McGraw Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc.
("Moody's") to provide their respective credit ratings of the Notes.
(f) DTC. The Company will cooperate with the Initial Purchasers
and use its reasonable best efforts to permit the Notes to be eligible for
clearance and settlement through the facilities of DTC.
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(g) USE OF PROCEEDS. The Company will use the net proceeds
received by it from the sale of the Notes in the manner specified in the
Offering Memorandum under "Use of Proceeds."
(h) RESTRICTION ON SALE OF NOTES. During a period of 20 days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of the Initial Purchasers, directly or indirectly, issue,
sell, offer or agree to sell, grant any option for the sale of, or otherwise
dispose of, any Notes or securities of the Company that are convertible into,
or exchangeable for, the Notes.
(i) ABR ACQUISITION. The Company will use its reasonable best
efforts to consummate the acquisition of ABR on the terms set forth in the
Merger Agreement without waivers of any conditions thereunder (except for
such changes in such terms or such waivers as would not materially adversely
affect the holders of the Notes) and will take all such actions as shall be
required in connection therewith, including the solicitations of proxies from
the stockholders of the Company to vote in favor of such acquisition.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSE. Other than the fees and disbursements of counsel for
the Initial Purchasers, the Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Offering Memorandum (including
financial statements and any schedules or exhibits and any documents
incorporated therein by reference) and of each amendment or supplement
thereto, (ii) the preparation, printing and delivery to the Initial
Purchasers of this Agreement, the Registration Rights Agreement, the
Indenture and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Notes, (iii) the
preparation, issuance and delivery of the certificates for the Notes to the
Initial Purchasers, including any charges of DTC in connection therewith,
(iv) the fees and disbursements of the Company's counsel, accountants and
other advisors, (v) the qualification of the Notes in accordance with the
provisions of Section 3(d) hereof, including filing fees in connection
therewith, (vi) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Notes, and (vii) any fees payable in connection with the rating of the
Notes. Notwithstanding the foregoing, the Company shall not be required to
reimburse the Initial Purchasers for fees and expenses associated with the
road show.
(b) TERMINATION OF AGREEMEN. If this Agreement is terminated by
the Initial Purchasers in accordance with the provisions of Section 5(i) or
10 hereof, the Company shall reimburse the Initial Purchasers for all of
their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the Initial Purchasers.
SECTION 5. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the several Initial Purchasers hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officers of the Company or any of
its subsidiaries delivered pursuant to the provisions hereof, to the
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performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) OPINION OF COUNSEL FOR COMPANY. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Time, of Oppenheimer Wolff & Donnelly LLP, counsel for the Company,
in form and substance reasonably satisfactory to counsel for the Initial
Purchasers, to the effect set forth in EXHIBIT A hereto and to such further
effect as counsel to the Initial Purchasers may reasonably request. The
opinion of Oppenheimer Wolff & Donnelly LLP described in this Section 5(a)
shall be rendered to the Initial Purchasers at the request of the Company and
shall so state therein. In rendering such opinion, such counsel may rely
upon certificates of any officers of the Company or of government officials
as to matters of fact of which the maker of such certificate has knowledge
provided that counsel rendering such opinion shall furnish the Initial
Purchasers with copies of any such statements or certificates. In addition,
in rendering their opinion, such counsel may state that their opinion is
limited to matters of the laws of the State of Minnesota, the State of New
York, the General Corporation Law of the State of Delaware and the federal
law of the United States.
(b) OPINION OF GENERAL COUNSEL FOR COMPANY. At the Closing Time,
the Initial Purchasers shall have received the favorable opinion, dated as of
the Closing Time, of Gary Nelson, General Counsel for the Company, in form
and substance reasonably satisfactory to counsel for the Initial Purchasers,
to the effect set forth in EXHIBIT B hereto and to such further effect as
counsel to the Initial Purchasers may reasonably request. The opinion of
Gary Nelson described in this Section 5(b) shall be rendered to the Initial
Purchasers at the request of the Company and shall so state therein.
(c) OPINION OF COUNSEL FOR INITIAL PURCHASERS. At the Closing
Time, the Initial Purchasers shall have received the favorable opinion, dated
as of the Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel
for the Initial Purchasers, in form and substance reasonably satisfactory to
the Initial Purchasers. In giving such opinion such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States, upon the opinions
of counsel satisfactory to the Initial Purchasers. Such counsel may also
state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(d) OFFICERS' CERTIFICATE. At the Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any Material Adverse Change,
whether or not arising in the ordinary course of business, and the Initial
Purchasers shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting
officer of the Company, dated as of the Closing Time, to the effect that (i)
there has been no such Material Adverse Change, (ii) the representations and
warranties in Section 1 hereof that are qualified as to materiality are true
and correct in all respects with the same force and effect as though
expressly made at and as of the Closing Time, and the representations and
warranties in Section 1 hereof that are not so qualified as to materiality
are true and correct in all material respects with the
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same force and effect as though expressly made at and as of the Closing Time,
and (iii) the Company has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time.
(e) ACCOUNTANTS' COMFORT LETTER. At the time of the execution of
this Agreement, the Initial Purchasers shall have received from each of KPMG
LLP, independent accountants for the Company, and Grant Thornton LLP,
independent accountants for ABR, a letter dated such date, in form and
substance satisfactory to the Initial Purchasers, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to initial purchasers with respect to the financial statements and certain
financial information contained or incorporated by reference in the Offering
Memorandum.
(f) BRING-DOWN COMFORT LETTER. At the Closing Time, the Initial
Purchasers shall have received from KPMG LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.
(g) MAINTENANCE OF RATING. At the Closing Time, the Notes shall be
rated at least Baa3 by Moody's and BBB by S&P, and the Company shall have
delivered to the Initial Purchasers a letter dated the date of the Closing
Time from each such rating agency, or other evidence reasonably satisfactory
to the Initial Purchasers, confirming that the Notes have such ratings; and
since the date of this Agreement there shall not have occurred a downgrading
in the rating assigned to the Notes or any of the Company's other debt
securities by any "nationally recognized statistical rating agency," as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the
1933 Act, and, except as disclosed in the Preliminary Offering Memorandum, no
such securities rating agency shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
the Notes or any of the Company's other debt securities.
(h) ADDITIONAL DOCUMENTS. At the Closing Time, counsel for the
Initial Purchasers shall have been furnished with such documents and opinions
as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Notes as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties or the
fulfillment of any of the conditions herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Notes as
herein contemplated shall be reasonably satisfactory in form and substance to
the Initial Purchasers and counsel for the Initial Purchasers.
(i) TERMINATION OF AGREEMENT. If any condition specified in this
Section that is to be fulfilled by the Company shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Initial Purchasers by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1,
7, 8 and 9 shall survive any such termination and remain in full force and
effect.
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SECTION 6. SUBSEQUENT OFFERS AND RESALES OF THE NOTES.
(a) OFFER AND SALE PROCEDURES. Each of the Initial Purchasers and
the Company shall agree to observe the following procedures in connection
with the offer and sale of the Notes:
(i) OFFERS AND SALES ONLY TO QUALIFIED INSTITUTIONAL BUYERS.
Offers and sales of the Notes shall only be made (A) to persons whom the
offeror or seller reasonably believes to be Qualified Institutional
Buyers or (B) in offshore transactions meeting the requirements of
Regulation S.
(ii) NO GENERAL SOLICITATION. No general solicitation or
general advertising (within the meaning of Rule 502(c) under the 1933
Act) will be used in the United States in connection with the offering or
sale of the Notes.
(iii) PURCHASES BY NON-BANK FIDUCIARIES. In the case of a
non-bank Subsequent Purchaser of Notes acting as a fiduciary for one
or more third parties, each third party shall, in the judgment of the
applicable Initial Purchaser, be a Qualified Institutional Buyer or a
Non-U.S. Person within the meaning of Regulation S.
(iv) SUBSEQUENT PURCHASER NOTIFICATION. Each Initial Purchaser
will take reasonable steps to inform, and cause each of its affiliates to
take reasonable steps to inform, persons acquiring Notes from such
Initial Purchaser or affiliate, as the case may be, in the United States
that (A) the offering and sale of the Notes have not been and will not be
registered under the 1933 Act, (B) the Notes are being sold to them
without registration under the 1933 Act in reliance on Rule 144A or
Regulation S and (C) the Notes may not be offered, sold or otherwise
transferred except (1) to the Company, (2) pursuant to a registration
statement which has been declared effective under the 1933 Act, or (3) in
accordance with (x) Rule 144A to a person whom the seller reasonably
believes is a Qualified Institutional Buyer that is purchasing such Notes
for its own account or for the account of a Qualified Institutional Buyer
to whom notice is given that the offer, sale or transfer is being made in
reliance on Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act.
(v) RESTRICTIONS ON TRANSFER. The transfer restrictions and
the other provisions set forth in the Offering Memorandum under the
heading "Notice to Investors," including the legend required thereby,
shall apply to the Notes except as otherwise agreed by the Company and
the Initial Purchasers.
(vi) DELIVERY OF OFFERING MEMORANDUM. Each Initial Purchaser
will deliver to each purchaser of the Notes from such Initial Purchaser,
in connection with its original distribution of the Notes, a copy of the
Offering Memorandum, as amended and supplemented at the date of such
delivery.
(b) COVENANTS OF THE COMPANY. The Company covenants with each
Initial Purchaser as follows:
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(i) INTEGRATION. The Company will not and will cause its
Affiliates not to solicit any offer to buy or make any offer or sale of,
or otherwise negotiate in respect of, securities of the Company of any
class if, as a result of the doctrine of "integration" referred to in
Rule 502 under the 1933 Act, such offer or 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 1933 Act provided by Section 4(2) thereof or by Rule 144A or by
Regulation S thereunder or otherwise.
(ii) RULE 144A INFORMATION. In order to render the Notes
eligible for resale pursuant to Rule 144A under the 1933 Act, while any
of the Notes remain outstanding, the Company will make available, upon
request, to any holder of Notes or prospective purchasers of Notes the
information specified in Rule 144A(d)(4), unless the Company furnishes
information to the Commission pursuant to Section 13 or 15(d) of the 1934
Act (such information, whether made available to holders or prospective
purchasers or furnished to the Commission, is herein referred to as
"Additional Information").
(c) RESALE PURSUANT TO RULE 144A. Each Initial Purchaser
understands that the offering and sale of the Notes have not been and will
not be registered under the 1933 Act and the Notes may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with an exemption from the registration
requirements of the 1933 Act. Each Initial Purchaser severally represents and
agrees, that it has offered and sold Notes and will offer and sell Notes as
part of their distribution at any time only in accordance with Rule 144A
under the 1933 Act or Regulation S.
SECTION 7. INDEMNIFICATION
(a) The Company shall indemnify and hold harmless (i) each of the
Initial Purchasers and (ii) each person, if any, who controls (within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act) any of
the Initial Purchasers (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person"), and (iii) the
respective officers, directors, partners, employees, representatives and
agents of any of the Initial Purchasers or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an
"Indemnified Person") to the fullest extent lawful from and against any and
all losses, claims, damages, liabilities, judgments, actions and expenses
(including without limitation and as incurred, reimbursement of all
reasonable costs of investigating, preparing, pursuing or defending any claim
or action or any investigation or proceeding by any governmental agency or
body, commenced or threatened, including the reasonable fees and expenses of
counsel to any Indemnified Person) directly or indirectly caused by, related
to, based upon, arising out of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in the Offering
Memorandum (or any amendment thereto) or any document incorporated by
reference therein or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Offering
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Memorandum, in light of the circumstances under which they were made) not
misleading, except insofar as such losses, claims, damages, liabilities,
judgments, actions or expenses are caused by an untrue statement or omission
or alleged untrue statement or omission that is (i) made in reliance upon and
in conformity with information relating to any Initial Purchaser furnished in
writing to the Company by such Initial Purchaser expressly for use in the
Offering Memorandum ("Initial Purchaser Information") or (ii) with respect to
the Initial Purchaser from whom the person asserting the loss, claim, damage
or liability purchased Notes, made in any Preliminary Offering Memorandum if
a copy of the Offering Memorandum (as amended or supplemented) shall have
been furnished to the Initial Purchasers by the Company with such amendments
or supplements thereto on a timely basis and such Offering Memorandum was not
delivered by or on behalf of any of the Initial Purchasers to the person
asserting the claim or action if required by law to have been so delivered by
the Indemnified Person seeking indemnification, at or prior to the written
confirmation of the sale of the Notes, and it shall be finally determined by
a court of competent jurisdiction, by a judgment not subject to appeal or
review, that the Offering Memorandum (as so amended or supplemented) would
have corrected such untrue statement or omission. The Company shall notify
you promptly of the institution, threat or assertion of any claim, proceeding
(including any governmental investigation) or litigation in connection with
the matters addressed by this Agreement which involves the Company or an
Indemnified Person. The parties hereto agree that for purposes of this
Section 7 and Section 1(b) the only Initial Purchasers Information is (i) the
statement contained in the fourth sentence in the third paragraph in "Plan of
Distribution" relating to the Company receiving advice from the Initial
Purchasers that the Initial Purchasers intend to make a market in the Notes,
and (ii) the fourth, fifth and sixth paragraph of "Plan of Distribution"
relating to stabilization transactions.
(b) In case any action or proceeding (including any
governmental investigation) shall be brought or asserted against any
Indemnified Person with respect to which indemnity may be sought from an
indemnifying party (or indemnifying parties), such Indemnified Person shall
promptly notify the indemnifying party (or indemnifying parties) in writing
(PROVIDED that the failure to give such notice shall not relieve the
indemnifying party (or indemnifying parties) of its obligations pursuant to
this Agreement unless and only to the extent such failure to give notice
results in the loss or compromise of any material rights or defenses of the
indemnifying party (or indemnifying parties) as determined by a court of
competent jurisdiction by a final judgment no longer subject to appeal or
review and shall not relieve the indemnifying party from any liability which
it may have to an Indemnified Person otherwise than under this Section 7).
Upon receiving such notice, the indemnifying party (or indemnifying parties)
shall be entitled to participate in any such action or proceeding and to
assume, at their sole expense, the defense thereof, with counsel reasonably
satisfactory to such Indemnified Person (who shall not, except with the
consent of the Indemnified Person, be counsel to the indemnifying party (or
indemnifying parties) or an affiliate thereof) and, after written notice from
the indemnifying party (or indemnifying parties) to such Indemnified Person
of its or their election so to assume the defense thereof within 15 business
days after receipt of the notice from the Indemnified Person of such action
or proceeding, the indemnifying party (or indemnifying parties) shall not be
liable to such Indemnified Person hereunder for legal expenses of other
counsel subsequently incurred by such Indemnified Person in connection with
the defense thereof, other than reasonable costs of investigation, unless (i)
the indemnifying party (or
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indemnifying parties) agrees in writing to pay such fees and expenses, or
(ii) the indemnifying party (or indemnifying parties) fails to assume such
defense within the 15 business days specified above or fails to employ
counsel reasonably satisfactory to such Indemnified Person, or (iii) the
named parties to any such action or proceeding (including any impleaded
parties) include both such Indemnified Person and the indemnifying party (or
indemnifyig parties) or its affiliates, and such Indemnified Person shall
have been advised by counsel in writing that a conflict of interest exists
between such Indemnified Person and the indemnifying party (or indemnifying
parties) or its affiliates (in which case, if such Indemnified Person
notifies the indemnifying party (or indemnifying parties) in writing, neither
the indemnifying party (or indemnifying parties) nor its affiliates shall
have the right to assume the defense thereof), it being understood, however,
that the indemnifying party (or indemnifying parties) shall not, in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for all Indemnified Persons,
which firm shall be designated in writing by BofA so long as it is one of the
Indemnified Persons or by mutual agreement if it is not such a person. No
indemnifying party shall be liable for any settlement of any such action or
proceeding effected without its prior written consent. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
the indemnifying party (or indemnifying parties) to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, the indemnifying party (or indemnifying parties)
agree that they shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than
90 business days after receipt by the indemnifying party (or indemnifying
parties) of the aforesaid request and (ii) the indemnifying party (or
indemnifying parties) shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. The
indemnifying party (or indemnifying parties) shall not, without the prior
written consent of each Indemnified Person, settle or compromise or consent
to the ntry of judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Person is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Person from all liability arising out of such action, claim, litigation or
proceeding.
(c) Each of the Initial Purchasers agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers, and any person controlling (within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act) the Company, to the same extent as
the foregoing indemnity from the Company to each of the Indemnified Persons,
but only with respect to claims and actions based on any Initial Purchaser
Information provided by such Initial Purchaser.
SECTION 8. CONTRIBUTION. If the indemnification provided for in
Section 7 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the Company or the Initial
Purchasers, as applicable, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims,
21
<PAGE>
damages, liabilities and expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand from the offering of the Notes or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
indemnifying parties and the indemnified party, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on
the one hand, and any of the Initial Purchasers, on the other hand, shall be
deemed to be in the same proportion as the total proceeds from the offering
(net of discounts and commissions but before deducting expenses) received by
the Company bears to the total discounts and commissions received by such
Initial Purchaser. The relative fault of the Company on the one hand, and
the Initial Purchasers, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
related to information supplied by the Company, on the one hand, or the
Initial Purchasers, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The indemnity and contribution obligations of the
Company set forth herein and in Section 7 hereof shall be in addition to any
liability or obligation that the Company may otherwise ave (other than with
respect to the matters covered by Section 7 and this Section 8) to any
Indemnified Person.
The Company and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 8 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
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of Section 7 and this Section 8, none of the Initial Purchasers
(or their related Indemnified Persons) shall be required to contribute, in
the aggregate, any amount in excess of the amount by which the total discount
applicable to the Notes purchased by such Initial Purchaser exceeds the
amount of any damages which such Initial Purchaser 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 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective principal amounts of Notes purchased by each of the Initial
Purchasers hereunder and not joint.
The rights and obligations provided in this Section 8 shall
terminate fifteen years from the date hereof.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of
22
<PAGE>
officers of the Company or any of its subsidiaries submitted pursuant hereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Initial Purchaser or by or on
behalf of the Company, and shall survive delivery of the Notes to the Initial
Purchasers.
SECTION 10. TERMINATION OF AGREEMENT
(a) TERMINATION; GENERAL. The Initial Purchasers may terminate
this Agreement, by notice to the Company, at any time at or prior to the
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in
the Offering Memorandum, any Material Adverse Change, whether or not arising
in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Initial Purchasers, impracticable to market the Notes
or to enforce contracts for the sale of the Notes, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or
by such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either U.S. Federal or New York
authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section 10, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 7, 8 and 9 shall survive such termination and remain in full
force and effect.
SECTION 11. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS. If
one or more of the Initial Purchasers shall fail at the Closing Time to
purchase the Notes which it or they are obligated to purchase under this
Agreement (the "Defaulted Notes"), BofA shall have the right, but not the
obligation, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Initial Purchasers, or any other Initial Purchasers, to
purchase all, but not less than all, of the Defaulted Notes in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, BofA
shall not have completed such arrangements within such 24-hour period, then
this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser.
If at the Closing Time any one or more of the Initial
Purchasers shall fail or refuse to purchase the Notes which it or they have
agreed to purchase hereunder on such date and the aggregate principal amount
of Notes which such defaulting Initial Purchaser or Initial Purchasers, as
the case may be, agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of Notes to be purchased on such
date by all Initial
23
<PAGE>
Purchasers, each non-defaulting Initial Purchaser shall be obligated
severally, in the proportion which the principal amount of Notes set forth
opposite its name in Schedule A bears to the aggregate principal amount of
Notes which all the non-defaulting Initial Purchasers, as the case may be,
have agreed to purchase, or in such other proportion as you may specify, to
purchase the Notes which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase on
such date; PROVIDED that in no event shall the aggregate principal amount of
Notes which any Initial Purchaser has agreed to purchase pursuant to Section
2 hereof be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such principal amount of Notes without the written consent of
such Initial Purchaser. If at the Closing Time any Initial Purchaser or
Initial Purchasers shall fail or refuse to purchase Notes and the aggregate
principal amount of Notes with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Notes to be purchased by
all Initial Purchasers and arrangements satisfactory to you and the Company
for purchase of such Notes are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Initial Purchaser and the Company. In any such case which
does not result in termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Time, but in no event for longer
than seven days, in order that the required changes, if any, in the Offering
Memorandum or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of any such Initial
Purchaser under this Agreement.
No action pursuant to this Section, shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either BofA or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Offering Memorandum or in any
other documents or arrangements.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Initial Purchasers shall be directed to c/o Banc of America Securities LLC,
100 North Tryon Street, Charlotte, North Carolina 28255, attention of Keith
DeLeon; notices to the Company shall be directed to it at 8100 34th Avenue
South, Minneapolis, Minnesota, attention of Gary Nelson.
SECTION 13. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Initial Purchasers and the Company and their respective successors
and the controlling persons and other persons referred to in Sections 7 and 8
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. This Agreement and all conditions and provisions hereof are
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 other persons and
24
<PAGE>
their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Notes from any Initial
Purchaser shall be deemed to be a successor by reason of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE
LAWS AND RULES. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
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 between the Initial Purchasers and the Company in accordance with
its terms.
<PAGE>
Very truly yours,
CERIDIAN CORPORATION
By: /s/Gary M. Nelson
---------------------
Name: Gary M. Nelson
Title: Vice President, General
Counsel and Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written:
BANC OF AMERICA SECURITIES LLC
By: /s/Lynn T. McConnell
----------------------------
Authorized Signatory
CHASE SECURITIES INC.
By: /s/Melanie Shugart
----------------------------
Authorized Signatory
BNY CAPITAL MARKETS, INC.
By: /s/Daniel Klinger
----------------------------
Authorized Signatory
TD SECURITIES (USA) INC.
By: /s/Gordon A. Paris
----------------------------
Authorized Signatory
U.S. BANCORP PIPER JAFFRAY INC.
By: /s/Stuart C. Harvey, Jr.
----------------------------
Authorized Signatory
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal
Name of Initial Purchaser Amount of
------------------------- Senior Notes
------------
<S> <C>
Banc of America Securities LLC . . . . . . . . . $315,000,000
Chase Securities Inc. . . . . . . . . . . . . . . $ 67,500,000
BNY Capital Markets, Inc. . . . . . . . . . . . . $ 22,500,000
TD Securities (USA) Inc. . . . . . . . . . . . . $ 22,500,000
U.S. Bancorp Piper Jeffrey Inc. . . . . . . . . . $ 22,500,000
------------
Total . . . . . . . . . . . . . . . . . . . . . . $450,000,000
------------
------------
</TABLE>
<PAGE>
SCHEDULE B
CERIDIAN CORPORATION
$450,000,000
7.25% Senior Notes due June 1, 2004
1. The initial offering price of the Notes shall be 99.654% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the
Notes shall be 99.029% of the principal amount thereof.
3. The interest rate on the Notes shall be 7.25% per annum.
<PAGE>
SCHEDULE C
<TABLE>
<CAPTION>
NAME PLACE OF INCORPORATION
---- ----------------------
<S> <C>
Spring Acquisition Corp. Florida
Comdata Network, Inc. Maryland
Ceridian Canada, Ltd. Canada
</TABLE>
<PAGE>
EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) the Indenture and the Notes have been duly authorized,
executed and delivered by the Company; the issuance and sale of the
Notes to the Initial Purchasers pursuant to this Agreement have been
duly authorized;
(ii) the Notes, when executed and authenticated in accordance
with the terms of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, will
be legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, subject to the following exceptions,
limitations and qualifications: the effect of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws then
or thereafter in effect relating to or affecting the rights and remedies
of creditors; general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or law), and the
discretion of the court before which any proceeding therefor may be
brought; the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy;
(iii) the Exchange Notes have been duly authorized by the
Company and when executed, authenticated and delivered in accordance
with the terms of the Indenture and the Registration Rights Agreement,
will be legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture, subject to the following
exceptions, limitations and qualifications: the effect of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws then or thereafter in effect relating to or affecting the
rights and remedies of creditors; general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or law), and the discretion of the court before which any
proceeding therefor may be brought; the unenforceability under certain
circumstances under law or court decisions of provisions providing for
the indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to
public policy;
(iv) the Indenture, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms, subject to the following exceptions, limitations and
qualifications: the effect of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws then or
thereafter in effect relating to or affecting the rights and remedies of
creditors; general principles of equity (regardless of whether
enforcement is
<PAGE>
considered in a proceeding in equity or law), and the discretion of the
court before which any proceeding therefor may be brought; the
unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy; the
enforceability of the waiver of rights or defenses under any usury law
contained in the Indenture;
(v) the Notes, the Exchange Notes, the Registration Rights
Agreement and the Indenture conform in all material respects to the
descriptions thereof contained in the Offering Memorandum under the
headings "Description of the Notes" and "Exchange Offer; Registration
Rights";
(vi) the Indenture complies as to form in all material
respects with the requirements of the 1939 Act, and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder. It is not necessary in connection with the offer,
sale and delivery of the Notes to the Initial Purchasers in the manner
contemplated by this Agreement or in connection with the Exempt Resales
to qualify the Indenture under the 1939 Act;
(vii) the execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Indenture by the
Company, compliance by the Company with all the provisions hereof and
thereof and the consummation of the transactions contemplated hereby and
thereby, including the issuance and sale of the Notes and the Exchange
Notes to the Initial Purchasers, will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except such as may be
required under the 1933 Act, the 1939 Act or other securities or blue
sky laws or the laws of any foreign countries) and will not conflict
with or constitute a breach of any of the terms or provisions of, or a
default (with the passage of time, the giving of notice or otherwise)
under, the charter or by-laws or other equivalent instruments, as the
case may be, of the Company or any of the Subsidiaries or any agreement,
lease, contract, indenture or other instrument referenced in the
Offering Memorandum or any document incorporated by reference therein,
or (assuming compliance with all applicable state securities or blue sky
laws or the laws of any foreign countries) violate or conflict with any
valid statutes or valid and published administrative regulations,
including Regulation U of the Federal Reserve Board, applicable to the
Company or any of its Subsidiaries or their respective properties or
solely in respect of Regulation U to the Initial Purchasers which, in
our opinion, are normally applicable to the transactions of the type
contemplated by this Agreement or violate any judgment, injunction,
order or decree disclosed in writing to us that names the Company or any
of the Subsidiaries and is specifically directed to any of them or any
of their respective properties;
(viii) the Company has the corporate power and authority to
enter into and perform this Agreement; and this Agreement has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company enforceable in accordance with its
terms, subject to the following exceptions, limitations and
qualifications: the effect of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws then or
thereafter in effect relating to or affecting the rights and remedies of
creditors; general
<PAGE>
principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or law), and the discretion of the court before
which any proceeding therefor may be brought; the unenforceability under
certain circumstances under law or court decisions of provisions
providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is
contrary to public policy;
(ix) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(x) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to the following exceptions,
limitations and qualifications: the effect of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws then
or thereafter in effect relating to or affecting the rights and remedies
of creditors; general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or law), and the
discretion of the court before which any proceeding therefor may be
brought; the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to liability where such
indemnification or contribution is contrary to public policy; and
(xi) no registration under the 1933 Act is required for the
sale of the Notes to the Initial Purchasers as contemplated by this
Agreement or for the Exempt Resales, assuming (x) that each Initial
Purchaser is a QIB, (y) the accuracy of the representations and
agreement of the Company set forth in Sections 1(a) and 1(ag) through
1(ai) of the Purchase Agreement, and (z) no breach by the Initial
Purchasers of their agreements pursuant to Section 6(a) of this
Agreement.
We have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Initial Purchasers and
their counsel at which the contents of the Offering Memorandum were discussed
and, although we have not independently verified and are not passing upon and
do not assume responsibility for the accuracy, completeness or fairness of
the statements contained in the aforesaid Offering Memorandum (except as
specified elsewhere herein), on the basis of the foregoing, nothing has come
to our attention that causes us to believe that the Offering Memorandum
contained any 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. We express no opinion with respect to the
financial statements, schedules and pro forma and other financial and
statistical data included or incorporated by reference in the Offering
Memorandum.
<PAGE>
EXHIBIT B
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) the Company has been duly incorporated and the Company and
each of its subsidiaries listed on Schedule C to the Purchase Agreement
(the "Subsidiaries") is existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and corporate authority required to carry on its business as described in
the Offering Memorandum and to own, lease and operate its properties;
(ii) to the best of his knowledge, each contract or document
material to the Company and its subsidiaries as a whole described in or
whose description is incorporated into the Offering Memorandum is in full
force and effect in accordance with its terms, except such as would not
cause a Material Adverse Effect;
(iii) neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or other equivalent
instruments, as the case may be, and, except such as would not have a
Material Adverse Effect, neither the Company nor any of its subsidiaries
is in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, lease, contract, indenture or
instrument to which the Company or any of its subsidiaries is a party or
by which it or any of its subsidiaries or their respective property is
bound, and there exists no condition which, with the passage of time or
otherwise, would constitute such a default under any such document or
instrument;
(iv) the execution, delivery and performance of this Agreement,
the Registration Rights Agreement, the Indenture, the Exchange Notes and
the Notes by the Company, compliance by the Company with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except such as may be
required under the 1933 Act, the 1939 Act or other securities or blue sky
laws or the laws of any foreign countries) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
(with the passage of time or otherwise) under, the charter or by-laws or
other equivalent instruments, as the case may be, of the Company or any
of its subsidiaries or any agreement, lease, contract, indenture or other
instrument referenced in the Offering Memorandum or any document
incorporated by reference therein, or (assuming compliance with all
applicable state securities or blue sky laws and the laws of any foreign
countries) to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective
properties are bound, or violate or conflict with any valid statutes or
valid and published administrative regulations applicable to the Company
or any of its subsidiaries or their respective properties which are
normally applicable to transactions of the type contemplated by this
Agreement or violate any judgment, injunction,
<PAGE>
order or decree that names the Company or any of the Subsidiaries and
is specifically directed to any of them or any of their respective
properties;
(v) there exists no legal or governmental proceeding pending or
threatened to which the Company or any of its subsidiaries is a party or
to which any of their respective property is subject which is required to
be described in the Offering Memorandum and is not so described or
incorporated by reference;
(vi) the Company has the corporate power and authority to enter
into and perform its obligations under this Agreement, the Indenture, the
Registration Rights Agreement, the Exchange Notes and the Notes;
(vii) all of the issued and outstanding shares of capital stock
of each of the Subsidiaries have been duly and validly authorized and
issued and are fully paid and nonassessable; and
(viii) we do not know of any contract or other document to which
the Company or any Subsidiary is a party which is required to be
described in the Offering Memorandum or the materials incorporated by
reference therein which has not been so described.
I have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Initial Purchasers and
their counsel at which the contents of the Offering Memorandum were discussed
and nothing has come to my attention that causes me to believe that the
Offering Memorandum, as amended or supplemented, as of its date and the date
of the Closing Time, contained any 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, in the light of the circumstances under which
they were made, not misleading. I express no opinion with respect to the
financial statements, schedules and pro forma and other financial data
included in the Offering Memorandum.
<PAGE>
EXHIBIT 10.02
CERIDIAN CORPORATION
1999 STOCK INCENTIVE PLAN
1. PURPOSE OF PLAN.
The purpose of the Ceridian Corporation 1999 Stock Incentive Plan (the
"Plan") is to advance the interests of Ceridian Corporation (the "Company")
and its stockholders by enabling the Company and its Subsidiaries to attract
and retain persons of ability to perform services for the Company and its
Subsidiaries by providing an incentive to such individuals through equity
participation in the Company and by rewarding such individuals who contribute
to the achievement by the Company of its economic objectives.
2. DEFINITIONS.
The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:
2.1 "BOARD" means the Board of Directors of the Company.
2.2 "BROKER EXERCISE NOTICE" means a written notice pursuant to
which a Participant, upon exercise of an Option, irrevocably instructs a
broker or dealer to sell a sufficient number of shares or loan a sufficient
amount of money to pay all or a portion of the exercise price of the Option
and/or any related withholding tax obligations and remit such sums to the
Company and directs the Company to deliver stock certificates to be issued
upon such exercise directly to such broker or dealer.
2.3 "CHANGE OF CONTROL" means an event described in Section 12.1 of
the Plan or such other definition as may be adopted by the Committee from
time to time in its sole discretion.
2.4 "CODE" means the Internal Revenue Code of 1986, as amended.
2.5 "COMMITTEE" means the group of individuals administering the
Plan, as provided in Section 3 of the Plan.
2.6 "COMMON STOCK" means the common stock of the Company, par value
$0.50 per share, or the number and kind of shares of stock or other
securities into which such Common Stock may be changed in accordance with
Section 4.4 of the Plan.
2.7 "DISABILITY" means the disability of the Participant such as
would entitle the Participant to receive disability income benefits pursuant
to the long-term disability plan of the Company or Subsidiary then covering
the Participant or, if no such plan exists or is applicable to the
Participant, the permanent and total disability of the Participant within the
meaning of Section 22(e)(3) of the Code.
2.8 "ELIGIBLE RECIPIENTS" means all employees (including, without
limitation, officers and directors who are also employees) of the Company or
any Subsidiary and any non-employee directors, consultants and independent
contractors of the Company or any Subsidiary.
2.9 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
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2.10 "FAIR MARKET VALUE" means, with respect to the Common Stock as
of any date, the closing market price per share of the Common Stock as
reported on the New York Stock Exchange Composite Tape on that date (or, if
no shares were traded or quoted on such date, as of the next preceding date
on which there was such a trade or quote).
2.11 "INCENTIVE AWARD" means an Option, Restricted Stock Award or
Performance Unit granted to an Eligible Recipient pursuant to the Plan.
2.12 "INCENTIVE STOCK OPTION" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.
2.13 "NON-STATUTORY STOCK OPTION" means a right to purchase Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that
does not qualify as an Incentive Stock Option.
2.14 "OPTION" means an Incentive Stock Option or a Non-Statutory
Stock Option.
2.15 "PARTICIPANT" means an Eligible Recipient who receives one or
more Incentive Awards under the Plan.
2.16 "PERFORMANCE GOAL" means one or more of the following
performance goals, either individually, alternatively or in any combination,
applied on a corporate, subsidiary or business unit basis: cash flow,
earnings (including one or more of gross profit, earnings before interest and
taxes, earnings before interest, taxes, depreciation and amortization and net
earnings), earnings per share, individually, margins (including one or more
of gross, operating and net income margins), returns (including one or more
of return on assets, equity, investment, capital and revenue and total
stockholder return), stock price, economic value added, working capital,
market share, cost reductions and strategic plan development and
implementation. Such goals may reflect absolute entity or business unit
performance or a relative comparison to the performance of a peer group of
entities or other external measure of the selected performance criteria. The
Committee may appropriately adjust any evaluation of performance under such
goals to exclude any of the following events: asset write-downs, litigation
or claim judgments or settlements, the effect of changes in tax law,
accounting principles or other such laws or provisions affecting reported
results, accruals for reorganization and restructuring programs, uninsured
catastrophic losses, and any extraordinary non-recurring items as described
in Accounting Principles Board Opinion No. 30 or in management's discussion
and analysis of financial performance appearing in the Company's annual
report to stockholders for the applicable year.
2.17 "PERFORMANCE UNIT" means a right granted to an Eligible
Recipient pursuant to Section 8 of the Plan to receive a payment from the
Company, in the form of Common Stock, cash, Stock Units or a combination of
the foregoing, upon the achievement of established performance criteria.
2.18 "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that
are already owned by the Participant or, with respect to any Incentive Award,
that are to be issued upon the grant, exercise or vesting of such Incentive
Award.
2.19 "PRIOR PLANS" mean the Company's 1993 Long-Term Incentive Plan
and the 1990 Long-Term Incentive Plan.
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2.20 "RESTRICTED STOCK AWARD" means an award of Common Stock or Stock
Units granted to an Eligible Recipient pursuant to Section 7 of the Plan that is
subject to the restrictions on transferability and the risk of forfeiture
imposed by the provisions of such Section 7.
2.21 "RETIREMENT" means the termination (other than for Cause or by
reason of death or Disability) of a Participant's employment or other service on
or after the date on which the Participant has attained the age of 55 and has
completed 10 years of continuous service to the Company or any Subsidiary (such
period of service to be determined in accordance with the retirement/pension
plan or practice of the Company or Subsidiary then covering the Participant,
provided that if the Participant is not covered by any such plan or practice,
the Participant will be deemed to be covered by the Company's plan or practice
for purposes of this determination).
2.22 "SECTION 162(m)" means Section 162(m) of the Code.
2.23 "SECURITIES ACT" means the Securities Act of 1933, as amended.
2.24 "STOCK UNIT" means a bookkeeping entry representing the equivalent
of one share of Common Stock that is payable in the form of Common Stock, cash
or any combination of the foregoing.
2.25 "SUBSIDIARY" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.
2.26 "TAX DATE" means the date any withholding tax obligation arises
under the Code for a Participant with respect to an Incentive Award.
3. PLAN ADMINISTRATION.
3.1 THE COMMITTEE. So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, the Plan will be
administered by a committee (the "Committee") consisting solely of not less than
two members of the Board who are "Non-Employee Directors" within the meaning of
Rule 16b-3 under the Exchange Act and, if the Board so determines in its sole
discretion, who are "outside directors" within the meaning of Section 162(m).
To the extent consistent with corporate law, the Committee may delegate to any
directors or officers of the Company the duties, power and authority of the
Committee under the Plan pursuant to such conditions or limitations as the
Committee may establish; provided, however, that only the Committee may exercise
such duties, power and authority with respect to Eligible Recipients who are
subject to Section 16 of the Exchange Act. Each determination, interpretation
or other action made or taken by the Committee pursuant to the provisions of the
Plan will be conclusive and binding for all purposes and on all persons, and no
member of the Committee will be liable for any action or determination made in
good faith with respect to the Plan or any Incentive Award granted under the
Plan.
3.2 AUTHORITY OF THE COMMITTEE.
(a) In accordance with and subject to the provisions of the
Plan, the Committee will have the authority to determine all
provisions of Incentive Awards as the
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Committee may deem necessary or desirable and as consistent with the
terms of the Plan, including, without limitation, the following: (i)
the Eligible Recipients to be selected as Participants; (ii) the
nature and extent of the Incentive Awards to be made to each
Participant (including the number of shares of Common Stock to be
subject to each Incentive Award, any exercise price, the manner in
which Incentive Awards will vest or become exercisable and whether
Incentive Awards will be granted in tandem with other Incentive
Awards) and the form of written agreement, if any, evidencing such
Incentive Award; (iii) the time or times when Incentive Awards will be
granted; (iv) the duration of each Incentive Award; and (v) the
restrictions and other conditions to which the payment or vesting of
Incentive Awards may be subject. In addition, the Committee will have
the authority under the Plan in its sole discretion to pay the
economic value of any Incentive Award in the form of cash, Common
Stock, Stock Units or any combination of the foregoing.
(b) Except as otherwise provided in the remainder of this
Section 3.2(b), the Committee will have the authority under the Plan
to amend or modify the terms of any outstanding Incentive Award in any
manner, including, without limitation, the authority to modify the
number of shares or other terms and conditions of an Incentive Award,
extend the term of an Incentive Award or accelerate the exercisability
or vesting or otherwise terminate any restrictions relating to an
Incentive Award; provided, however that the amended or modified terms
are permitted by the Plan as then in effect and that any Participant
adversely affected by such amended or modified terms has consented to
such amendment or modification. Without prior approval of the
Company's stockholders, the Committee shall not have the authority
under the Plan to (i) amend or modify the terms of any pre-existing
Option awards to lower the Option exercise price or (ii) authorize the
grant of replacement Option awards in substitution for pre-existing
Option awards that have been or are to be surrendered and canceled at
any time when the Fair Market Value of the Common Stock is less than
the exercise price applicable to such surrendered and canceled Option
awards.
(c) In the event of (i) any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering,
extraordinary dividend or divestiture (including a spin-off) or any
other change in corporate structure or shares, (ii) any purchase,
acquisition, sale or disposition of a significant amount of assets or
a significant business, (iii) any change in accounting principles or
practices, or (iv) any other similar change, in each case with respect
to the Company (or any Subsidiary or division thereof) or any other
entity whose performance is relevant to the grant or vesting of an
Incentive Award, the Committee (or, if the Company is not the
surviving corporation in any such transaction, the board of directors
of the surviving corporation) may, without the consent of any affected
Participant, amend or modify the grant or vesting criteria of any
outstanding Incentive Award that is based in whole or in part on the
financial performance of the Company (or any Subsidiary or division
thereof) or such other entity so as equitably to reflect such event,
with the desired result that the criteria for evaluating such
financial performance of the Company or such other entity will be
substantially the same (in the sole discretion of the Committee or the
board of directors of the surviving corporation) following such event
as prior to such event; provided, however, that the amended or
modified terms are permitted by the Plan as then in effect.
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(d) The Committee may permit or require the deferral of any
payment, issuance or other settlement of an Incentive Award subject to
such rules and procedures as the Committee may establish, including
the conversion of such payment, issuance or other settlement into
Options or Stock Units and the payment or crediting of interest,
dividends or dividend equivalents.
4. SHARES AVAILABLE FOR ISSUANCE.
4.1 MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to adjustment as
provided in Section 4.4 of the Plan, the maximum number of shares of Common
Stock that will be available for issuance under the Plan will be
10,000,000 shares, plus (a) any shares that, as of the date the Plan is approved
by the stockholders of the Company, are available for issuance under the Prior
Plan, (b) any shares that subsequently become available for issuance under the
Prior Plans as a result of the forfeiture, termination or expiration of awards
under the Prior Plans and that would otherwise have been available for further
issuance under the Prior Plans, and (c) any shares issued under the Plan in
connection with the settlement, assumption or substitution of outstanding
awards, or obligations to grant future awards, as a condition of the Company
acquiring another entity. The Committee may use shares available for issuance
under the Plan as the form of payment for compensation, awards or rights earned
or due under deferred or any other compensation plans or arrangements of the
Company or any Subsidiary. The shares available for issuance under the Plan
may, at the election of the Committee, be either treasury shares or shares
authorized but unissued, and, if treasury shares are used, all references in the
Plan to the issuance of shares will, for corporate law purposes, be deemed to
mean the transfer of shares from treasury.
4.2 CALCULATION OF SHARES AVAILABLE. Shares of Common Stock that are
issued under the Plan or that are subject to outstanding Incentive Awards will
be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. To the extent that any shares of Common
Stock that are subject to an Incentive Award under the Plan or the Prior Plan
(a) are not issued to a Participant due to the fact that such Incentive Award
lapses, expires, is forfeited or for any reason is terminated unexercised or
unvested, or is settled or paid in cash or (b) are used to satisfy any exercise
price or withholding obligations, such shares will automatically again become
available for issuance under the Plan. In addition, to the extent that a
Participant tenders (either by actual delivery or by attestation) shares of
Common Stock already owned by the Participant to the Company in satisfaction of
any exercise price or withholding tax obligations, such shares will
automatically again become available for issuance under the Plan.
4.3 ADDITIONAL LIMITATIONS. Notwithstanding any other provisions of
the Plan to the contrary and subject, in each case, to adjustment as provided in
Section 4.4 of the Plan, (a) no more than 10,000,000 shares of Common Stock may
be issued under the Plan with respect to Incentive Stock Options, (b) no more
than 3,500,000 shares of Common Stock may be issued under the Plan with respect
to Restricted Stock Awards that are not granted in lieu of cash compensation
that would otherwise be payable to Participants, and (c) no Participant in the
Plan may be granted Incentive Awards relating to more than 750,000 shares of
Common Stock in the aggregate during any period of three consecutive fiscal
years of the Company.
4.4 ADJUSTMENTS TO SHARES AND INCENTIVE AWARDS. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
other change in the corporate structure or shares of the Company, the Committee
(or, if the
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Company is not the surviving corporation in any such transaction, the board
of directors of the surviving corporation) will make appropriate adjustments
(which determination will be conclusive) as to the number and kind of
securities or other property (including cash) available for issuance or
payment under the Plan and, in order to prevent dilution or enlargement of
the rights of Participants, (a) the number and kind of securities or other
property (including cash) subject to outstanding Options, and (b) the
exercise price of outstanding Options.
5. PARTICIPATION.
Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries. Eligible Recipients may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee in its sole discretion. Incentive
Awards will be deemed to be granted as of the date specified in the grant
resolution of the Committee, which date will be the date of any related
agreement with the Participant.
6. OPTIONS.
6.1 GRANT. An Eligible Recipient may be granted one or more Options
under the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion and reflected in the award agreement evidencing
such Option. The Committee may designate whether an Option is to be considered
an Incentive Stock Option or a Non-Statutory Stock Option. To the extent that
any Incentive Stock Option granted under the Plan ceases for any reason to
qualify as an "incentive stock option" for purposes of Section 422 of the Code,
such Incentive Stock Option will continue to be outstanding for purposes of the
Plan but will thereafter be deemed to be a Non-Statutory Stock Option.
6.2 EXERCISE PRICE. The per share price to be paid by a Participant
upon exercise of an Option will be determined by the Committee in its discretion
at the time of the Option grant; provided, however, that such price will not be
less than 100% of the Fair Market Value of one share of Common Stock on the date
of grant or, with respect to an Incentive Stock Option (110% of the Fair Market
Value if, at the time the Incentive Stock Option is granted, the Participant
owns, directly or indirectly, more than 10% of the total combined voting power
of all classes of stock of the Company or any parent or subsidiary corporation
of the Company).
6.3 EXERCISABILITY AND DURATION. An Option will become exercisable at
such times and in such installments as may be determined by the Committee in its
sole discretion at the time of grant; provided, however, that no Option may be
exercisable prior to six months from its date of grant (other than in connection
with a Participant's death or Disability or in connection with a Change of
Control of the Company) and no Incentive Stock Option may be exercisable after
10 years from its date of grant (five years from its date of grant if, at the
time the Incentive Stock Option is granted, the Participant owns, directly or
indirectly, more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation of the Company).
6.4 PAYMENT OF EXERCISE PRICE. The total purchase price of the shares
to be purchased upon exercise of an Option will be paid entirely in cash
(including check, bank draft or money
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order); provided, however, that the Committee, in its sole discretion and
upon terms and conditions established by the Committee, may allow such
payments to be made, in whole or in part, by tender of a Broker Exercise
Notice, Previously Acquired Shares (including through delivery of a written
attestation of ownership of such Previously Acquired Shares if permitted, and
on terms acceptable, to the Committee in its sole discretion), a full
recourse promissory note (on terms acceptable to the Committee in its sole
discretion) or by a combination of such methods.
6.5 MANNER OF EXERCISE. An Option may be exercised by a Participant
in whole or in part from time to time, subject to the conditions contained in
the Plan and in the agreement evidencing such Option, by delivery in person, by
facsimile or electronic transmission or through the mail of written notice of
exercise to the Company, Attention: Corporate Treasury, at its principal
executive office in Minneapolis, Minnesota and by paying in full the total
exercise price for the shares of Common Stock to be purchased in accordance with
Section 6.4 of the Plan.
6.6 AGGREGATE LIMITATION OF STOCK SUBJECT TO INCENTIVE STOCK OPTIONS.
To the extent that the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which incentive stock options (within the meaning of Section 422 of the Code)
are exercisable for the first time by a Participant during any calendar year
(under the Plan and any other incentive stock option plans of the Company or any
subsidiary or parent corporation of the Company (within the meaning of the
Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code
from time to time), such excess Options will be treated as Non-Statutory Stock
Options. The determination will be made by taking incentive stock options into
account in the order in which they were granted. If such excess only applies to
a portion of an Incentive Stock Option, the Committee, in its discretion, will
designate which shares will be treated as shares to be acquired upon exercise of
an Incentive Stock Option.
7. RESTRICTED STOCK AWARDS.
7.1 GRANT. An Eligible Recipient may be granted one or more
Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be
subject to such terms and conditions, consistent with the provisions of the
Plan, as may be determined by the Committee in its sole discretion and reflected
in the award agreement evidencing such Restricted Stock Award. The Committee
may impose such restrictions or conditions, not inconsistent with the provisions
of the Plan, to the vesting of such Restricted Stock Awards as it deems
appropriate, including, without limitation, that the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain period
or that the Participant or the Company (or any Subsidiary or division thereof)
satisfy certain performance criteria; provided, however, that no Restricted
Stock Award may vest prior to six months from its date of grant (other than in
connection with a Participant's death or Disability or in connection with a
Change of Control of the Company). Notwithstanding the foregoing and except as
result of a Participant's death or Disability or in connection with a Change of
Control of the Company, Restricted Stock Awards that provide for (a) vesting
upon the satisfaction of certain performance criteria shall vest over a period
of not less than one year from its date of grant and (b) time based vesting
shall vest over a period of not less than three years from its date of grant;
provided, however, that Restricted Stock Awards granted in lieu of some other
form of compensation to an Eligible Recipient would be permitted without such
vesting restrictions.
7.2 RIGHTS AS A STOCKHOLDER; TRANSFERABILITY. Except as provided in
Sections 7.1, 7.3 and 13.3 of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common Stock
issued to the Participant as a Restricted Stock Award under this
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Section 7 upon the Participant becoming the holder of record of such shares
as if such Participant were a holder of record of shares of unrestricted
Common Stock.
7.3 DIVIDENDS AND DISTRIBUTIONS. Unless the Committee determines
otherwise in its sole discretion (either in the agreement evidencing the
Restricted Stock Award at the time of grant or at any time after the grant of
the Restricted Stock Award), any dividends or distributions (including regular
quarterly cash dividends) paid with respect to shares of Common Stock subject to
the unvested portion of a Restricted Stock Award will not be subject to the same
restrictions as the shares to which such dividends or distributions relate and
will be paid currently to the Participant. In the event the Committee determines
not to pay such dividends or distributions currently, the Committee will
determine in its sole discretion whether any interest will be paid on such
dividends or distributions. In addition, the Committee, in its sole discretion,
may require such dividends and distributions to be reinvested (and in such case
the Participants consent to such reinvestment) in shares of Common Stock that
will be subject to the same restrictions as the shares to which such dividends
or distributions relate.
7.4 ENFORCEMENT OF RESTRICTIONS. To enforce the restrictions referred
to in this Section 7, the Committee may (a) place a legend on the stock
certificates referring to such restrictions and may require Participants, until
the restrictions have lapsed, to keep the stock certificates, together with duly
endorsed stock powers, in the custody of the Company or its transfer agent, or
(b) maintain evidence of stock ownership, together with duly endorsed stock
powers, in a certificateless book-entry stock account with the Company's
transfer agent for its Common Stock.
8. PERFORMANCE UNITS.
An Eligible Recipient may be granted one or more Performance Units under
the Plan, and such Performance Units will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. The Committee may impose
such restrictions or conditions, not inconsistent with the provisions of the
Plan, to the vesting of such Performance Units as it deems appropriate,
including, without limitation, that the Participant remain in the continuous
employ or service of the Company or any Subsidiary for a certain period or that
the Participant or the Company (or any Subsidiary or division thereof) satisfy
certain performance goals or criteria. The Committee will have the sole
discretion to determine the form in which payment of the economic value of
Performance Units will be made to a Participant (i.e., cash, Common Stock, Stock
Units or any combination of the foregoing) or to consent to or disapprove the
election by a Participant of the form of such payment. Notwithstanding the
foregoing, Performance Units that provide for vesting upon the satisfaction of
certain performance criteria shall vest over a period of not less than three
years from its date of grant; provided, however, that Performance Units granted
in lieu of some other form of compensation to an Eligible Recipient would be
permitted without such vesting restrictions.
9. PERFORMANCE-BASED COMPENSATION PROVISIONS.
The Committee, in its sole discretion, may designate whether any
Incentive Awards are intended to be "performance-based compensation" within the
meaning of Section 162(m). Any Incentive Awards so designated will be
conditioned on the achievement of one or more Performance Goals, and such
Performance Goals will be established by the Committee within the time period
prescribed by, and will otherwise comply with the requirements of, Section
162(m). The maximum dollar value payable to any Participant with respect to
Incentive Awards that are
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designated as "performance-based compensation" and that are valued with
reference to property other than shares of Common Stock may not exceed
$5,000,000 in the aggregate during any period of three consecutive fiscal
years of the Company.
10. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.
10.1 RIGHTS UPON TERMINATION. The Committee will have the authority,
in its sole discretion, to determine the effect that termination of a
Participant's employment or other service with the Company and all Subsidiaries,
whether due to death, Disability, Retirement or any other reason, will have on
outstanding Incentive Awards then held by such Participant.
10.2 MODIFICATION OF RIGHTS UPON TERMINATION. Notwithstanding the other
provisions of this Section 10, upon a Participant's termination of employment or
other service with the Company and all Subsidiaries, the Committee may, in its
sole discretion (which may be exercised at any time on or after the date of
grant, including following such termination), cause Options (or any part
thereof) then held by such Participant to become or continue to become
exercisable and/or remain exercisable following such termination of employment
or service and Restricted Stock Awards and Performance Units then held by such
Participant to vest and/or continue to vest or become free of restrictions
following such termination of employment or service, in each case in the manner
determined by the Committee; provided, however, that no Option or Restricted
Stock Award may become exercisable or vest prior to six months from its date of
grant (other than in connection with a Participant's death or Disability or in
connection with a Change of Control of the Company) or remain exercisable or
continue to vest beyond its expiration date.
10.3 DATE OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE. Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to have
terminated on the date recorded on the personnel or other records of the Company
or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such
records.
11. PAYMENT OF WITHHOLDING TAXES.
11.1 GENERAL RULES. The Company is entitled to (a) withhold and deduct
from future wages of the Participant (or from other amounts which may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all federal, state and local withholding and employment-related
tax requirements attributable to an Incentive Award, including, without
limitation, the grant, exercise or vesting of, or payment of dividends with
respect to, an Incentive Award or a disqualifying disposition of stock received
upon exercise of an Incentive Stock Option, or (b) require the Participant
promptly to remit the amount of such withholding to the Company before taking
any action with respect to an Incentive Award.
11.2 SPECIAL RULES. The Committee may, in its sole discretion and
upon terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 11.1 of the Plan (up
to the minimum statutory rate) by electing to tender Previously Acquired
Shares, a Broker Exercise Notice or a promissory note (on terms acceptable to
the Committee in its sole discretion), or by a combination of such methods.
12. CHANGE OF CONTROL.
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12.1 DEFINITIONS. For purposes of this Section 12, the following
definitions will apply:
(a) "Benefit Plan" means any formal or informal plan,
program or other arrangement heretofore or hereafter adopted by
the Company or any Subsidiary for the direct or indirect provision
of compensation to the Participant (including groups or classes of
participants or beneficiaries of which the Participant is a
member), whether or not such compensation is deferred, is in the
form of cash or other property or rights, or is in the form of a
benefit to or for the Participant.
(b) "Change of Control" means any of the following
events:
(a) a merger or consolidation to which the Company is
a party if the individuals and entities who were stockholders
of the Company immediately prior to the effective date of such
merger or consolidation have beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) of less than 50% of the
total combined voting power for election of directors of the
surviving corporation immediately following the effective date
of such merger or consolidation;
(b) the direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) in the aggregate
of securities of the Company representing 25% or more of the
total combined voting power of the Company's then issued and
outstanding securities by any person or entity, or group of
associated persons or entities acting in concert;
(c) the sale of the properties and assets of the
Company, substantially as an entirety, to any person or entity
which is not a wholly-owned subsidiary of the Company;
(d) the stockholders of the Company approve any plan
or proposal for the liquidation of the Company; or
(e) a change in the composition of the Board at any
time during any consecutive 24 month period such that the
"Continuity Directors" cease for any reason to constitute at
least a 70% majority of the Board. For purposes of this
clause, "Continuity Directors" means those members of the Board
who either (1) were directors at the beginning of such
consecutive 24 month period, or (2) were elected by, or on the
nomination or recommendation of, at least a two-thirds majority
of the then-existing Board of Directors.
12.2 EFFECT OF A CHANGE OF CONTROL. The Committee will have the
authority, in its sole discretion, to determine the effect that a Change of
Control of the Company will have on outstanding Incentive Awards then held by
such Participant.
12.3 AUTHORITY TO MODIFY CHANGE OF CONTROL PROVISIONS. Prior to a
Change of Control of the Company, unless otherwise provided in the agreement
evidencing the Incentive Award, the Participant will have no rights under this
Section 12, and the Committee will have the authority, in its sole discretion,
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to rescind, modify or amend the provisions of this Section 12 without the
consent of any Participant.
13. RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.
13.1 EMPLOYMENT OR SERVICE. Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary.
13.2 RIGHTS AS A STOCKHOLDER. As a holder of Incentive Awards (other
than Restricted Stock Awards), a Participant will have no rights as a
stockholder unless and until such Incentive Awards are exercised for, or paid in
the form of, shares of Common Stock and the Participant becomes the holder of
record of such shares. Except as otherwise provided in the Plan, no adjustment
will be made for dividends or distributions with respect to such Incentive
Awards as to which there is a record date preceding the date the Participant
becomes the holder of record of such shares, except as the Committee may
determine in its discretion.
13.3 RESTRICTIONS ON TRANSFER.
(a) Except pursuant to testamentary will or the laws of descent
and distribution and except as expressly permitted by Section 13.3(b) of
the Plan, no right or interest of any Participant in an Incentive Award
prior to the exercise or vesting of such Incentive Award will be
assignable or transferable, or subjected to any lien, during the lifetime
of the Participant, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise. A Participant will,
however, be entitled to designate a beneficiary to receive an Incentive
Award upon such Participant's death. In the event of a Participant's
death, payment of any amounts due under the Plan will be made to, and
exercise of any Options (to the extent permitted pursuant to Section 10
of the Plan) will be made by, the Participant's designated beneficiary.
For purposes of the Plan, a "designated beneficiary" will be the
beneficiary or beneficiaries designated by the Participant in a writing
filed with the Committee in such form and at such time as the Committee
will require in its sole discretion. If a Participant fails to designate
a beneficiary, or if the designated beneficiary does not survive the
Participant or dies before the designated beneficiary's exercise of all
rights under the Plan, payment of any amounts due under the Plan will be
made to, and exercise of any Options (to the extent permitted pursuant to
Section 10 of the Plan) may be made by, the Participant's personal
representative.
(b) The Committee may, in its discretion, authorize all or a
portion of the Options to be granted to a Participant to be on terms
which permit transfer by such Participant to (i) the spouse, ex-spouse,
children, step-children or grandchildren of the Participant (the "Family
Members"), (ii) a trust or trusts for the exclusive benefit of such
Family Members, (iii) a partnership in which such Family Members are the
only partners, or (iv) such other persons or entities as the Committee,
in its discretion, may permit, provided that (1) there may be no
consideration for such a transfer (other than the possible receipt of an
ownership interest in an entity to which such a transfer is made), (2)
the award agreement pursuant to which such Options are granted must be
approved by the Committee and must expressly provide for transferability
in a manner consistent with this Section 13.3(b), (3) timely written
notice of the transfer must be provided to the Company by the
Participant, and (4) subsequent transfers of the transferred Options
shall be prohibited except for those in accordance with Section 13.3(a).
Following transfer, any such Option and the rights of any transferee with
respect thereto will continue to be
11
<PAGE>
subject to the same terms and conditions as were applicable
immediately prior to the transfer, including that the events of
termination of employment or other service as provided in the Plan and
in any applicable award agreement will continue to be applied with
respect to the original Participant, with the transferee bound by the
consequences of any such termination of employment or service as
specified in the Plan and the applicable award agreement. The Company
will be under no obligation to provide notice of termination of a
Participant's employment or other service to any transferee of such
Participant's Options. Notwithstanding any Option transfer pursuant
to this Section 13.3(b), the Participant will remain subject to and
liable for any employment-related taxes in connection with the
exercise of such Option.
13.4 NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to modify or rescind any previously approved compensation plans or
programs of the Company or create any limitations on the power or authority of
the Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.
14. SECURITIES LAW AND OTHER RESTRICTIONS.
Notwithstanding any other provision of the Plan or any agreements entered
into pursuant to the Plan, the Company will not be required to issue any shares
of Common Stock under this Plan, and a Participant may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Incentive Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable state securities laws or an exemption from such registration under
the Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee, in its sole discretion, deems necessary or advisable. The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.
15. PLAN AMENDMENT, MODIFICATION AND TERMINATION.
The Board may suspend or terminate the Plan or any portion thereof at any
time, and may amend the Plan from time to time in such respects as the Board may
deem advisable in order that Incentive Awards under the Plan will conform to any
change in applicable laws or regulations or in any other respect the Board may
deem to be in the best interests of the Company; provided, however, that no
Material Amendment of the Plan shall be made without approval of the
stockholders of the Company. For the purposes hereof, a "Material Amendment of
the Plan" shall mean any amendment that (a) requires stockholder approval
pursuant to Section 422 of the Code or the rules of the New York Stock Exchange
or (b) increases the authorized shares, the benefits to Participants, or the
class of Participants under the Plan. No termination, suspension or amendment
of the Plan may adversely affect any outstanding Incentive Award without the
consent of the affected Participant; provided, however, that this sentence will
not impair the right of the Committee to take whatever action it deems
appropriate under Section 4.4 and Section 12 of the Plan.
16. EFFECTIVE DATE AND DURATION OF THE PLAN.
The Plan is effective as of February 3, 1999, the date it was adopted by
the Board. The Plan will terminate at midnight on February 2, 2009, and may be
terminated prior thereto by Board
12
<PAGE>
action, and no Incentive Award will be granted after such termination.
Incentive Awards outstanding upon termination of the Plan may continue to
vest, or become free of restrictions, in accordance with their terms.
17. MISCELLANEOUS.
17.1 GOVERNING LAW. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Delaware.
17.2 SUCCESSORS AND ASSIGNS. The Plan will be binding upon and inure
to the benefit of the successors and permitted assigns of the Company and the
Participants.
As Amended: May 19, 1999
13
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