SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 26, 1997
World Access, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-19998 65-0044209
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
945 E. Paces Ferry Road, Suite 2240, Atlanta, Georgia 30326
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 231-2025
<PAGE>
Item 5. Other Events
On September 26, 1997, World Access, Inc. ("World Access") issued a
press release announcing that it would sell in a private placement $100,000,000
aggregate principal amount of 4.5% convertible subordinated notes due October 1,
2002 (the "Notes"), which Notes are convertible into shares of World Access
common stock, $.01 par value per share (the "Common Stock"), at a conversion
price of $37.03125 per share, subject to adjustment (the "Conversion Price").
On October 1, 1997, the Company completed the sale of the Notes to BT
Alex. Brown Incorporated and Prudential Securities Incorporated (collectively,
the "Initial Purchasers") pursuant to that certain Purchase Agreement by and
between World Access and the Initial Purchasers dated as of September 26, 1997
(the "Purchase Agreement"), at a purchase price of 97% of the aggregate
principal amount of the Notes, representing an aggregate discount of $3,000,000
to the Initial Purchasers. Under the terms of the Purchase Agreement, World
Access granted the Initial Purchasers an option exercisable for 30 days to
purchase up to an aggregate of $15,000,000 additional principal amount of Notes
to cover over-allotments, if any.
The Notes were issued pursuant to an Indenture dated as of October 1,
1997 by and between World Access and First Union National Bank, as trustee (the
"Indenture"). The Notes bear interest at the rate of 4.5% per annum and mature
on October 1, 2002. The Notes are convertible into Common Stock at any time
prior to the close of business on the maturity date, unless previously redeemed
or repurchased, at the Conversion Price. The Notes are unsecured and
subordinated in right of payment in full to all existing and future Senior
Indebtedness (as defined in the Indenture) of World Access. If a Change of
Control (as defined in the Indenture) of World Access occurs, each holder of
Notes may require World Access to repurchase all or a portion of such holder's
Notes at 100% of the principal amount thereof, together with accrued interest to
the repurchase date. The Notes are redeemable by World Access any time after
October 1, 2000.
World Access has agreed to file, within 90 days following the latest
date of original issuance of the Notes, a shelf registration statement in
respect of the Notes and the Common Stock issuable upon conversion thereof
pursuant to the Registration Rights Agreement dated as of October 1, 1997 by and
between World Access and the Initial Purchasers (the "Registration Rights
Agreement").
The foregoing summary of the Press Release, the Purchase Agreement, the
Indenture, the Registration Rights Agreement and the Notes does not purport to
be complete and is subject to, and qualified in its entirety by reference to,
the full text of the Press Release, the Purchase Agreement, the Indenture and
the Registration Rights Agreement, the forms of which are filed as exhibits
hereto, and the Notes, the forms of which are included as an exhibit to the
Indenture filed as an exhibit hereto.
<PAGE>
Item 7. Exhibits
The following exhibits are filed herewith by direct transmission via
"edgar."
4.1 Indenture dated as of October 1, 1997 by and between World
Access, Inc. and First Union National Bank, as trustee.
10.1 Purchase Agreement dated as of September 26, 1997 by and
between World Access, Inc., BT Alex. Brown Incorporated and
Prudential Securities Incorporated.
10.2 Registration Rights Agreement dated as of October 1, 1997 by
and between World Access, Inc., BT Alex. Brown Incorporated
and Prudential Securities Incorporated.
99.1 Press release dated September 26, 1997.
Item 9. Sales of Equity Securities Pursuant to Regulation S
The response to Item 5 above is incorporated herein by reference.
As described in Item 5, on October 1, 1997, World Access sold
$100,000,000 aggregate principal amount of the Notes to the Initial Purchasers
pursuant to the terms of the Purchase Agreement. The sale of the Notes to the
Initial Purchasers was not registered under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance on the exemption provided by Section
4(2) of the Securities Act. The Initial Purchasers resold $96,170,000 aggregate
principal amount of the Notes in the United States to certain "qualified
institutional buyers" pursuant to Rule 144A under the Securities Act and
$3,830,000 aggregate principal amount of the Notes outside of the United States
to "non-U.S. persons" in reliance on Regulation S under the Securities Act.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WORLD ACCESS, INC.
By: /s/ Martin D. Kidder
---------------------------------
Martin D. Kidder
Its Vice President and Controller
Dated as of October 8, 1997.
<PAGE>
Exhibit 4.1
================================================================================
MMM DRAFT 9/30/1997
WORLD ACCESS, INC.
$100,000,000
4.5% Convertible Subordinated Notes due 2002
----------------
INDENTURE
Dated as of October 1, 1997
----------------
FIRST UNION NATIONAL BANK
Trustee
================================================================================
<PAGE>
INDENTURE dated as of October 1, 1997, between World Access, Inc., a
Delaware corporation (hereinafter sometimes called the "Company," as more fully
set forth in Section 1.1), and First Union National Bank, a national banking
association, as trustee hereunder (hereinafter sometimes called the "Trustee,"
as more fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its 4.5% Convertible Subordinated Notes due 2002
(hereinafter sometimes called the "Notes"), in an aggregate principal amount not
to exceed $100,000,000 ($115,000,000 if the overallotment option is exercised in
full) and, to provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture;
WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to elect repurchase upon a
Change in Control and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the Holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective Holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.
The terms defined in this Section 1.1 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.1. All other terms used in this
Indenture that are defined in the Trust Indenture Act or which are by reference
therein defined in the Securities Act (except as herein otherwise expressly
provided or unless the context otherwise requires) shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act as
in force at the date of the execution of this Indenture. The words "herein,"
"hereof," "hereunder," and words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other Subdivision. The terms
defined in this Article include the plural as well as the singular.
"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 Conversion Agent or any
successor thereto.
"Board of Directors" means either the Board of Directors of the Company
or any committee of such Board duly authorized to act for it hereunder.
"Business Day" means any day other than (i) a Saturday or Sunday or
(ii) a day on which banking institutions in the City of New York are authorized
or required by law or executive order to remain closed.
"Capitalized Lease Obligation" means indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with generally accepted accounting principles;
the amount of such indebtedness shall be the capitalized amount of such
obligations determined in accordance with such principles.
"Cash" or "cash" means such coin or currency of the United States as at
any time of payment is legal tender for the payment of public and private debts.
"Cedel" means Cedel Bank, societe anonyme.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Common Stock" means the common stock, par value $0.01 per share,of the
Company.
"Company" means World Access, Inc. until a successor corporation shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor corporation.
"Corporate Trust Office" means the principal offices of the Trustee at
which at any particular time its corporate trust business shall be administered,
which offices as of the date of this Indenture are located at 901 East Cary
Street, Second Floor, Richmond, Virginia 23219 and 999 Peachtree Street, Suite
1100, Atlanta, Georgia 30309.
"Custodian" means First Union National Bank, as custodian with respect
to the Notes in global form, or any successor entity thereto.
"Default" means any event which is, or after notice or passage of time,
or both, would be, an Event of Default.
"Depositary" means, with respect to the Notes issued or issuable in
whole or in part in global form, the Person designated as Depositary by the
Company pursuant to Section 2.8 with respect to such Notes (or any successor
thereto).
"Designated Senior Indebtedness" means the Company's Indebtedness
outstanding from time to time under its revolving credit facility and any
particular Senior Indebtedness in which the instrument creating or evidencing
the same or the assumption or guarantee thereof (or related agreements or
documents to which the Company is a party) expressly provides that such Senior
Indebtedness shall be "Designated Senior Indebtedness" for purposes of the
Indenture (provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Indebtedness to exercise
the rights of Designated Senior Indebtedness).
"DTC" means The Depository Trust Company, a limited purpose trust
company organized under the laws of the State of New York.
"Euroclear" means the Euroclear System.
"Event of Default" means any event specified in Section 7.1(a), (b),
(c), (d), (e), (f), (g) or (h).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Holder" or "Noteholder" means a Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) the principal of and premium, if any, and interest on, and
fees, costs, enforcement expenses, collateral protection expenses and other
reimbursement or indemnity obligations in respect to all indebtedness or
obligations of the Company to any Person, including, but not limited to, banks
and other lending institutions, for money borrowed that is evidenced by a note,
bond, loan agreement, or similar instrument or agreement (including purchase
money obligations with original maturities in excess of one year and
noncontingent reimbursement obligations in respect of amounts paid under letters
of credit), (b) all reimbursement obligations and other liabilities (contingent
or otherwise) of such Person with respect to letters of credit, bank guarantees
or bankers' acceptances, (c) all obligations and liabilities (contingent or
otherwise) in respect of Capitalized Lease Obligations on the balance sheet of
such Person, (d) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement, (e) all direct or indirect guaranties or
similar agreements by such Person in respect of, and obligations or liabilities
(contingent or otherwise) of such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of indebtedness, obligations
or liabilities of another Person of the kind described in clauses (a) through
(d), (f) any indebtedness or other obligations, excluding any operating leases
the Company is currently (or may become) a party to, described in clauses (a)
through (d) secured by any mortgage, pledge, lien or other encumbrance existing
on property which is owned or held by such Person, regardless of whether the
indebtedness or other obligation secured thereby shall have been assumed by such
Person and (g) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (a) through (f).
"Indenture" means this instrument as originally executed or, if
supplemented or amended as herein provided, as so supplemented or amended.
"Initial Purchasers" means BT Alex. Brown Incorporated and Prudential
Securities Incorporated.
"Institutional Accredited Investor" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.
"Officer" means the Chairman of the Board, the President, the Chief
Financial Officer, the Controller, the Secretary, any Assistant Secretary or any
Vice President of the Company.
"Officer's Certificate" means a certificate signed by two Officers, one
of whom must be the Chairman of the Board, the President, the Chief Financial
Officer or a Vice President of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Person" means any individual, corporation, partnership, joint venture,
trust, association, joint stock company, unincorporated organization or
government or any agency or political subdivision thereof.
"PORTAL Market" means the Private Offerings, Resales and Trading
through Automated Linkages Market operated by the National Association of
Securities Dealers, Inc. or any successor thereto.
"Principal" or "principal" of a debt security, including the Notes,
means the principal of the security plus, when appropriate, the premium, if any,
on the security.
"QIB" shall mean a "qualified institutional buyer" as defined in Rule
144A under the Securities Act.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of October 1, 1997, between the Company and the Initial
Purchasers.
"Regulation D" means Regulation D promulgated under the Securities Act
(or any successor provision), as it may be amended from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act
(or any successor provision), as it may be amended from time to time.
"Representative" means the indenture trustee or other trustee, agent or
representative for the holders of any Senior Indebtedness.
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness of the Company, whether outstanding
on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all deferrals,
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Notes or expressly provides that such Indebtedness is
"pari passu" with or "junior" to the Notes. Notwithstanding the foregoing, the
term Senior Indebtedness shall not include any Indebtedness of the Company to
any Subsidiary of the Company.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Subsidiary" means with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock 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 such
person or one or more Subsidiaries of such person (or a combination thereof) and
(ii) any partnership (a) the sole general partner or managing general partner of
which is such person or a Subsidiary of such person or (b) the only general
partners of which are such person or one or more Subsidiaries of such Person (or
any combination thereof).
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. ss.ss.77aaa-77666), as amended by the Trust Indenture Reform Act of
1990, and as in effect on the date of this Indenture, except as provided in
Sections 11.3, 15.6 and 16.5, and except to the extent any amendment to the
Trust Indenture Act expressly provides for application of the Trust Indenture
Act as in effect on another date.
"Trading Day" or "trading day" means, with respect to any security,
each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on
which securities are not traded on the exchange or market in which such security
is traded.
"Transfer Agent" means the transfer agent for the Common Stock as may
be designated by the Company from time to time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture, and
thereafter means the successor.
"Trust Officer" means any officer of the Trustee with direct
responsibility for the administration of this Indenture or who is otherwise
exercising judgment with respect to this Indenture.
"U.S. Government Obligations" means direct noncallable obligations of,
or noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States is pledged.
"Vice President" when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
Section 1.2. Other Definitions.
TERM DEFINED IN SECTION
"Change in Control" Section 16.4
"Closing Price" Section 15.5
"Conversion Agent" Section 2.5
"Conversion Price" Section 15.4
"Current Market Price" Section 15.5
"Defaulted Interest" Section 2.3
"Expiration Time" Section 15.5
"Interest Payment Date" Section 2.3
"Global Note" Section 2.8
"Paying Agent" Section 2.5
"Payment Blockage Notice" Section 4.2
"Purchased Shares" Section 15.5
"Record Date" Section 15.5
"Registrar" Section 2.5
"Regulation S Global Notes" Section 2.8
"Rule 144A Global Notes" Section 2.8
"Securities" Section 15.5
"Trigger Event" Section 15.5
Section 1.3. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
effect on the date hereof, and any other reference in this Indenture to
"generally accepted accounting principles" refers to generally accepted
accounting principles in effect on the date hereof;
(3) words in the singular include the plural, and words in the
plural include the singular;
(4) provisions apply to successive events and transactions;
and
(5) "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.
ARTICLE II
THE NOTES
Section 2.1. Designation, Amount and Issue of Notes.
The Notes shall be designated as "4.5% Convertible Subordinated Notes
due 2002." Notes to exceed the aggregate principal amount of $100,000,000 (or
$115,000,000 if the over-allotment option set forth in Section 2(b) of the
Purchase Agreement, dated September 26, 1997, by and between the Company and the
Initial Purchasers is exercised in full) upon the execution of this Indenture,
or (except pursuant to Sections 2.8, 2.9, 15.2 and 16.1 hereof) from time to
time thereafter, may be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes to or upon the written order of the Company, signed by its (a) Chairman of
the Board, President or any Vice President and (b) Treasurer or Assistant
Treasurer or its Secretary or Assistant Secretary, without any further action by
the Company hereunder.
Section 2.2. Form of Notes.
The Notes and the Trustee's certificate of authentication to be borne
by such Notes shall be substantially in the form set forth in Exhibit A, which
is incorporated in and part of this Indenture, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the Officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the Holder of such Notes in
accordance with this Indenture. Payment of principal of and interest and
premium, if any, on any Note in global form shall be made to the Holder of such
Note.
The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Neither the Company nor the Trustee shall have any responsibility for
any defect in the CUSIP number that appears on any Note, check, advice of
payment or redemption notice, and any such document may contain a statement to
the effect that CUSIP numbers have been assigned by an independent service for
convenience of reference and that neither the Company nor the Trustee shall be
liable for any inaccuracy in such numbers.
Section 2.3. Date and Denomination of Notes; Payments of Interest.
The Notes shall be issuable in registered form without coupons in
denominations of $1,000 principal amount ($100,000 and integral multiples of
$1,000 in excess thereof, in the case of Notes issued pursuant to Regulation D).
Every Note shall be dated October 1, 1997 and shall bear interest from the
applicable date in each case as specified on the face of the form of Note
attached as Exhibit A hereto. Interest on the Notes shall be paid in arrears on
each April 1 and October 1 commencing April 1, 1998. Interest on the Notes shall
be computed on the basis of a 360-day year comprised of twelve 30-day months.
The Person in whose name any Note is registered at the close of
business on any record date with respect to any Interest Payment Date (including
any Note that is converted after the record date and on or before the Interest
Payment Date) shall be entitled to receive the interest payable on such Interest
Payment Date notwithstanding the cancellation of such Note upon any transfer,
exchange or conversion subsequent to the record date and on or prior to such
Interest Payment Date, provided, that in the case of any Note, or portion
thereof, called for redemption on a Redemption Date or repurchased in connection
with a Change in Control on a repurchase date that is after a record date and
prior to (but excluding) the next succeeding Interest Payment Date, interest
shall not be paid to the Person in whose name the Note, or portion thereof, is
registered on the close of business on such record date and the Company shall
have no obligation to pay interest on such Note or such portion except to the
extent required to be paid upon redemption or repurchase of such Note or portion
thereof pursuant to Section 3.1 or 16.1 hereof. Interest may, at the option of
the Company, be paid by check mailed to the address of such Person on the Note
register provided that, with respect to any Holder of Notes with an aggregate
principal amount equal to or in excess of $5,000,000 at the request of such
Holder in writing to the Company at least five (5) days prior to the date set
for payment of interest (which shall then furnish written notice to such effect
to the Trustee), interest on such Holder's Notes shall be paid by wire transfer
in immediately available funds in accordance with the wire transfer instructions
supplied by such Holder to the Trustee and Paying Agent (if different from the
Trustee). The term "Interest Payment Date" shall mean April 1 and October 1 of
each year commencing on April 1, 1998. The term "record date" with respect to
any interest payment date shall mean the March 15 or September 15 preceding said
April 1 or October 1, respectively.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any said April 1 or October 1 (herein called "Defaulted
Interest") shall 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 are registered at the close of
business on a special record date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest to be paid on each Note
and the date of payment (which shall not be less than 25 days after the receipt
by the Trustee of such notice, unless the Trustee shall consent to an earlier
date), and at the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this clause provided. Thereupon the Trustee shall fix a special record date
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than ten (10) days prior to the date of the proposed payment and
not less than ten (10) days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the special
record date therefor to be mailed, first-class postage prepaid, to each
Noteholder at his address as it appears in the Note register, not less than ten
(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 so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the
Notes were registered at the close of business 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 or
automated quotation system on which the Notes may be listed or designated for
listing, and upon such notice as may be required by such exchange or automated
quotation system, if, after notice is given by the Company in writing to the
Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Section 2.4. Execution of Notes.
The Notes shall be signed in the name and on behalf of the Company by
the manual or facsimile signage of its Chairman of the Board, President or any
Vice President and attested by the manual or facsimile signature of its
Secretary or any of its Assistant Secretaries (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Notes as
shall bear thereon a certificate of authentication substantially in the form set
forth on the form of Note attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 17.11), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the Holder is entitled to the benefits of this
Indenture. Each Note shall be dated the date of its authentication.
In case any Officer who shall have signed any of the Notes shall cease
to be such Officer before the Notes so signed shall have been authenticated and
delivered by the Trustee, or disposed of by the Company, such Notes nevertheless
may be authenticated and delivered or disposed of as though the Person who
signed such Notes had not ceased to be such Officer and any Note may be signed
on behalf of the Company by such Persons as, at the actual date of the execution
of such Note, shall be the proper Officers, although at the date of the
execution of this Indenture any such Person was not such an Officer.
Section 2.5. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (the "Registrar"), an
office or agency where Notes may be presented for payment (the "Paying Agent"),
an office or agency where Notes may be presented for conversion (the "Conversion
Agent") and an office or agency where notices and demands to or upon the Company
in respect of the Notes and this Indenture may be served. The Registrar shall
keep a register of the Notes and of their transfer and exchange.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to maintain a Registrar, Paying Agent,
Conversion Agent or agent for service of notices and demands, or fails to give
the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands in connection with
the Notes.
Section 2.6. Paying Agent to Hold Money in Trust.
On or prior to each due date of the principal of or interest on any
Securities, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal or interest so becoming due. Subject to Sections 4.1, 4.2 and
4.3, the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Notes, and shall notify the Trustee of any default by the
Company (or any other obligor on the Notes) in making any such payment. If the
Company or an Affiliate of the Company acts as Paying Agent, it shall, on or
before each due date of the principal of or interest on any Notes, segregate the
money and hold it as a separate trust fund. The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee and the Trustee may at
any time during the continuance of any default, upon written request to a Paying
Agent, require such Paying Agent to forthwith pay to the Trustee all sums so
held in trust by such Paying Agent. Upon doing so, the Paying Agent (other than
the Company) shall have no further liability for the money.
Section 2.7. Noteholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before 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 Holders, and the
Company shall otherwise comply with TIA Section 312(a).
Section 2.8. Exchange and Registration of Transfer of Notes;
Restrictions on Transfer; Depositary.
(a) The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency of the Company designated pursuant to Section 5.3 being herein sometimes
collectively referred to as the "Note register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Note register shall be in
written form or in any form capable of being converted into written form within
a reasonably prompt period of time. The Trustee is hereby appointed "Registrar"
for the purpose of registering Notes and transfers of Notes as herein provided.
The Company may appoint one or more co-Registrars in accordance with Section
5.3.
Upon surrender for registration of transfer of
any Note to the Registrar or any co-Registrar, and satisfaction of the
requirements for such transfer set forth in this Section 2.8, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Notes may be exchanged for other Notes of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at any such office or agency maintained
by the Company pursuant to Section 5.3. Whenever any Notes are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Notes which the Noteholder making the exchange is entitled to
receive bearing registration numbers not contemporaneously outstanding.
Whenever any Notes are to be issued pursuant to this
Indenture, the Company shall deliver to the Trustee an Officer's Certificate
specifying the amount of Notes to be authenticated and certifying that all
conditions precedent to the issuance of such Notes contained in this Indenture
have been complied with.
All Notes issued upon any registration of transfer
or exchange of Notes shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange.
All Notes presented or surrendered for registration
of transfer or for exchange, redemption, repurchase or conversion shall (if so
required by the Company or the Registrar) be duly endorsed, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company and the Trustee, and the Notes shall be duly executed by the Noteholder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration
of transfer or exchange of Notes, but the Company or the Trustee may require
payment of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes.
Neither the Company nor the Trustee nor any Registrar
nor any co-Registrar shall be required to exchange or register a transfer of (a)
any Notes for a period of 15 days next preceding any selection of Notes to be
redeemed or (b) any Notes or portions thereof called for redemption pursuant to
Article III or (c) any Notes or portions thereof surrendered for conversion
pursuant to Article XV.
(b) So long as the Notes are eligible for book-entry
settlement with the Depositary, unless otherwise required by law, all Notes to
be traded (i) on the PORTAL Market shall be represented by a Note in global form
(the "Rule 144A Global Note") or (ii) to a Person who is not a U.S. Person (as
defined in Regulation S) who is acquiring the Note in an offshore transaction (a
"Foreign Person") in accordance with Regulation S shall be represented by a Note
in global form (the "Regulation S Global Note") (the Rule 144 A Global Note and
the Regulation S Global Note collectively referred to in this Indenture as the
"Global Note"), the Rule 144A Global Note and the Regulation S Global Note being
registered in the name of the Depositary or the nominee of the Depositary. The
transfer and exchange of beneficial interests in the Global Note, which does not
involve the issuance of a Note in certificated form, shall be effected through
the Depositary, in accordance with this Indenture (including restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.
At any time at the request of the beneficial Holder
of an interest in the Global Note to obtain a Note in certificated form, such
beneficial Holder shall be entitled to obtain a Note in certificated form upon
written request to the Trustee and the Custodian in accordance with the standing
instructions and procedures existing between the Custodian and Depositary for
the issuance thereof. Upon receipt of any such request, the Trustee, or the
Custodian at the discretion of the Trustee, will cause, in accordance with the
standing, instructions and procedures existing between the Depositary and the
Custodian, the aggregate principal amount of the Rule 144A Global Note or
Regulation S Global Note, as appropriate, to be reduced by the principal amount
of the Note in certified form issued upon such request to such beneficial Holder
and, following such reduction, the Company will execute and the Trustee will
authenticate and deliver to such beneficial Holder (or its nominee) a Note or
Notes in certificated form in the appropriate aggregate principal amount in the
name of such beneficial Holder (or its nominee) and bearing such restrictive
legends as may be required by this Indenture.
Any transfer of a beneficial interest in the Global
Note which cannot be effected through book-entry settlement must be effected by
the delivery to the transferee (or its nominee) of a Note or Notes in
certificated form registered in the name of the transferee (or its nominee) on
the books maintained by the Registrar in accordance with the transfer
restrictions set forth herein. With respect to any such transfer, the Trustee,
or the Custodian at the direction of the Trustee, will cause, in accordance with
the standing instructions and procedures existing between the Depositary and the
Custodian, the aggregate principal amount of the Rule 144A Global Note or
Regulation S Global Note to be reduced by the principal amount of the respective
beneficial interest in the Rule 144A Global Note or Regulation S Global Note
being transferred and, following such reduction, the Company will execute and
the Trustee will authenticate and deliver to the transferee (or such
transferee's nominee, as the case may be), a Note or Notes in certificated form
in the appropriate aggregate principal amount in the name of such transferee (or
its nominee) bearing such restrictive legends as may be required by this
Indenture.
(c) So long as the Notes are eligible for book-entry
settlement, or unless otherwise
required by law, upon any transfer of a Note in certificated form to a QIB in
accordance with Rule 144A or a Foreign Person in accordance with the Regulation
S, and upon receipt of the Note or Notes in certificated form being so
transferred, together with a certification from the transferor that the
transferee is a QIB or a Foreign Person (or other evidence satisfactory to the
Trustee), the Trustee shall make, or direct the Custodian to make, an
endorsement on the Rule 144A Global Note or Regulation S Global Note to reflect
an increase in the aggregate principal amount of the Notes represented by the
Rule 144A Global Note or Regulation S Global Note, and the Trustee shall cancel
such Note or Notes in certificated form and cause, or direct the Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Custodian, the aggregate principal amount of
Notes represented by the Rule 144A Global Note or Regulation S Global Note to be
increased accordingly provided that no Note in certificated form, or portion
thereof, in respect of which the Company or an Affiliate of the Company held any
beneficial interest shall be included in the Global Note until such Note in
certificated form is freely tradable in accordance with Rule 144(k) provided
further that the Trustee shall issue Notes in certificated form upon any
transfer of a beneficial interest in the Global Note to the Company or an
Affiliate of the Company.
Any Global Note may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Indenture as may be required by the
Custodian, the Depositary or by the National Association of Securities Dealers,
Inc. in order for the Notes to be tradable on the PORTAL Market or tradable on
Euroclear or Cedel or as may be required for the Notes to be tradable on any
other market developed for trading of securities pursuant to Rule 144A or
Regulation S under the Securities Act or required to comply with any applicable
law or any regulation thereunder or with the rules and regulations of any
securities exchange or automated quotation system upon which the Notes may be
listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Notes
are subject.
(d) Every Note that bears or is required under this
Section 2.8(d) to bear the
legend set forth in this Section 2.8(d) (together with any Common Stock issued
upon conversion of the Notes and required to bear the legend set forth in
Section 2.8(e), collectively, the "Restricted Notes") shall be subject to the
restrictions on transfer set forth in this Section 2.8(d) (including those set
forth in the legend set forth below) unless such restrictions on transfer shall
be waived by written consent of the Company (with written notice to the
Trustee), and the Holder of each such Restricted Note, by such Noteholder's
acceptance thereof, agrees to be bound by all such restrictions on transfer. As
used in Section 2.8(d) and 2.8(e), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Note.
Until two (2) years after the original issuance
date of any Note, any certificate evidencing such Note (and all Notes issued in
exchange therefor or substitution thereof, other than Common Stock, if any,
issued upon conversion thereof, which shall bear the legend set forth in Section
2.8(e), if applicable) shall bear a legend in substantially the following form,
unless otherwise agreed by the Company in writing, with written notice thereof
to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) or (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THE NOTE EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT
IT WILL NOT PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THE NOTE EVIDENCED HEREBY AND THE LAST DATE ON WHICH WORLD ACCESS,
INC. (THE "COMPANY") OR ANY "AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE OWNER OF THE NOTE (THE "RESTRICTION
TERMINATION DATE") RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO FIRST UNION NATIONAL BANK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY BEFORE THE RESTRICTION TERMINATION DATE, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS NOTE TO FIRST UNION NATIONAL BANK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO
CLAUSE (C), (D) OR (E) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO FIRST UNION NATIONAL BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION
OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Note (or security issued in exchange or
substitution therefor) as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for removal
of the foregoing legend set forth therein have been satisfied may, upon
surrender of such Note for exchange to the Registrar in accordance with the
provisions of this Section 2.8, be exchanged for a new Note or Notes, of like
tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.8(d).
Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in the second paragraph of Section 2.8(b)
and in this Section 2.8(d), a Global Note may not be transferred as a whole or
in part except by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary.
The Depositary shall be a clearing agency registered
under the Exchange Act. The Company initially appoints The Depository Trust
Company to act as Depositary with respect to the Global Notes. Initially, the
Rule 144A Global Note shall be deposited with, or on behalf of, the Depositary
and registered in the name of Cede & Co., as the nominee of the Depositary.
Initially, the Regulation S Global Note shall be deposited with, or on behalf
of, the Depositary and registered in the name of Cede & Co., as the nominee of
the Depositary, for the accounts of Euroclear and Cedel.
The Trustee is hereby authorized and requested to
execute and deliver a Letter of Representation to the Depositary and, in
connection with any successor nominee for the Depositary or any successor
Depositary, enter into comparable arrangements, and shall have the same rights
with respect to its actions thereunder as it has with respect to its action
under this Indenture.
If at any time the Depositary for the Global Note
notifies the Company that it is unwilling or unable to continue as Depositary
for the Global Note, the Company may appoint a successor Depositary with respect
to such Global Note. If a successor Depositary is not appointed by the Company
within 90 days after the Company receives such notice, the Company will execute,
and the Trustee, upon receipt of an Officers' Certificate for the authentication
and delivery of Notes, will authenticate and deliver, Notes in certificated
form, in an aggregate principal amount equal to the principal amount of the
Global Note, in exchange for the Global Note.
If a Note in certificated form is issued in exchange
for any portion of a Global Note after the close of business at the office or
agency where such exchange occurs on any record date and before the opening of
business at such office or agency on the next succeeding Interest Payment Date,
interest will not be payable on such interest payment date in respect of such
Note, but will be payable on such interest payment date only to the Person to
whom interest in respect of such portion of such Global Note is payable in
accordance with the provisions of this Indenture.
Notes in certificated form issued in exchange for
all or a part of a Global Note pursuant to this Section 2.8 shall be registered
in such names and in such authorized denominations as the Depositary, pursuant
to instruction from its direct or indirect participants or otherwise, shall
instruct the Trustee in writing. Upon execution and authentication, the Trustee
shall deliver such Notes in certificated form to the Persons in whose names such
Notes in certificated form are so registered.
At such time as all interests in a Global Note have
been redeemed, repurchased, converted, canceled, exchanged for Notes in
certificated form, or transferred to a transferee who receives Notes in
certificated form, such Global Note shall, upon receipt thereof, be canceled by
the Trustee in accordance with standing procedures and instructions existing
between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Global Note is exchanged for Notes in
certificated form, redeemed, converted, repurchased or canceled, or transferred
to a transferee who receives Notes in certificated form therefor or any Note in
certificated form is exchanged or transferred for part of a Global Note, the
principal amount of such Global Note shall, in accordance with the standing
procedures and instructions existing between the Depositary and the Custodian,
be appropriately reduced or increased, as the case may be, and an endorsement
shall be made on such Global Note, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase. In the event of
any transfer of any beneficial interest between the Rule 144A Global Note and
the Regulation S Global Note in accordance with the standing procedures and
instructions between the Depositary and the Custodian and the transfer
restrictions set forth herein, the aggregate principal amount of each of the
Rule 144A Global Note and the Regulation S Global Note shall be appropriately
increased or decreased, as the case may be, and an endorsement shall be made on
each of the Rule 144A Global Note and the Regulation S Global Note by the
Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
(e) Until two (2) years after the original issuance
date of any Note, any stock
certificate representing Common Stock issued upon conversion of such Note shall
bear a legend in substantially the following form, unless such Common Stock has
been transferred pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the Transfer Agent and the
Registrar:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW.
THE HOLDER HEREOF AGREES THAT PRIOR TO THE DATE THAT
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE NOTE UPON THE
CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED AND THE LAST
DATE ON WHICH WORLD ACCESS, INC. (THE COMPANY") OR ANY "AFFILIATE" (AS DEFINED
IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE OWNER OF THE NOTE
OR THE COMMON STOCK EVIDENCED HEREBY (THE "RESTRICTION TERMINATION DATE"); (1)
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY
EXCEPT (A) TO THE COMPANY, OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER FURNISHES TO
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY, AS TRANSFER AGENT (OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (D) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2)
PRIOR TO SUCH TRANSFER BEFORE THE RESTRICTION TERMINATION DATE (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH CONTINENTAL STOCK
TRANSFER AND TRUST COMPANY, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH PERSON TO
WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF
THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(F) ABOVE
OR UPON THE RESTRICTION TERMINATION DATE OR UPON THE EARLIER SATISFACTION OF
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY, AS TRANSFER AGENT (OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), THAT THE COMMON STOCK HAS BEEN OR IS BEING
OFFERED AND SOLD IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION
S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions
on transfer shall have expired in accordance with their terms or as to which the
conditions for removal of the foregoing legend set forth therein have been
satisfied may, upon surrender of the certificates representing such shares of
Common Stock for exchange in accordance with the procedures of the transfer
agent for the Common Stock, be exchanged for a new certificate or certificates
for a like number of shares of Common Stock, which shall not bear the
restrictive legend required by this Section 2.8(e). The Company shall advise the
Trustee in writing as to the termination of the restricted period and the
Trustee may rely conclusively thereon.
(f) Any certificate evidencing a Note that has been
transferred to an Affiliate of the Company within two (2) years after the
original issuance date of the Note, as evidenced by a notation on the Assignment
Form for such transfer or in the representation letter delivered in respect
thereof (substantially in the form attached as an exhibit to the Offering
Memorandum), shall, until two (2) years after the last day on which the Company
or any Affiliate of the Company was an owner of such Note, bear a legend in
substantially the following form, unless otherwise agreed by the Company (with
written notice thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE.
BY ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON
STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO WORLD ACCESS, INC. OR
ANY SUBSIDIARY THEREOF, (B) IN A TRANSACTION REGISTERED UNDER THE SECURITIES ACT
OR (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (2) THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. THIS LEGEND SHALL BE REMOVED UPON THE TRANSFER OF THE
NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE
PURSUANT TO THE IMMEDIATELY PRECEDING SENTENCE.
IF THE PROPOSED TRANSFER IS PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FIRST UNION NATIONAL BANK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
Any stock certificate representing Common Stock
issued upon conversion of such Note shall also bear a legend in substantially
the form indicated above, unless otherwise agreed by the Company (with written
notice thereof to the Trustee).
(g) Neither the Company nor the Trustee shall
have any responsibility for any actions taken or not taken by the Depositary,
Euroclear or Cedel.
Section 2.9. Mutilated, Destroyed, Lost or Stolen Notes.
In case any Note shall become mutilated or be destroyed, lost or
stolen, the Company in its discretion may execute and upon receipt of an
Officer's Certificate for the authentication and delivery of Notes, the Trustee,
or an authenticating agent appointed by the Trustee, shall authenticate and
deliver a new Note, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Note, or in lieu of and in
substitution for the Note so destroyed, lost or stolen. In every case the
applicant for a substituted Note shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or connected with such substitution, and, in every
case of destruction, loss or theft, the applicant shall furnish to the Company,
to the Trustee and, if applicable, to such authenticating agent evidence to
their satisfaction of the destruction, loss or theft of such Note and of the
ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, the Company or the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note which has matured or is about to
mature or has been called for redemption or is about to be converted into Common
Stock shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Note, pay or authorize the payment of or convert
or authorize the conversion of the same (without surrender thereof except in the
case of a mutilated Note), as the case may be, if the applicant for such payment
or conversion shall furnish to the Company, to the Trustee and, if applicable,
to such authenticating agent such security or indemnity as may be required by
them to save each of them harmless for any loss, liability, cost or expense
caused by or connected with such substitution, and, in case of destruction, loss
or theft, evidence satisfactory to the Company, the Trustee and, if applicable,
any Paying Agent or Conversion Agent of the destruction, loss or theft of such
Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section
2.9 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionally with any and all other Notes
duly issued hereunder. To the extent permitted by law, all Notes shall be held
and owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.10. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any notice, direction, waiver or consent, Notes owned by
the Company or any other obligor on the Notes or by any Affiliate of the Company
or of such other obligor on the Notes shall be disregarded, except that, for
purposes of determining whether the Trustee shall be protected in relying on any
such notice, direction, waiver or consent, only Notes which a Trust Officer
knows are so owned shall be so disregarded. Notes so owned which have been
pledged in good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to the
Notes and that the pledgee is not the Company or any other obligor on the Notes
or any Affiliate of the Company or of such other obligor.
Section 2.11. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare
and execute, and, upon the order of the Company, the Trustee, upon receipt of an
Officer's Certificate for the authentication and delivery of Notes, shall
authenticate and deliver temporary Notes. Temporary Notes shall be substantially
in the form of definitive Notes but may have variations that the Company, with
the consent of the Trustee, considers appropriate for temporary Notes (as
conclusively evidenced by its execution of such Notes). Without unreasonable
delay, the Company shall prepare and execute and the Trustee, upon receipt of an
Officer's Certificate for the authentication and delivery of Notes, shall
authenticate and deliver definitive Notes in exchange for temporary Notes. Until
so exchanged, the Temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes.
Section 2.12. Cancellation.
All Notes surrendered for the purpose of payment, redemption,
repurchase, conversion, exchange or registration of transfer, shall, if
surrendered to the Company or any Paying Agent or any Registrar or any
Conversion Agent, be surrendered to the Trustee and promptly canceled by it, or,
if surrendered to the Trustee, shall be promptly canceled by it, and no Notes
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture provided that any Note or portion thereof
surrendered for repurchase shall only be canceled at such time as such Note or
portion thereof has been repurchased pursuant to Article XVI hereof. The Trustee
shall destroy canceled Notes (unless the Company directs it in writing to do
otherwise) and, after such destruction, shall, if requested by the Company,
deliver a certificate of such destruction to the Company. If the Company shall
acquire any of the Notes, such acquisitions shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.
Section 2.13. Deposit of Funds.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and the maturity date, the Company shall deposit with the Paying Agent in
immediately available funds sufficient to make cash payments, if any, due on
such Interest Payment Date or maturity date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or maturity date, as the case may be.
ARTICLE III
REDEMPTION OF NOTES
Section 3.1. Right to Redeem; Notice to Trustee.
The Notes shall not be redeemable at the option of the Company prior to
October 1, 2000. At any time after October 1, 2000, and prior to maturity, the
Notes may be redeemed at the option of the Company from time to time, as a whole
or in part, at the Redemption Prices specified in paragraph nine of the form of
Note (reverse side) attached hereto as Exhibit A, together with accrued interest
up to but not including the Redemption Date.
If the Company elects to redeem Notes pursuant to this Section 3.1 and
paragraph eight of the Notes, it shall notify the Trustee in writing at least 45
days prior to the Redemption Date as fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee) of the Redemption Date and the
principal amount of Notes to be redeemed and shall deliver to the Trustee such
documentation and records as shall enable the Trustee to select the Notes to be
redeemed. If fewer than all of the Notes are to be redeemed, the record date
relating to such redemption shall be selected by the Company and given to the
Trustee in writing, which record date shall not be less than ten days after the
date of written notice to the Trustee.
Section 3.2. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed, the Trustee shall,
not more than 60 days prior to the Redemption Date, select the Notes to be
redeemed by lot or by a method the Trustee considers fair and appropriate;
provided, however, that such method is not prohibited by any stock exchange or
automated quotations system on which the Notes are then listed or traded. The
Trustee shall make the selection from the Notes outstanding and not previously
called for redemption. The Trustee shall select for redemption portions of the
principal of Notes that have denominations larger than $1,000. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
Section 3.3. Notice of Redemption.
At least 15 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by
first-class mail to the Trustee and to each Holder of Notes to be redeemed at
such Holder's address as it appears on the Note register.
The notice shall identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the then current Conversion Price;
(4) the name and address of the Paying Agent and the Conversion
Agent;
(5) that Notes called for redemption must be presented and surrendered
to the Paying Agent to collect the Redemption Price;
(6) that the Notes called for redemption may be converted at any time
before the close of business on the fifth Business Day immediately preceding the
Redemption Date;
(7)that Holders who wish to convert Notes must satisfy the requirements
in paragraph 11 of the Notes;
(8) that, unless the Company defaults in making the redemption payment,
the only remaining right of the Holder shall be to receive payment of the
Redemption Price upon presentation and surrender to the Paying Agent of the
Notes;
(9) 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
presentation and surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion thereof will be issued; and
(10) that interest on Notes called for redemption ceases to accrue
on and after the Redemption Date.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed by the Company, or by the Trustee
at the written request of the Company, Notes called for redemption become due
and payable on the Redemption Date and at the Redemption Price stated in the
notice, except for Notes that are converted in accordance with the provisions of
Section 15.1. Upon presentation and surrender to the Paying Agent, Notes called
for redemption shall be paid at the Redemption Price, plus accrued interest up
to but not including the Redemption Date.
Section 3.5. Deposit of Redemption Price.
On or before 10:00 a.m. New York City time on any Redemption Date, the
Company shall deposit with the Paying Agent money sufficient to pay the
Redemption Price of and accrued interest on all Notes to be redeemed on that
date, other than Notes or portions thereof called for redemption on that date
which have been delivered by the Company to the Trustee for cancellation or have
been converted. The Paying Agent shall promptly return to the Company any money
not required for that purpose because of the conversion of Notes pursuant to
Article XV or otherwise. If such money is instead held by the Company or an
Affiliate of the Company in trust and is not required for such purpose, it shall
be discharged from the trust.
Section 3.6. Notes Redeemed in Part.
Upon presentation and surrender of a Note that is redeemed in part, the
Company shall execute and the Trustee shall, upon receipt of an Officer's
Certificate for the authentication and delivery of Notes, authenticate for and
deliver to the Holder a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
Notwithstanding the foregoing, the Trustee shall not pay the Redemption
Price of any Notes or mail any notice of redemption during the continuance of a
default in payment of interest on the Notes or of any Event of Default of which
a Trust Officer has knowledge. If any Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal and premium, if any,
shall, until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Note and such Note shall remain convertible
into Common Stock until the principal and premium, if any, shall have been paid
or duly provided for.
Section 3.7. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Notes, the Company may arrange for
the purchase and conversion of any Notes by an agreement with one or more
investment bankers or other purchasers to purchase such Notes by paying to the
Trustee in trust for the Holders, on or before the date fixed for redemption, an
amount not less than the applicable Redemption Price, together with interest
accrued to (but excluding) that date fixed for redemption, of such Notes.
Notwithstanding anything to the contrary contained in this Article III, the
obligation of the Company to pay the Redemption Price of such Notes, together
with interest accrued to (but excluding) the date fixed for redemption, shall be
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into (a copy of which shall be
filed with the Trustee prior to the date fixed for redemption), any Notes not
duly surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and surrendered by such purchasers for conversions,
all as of immediately prior to the close of business on the date fixed for
redemption (and the right to convert any such Notes shall be extended through
such time), subject to payment of the above amount as aforesaid. At the written
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Notes shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Notes between the Company and such purchasers to which the Trustee has not
consented in writing, including the costs and expenses, including reasonable
legal fees, incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
ARTICLE IV
SUBORDINATION OF NOTES
Section 4.1. Notes Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of Notes issued
hereunder by his or her acceptance thereof likewise covenants and agrees, that
all Notes shall be issued subject to the provisions of this Article IV; and each
Person holding any Note, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of and interest on all Notes issued
hereunder (including, without limitation, in connection with any redemption of
Notes) shall, to the extent and in the manner hereinafter set forth, be
subordinated and subject in right of payment to the prior payment in full of all
Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter created, incurred, assumed or guaranteed.
Section 4.2. Payments to Holders.
No payment shall be made with respect to the principal of, or premium,
if any, or interest on the Notes (including, but not limited to, the Redemption
Price with respect to the Notes to be called for redemption in accordance with
Section 3.2 or submitted for repurchase in accordance with Section 16.2, as the
case may be, as provided in the Indenture), except payments and distributions
made by the Trustee as permitted by the first or second paragraph of Section
4.5, if:
(a) a default in the payment of principal, premium, interest, rent or
other obligations due on any Senior Indebtedness occurs and is continuing (or,
in the case of Senior Indebtedness for which there is a period of grace, in the
event of such a default that continues beyond the period of grace, if any,
specified in the instrument or lease evidencing such Senior Indebtedness),
unless and until such default shall have been cured or waived or shall have
ceased to exist, or
(b) a default, other than a payment default, on any Designated Senior
Indebtedness occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity and the Trustee
receives a written notice of the default (a "Payment Blockage Notice") from a
Representative or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(b) above, no subsequent Payment Blockage Notice shall be effective for purposes
of this Section unless and until (A) at least 365 days shall have elapsed since
the initial effectiveness of the immediately prior Payment Blockage Notice, and
(B) all scheduled payments of principal, premium, if any, and interest on the
Notes that have come due have been paid in full in cash. No nonpayment default
that existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Payment
Blockage Notice.
The Company, after providing written notice to the Trustee, shall
resume payments on and distributions in respect of the Notes upon the earlier
of:
(a) the date upon which the default is cured or waived or ceases
to exist, or
(b) in the case of a default referred to in clause (b) above, 179 days
pass after notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated;
unless this Article IV otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or payment thereof in
accordance with its terms provided for in cash or other payment satisfactory to
the holders of such Senior Indebtedness, before any payment is made on account
of the principal of, premium, if any, or interest on the Notes (except payments
made pursuant to Article XIII from monies deposited with the Trustee pursuant
thereto prior to commencement of proceedings for such dissolution, winding up,
liquidation or reorganization) and upon any such dissolution or winding up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other proceeding, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the holders of the Notes or the Trustee would be entitled,
except for the provision of this Article IV, shall (except as aforesaid) be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the holders of
the Notes or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, or
as otherwise required by law or a court order) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay all
Senior Indebtedness in full, in cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness, before any
payment or distribution or provision therefor is made to the holders of the
Notes or to the Trustee.
For purposes of this Article IV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article IV with respect
to the Notes to the payment of all Senior Indebtedness which may at the time be
outstanding provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases which are
not assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article XII shall not be deemed a dissolution,
winding up, liquidation or reorganization for the purposes of this Section 4.2
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article XII.
In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, premium, if any, or interest on the
Notes (including, but not limited to, the Redemption Price with respect to the
Notes, called for redemption in accordance with Section 3.2 or submitted for
repurchase in accordance with Section 16.2, as the case may be, as provided in
the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 4.5, until all Senior
Indebtedness has been paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Indenture. If payment of the Notes is accelerated because
of an Event of Default, the Company shall promptly notify holders of Senior
Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing, shall be received by the
Trustee or the Holders before all Senior Indebtedness is paid in full in cash or
other payment satisfactory to the holders of such Senior Indebtedness, or
provision is made for such payment thereof in accordance with its terms in cash
or other payment satisfactory to the holders of such Senior Indebtedness, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or
other payment satisfactory to the holders of such Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the holders of
such Senior Indebtedness.
Nothing in this Section 4.2 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject
to the further provisions of Section 4.5, and the right to rescind and annul
acceleration of the notice pursuant to Section 7.1
Section 4.3. Notes to Be Subrogated to Rights of Holders of
Senior Indebtedness.
Subject to the prior payment in full of all Senior Indebtedness then
due, the Holders shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until the principal of and interest on the
Notes shall be paid in full, and, for purposes of such subrogation, no payments
or distributions to the holders of Senior Indebtedness of assets, whether in
cash, property or securities, distributable to the holders of Senior
Indebtedness under the provisions hereof to which the Holders would be entitled
except for the provisions of this Article IV, and no payment pursuant to the
provisions of this Article IV to the holders of Senior Indebtedness by the
Holders shall, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment by the Company
to or on account of Senior Indebtedness, it being understood that the provisions
of this Article IV are, and are intended, solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
Section 4.4. Obligations of the Company Unconditional.
Nothing contained in this Article IV or elsewhere in this Indenture or
in any Note is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders the
principal of and interest on the Notes, as the same shall become due and payable
in accordance with the terms of the Notes, or to affect the relative rights of
the Holders and other creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
the happening of an Event of Default under this Indenture, subject to the
provisions of Article VIII, and the rights, if any, under this Article IV of the
holders of Senior Indebtedness in respect of assets, whether in cash, property
or securities, of the Company received upon the exercise of any such remedy.
Section 4.5. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Notes. Notwithstanding the provisions of this Article
IV or any other provision of this Indenture, the Trustee shall not at any time
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee, unless and until a Trust Officer
shall have received written notice thereof from the Company or from the holder
or holders of Senior Indebtedness or from their Representative or
Representatives; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Sections 8.1 and 8.2, shall be entitled to
assume conclusively that such facts do not exist.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or herself to be a holder of
Senior Indebtedness (or a Representative of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a Representative of
any such holder. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article IV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent of which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
each Person under this Article IV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 4.6. Application by Trustee of Monies Deposited With It.
Money or U.S. Government Obligations deposited with the Trustee or any
Paying Agent (whether or not in trust) for the payment of the principal of or
interest on any Notes shall be subject to the provisions of Sections 4.1, 4.2,
4.3 and 4.4; except that, if two (2) Business Days prior to the date on which by
the terms of this Indenture any such monies or U.S. Government Obligations may
become payable for any purpose (including, without limitation, the payment of
either the principal of or interest on any Note) the Trustee shall not have
received with respect to such monies or U.S. Government Obligations the notice
provided for in Section 4.5, then the Trustee or any Paying Agent shall have
full power and authority to receive such monies and to apply such monies to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such date. This Section 4.6
shall be construed solely for the benefit of the Trustee and the Paying Agent
and shall not otherwise affect the rights that holders of Senior Indebtedness
may have to recover any such payments from the Holders in accordance with the
provisions of this Article IV.
Section 4.7. Subordination Rights Not Impaired by Acts or Omissions
of Company or holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of any Senior Indebtedness may extend,
renew, modify or amend the terms of such Senior Indebtedness or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company, all without affecting the liabilities and obligations of the
parties to this Indenture or the Holders. No provision in any supplemental
indenture which affects the superior position of the holders of the Senior
Indebtedness shall be effective against the holders of the Senior Indebtedness
unless the holders of such Senior Indebtedness (required pursuant to the terms
of such Senior Indebtedness to give such consent) have consented thereto.
Section 4.8. Trustee to Effectuate Subordination.
Each Holder of a Note by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to effectuate the subordination provided in this Article IV and
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Section 4.9. Right of Trustee to Hold Senior Indebtedness.
The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article IV in respect of any Senior Indebtedness at
any time held by it to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
Section 4.10. Article IV Not to Prevent Events of Default.
The failure to make a payment on account of the principal of or
interest on the Notes by reason of any provision in this Article IV shall not be
construed as preventing the occurrence of an Event of Default under Section 7.1.
Section 4.11. No Fiduciary Duty Created to Holders of Senior
Indebtedness.
Notwithstanding any other provision in this Article IV, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness by virtue of the provisions of this Article IV.
Section 4.12. Article Applicable to Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article IV shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article IV in addition to or in place of the Trustee.
ARTICLE V
COVENANTS
Section 5.1. Payment of Notes.
The Company shall promptly make all payments in respect of the Notes on
the dates and in the manner provided in the Notes and this Indenture. An
installment of principal or interest shall be considered paid on the date it is
due if the Trustee or Paying Agent (other than the Company or an Affiliate of
the Company) holds on that date money deposited by the Company or an Affiliate
thereof sufficient to pay the installment. The Company shall pay interest on
overdue principal at the rate borne by the Notes per annum; it shall pay
interest on overdue installments of interest at the same rate to the extent
lawful.
Section 5.2. SEC Reports.
The Company shall file all reports and other information and documents
which it is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, and within 15 days after it files them with the SEC, the Company
shall file copies of all such reports, information and other documents with the
Trustee. The Company will cause any quarterly and annual reports which it mails
to its stockholders to be mailed to the Holders.
During the period beginning on the latest date of the original issuance
of the Notes and ending on the date that is two (2) years from such date, the
Company covenants and agrees that it shall, during any period in which it is not
subject to Section 13 or 15(d) under the Exchange Act, make available to any
Holder or beneficial Holder of Notes or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Notes or such Common Stock from such
Holder or beneficial Holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any Holder or beneficial
Holder of such Notes or such Common Stock and it will take such further action
as any Holder or beneficial Holder of such Notes or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
Holder or beneficial Holder to sell its Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any Holder or any beneficial Holder of the Notes or such Common
Stock, the Company will deliver to such Holder a written statement as to whether
it has complied with such requirements.
section 5.3. Maintenance of Office or Agency.
The Company will maintain in Atlanta, Georgia an office or agency
(which may be the Corporate Trust Office) where the Notes may be surrendered for
registration of transfer or exchange or for presentation for payment or for
conversion or redemption and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency not designated or appointed by the Trustee.
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 or the office or agency of the Trustee in Atlanta,
Georgia.
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 designations provided
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in Atlanta, Georgia, for such
purposes. The Company will give prompt written notice to the holders of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates each of the Corporate Trust
Office of the Trustee and the office or agency of the Trustee in Atlanta,
Georgia as one such office or agency of the Company for each of the aforesaid
purposes.
Section 5.4. Stay, Extension and Usury Laws.
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 claims
or take the benefit or advantage of, any stay, extension or usury law or other
law which would prohibit or forgive the Company from paying all or any portion
of the principal of, premium, if any, or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture, and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefits or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
Section 5.5. Liquidation.
Subject to the provisions of Article IV, so far as they may be
applicable hereto, the Board of Directors or the stockholders of the Company may
not adopt a plan of liquidation, which plan provides for, contemplates or the
effectuation of which is preceded by (a) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company otherwise
than substantially as an entirety (any such sale, lease, conveyance or other
disposition substantially as an entirety being governed by Article VII) and (b)
the distribution of all or substantially all of the proceeds of such sale,
lease, conveyance or other disposition and of the remaining assets of the
Company to the holders of the capital stock of the Company, unless the Company
shall in connection with the adoption of such plan make provision for, or agree
that prior to making any liquidating distributions it will make provision for,
the satisfaction of the Company's obligations hereunder and under the Notes as
to the payment of the principal and interest thereof. The Company shall be
deemed to make provision for such payments only if (1) the Company irrevocably
deposits in trust with the Trustee money or U.S. Government Obligations maturing
as to principal and interest in such amounts and at such times as are
sufficient, without consideration of any reinvestment of such interest, to pay
the principal of and interest on the Notes then outstanding to maturity and to
pay all other sums payable by it hereunder or (2) there is an express assumption
of the due and punctual payment of the Company's obligations hereunder and under
the Notes and the performance and observance of all covenants and conditions to
be performed by the Company hereunder, by the execution and delivery of a
supplemental indenture in form satisfactory to the Trustee by a Person who
acquires, or will acquire (otherwise than pursuant to a lease), all or
substantially all of the assets of the Company, and which Person will have
assets (immediately after the acquisition) and aggregate earnings (for such
Person's four full fiscal quarters immediately preceding such acquisition) at
least equal to the assets of the Company (immediately preceding such
acquisition) and the aggregate earnings of the Company (for its four (4) full
fiscal quarters immediately preceding the acquisition), respectively, and which
is a corporation organized under the laws of the United States, any State
thereof or the District of Columbia; provided, however, that the Company shall
not make any liquidating distribution until after the Company (x) has certified
to the Trustee with an Officers' Certificate at least five (5) days prior to the
making of any liquidating distribution that it has complied with the provisions
of this Section 5.5 and (y) delivered to the Trustee an Opinion of Counsel that
all conditions precedent to such liquidation have been complied with.
Section 5.6. Compliance Certificates.
The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate as to the signer's
knowledge of the Company's compliance with all conditions and covenants on its
part contained in this Indenture and stating whether or not the signer knows of
any default or Event of Default. If such signer knows of such a default or Event
of Default, the Officers' Certificate shall describe the default or Event of
Default and the efforts to remedy the same. For the purposes of this Section
5.6, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture. The
Officers' Certificate need not comply with Section 17.5 hereof.
Section 5.7. Notice of Defaults.
In the event (a) that Indebtedness of the Company in an aggregate
amount in excess of $5,000,000 is declared due and payable before its maturity
because of the occurrence of any default under such Indebtedness, or (b) of the
occurrence of any event which, with the giving of notice or the passage of time,
or both, would entitle the holder or holders of such Indebtedness to declare
such Indebtedness due and payable before its maturity, the Company will promptly
give written notice to the Trustee of such declaration.
Section 5.8. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company, directly or by reason
of its ownership of any Subsidiary or upon the income, profits or property of
the Company and (b) all material lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a lien upon the property of the
Company; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which adequate provision has been made.
Section 5.9. Corporate Existence.
Subject to Article XII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and rights (charter and statutory); provided, however, that the
Company shall not be required to preserve any right if the Board of Directors
shall determine in good faith that the preservation is no longer desirable in
the conduct of the Company's business and that the loss thereof is not, and will
not be, adverse in any material respect to the Holders.
Section 5.10. Maintenance of Properties.
Subject to Section 5.5, the Company and its Subsidiaries will cause all
material properties (real and personal) owned, leased or licensed in the conduct
of their business to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof and thereto, all as in the reasonable judgment of the Board of Directors
may be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times while any Notes are
outstanding, provided, however, that nothing in this Section 5.10 shall prevent
the Company and its Subsidiaries from discontinuing the maintenance of any such
properties if, in the reasonable judgment of the Board of Directors, such
discontinuance is desirable in the conduct of the Company's business and is not,
and will not be, adverse in any material respect to the Holders.
Section 5.11. Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS
BY THE TRUSTEE
Section 6.1. Holders' Lists.
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee, semiannually, not more than 15 days after each March
15 and September 15 in each year beginning with 1998, and at such other times as
the Trustee may request in writing, within 30 days after receipt by the Company
of any such request (or such lesser time as the Trustee may reasonably request
in order to enable it to timely provide any notice to be provided by it
hereunder), a list in such form as the Trustee may reasonably require of the
names and addresses of the Holders of Notes as of a date not more than 15 days
(or such other date as the Trustee may reasonably request in order to so provide
any such notices) prior to the time such information is furnished, except that
no such list need be furnished so long as the Trustee is acting as Registrar.
Section 6.2. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
Notes contained in the most recent list furnished to it as provided in Section
6.1 or maintained by the Trustee in its capacity as Registrar, if so acting. The
Trustee may destroy any list furnished to it as provided in Section 6.1 upon
receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders of Notes
with respect to their rights under this Indenture or under the Notes, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
Agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders of Notes made pursuant to the
Trust Indenture Act.
Section 6.3. Reports by Trustee.
(a) Within 60 days after December 31 of each year commencing with the
year 1997, the Trustee shall transmit to Holders of Notes such reports dated as
of December 31 of the year in which such reports are made concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
Holders of Notes, be filed by the Trustee with each stock exchange or automated
quotation system upon which the Notes may be listed or traded with the Company.
The Company will notify the Trustee in writing within a reasonable time if the
Notes are listed on any stock exchange or automated quotation system.
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
Section 7.1. Events of Default.
In case one or more of the following Events of Default (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of any installment of interest upon any of
the Notes as and when the same shall become due and payable, and continuance of
such default for a period of 30 days, whether or not such payment is permitted
under Article IV hereof; or
(b) default in the payment of the principal of or premium, if any, on
any of the Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption pursuant to Article III or
repurchase pursuant to Article XVI, by acceleration or otherwise, whether or not
such payment is permitted under Article IV hereof; or
(c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Notes or
in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 7.1 specifically dealt
with) continued for a period of 60 days after the date on which written notice
of such failure, requiring the Company to remedy the same, shall have been given
to the Company by the Trustee, or to the Company and a Trust Officer of the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4; or
(d) failure on the part of the Company or any Subsidiary with respect
to its obligation to pay principal of or interest on Indebtedness for borrowed
money which default shall have resulted in Indebtedness in an amount in excess
of $5,000,000; or
(e) default by the Company with respect to any Indebtedness for
borrowed money of the Company, which default results in acceleration of any such
Indebtedness which is in an amount of in excess of $5,000,000 without such
Indebtedness having been discharged, or such acceleration having been rescinded
or annulled within the applicable grace period; or
(f) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due; or
(g) an involuntary case or other proceeding shall be commenced against
the Company seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 consecutive days; or
(h) the entry by a court having jurisdiction in the premises of a final
judgment, decree or order against the Company or any Subsidiary which shall
require the payment by the Company or any Subsidiary of an amount (to the extent
not covered by insurance) in excess of $5,000,000 and the continuance of any
such judgment, decree or order unstayed or unsatisfied and in effect for a
period of 60 consecutive days which is not being contested in good faith by
appropriate judicial proceedings;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1(f) or (g)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Notes then outstanding hereunder
determined in accordance with Section 9.4, by notice in writing to the Company
(and to the Trustee if given by Holders), may declare the principal of all the
Notes and the interest accrued thereon to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Notes contained to the contrary
notwithstanding. If an Event of Default specified in Section 7.1(f) or (g)
occurs, the principal of all the Notes and the interest accrued thereon shall be
immediately and automatically due and payable without necessity of further
action. This provision, however, is subject to the condition that if, at any
time after the decree for the payment of the monies due shall have been obtained
or entered as hereinafter provided, the Company shall pay or shall deposit with
the Trustee a sum sufficient to pay all matured installments of interest upon
all Notes and the principal of and premium, if any, on any and all Notes which
shall have become due otherwise than by acceleration (with interest on overdue
installments of interest (to the extent that payment of such interest is
enforceable under applicable law) and on such principal and premium, if any, at
the rate borne by the Notes, to the date of such payment or deposit) and amounts
due to the Trustee pursuant to Section 8.6, and if any and all defaults under
this Indenture, other than the nonpayment of principal of and premium, if any,
and accrued interest on Notes which shall have become due by acceleration, shall
have been cured or waived pursuant to Section 7.7, then and in every such case
the Holders of a majority in aggregate principal amount of the Notes then
outstanding determined in accordance with Section 9.4, by written notice to the
Company and to the Trustee, may waive all defaults or Events of Default and
rescind and annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or Event of Default, or shall impair any right consequent thereon. The Company
shall notify a Trust Officer in writing, promptly upon becoming aware thereof,
of any default or Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the Holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder and all rights,
remedies and powers of the Company, the Holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.
Section 7.2. Payment of Notes on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Notes as and when the
same shall become due and payable, and such default shall have continued for a
period of 30 days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Notes as and when the same shall
have become due and payable, whether at maturity of the Notes or in connection
with any redemption or repurchase, under this Indenture, by declaration or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the Holders, the whole amount that then shall have
become due and payable on all such Notes for principal and premium, if any, or
interest, or both, as the case may be, with interest upon the overdue principal
and premium, if any, and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest at
the rate borne by the Notes and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder. Until such demand
by the Trustee, the Company may pay the principal of and premium, if any, and
interest on the Notes to the Holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as Trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company or any other obligor on the Notes under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, 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 and
of the Holders allowed in such judicial proceedings relative to the Company or
any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.6, and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Holders to make such payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due it
for reasonable compensation, expenses, advances and disbursements, including
counsel fees incurred by it up to the date of such distribution. To the extent
that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings 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, monies, securities and other property
which the Holders may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders, and it shall not be necessary to make any Holders parties to any such
proceedings.
Section 7.3. Application of Monies Collected by Trustee.
Any monies collected by the Trustee pursuant to this Article VII shall
be applied in the order following, at the date or dates fixed by the Trustee for
the distribution of such monies, upon presentation of the several Notes, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
First: to the payment of all amounts due the Trustee under Section 8.6;
Second: subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall not have become due and be unpaid, to the payment
of interest on the Notes in default in the order of the maturity of the
installments of such interest, with interest (to the extent that such interest
has been collected by the Trustee) upon the overdue installments of interest at
the rate borne by the Notes, such payments to be made ratably to the Persons
entitled thereto;
Third: subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall have become due, by acceleration or otherwise,
and be unpaid, to the payment of the whole amount then owing and unpaid upon the
Notes for principal and premium, if any, and interest, with interest on the
overdue principal and premium, if any, and (to the extent that such interest has
been collected by the Trustee) upon overdue payments of interest at the rate
borne by the Notes, and in case such monies shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Notes, then to the payment of such
principal and premium, if any, and interest without preference or priority of
principal and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest; and
Fourth: subject to the provisions of Article IV, to the payment
of the remainder, if any, to the Company or any other Person lawfully entitled
thereto.
Section 7.4. Proceedings by Holders.
No Holder shall have any right by virtue of or by availing itself of
any provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture, or for the
appointment of a receiver, trustee, liquidator, custodian or other similar
official, or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of an Event of Default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
not less than 25% in aggregate principal amount of the Notes then outstanding
determined in accordance with Section 9.4 shall have made written request upon
the Trustee to institute such action, suit or proceedings in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section
7.7, it being understood and intended, and being expressly covenanted by the
taker and Holder of every Note with every other taker and Holder and the
Trustee, that no one or more Holders shall have any right in any manner whatever
by virtue of or by availing itself of any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holder of Notes, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders (except as otherwise
provided herein). For the protection and enforcement of this Section 7.4, each
and every Noteholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any Holder of any Note to receive payment of the
principal of and premium, if any, and interest on such Note, on or after the
respective due dates therefor, or to institute suit for the enforcement of any
such payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such Holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the Holder of any Note, without the consent of either the
Trustee or the Holder of any other Note, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
Section 7.5. Proceedings by Trustee.
In case of an Event of Default, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either by suit in equity or by action at
law or by proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
Section 7.6. Remedies Cumulative and Continuing.
Except as provided in the last paragraph of Section 2.9, all powers and
remedies given by this Article VII to the Trustee or to the Holders shall, to
the extent permitted by law, be deemed cumulative and not exclusive of any
thereof or of any other powers and remedies available to the Trustee or the
Holders, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture, and no
delay or omission of the Trustee or of any Holder of any of the Notes to
exercise any right or power accruing upon any default or Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or any acquiescence
therein and, subject to the provisions of Section 7.4, every power and remedy
given by this Article VII or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Holders.
Section 7.7. Direction of Proceedings and Waiver of Defaults by
Majority of Holders.
The Holders of a majority in aggregate principal amount of the Notes at
the time outstanding determined in accordance with Section 9.4 shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee, provided, however, that (a) such direction shall not be in conflict
with any rule of law or with this Indenture, and (b) the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction. The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding determined in accordance with Section 9.4 may on behalf
of the Holders of all of the Notes waive any past default or Event of Default
hereunder and its consequences except (i) a default in the payment of interest
or premium, if any, on, or the principal of, the Notes, (ii) a failure by the
Company to convert any Notes into Common Stock, (iii) a default in the payment
of the Redemption Price pursuant to Article III or repurchase price pursuant to
Article XVI or (iv) a default in respect of a covenant or provisions hereof
which under Article XI cannot be modified or amended without the consent of the
Holders of all Notes then outstanding. Upon any such waiver, the Company, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this Section
7.7, said default or Event of Default shall for all purposes of the Notes and
this Indenture be deemed to have been cured and to be not continuing, but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
Section 7.8. Notice of Defaults.
The Trustee shall, within 90 days after a Trust Officer has knowledge
of the occurrence of a default, mail to all Holders, as the names and addresses
of such Holders appear upon the Note register, notice of all defaults known to a
Trust Officer, unless such defaults shall have been cured or waived before the
giving of such notice and provided that, except in the case of default in the
payment of the principal of, or premium, if any, or interest on any of the
Notes, the Trustee shall be protected in withholding such notice if and so long
as a trust committee of directors and/or officers of the Trustee in good faith
determines that the withholding of such notice is in the interest of the
Holders.
Section 7.9. Undertaking to Pay Costs.
All parties to this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may, in its
discretion, require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, provided that
the provisions of this Section 7.9 (to the extent permitted by law) shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Noteholder, or group of Holders, holding in the aggregate more than ten percent
in principal amount of the Notes at the time outstanding determined in
accordance with Section 9.4, or to any suit instituted by any Noteholder for the
enforcement of the payment of the principal of or premium, if any, or interest
on any Note on or after the due date therefor or to any suit for the enforcement
of the right to convert any Note in accordance with the provisions of Article XV
or to require the Company to repurchase any Note in accordance with Article XVI.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1. Duties and Responsibilities of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trust Indenture Act,
and the Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture or the Trust
Indenture Act against the Trustee; and
(2) in the absence of bad faith and willful misconduct on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture but, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer or Officers, unless the Trustee was negligent in
ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of not less than a majority in principal amount of the Notes at the time
outstanding determined as provided in Section 9.4 relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee as Trustee, Paying Agent, Registrar, Custodian or Conversion
Agent shall be subject to the provisions of this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers.
Section 8.2. Reliance on Documents, Opinions, Etc.
Except as otherwise provided in Section 8.1,
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, note, coupon or other paper or document believed
by it in good faith to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed) and any
resolution of the Board of Directors may be evidence to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel, and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or omitted by it thereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby;
(e) 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, Note or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by Agent or attorney, provided, however, that if the payments
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liability as a condition to so
proceeding and the reasonable expenses of every such examination shall be paid
by the Company or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Company upon demand;
(f) 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 and the Trustee shall not be responsible for any misconduct or
negligence on the part of any Agent or attorney appointed by it with due care
hereunder; and
(g) the Trustee shall not be deemed to have notice of an Event of
Default or of any event or conditions which, with the giving of notice, the
passage of time, or both, might constitute an Event of Default unless (i) the
Trustee has received written notice thereof from the Company or any Noteholder
or (ii) a Trust Officer shall have actual knowledge thereof.
Section 8.3. No Responsibility for Recitals, Etc.
The recitals contained herein and in the Notes (except in the Trustee's
certificate of authentication) shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use or
application by the Company of any Notes or the proceeds of any Notes
authenticated and delivered by the Trustee in conformity with the provisions of
this Indenture.
Section 8.4. Trustee, Paying Agents, Conversion Agents or
Registrar May Own Notes.
The Trustee, any Paying Agent, any Conversion Agent or Registrar, in
its individual or any other capacity, may become the owner or pledgee of Notes
with the same rights it would have if it were not Trustee, Paying Agent,
Conversion Agent or Registrar.
Section 8.5. Monies to Be Held in Trust.
Subject to the provisions of Section 13.4, all monies received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received. Money held by the Trustee in trust
thereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as may be agreed from time to time by the
Company and the Trustee.
Section 8.6. Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder in any capacity (which shall not be limited by
any provision of law in regard to the compensation of a Trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances reasonably incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all Persons not regularly in its employ), except any such
expense, disbursement or advance as may arise from the Trustee's negligence,
willful misconduct, recklessness or bad faith. The Company also covenants to
indemnify the Trustee in any capacity under this Indenture and its agents and
any authenticating agent for, and to hold them harmless against, any loss,
liability or expense incurred without negligence, willful misconduct,
recklessness, or bad faith on the part of the Trustee or such Agent or
authenticating agent, as the case may be, and arising out of or in connection
with the acceptance or administration of this trust or in any other capacity
hereunder, including the costs and expenses of defending themselves against any
claim of liability in the premises. All indemnifications and releases from
liability granted hereunder to the Trustee shall extend to its Officers,
directors, employees, agents, successors and assigns. The obligations of the
Company under this Section 8.6 to compensate or indemnify the Trustee and to pay
or reimburse the Trustee for expenses, disbursements and advances shall be
secured by a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Notes. The obligation of the Company under this
Section 8.6 shall survive the satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.1(f) or (g) occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any bankruptcy,
insolvency or similar laws.
Section 8.7. Officers' Certificate as Evidence.
Except as otherwise provided in Section 8.1, wherever in the
administration of the provisions of this Indenture, the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence,
willful misconduct, recklessness, or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers' Certificate
delivered to the Trustee.
Section 8.8. Conflicting Interests of Trustee.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 8.9. Eligibility of Trustee.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and which
shall have (or, in the case of a corporation included in a bank holding company
system, the related bank holding company shall have) a combined capital and
surplus of at least $50,000,000. If such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of any supervising or
examining authority, then for the purposes of this Section 8.9, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.9, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article VIII.
Section 8.10. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company and to the Holders of Notes. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor Trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor Trustee. If no successor Trustee
shall have been so appointed and have accepted appointment within 60 days after
the mailing of such notice of resignation to the Holders, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee, or any Noteholder who has been a bona fide Holder of a Note
or Notes for at least six months may, subject to the provisions of Section 7.9,
on behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor Trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
Trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with
Section 8.8 after written request therefor by the Company or by any Noteholder
who has been a bona fide Holder of a Note or Notes for at least six (6) months;
or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of
Section 8.9 and shall fail to resign after written request therefor by the
Company or by any such Noteholder; or
(3) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, the Company may remove the Trustee and
appoint a successor Trustee by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be delivered
to the Trustee so removed and one copy to the successor Trustee, or, subject to
the provisions of Section 7.9, any Noteholder who has been a bona fide Holder of
a Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor Trustee.
(c) The Holders of a majority in aggregate principal amount
of the Notes at the time outstanding may at any time remove the Trustee and
nominate a successor Trustee which shall be deemed appointed as successor
Trustee unless within ten (10) days after notice to the Company of such
nomination, the Company objects thereto, in which case the Trustee so removed or
any Noteholder, upon the terms and conditions and otherwise as in Section
8.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor Trustee.
(d) Any resignation or removal of the Trustee and
appointment of a successor Trustee pursuant to any of the provisions of this
Section 8.10 shall become effective upon acceptance of appointment by the
successor Trustee as provided in Section 8.11.
Section 8.11. Acceptance by Successor Trustee.
Any successor Trustee appointed as provided in Section 8.10 shall
execute, acknowledge and deliver to the Company and to its predecessor Trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee herein
but, nevertheless, on the written request of the Company or of its successor
Trustee, the Trustee ceasing to act shall, upon payment of any amounts then due
it pursuant to the provisions of Section 8.6, execute and deliver an instrument
transferring to such successor Trustee all the rights and powers of the Trustee
so ceasing to act. Upon request of any such successor Trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor Trustee all such rights and powers. Any
Trustee ceasing to act shall, nevertheless, retain a lien upon all property and
funds held or collected by such Trustee as such, except for funds held in trust
for the benefit of Holders of particular Notes, to secure any amounts then due
it pursuant to the provisions of Section 8.6.
No successor Trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance, such successor Trustee shall
be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.11, the Company (or the former Trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such Trustee hereunder the Holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12. Succession by Merger, Etc.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including any trust created by this Indenture), shall
be the successor to the Trustee hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
in the case of any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, such corporation shall be qualified
under the provisions of Section 8.8 and eligible under the provisions of Section
8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor Trustee or authenticating agent appointed
by such predecessor Trustee, and deliver such Notes so authenticated and in case
at that time any of the Notes shall not have been authenticated, any successor
to the Trustee or an authenticating agent appointed by such successor Trustee
may authenticate such Notes either in the name of any predecessor Trustee
hereunder or in the name of the successor Trustee and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
Section 8.13. Limitation on Rights of Trustee as Creditor.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Notes), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of the claims
against the Company (or any such other obligor).
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1. Action by Holders.
When in this Indenture it is provided that the Holders of a specified
percentage in aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that at the time
of taking any such action, the Holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by Holders in Person or by Agent or proxy appointed in
writing, or (b) by the record of the Holders of Notes voting in favor thereof at
any meeting of Holders duly called and held in accordance with the provisions of
Article X, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Holders. Whenever the Company or the Trustee
solicits the taking of any action by the Holders, the Company or the Trustee may
fix in advance of such solicitation, a date as the record date for determining
Holders entitled to take such action. The record date shall be not more than 15
days prior to the date of commencement of solicitation of such action.
Section 9.2. Proof of Execution by Holders.
Subject to the provisions of Sections 8.1, 8.2 and 10.5, proof of the
execution of any instrument by a Noteholder or his Agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The holding of Notes shall be provided by the registry of such
Notes or by a certificate of the Registrar.
The record of any Holders' meeting shall be proved in the manner
provided in Section 10.6.
Section 9.3. Who are Deemed Absolute Owners.
The Company, any other obligor on the Notes, the Trustee, any
authenticating agent, any Paying Agent, any Conversion Agent and any Registrar
may deem the Person in whose name such Note shall be registered upon the Note
register to be, and may treat him as, the absolute owner of such Note (whether
or not such Note shall be overdue and notwithstanding any notation of ownership
or other writing thereon) for the purpose of receiving payment of or on account
of the principal of, premium, if any, and interest on such Note, for conversion
of such Note and for all other purposes and neither the Company nor any
authenticating agent nor any Registrar shall be affected by any notice to the
contrary. All such payments so made to any Holder for the time being, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon such
Note.
Section 9.4. Company-Owned Notes Disregarded.
In determining whether the Holders of the requisite aggregate principal
amount of Notes have concurred in any direction, consent, waiver or other action
under this Indenture, Notes which are owned by the Company or any other obligor
on the Notes or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company or any other
obligor on the Notes shall be disregarded and deemed not to be outstanding for
the purpose of any such determination, provided that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, consent, waiver or other action, only Notes which a Trust Officer
knows are so owned shall be so disregarded. Notes so owned which have been
pledged in good faith may be regarded as outstanding for the purpose of this
Section 9.4 if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Notes and that the pledgee is not the Company,
any other obligor on the Notes or a Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company of any
such other obligor. In the case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full protection to the
Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers' Certificate listing and identifying all Notes, if any,
known by the Company to be owned or held by or for the account of any of the
above-described Persons and, subject to Section 8.1, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Notes not listed therein are
outstanding for the purpose of any such determination.
Section 9.5. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 9.1, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any Holder of a Note which is shown by
the evidence to be included in the Notes the Holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.2, revoke such
action so far as it concerns such Note. Except as aforesaid, any such action
taken by the Holder of any Note shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Note and of any Notes issued in
exchange or substitution therefor, irrespective of whether any notation in
regard thereto is made upon such Note or any Note issued in exchange or
substitution therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1. Purpose of Meetings.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article X for any of the following purposes:
(a) to give any notice to the Company or to the Trustee or to
give any directions to the Trustee permitted under this Indenture, or to consent
to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by Holders
pursuant to any of the provisions of Article VII;
(b) to remove the Trustee and nominate a successor Trustee
pursuant to the provisions of Article VIII;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2; or
(d) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable law.
Section 10.2. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Holders to take any
action specified in Section 10.1, to be held at such time and at such place at a
location within ten (10) miles of the Corporate Trust Office or in New York, New
York, as the Trustee shall determine. Notice of every meeting of the Holders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting and the establishment of any record
date pursuant to Section 9.1, shall be mailed to Holders of Notes at their
addresses as they shall appear on the Note register. Such notice shall also be
mailed to the Company. Such notices shall be mailed not less than 20 nor more
than 90 days prior to the date fixed for the meeting.
Any meeting of Holders shall be valid without notice if the Holders of
all Notes then outstanding are present in Person or by proxy or if notice is
waived before or after the meeting by the Holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.3. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a resolution of its Board
of Directors, or the Holders of at least ten percent in aggregate principal
amount of the Notes then outstanding, shall have requested the Trustee to call a
meeting of Holders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Holders may determine the time and the place at any
location within 10 miles of the Corporate Trust Office or New York, New York for
such meeting and may call such meeting to take any action authorized in Section
10.1, by mailing notice thereof as provided in Section 10.2.
Section 10.4. Qualifications for Voting.
To be entitled to vote at any meeting of Holders a Person shall (a) be
a Holder of one or more Notes on the record date pertaining to such meeting or
(b) be a Person appointed by an instrument in writing as proxy by a Holder of
one or more Notes. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.
Section 10.5. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders, in regard to proof of the holding of Notes and of the appointment of
proxies, and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders as provided in Section 10.3, in which case the Company or
the Holders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the Holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each
Noteholder or proxy Holder shall be entitled to one vote for each $1,000
principal amount of Notes then outstanding and held or represented by him,
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Note challenged as not outstanding and ruled by the chairman of
the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Notes held by him or instruments in
writing as aforesaid duly designating him as the proxy vote on behalf of other
Holders. Any meeting of Holders duly called pursuant to the provisions of
Section 10.2 or 10.3 may be adjourned from time to time by the Holders of a
majority of the aggregate principal amount of Notes represented at the meeting,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
Section 10.6. Voting.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballot on which shall be subscribed the signatures of the Holders
of Notes or of their representative by proxy and the principal amount of the
Notes held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Holders
shall be prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more Persons having knowledge of
the facts setting forth a copy of the notice of the meeting and showing that
said notice was mailed as provided in Section 10.2. The record shall show the
principal amount of the Notes voting in favor of or against any resolution. The
record shall be signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7. No Delay of Rights by Meeting.
Nothing in this Article X shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Holders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Holders under any of the provisions of this Indenture or of the Notes.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1. Supplemental Indentures Without Consent of Holders.
The Company, when authorized by resolutions of the Board of Directors
certified by its Secretary or an Assistant Secretary, and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to make provisions with respect to the conversion rights
of the Holders of Notes pursuant to the requirements of Section 15.6 or the
repurchase obligations of the Company pursuant to the requirements of Section
16.5;
(b) subject to Article IV, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Notes, any property or
assets;
(c) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article XII;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the Holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth provided, however, that in
respect of any such additional covenant, restriction or conditions such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes
in coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provisions contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture which shall not materially adversely
affect the interests of the Holders;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act, or under any similar federal
statue hereafter enacted.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
Section 11.2. Supplemental Indentures with Consent of Holders.
With the consent (evidenced as provided in Article IX) of the Holders
of not less than a majority in aggregate principal amount of the Notes at the
time outstanding determined in accordance with Section 9.4, the Company, when
authorized by the resolutions of the Board of Directors, and the Trustee may
from time to time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or any
supplemental indenture or of modifying in any manner the rights of the Holders,
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof or premium, if any,
thereon, or reduce any amount payable on redemption thereof, or impair the right
of any Noteholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, or modify the provisions of this
Indenture with respect to the subordination of the Notes in a manner adverse to
the Holders in any material respect, or change the obligation of the Company to
repurchase any Note upon the occurrence of a Change in Control in a manner
adverse to the Holder of Notes, or impair the right to convert the Notes into
Common Stock in any material respect, without the consent of the Holder of each
Note so affected, or (ii) reduce the aforesaid percentage of Notes, the Holders
of which are required to consent to any such supplemental indentures, without
the consent of the Holders of all Notes then outstanding.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or an Assistant
Secretary authorizing the execution of any such supplemental indentures, and
upon the filing with the Trustee of evidence of the consent of Holders as
aforesaid the Trustee shall join with the Company in the execution of such
supplemental indentures unless such supplemental indenture 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 supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.3. Effect of Supplemental Indenture.
Any supplemental indenture executed pursuant to the provisions of this
Article XI shall comply with the Trust Indenture Act, as then in effect,
provided that this Section 11.3 shall not require such supplemental indenture or
the Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act or
the Indenture has been qualified under the Trust Indenture Act, nor shall it
constitute any admission or acknowledgment by any party to such supplemental
indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act or
the Indenture has been qualified under the Trust Indenture Act. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article XI, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitation of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the Holders of Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
Section 11.4. Notation on Notes.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article XI may bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may, at the Company's expense, be prepared and executed
by the Company, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 17.11) and delivered in exchange
for the Notes then outstanding, upon surrender of such Notes then outstanding.
Section 11.5. Evidence of Compliance of Supplemental Indenture to
Be Furnished Trustee.
The Trustee, subject to the provisions of Sections 8.1 and 8.2, may
require an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1. Company May Consolidate Etc. on Certain Terms.
Subject to the provisions of Sections 12.2 and 16.1, nothing contained
in this Indenture or in any of the Notes shall prevent any consolidation or
merger of the Company with or into any other corporation or corporations
(whether or not affiliated with the Company), or successive consolidations or
mergers in which the Company or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance or lease (or successive sales,
conveyances or leases) of the property of the Company, substantially as an
entirety, to any other corporation (whether or not affiliated with the Company),
authorized to acquire and operate the same and which, in each case, shall be
organized under the laws of the United States of America, any state thereof or
the District of Columbia, provided, that upon any such consolidation, merger,
sale, conveyance or lease, if the Company is not the surviving entity, the due
and punctual payment of the principal of and premium, if any, and interest on
all of the Notes, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the corporation (if other than the Company) formed by such consolidation, or
into which the Company shall have been merged, or by the corporation which shall
have acquired or leased such property, and such supplemental indenture shall
provide for the applicable conversion rights set forth in Section 15.6.
Section 12.2. Successor Corporation to Be Substituted.
In case of any such consolidation, merger, sale, conveyance or lease
referenced in Section 12.1 and upon the assumption by any successor corporation,
by supplemental indenture required by Section 12.1, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as such. Such successor corporation
thereupon may cause to be signed and may issue either in its own name or in the
name of World Access, Inc. any or all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee and, upon the order of such successor corporation instead of the Company
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Notes which previously shall have been signed
and delivered by the Officers of the Company to the Trustee for authentication,
and any Notes which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the Notes so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Notes theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Notes had been issued at the date of the
execution hereof. In the event of any such consolidation, merger, sale or
conveyance (but not in the event of any such lease), the Person named as the
"Company" in the first paragraph of this Indenture or any successor which shall
thereafter have become such in the manner prescribed in this Article XII shall
be released from its liabilities as obligor and maker of the Notes and from its
obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.
Section 12.3. Opinion of Counsel to Be Given Trustee.
The Trustee, subject to Sections 8.1 and 8.2, shall receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance or lease and any such assumption
complies with the provisions of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation all
Notes theretofore authenticated (other than any Notes which have been destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) and not theretofore canceled, or (b) all
the Notes not theretofore canceled or delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and
payable within one year or are to be canceled for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, monies
sufficient to pay at maturity or upon redemption of all of the Notes (other than
any Notes which shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which other Notes shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity or Redemption Date, as the case may be, and
if in either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to (i) remaining rights of registration of transfer,
substitution and exchange and conversion of Notes, (ii) rights hereunder of
Holders to receive payments of principal of and premium, if any, and interest
on, the Notes and the other rights, duties and obligations of Holders, as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee and (iii) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel as required by Section 17.5 and
at the cost and use of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
Section 13.2. Deposited Monies to Be Held in Trust by Trustee.
Subject to Section 13.4, all monies deposited with the Trustee pursuant
to Section 13.1 and not in violation of Article IV shall be held in trust for
the sole benefit of the Holders and not to be subject to the subordination
provisions of Article IV, and such monies shall be applied by the Trustee to the
payment, either directly or through any Paying Agent (including the Company if
acting as its own Paying Agent), to the Holders of the particular Notes for the
payment or redemption of which such monies have been deposited with the Trustee,
of all sums due and to become due thereon for principal and interest and
premium, if any.
Section 13.3. Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture, all monies then
held by any Paying Agent for the Notes (other than the Trustee) shall, upon
written request of the Company, be repaid to the Company or paid to the Trustee,
and thereupon such Paying Agent shall be released from all further liability
with respect to such monies.
Section 13.4. Return of Unclaimed Monies.
Subject to the requirement of applicable law, any monies deposited with
or paid to the Trustee for payment of the principal of, premium, if any, or
interest on Notes and not applied but remaining unclaimed by the Holders of
Notes for two years after the date upon which the principal of, premium, if any,
or interest on such Notes, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on demand and all
liability of the Trustee shall thereupon cease with respect to such monies, and
the Holder of any of the Notes shall thereafter look only to the Company for any
payment which such Holder may be entitled to collect except if an applicable
abandoned property law does not so permit.
Section 13.5. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 13.2 by reason of any order or judgment of any court of
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
13.1 until such time as the Trustee or the Paying Agent is permitted to apply
all such money in accordance with Section 13.2, provided, however, that if the
Company makes any payment of interest or premium, if any, on or principal of 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.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1. Indenture and Notes Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Note, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture or in any Note,
or because of the creation of any Indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, Officer, or director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1. Right to Convert.
Subject to and upon compliance with the provisions of this Indenture,
the Holder of any Note shall have the right, at his option, at any time prior to
the close of business on October 1, 2002 (except that, with respect to any Note
or portion of a Note which shall be called for redemption, such right shall
terminate, except as provided in Section 15.2 or Section 3.4, at the close of
business on the fifth Business Day preceding the date fixed for redemption of
such Note or portion of a Note, unless the Company shall default in payment due
upon redemption thereof) to convert the principal amount of any such Note, or
any portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided, together with any required
funds, in Section 15.2. A Holder of Notes is not entitled to any rights of a
Holder of Common Stock until such Holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article XV.
Section 15.2. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or
Dividends.
In order to exercise the conversion privilege with respect to any Note
in certificated form, the Holder of any such Note to be converted in whole or in
part shall surrender such Note, duly endorsed, at an office or agency maintained
by the Company pursuant to Section 5.3, accompanied by the funds, if any,
required by the penultimate paragraph of this Section 15.2, and shall give
written notice of conversion in the form provided on the Notes (or such other
notice which is acceptable to the Company) to such office or agency that the
Holder elects to convert such Note or the portion thereof specified in said
notice. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued, and shall be
accompanied by transfer taxes, if required pursuant to Section 15.7. Each such
Note surrendered for conversion shall, unless the shares issuable on conversion
are to be issued in the same name as the registration of such Note, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the Holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any
interest in a Note in global form, the beneficial Holder must complete the
appropriate instruction form for conversion pursuant to the Depositary's
book-entry conversion program, deliver by book-entry delivery an interest in
such Note in global form, furnish appropriate endorsements and transfer
documents if required by the Company or the Trustee or Conversion Agent, and pay
the funds, if any, required by this Section 15.2 and any transfer taxes if
required pursuant to Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such Holder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.3, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof in accordance with the provisions of this Article and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 15.3. In case any Note of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.3, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of the Note so surrendered, without
charge to him, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 15.2 have been satisfied as to such Note (or portion thereof),
and the Person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the Holder of record of the shares represented thereby,
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record Holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day next preceding the following
interest payment date shall (unless such Note or portion thereof being converted
shall have been called for redemption during the period from the close of
business on such record date to the close of business on the Business Day next
preceding the following interest payment date) be accompanied by payment, in New
York Clearing House funds or other funds acceptable to the Company, of an amount
equal to the interest payable on such interest payment date on the principal
amount being converted provided, however, that no such payment need be made if
there shall exist at the time of conversion a default in the payment of interest
on the Notes. In the event a Note or portion thereof is called for redemption on
or after October 1, 2000 and before April 1, 2001 and the Holder elects to
convert such Note after it has been called for redemption, the Holder will be
entitled to receive interest on such Note for the period from April 1, 2000
through October 1, 2000. Except as provided above in this Section 15.2, no
adjustment shall be made for interest accrued on any Note converted or for
dividends on any shares issued upon the conversion of such Note as provided in
this Article.
Upon the conversion of an interest in a Note in global form, the
Trustee, or the Custodian at the direction of the Trustee, shall make a notation
on such Note in global form as to the reduction in the principal amount
represented thereby as a result of such conversion.
Section 15.3. Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Note or Notes, the Company shall
make an adjustment and payment therefor in cash at the current market value
thereof to the Holder of Notes. The current market value of a share of Common
Stock shall be the Closing Price on the first Trading Day immediately preceding
the day on which the Notes (or specified portions thereof) are deemed to have
been converted.
Section 15.4. Conversion Price.
The conversion price shall be as specified in the form of Note (herein
called the "Conversion Price") attached as Exhibit A hereto, subject to
adjustment as provided in this Article XV.
Section 15.5. Adjustment of Conversion Price.
The Conversion Price shall be adjusted from time to time by the Company
as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all Holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.5(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all Holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within 45 days after the date fixed for determination of stockholders entitled
to receive such rights or warrants) to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price (as defined
below) on the date fixed for determination of stockholders entitled to receive
such rights or warrants, the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date fixed for determination of stockholders entitled
to receive such rights or warrants by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for determination of stockholders entitled to receive such rights and
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price,
and of which the denominator shall be the number of shares of Common Stock
outstanding on the date fixed for determination of stockholders entitled to
receive such rights and warrants plus the total number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall be
successively made whenever any such rights and warrants are issued, and shall
become effective immediately after the opening of business on the day following
the date fixed for determination of stockholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock are not delivered after
the expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the Holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company for such
rights or warrants, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all Holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 15.5(a)
applies) or evidences of its Indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 15.5(b), and excluding
any dividend or distribution paid exclusively in cash (any of the foregoing
hereinafter in this Section 15.5(d) called the "Securities")), then, in each
such case (unless the Company elects to reserve such Securities for distribution
to the Holders upon the conversion of the Notes so that any such Holder
converting Notes will receive upon such conversion, in addition to the shares of
Common Stock to which such Holder is entitled, the amount and kind of such
Securities which such Holder would have received if such Holder had converted
its Notes into Common Stock immediately prior to the Record Date (as defined in
Section 15.5(h) for such distribution of the Securities)), the Conversion Price
shall be reduced so that the same shall be equal to the price determined by
multiplying the Conversion Price in effect on the Record Date (as defined below)
with respect to such distribution by a fraction of which the numerator shall be
the Current Market Price per share of the Common Stock on such Record Date less
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board of
Directors) on the Record Date of the portion of the Securities so distributed
applicable to one share of Common Stock and the denominator shall be the Current
Market Price per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following such Record
Date provided, however, that in the event the then fair market value (as so
determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right to
receive upon conversion the amount of Securities such Holder would have received
had such Holder converted each Note on the Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 15.5(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Stock.
In the event the Company implements a stockholder rights plan, such
rights plan shall provide that upon conversion of the Notes the Holders will
receive, in addition to the Common Stock issuable upon such conversion, the
rights issued under such rights plan (notwithstanding the occurrence of an event
causing such rights to separate from the Common Stock at or prior to the time of
conversion).
Rights or warrants distributed by the Company to all Holders of Common
Stock entitling the Holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock (ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.5 (and no adjustment to the Conversion Price under
this Section 15.5 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.5(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
Indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
Holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 15.5 was made, (1) in the case of any such
rights or warrants which shall all have been redeemed or repurchased without
exercise by any Holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a Holder or Holders
of Common Stock with respect to such rights or warrants (assuming such Holder
had retained such rights or warrants), made to all Holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants which shall have expired or been terminated without exercise by any
Holders thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of Indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any further Conversion Price reduction required by this Section 15.5(d) with
respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 15.5(a) and (b) with respect to such dividend or distribution shall
then be made), except (A) the Record Date of such dividend or distribution shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Sections 15.5(a) and (b), and (B) any
shares of Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise, distribute to
all Holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 15.6 applies or as part of a
distribution referred to in Section 15.5(d)) in an aggregate amount that,
combined together with (1) the aggregate amount of any other such distributions
to all holders of its Common Stock made exclusively in cash within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 15.5(e) has been made, and (2) the aggregate
of any cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors) of consideration payable in respect of any tender offer by
the Company for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of such distribution, and in respect of
which no adjustment pursuant to Section 15.5(f) has been made, exceeds 10% of
the product of the Current Market Price (determined as provided in Section
15.5(h)) on the Record Date with respect to such distribution times the number
of shares of Common Stock outstanding on such date, then, and in each such case,
immediately after the close of business on such date, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
Record Date by a fraction (i) the numerator of which shall be equal to the
Current Market Price on the Record Date less an amount equal to the quotient of
(x) the excess of such combined amount over such 10% and (y) the number of
shares of Common Stock outstanding on the Record Date and (ii) the denominator
of which shall be equal to the Current Market Price on such Record Date
provided, however, that, if the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market Price
of the Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right to
receive upon conversion the amount of cash such Holder would have received had
such Holder converted such Note immediately prior to such Record Date. If such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared.
(f) In case a tender offer made by the Company or any of its
subsidiaries for all or any portion of the Common Stock expires and such tender
offer (as amended upon the expiration thereof) requires the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) that, combined together with (1) the aggregate of the
cash plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors), as of the expiration of such tender offer, of consideration payable
in respect of any other tender offers, by the Company or any of its subsidiaries
for all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to this Section 15.5(f) has been made and (2) the aggregate
amount of any distributions to all Holders of the Common Stock made exclusively
in cash within 12 months preceding the expiration of such tender offer and in
respect of which no adjustment pursuant to Section 15.5(e) has been made,
exceeds 10% of the product of the Current Market Price (determined as provided
in Section 15.5(h)) as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered shares) at
the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the date of the Expiration Time by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender offer) of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction (if any) to become effective
immediately prior to the opening of business on the day following the Expiration
Time. If the Company is obligated to purchase shares pursuant to any such tender
offer, but the Company is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in effect
if such tender offer had not been made. If the application of this Section
15.5(f) to any tender offer would result in an increase in the Conversion Price,
no adjustment shall be made for such tender offer under this Section 15.5(f).
(g) In case of a tender or exchange offer made by a Person other than
the Company or any subsidiary of the Company for an amount which increases the
offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding and shall involve the payment by such Person of consideration per
share of Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the Expiration Time that exceeds the
Current Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, and in which, as of the Expiration Time the Board of Directors
is not recommending rejection of the offer, the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Expiration Time
multiplied by the current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time and the denominator shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) on the Expiration Time and the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become effective as of immediately prior to the opening of business
on the day following the Expiration Time. In the event that such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 15.5(g) shall not be made if, as of the
Expiration Time, the offering documents with respect to such offer disclose a
plan or intention to cause the Company to engage in any transaction described in
Article XII.
(h) For purposes of this Section 15.5, the following terms shall have
the meaning indicated:
(1) "Closing Price" with respect to any securities on any day shall
mean the closing sale price regular way on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case on the New York Stock Exchange, or, if such
security is not listed or admitted to trading on such Exchange, on the principal
national security exchange or quotation system on which such security is quoted
or listed or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the average of
the closing bid and asked prices of such security on the over-the-counter market
on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or if not so
available, in such manner as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.
(2) "Current Market Price" shall mean the average of the daily Closing
Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question provided, however, that (1) if the
"ex" date (as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g)
occurs during such ten consecutive Trading Days, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the Conversion
Price is so required to be adjusted as a result of such other event, (2) if the
"ex" date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the "ex" date
for the issuance or distribution requiring such computation and prior to the day
in question, the Closing Price for each Trading Day on and after the "ex" date
for such other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, and (3) if the "ex" date for the
issuance or distribution requiring such computation is prior to the day in
question, after taking into account any adjustment required pursuant to clause
(1) or (2) of this proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash and
the fair market value (as determined by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof in a manner
consistent with any determination of such value for purposes of Section 15.5(d),
(f) or (g), whose determination shall be conclusive and described in a
resolution of the Board of Directors or such duly authorized committee thereof,
as the case may be) of the evidences of Indebtedness, shares of capital stock or
assets being distributed applicable to one share of Common Stock as of the close
of business on the day before such "ex" date. For purposes of any computation
under Section 15.5(f) or (g), the Current Market Price of the Common Stock on
any date shall be deemed to be the average of the daily Closing Prices per share
of Common Stock for such day and the next two succeeding Trading Days provided,
however, that if the "ex" date for any event (other than the tender or exchange
offer requiring such computation) that requires an adjustment to the Conversion
Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or
after the Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the Closing Price for each Trading
Day on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such other event.
For purposes of this paragraph, the term "ex" date, (1) when used with respect
to any issuance or distribution, means the first date on which the Common Stock
trades regular way on the relevant exchange or in the relevant market from which
the Closing Price was obtained without the right to receive such issuance or
distribution, (2) when used with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which such
subdivision or combination becomes effective, and (3) when used with respect to
any tender or exchange offer means the first date on which the Common Stock
trades regular way on such exchange or in such market after the Expiration Time
of such offer.
(3) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the Holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is listed
or admitted for trading on the New York Stock Exchange, the Nasdaq Stock Market
(National Market) or another national security exchange, a day on which the New
York Stock Exchange, the Nasdaq Stock Market (National Market) or another
national security exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may be
made thereon or (z) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5(a), (b), (c), (d), (e), (f) and (g),
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to Holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days, the reduction is irrevocable during the period and
the Board of Directors shall have made a determination that such reduction would
be in the best interests of the Company, which determination shall be
conclusive. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to Holders of record of the Notes a notice of
the reduction at lease 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1.00% in such price
provided, however, that any adjustments which by reason of this Section 15.5(j)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article XV shall be made
by the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail notice of such adjustment of the Conversion Price to
the Holder of each Note at his last address appearing on the Note register
provided for in Section 2.5 of this Indenture, within 20 days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(l) In any case in which this Section 15.5 provides that an adjustment
shall become effective immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Holder of any
Note converted after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such conversion by reason of
the adjustment required by such event over and above such conversion by reason
of the adjustment required by such event and above the Common Stock issuable
upon such conversion before giving effect to such adjustment and (ii) paying to
such Holder any amount in cash in lieu of any fraction pursuant to Section 15.5.
(m) For purposes of this Section 15.5, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
Section 15.6. Effect of Reclassification, Consolidation, Merger
or Sale.
If any of the following events occur, namely (i) any reclassification
or change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which Holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
Holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that such Notes shall be convertible
into the kind and amount of shares of stock and other securities or property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a Holder of a number
of shares of Common Stock issuable upon conversion of such Notes (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock
available to convert all such Notes) immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance assuming such
Holder of Common Stock did not exercise his rights of election, if any, as to
the kind or amount of shares of stock and other securities or property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance (provided that, if the kind or amount of
shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
("nonelecting share"), then for the purposes of this Section 15.6 the kind and
amount of shares of stock and other securities or property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares. Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Notes, at his address appearing on the
Note register provided for in Section 2.5 of this Indenture, within 20 days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply.
Section 15.7. Taxes on Shares Issued.
The issue of stock certificates on conversions of Notes shall be made
without charge to the converting Noteholder for any tax in respect of the issue
thereof. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of stock
in any name other than that of the Holder of any Note converted, and the Company
shall not be required to issue or deliver any such stock certificate unless and
until the Person or Persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
Section 15.8. Reservation of Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common
Stock.
The Company shall reserve, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares of
Common Stock to provide for the conversion of the Notes from time to time as
such Notes are presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.
The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that if at any time the Common Stock
shall be listed on the New York Stock Exchange, the Nasdaq Stock Market
(National Market), or any other national securities exchange the Company will,
if permitted by the rules of such exchange, list and keep listed so long as the
Common Stock shall be so listed on such exchange, all Common Stock issuable upon
conversion of the Notes.
Section 15.9. Responsibility of Trustee.
The Trustee and any other Conversion Agent shall not at any time be
under any duty or responsibility to any Holder of Notes to either calculate the
Conversion Price or determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other Conversion Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note and the Trustee and any
other Conversion Agent make no representations with respect thereto. Subject to
the provisions of Section 8.1, neither the Trustee nor any Conversion Agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion or
to comply with any of the duties, responsibilities or covenants of the Company
contained in this Article. Without limiting the generality of the foregoing,
neither the Trustee nor any Conversion Agent shall be under any responsibility
to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 15.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Holders upon the conversion of their Notes after any event referred to in
such Section 15.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 15.10. Notice to Holders Prior to Certain Actions.
In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 15.5; or
(b) the Company shall authorize the granting to all or substantially
all the Holders of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company shall cause to be filed with the Trustee and to be mailed to each
Holder of Notes at his address appearing on the Note register provided for in
Section 2.5 of this Indenture, as promptly as possible but in any event at least
15 days prior to the applicable date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, or rights or warrants are to be determined, or (y) the
date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that Holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliver-able upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
ARTICLE XVI
REPURCHASE OF NOTES AT OPTION OF THE HOLDER
UPON CHANGE IN CONTROL
Section 16.1. Right to Require Repurchase.
In the event that a Change in Control (as hereinafter defined) shall
occur, then each Holder shall have the right, at the Holder's option, to require
the Company to repurchase, and upon the exercise of such right the Company shall
repurchase, all of such Holder's Notes, or any portion of the principal amount
thereof that is an integral multiple of $1,000 (provided that no single Note may
be repurchased in part unless the portion of the principal amount of such Note
to be outstanding after such repurchase is equal to $1,000 or an integral
multiple of $1,000), on the date (the "Repurchase Date") that is 30 days after
the date of the Company Notice (as defined in Section 16.2) for cash at a
purchase price equal to 100% of the principal amount (the "Repurchase Price")
plus interest accrued and unpaid to, but excluding, the Repurchase Date. If the
Repurchase Date is between a record date for an interest payment date and such
interest payment date, then the interest payable on such interest payment date
shall be paid to the Holder of Record on the Note on such interest payment date.
Whenever in this Indenture there is a reference, in any context, to the
principal of any Note as of any time, such reference shall be deemed to include
reference to the Repurchase Price payable in respect of such Note to the extent
that such Repurchase Price is, was or would be so payable at such time, and
express mention of the Repurchase Price in any provision of this Indenture shall
not be construed as excluding the Repurchase Price in those provisions of this
Indenture when such express mention is not made.
Section 16.2. Notices; Method of Exercising Purchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption all
of the outstanding Notes pursuant to Article III, on or before the 15th day
after the occurrence of a Change in Control, the Company or, at the written
request of the Company on or before the tenth (10th) day after receipt of such
request, the Trustee, shall give to all Holders of Notes notice (the "Company
Notice") of the occurrence of the Change in Control and of the repurchase right
set forth herein arising as a result thereof. The Company shall also deliver a
copy of such notice of a repurchase right to the Trustee.
Each Company Notice shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must exercised,
(3) the Repurchase Price,
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right,
(5) that on the Repurchase Date the Repurchase Price will become due
and payable upon each such Note designated by the Holder to be repurchased, and
that interest thereon shall cease to accrue on and after said date,
(6) the Conversion Price, the date on which the right to convert the
Notes to be repurchased will terminate and the places where such Notes may be
surrendered for conversion, and
(7) the place or places where such Notes are to be surrendered for
payment of the Repurchase Price and accrued interest, if any.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Notes.
If any of the foregoing provisions or other provisions of this Article
are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 30th day after the date of the
Company Notice (i) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the Notes
to be repurchased (and, if any Note is to be repurchased in part, the serial
number thereof, the portion of the principal amount thereof to be repurchased
and the name of the Person in which the portion thereof to remain outstanding
after such repurchase is to be registered) and a statement that an election to
exercise the repurchase right is being made thereby, and (ii) the Notes with
respect to which the repurchase right is being exercised.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
or the Paying Agent the Repurchase Price in cash, for payment to the Holder on
the Repurchase Date, together with accrued and unpaid interest to, but
excluding, the Repurchase Date payable with respect to the Notes as to which the
repurchase right has been exercised.
(d) If any Note (or portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal amount of such Note (or
portion thereof, as the case may be) shall, until paid, bear interest from the
Repurchase Date at the rate of 4.5% per annum, and each Note shall remain
convertible into Common Stock until the principal of such Note (or portion
thereof, as the case may be) shall have been paid or duly provided for.
(e) Any Note which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Note without service
charge, a new Note or Notes, containing identical terms and conditions, each in
an authorized denomination in aggregate principal amount equal to and in
exchange for the portion of the principal of the Note so surrendered that was
not repurchased.
(f) Any Holder that has delivered to the Trustee its written notice
exercising its right to require the Company to repurchase its Notes upon a
Change in Control shall have the right to withdraw such notice at any time prior
to the close of business on the Repurchase Date by delivery of a written notice
of withdrawal to the Trustee prior to the close of business on such date. A Note
in respect of which a Holder is exercising its option to require repurchase upon
a Change in Control may be converted into Common Stock in accordance with
Article XV only if such Holder withdraws its notice in accordance with the
preceding sentence.
Section 16.3. Certain Definitions.
For purposes of this Article XVI,
(a) the term "beneficial owner" shall be determined in accordance with
Rule 13d-3 promulgated by the Commission pursuant to the Exchange Act; and
(b) the term "Person" shall include any syndicate or group which would
be deemed to be a "Person" under Section 13(d)(3) of the Exchange Act.
Section 16.4. Change in Control.
A "Change in Control" shall be deemed to have occurred at such time
after the original issuance of the Notes as:
(a) any Person, other than the Company, any subsidiary of the Company
or any entity Controlled (as defined below) by the foregoing, or any employee
benefit plan of the Company or any such subsidiary, is or becomes the beneficial
owner, directly or indirectly, through a purchase or other acquisition
transaction or series of transactions (other than a merger or consolidation
involving the Company), of shares of capital stock of the Company entitling such
Person to exercise in excess of 50% of the total voting power of all shares of
capital stock of the Company entitled to vote generally in the election of
directors;
(b) there occurs any consolidation of the Company with, or merger of
the Company into, any other Person, any merger of another Person into the
Company, or any sale or transfer of the assets of the Company as, or
substantially as, an entirety to another Person (other than (i) any such
transaction pursuant to which the Holders of the Common Stock immediately prior
to such transaction have, directly or indirectly, shares of capital stock of the
continuing or surviving corporation immediately after such transaction which
entitle such Holders to exercise in excess of 50% of the total voting power of
all shares of capital stock of the continuing or surviving corporation entitled
to vote generally in the election of directors and (ii) any merger (1) which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock or (2) which is effected solely to change the
jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares
of Common Stock and separate series of Common Stock carrying substantially the
same relative rights as the Common Stock); or
(c) a change in the Board of Directors of the Company in which the
individuals who constituted the Board of Directors of the Company at the
beginning of the one-year period immediately preceding such change (together
with any other director whose election by the Board of Directors of the Company
or whose nomination for election by the stockholders of the Company was approved
by a vote of at least a majority of the directors then in office either who were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the directors then in office; provided, however, that a Change in
Control shall not be deemed to have occurred if either (a) the Closing Price per
share of the Common Stock for any ten (10) Trading Days within the period of 20
consecutive Trading Days ending immediately before the Change in Control shall
equal or exceed 105% of the Conversion Price in effect on each such Trading Day,
or (b) (i) at least 90% of the consideration (excluding cash payments for
fractional shares) in the transaction or transactions constituting the Change in
Control consists of shares of Common Stock with full voting rights traded on a
national securities exchange or quoted on the Nasdaq National Market (or which
will be so traded or quoted when issued or exchanged in connection with such
Change in Control) (such securities being referred to as "Publicly Traded
Securities") and as a result of such transaction or transactions such Notes
become convertible solely into such Publicly Traded Securities and (ii) the
consideration in the transaction or transactions constituting the Change of
Control consists of cash, Publicly Traded Securities or a combination of cash
and Publicly Traded Securities with an aggregate fair market value (which, in
the case of Publicly Traded Securities, shall be equal to the average Closing
Price of such Publicly Traded Securities during the ten (10) consecutive Trading
Days, commencing with the sixth Trading Day, following consummation of the
transaction or transactions constituting the Change in Control) is at least 105%
of the Conversion Price in effect on the date immediately preceding the date of
consummation of such Change in Control. The term "Controlled" shall mean
ownership or control of more than 50% of the voting power of such entity.
Section 16.5. Consolidation, Merger, Etc.
In the case of any reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 15.6 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive shares of stock and other securities or property or assets (including
cash) which includes shares of Common Stock of the Company or Common Stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such shares of stock and other securities,
property and assets (including cash) (as determined by the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or combination or which acquires the
properties or assets (including cash) of the Company, as the case may be, shall
execute and deliver to the Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this Indenture relating to
the right of Holders to cause the Company to repurchase the Notes following a
Change in Control, including without limitation the applicable provisions of
this Article XVI and the definitions of the Common Stock and Change in Control,
as appropriate, and such other related definitions set forth herein as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply to the Common Stock and the issuer
thereof if different from the Company and Common Stock of the Company (in lieu
of the Company and the Common Stock of the Company).
ARTICLE XVII
MISCELLANEOUS PROVISIONS
Section 17.1. Provisions Binding on Company's Successors.
All the covenants, stipulations, promises and agreements by the Company
contained in this Indenture shall bind its successors and assigns whether so
expressed or not.
Section 17.2. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or Officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or Officer of any corporation that shall at the time be
the lawful sole successor of the Company.
Section 17.3. Addresses for Notices, Etc.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders of
Notes on the Company shall be deemed to have been sufficiently given or made,
for all purposes, if given or served by being deposited postage prepaid by
registered or certified mail in a post office letter box addressed (until
another address is filed by the Company with the Trustee) to World Access, Inc.,
945 East Paces Ferry Road, Suite 2240, Atlanta, Georgia 30326. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as of which
this Indenture is dated, located at 999 Peachtree Street, Suite 1100, Atlanta,
Georgia 30309, Attention: First Union National Bank Corporate Trust Department.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder 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, it is duly
given, whether or not the addressee receives it.
Section 17.4. Governing Law.
This Indenture and each Note shall be deemed to be a contract made
under the laws of the State of Georgia and for all purposes shall be construed
in accordance with the laws of the State of Georgia.
Section 17.5. Evidence of Compliance with Conditions Precedent
Certificates to Trustee.
Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the Person
making such certificate or opinion has read such covenant or condition (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Section 17.6. Legal Holidays.
In any case where the date of maturity of interest on or principal of
the Notes or the date fixed for redemption or repurchase of any Note will not be
a Business Day, then payment of such interest on or principal of the Notes need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the date of maturity or the date
fixed for redemption or repurchase, and no interest shall accrue for the period
from and after such date.
Section 17.7. Trust Indenture Act.
This Indenture is hereby made subject to, and shall be governed by, the
provisions of the Trust Indenture Act required to be part of and to govern
indentures qualified under the Trust Indenture Act; provided, however, that,
unless otherwise required by law, notwithstanding the foregoing, this Indenture
and the Notes issued hereunder shall not be subject to the provisions of
subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the Trust Indenture Act
as now in effect or as hereafter amended or modified; provided, further, that
this Section 17.7 shall not require this Indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act, nor shall it
constitute any admission or acknowledgment by any party to such supplemental
indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.
Section 17.8. No Security Interest Created.
Nothing in this Indenture or in the Notes, expressed or implied, shall
be construed to constitute a security interest under the Uniform Commercial Code
or similar legislation, as now or hereafter enacted and in effect, in any
jurisdiction where property of the Company or its subsidiaries is located.
Section 17.9. Benefits of Indenture.
Nothing in this Indenture or in the Notes, expressed or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
authenticating agent, any Custodian, any Conversion Agent, any Registrar and
their successors hereunder, the Holders of Notes and the Holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 17.10. Table of Contents, Headings, Etc.
The table of contents and the titles 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 hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 17.11. Authenticating Agent.
The Trustee may appoint an authenticating agent which shall be
authorized to act on its behalf and subject to its direction in the
authentication and delivery of Notes in connection with the original issuance
thereof and transfers and exchanges of Notes hereunder, including under Sections
2.4, 2.5, 2.6, 2.7, 3.3, 15.2 and 16.2, as fully to all intents and purposes as
though the authenticating agent had been expressly authorized by this Indenture
and those Sections to authenticate and deliver Notes. For all purposes of this
Indenture, the authentication and delivery of Notes by the authenticating agent
shall be deemed to be authentication and delivery of such Notes "by the Trustee"
and a certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Notes for the Trustee's certificate of authentication. Such authenticating
agent shall at all times be a Person eligible to serve as Trustee hereunder
pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture, and upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all Holders of Notes as the names and
addresses of such Holders appear on the Note register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section
17.11 shall be applicable to any authenticating agent.
Section 17.12. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such countervails shall together constitute but
one and the same instrument.
<PAGE>
First Union National Bank hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed, all as of the date first written above.
Attest: World Access, Inc.
By: /s/ Steven A. Odom
-----------------------
Title: Steven A. Odom
Chairman and Chief
Executive Officer
Attest: First Union National Bank,
as Trustee
By: /s/ R Douglas Milner
------------------------
Name: R. Douglas Milner
Title: Trustee
<PAGE>
EXHIBIT A
[For Global Note only:]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
[For all Notes:]
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) or (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED
HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE
THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY AND THE LAST DATE ON WHICH WORLD ACCESS, INC. (THE "COMPANY") OR ANY
"AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY WAS
THE OWNER OF THE NOTE (THE "RESTRICTION TERMINATION DATE") RESELL OR OTHERWISE
TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO FIRST UNION
NATIONAL BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY BEFORE THE
RESTRICTION TERMINATION DATE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS NOTE TO FIRST UNION NATIONAL BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE (C), (D) OR (E)
ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO FIRST UNION NATIONAL
BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF TWO YEARS FROM THE
ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
<PAGE>
WORLD ACCESS, INC.
4.5% CONVERTIBLE SUBORDINATED NOTE DUE 2002
No. _______ CUSIP [_____]
World Access, Inc., a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "Company"), which
term includes any successor corporation under the indenture referred to on the
reverse hereof, for value received hereby promises to pay to _____________ [for
global Note, insert: CEDE & CO.] or registered assigns, the principal sum of
[___________ ($____________)] [for Global Note only (as increased or decreased
from time to time in accordance with the procedures of DTC)] on October 1, 2002,
at the office or agency of the Company maintained for that purpose in
__________, _____________, or, at the option of the Holder of this Note, at the
Corporate Trust Office, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually on April 1 and October 1 of
each year, commencing April 1, 1998, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 4.5%, from the date
of this Note. The interest payable on this Note pursuant to the Indenture on any
April 1 or October 1 will be paid to the person in whose name this Note (or one
or more predecessor Notes is registered at the close of business on the record
date, which shall be the March 15 or September 15 (whether or not a Business
Day) next preceding such April 1 or October 1, as provided in the Indenture
provided that any such interest not punctually paid or duly provided for shall
be payable as provided in the Indenture. Interest may, at the option of the
Company, be paid by check mailed to the registered address of such person
provided that with respect to any Holder with an aggregate principal amount
equal to or in excess of $5,000,000 interest may be paid by wire transfer as
more fully specified in the Indenture.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in fully of all Senior Indebtedness, as defined in the Indenture,
and provisions giving the Holder of this Note the right to convert this Note
into Common Stock of the Company on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of Georgia, and for all purposes shall be construed in accordance with and
governed by the laws of said State.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
DATED: October 1, 1997
Attest: World Access, Inc.
By: Steven A. Odom
Title: Chairman and Chief Executive Officer
[SEAL]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
FIRST UNION NATIONAL BANK, as Trustee
By:
Name:
Title:
<PAGE>
[FORM OF REVERSE OF NOTE]
WORLD ACCESS, INC.
4.5% CONVERTIBLE SUBORDINATED NOTE DUE 2004
1. This Note is one of a duly authorized issue of Notes of the Company,
designated as its 4.5% Convertible Subordinated Notes due 2002 (herein called
the "Notes"), limited to aggregate principal amount of $100,000,000
($115,000,000 if the over-allotment option is exercised in full) issued or to be
issued under and pursuant to an indenture dated as of October 1, 1997 (herein
called the "Indenture"), between the Company and First Union National Bank, as
trustee (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders.
2. In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all Notes
may be declared, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
3. The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes as the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the Holders provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount thereof or premium,
if any, thereon, or reduce any amount payable on redemption thereof, or impair
the right of any Noteholder to institute suit for the payment thereof, or make
the principal thereof or interest or premium, if any, thereon payable in any
coin or currency other than that provided in the Note, or modify the provisions
of the Indenture with respect to the subordination of the Notes in a manner
adverse to the Holders in any material respect, or change the obligation of the
Company to repurchase any Note upon the occurrence of a Change in Control in a
manner adverse to the Holder of the Notes, or impair the right to convert the
Notes into Common Stock in any material respect, without the consent of the
Holder of each Note so affected or (ii) reduce the aforesaid percentage of
Notes, the Holders of which are required to consent to any such supplemental
indenture, without the consent of the Holders of all Notes then outstanding. It
is also provided in the Indenture that the Holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the
Holders of all of the Notes waive any past default or Event of Default under the
Indenture and its consequences except (i) a default in the payment of interest
or any premium, if any, on, or the principal of, the Notes, (ii) a failure by
the Company to convert any Notes into Common Stock, (iii) a default in the
payment of the Redemption Price pursuant to Article III or repurchase price
pursuant to Article XVI or (iv) a default in respect of a covenant or provisions
which under Article XI cannot be modified or amended without the consent of the
Holders of all Notes then outstanding. Any such consent or waiver by the Holder
of this Note (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this Note
and any Notes which may be issued in exchange or substitute hereof, irrespective
of whether or not any notation thereof is made upon this Note or such other
Notes.
4. The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
as defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each Holder of this Note by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
5. No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Note at the place, at the respective times, at the rate and in
the coin or currency herein prescribed.
6. Interest on the Notes shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
7. The Notes are issuable in registered form without coupons in minimum
denominations of $1,000 ($100,000 in the case of Notes issued pursuant to
Regulation D under the Securities Act) and any integral multiple of $1,000. At
the office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
8. The Notes will not be redeemable at the option of the Company prior
to October 1, 2000. At any time after October 1, 2000, and prior to maturity,
the Notes may be redeemed at the option of the Company from time to time, as a
whole or in part, upon mailing a notice of such redemption not less than 15 nor
more than 60 days before the date fixed for redemption to the Holders of Notes
at their registered addresses, all as provided in the Indenture, at the
following optional Redemption Prices (expressed as percentages of the principal
amount), together in each case with accrued interest to, but excluding, the date
fixed for redemption.
9. If redeemed during the 12-month period beginning October 1:
Year Percentage
2000..................................101.8%
2001..................................100.9%
and 100% at October 1, 2002 provided that if the date fixed for redemption is on
April 1 or October 1, then the interest payable on such date shall be paid to
the Holder of record of the Note on the next preceding March 15 or September 15,
respectively.
10.......The Notes are not subject to redemption through the operation
of any sinking fund.
11.......Subject to the provisions of the Indenture, the Holder hereof
has the right, at its option, at any time prior to the close of business on the
maturity date, subject to prior redemption or repurchase, or, as to all or any
portion hereof called for redemption, prior to the close of business on the
fifth Business day preceding the date fixed for redemption (unless the Company
shall default in payment due upon redemption thereof), to convert the principal
hereof or any portion of such principal which is $1,000 or an integral multiple
thereof, into that number of shares of the Company's Common Stock, said shares
shall be constituted at the date of conversion, obtained by dividing the
principal amount of this Note or portion thereof to be converted by the
Conversion Price of $37.03125 or such Conversion Price is adjusted from time to
time as provided in the Indenture, upon surrender of this Note, together with a
conversion notice as provided in the Indenture, to the Company at the office or
agency of the Company maintained for that purpose in Atlanta, Georgia, or at the
option of such Holder, the Corporate Trust Office, and, unless the shares
issuable on conversion are to be issued in the same name as this Note, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the Holder or by his duly authorized attorney. No
adjustment in respect of interest or dividends will be made upon any conversion;
provided, however, that if this Note shall be surrendered for conversion during
the period from the close of business on any record date for the payment of
interest to the close of business on the Business Day preceding the interest
payment date, this Note (unless it or the portion being converted shall have
been called for redemption during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day preceding the interest payment date) must be accompanied by an amount, in
New York Clearing house finds or other funds acceptable to the Company, equal to
the interest payable on such interest payment date on the principal amount being
converted, provided further however, that in the event this Note or a portion
thereof is called for redemption on or after October 1, 2000 and before April 1,
2001 and the Holder elects to convert such Note, the Holder will be entitled to
receive interest on such Note for the period from April 1, 2000 through October
1, 2000 (provided however, that no such payment need be made if there shall
exist at the time of conversion a default in the payment of interest on the
Notes.) No fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share which would otherwise be issuable upon the surrender of any
Note or Notes for conversion.
12.......Any Notes called for redemption, unless surrendered for
conversion on or before the close of business on the date fixed for redemption,
may be deemed to be purchased from the Holder of such Notes at an amount equal
to the applicable Redemption Price, together with accrued interest to the date
fixed for redemption, by one or more investment bankers or other purchasers who
may agree with the Company to purchase such Notes from the Holders thereof and
convert them into Common Stock of the Company and to make payment for such Notes
as aforesaid to the Trustee in trust for such Holders.
13.......Upon due presentment for registration of transfer of this Note
at the office or agency of the Company in Atlanta, Georgia or at the option of
the Holder of this Note, at the Corporate Trust Office, a new Note or Notes of
authorized denominations for an equal aggregate principal amount will be issued
to the transferee in exchange thereof, subject to the limitations provided in
the Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
14.......The Company, the Trustee, any authenticating agency, any
paying agent, any conversion agent and any Registrar may deem and treat the
registered Holder hereof as the absolute owner of this Note (whether or Note
this Note shall be overdue and notwithstanding any notation of ownership or
other writing hereon), for the purpose of receiving payment hereof, or on
account hereof, for the conversion hereof and for all other purposes, and
neither the Company nor the Trustee nor any other authenticating agent nor any
paying agent nor any other conversion agent nor any Registrar shall be affected
by any notice to the contrary. All payments made to or upon the order of such
registered Holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Note.
15.......No recourse for the payment of the principal or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporation, stockholder, employee, agent, officer or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration of
the issue hereof, expressly waived and released.
16.......Terms used in this Note and defined in the Indenture are used
herein as therein defined.
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM- as tenants in common UNIF GIFT MIN ACT Custodian
(Cust)
(Minor)
TEN ENT- as tenants by the
entireties
JT TEN- as joint tenants with under Uniform Gifts to Minors Act
right to survivor-ship
and not as tenants in
common ___________________________
(State)
Additional abbreviations may also be used
though not in the above list.
<PAGE>
CONVERSION NOTICE
To: WORLD ACCESS, INC.
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of World Access, Inc. in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for fractional shares
and any Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered Holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a Person other than the undersigned, the undersigned will
check the appropriate box below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid to the undersigned on account of
interest accompanies this Note.
Dated: ______________________
Signature(s)
Signature(s) must be
guaranteed by an
eligible Guarantor
Institution (banks,
stock brokers, savings
and loan associations
and credit unions)
with membership in an
approved signature
guarantee medallion
program pursuant to
Securities and
Exchange Commission
Rule 17Ad-15 if shares
of Common Stock are to
be issued, or Notes to
be delivered, other
than to and in the
name of the registered
Holder.
---------------------------------------
Signature Guarantee
<PAGE>
Fill in for registration of shares of Common Stock if to be issued, and Notes it
to be delivered, other than to and in the name of the registered Holder:
- -------------------------
(Name)
- -------------------------
(Street Address)
- -------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be
converted (if less than all):
$-----------
- -------------------------------------------------------
Social Security or Other Taxpayer Identification Number
<PAGE>
ASSIGNMENT
For value received ___________________ hereby sell(s), assign(s) and transfer(s)
unto
- ------------------------------------------------------------------------
(Please insert name, social security or other Taxpayer Identification Number of
assignee)
the within Note, and hereby irrevocably constitutes and appoints
- ------------------------------------------------------------------------------
attorney to transfer the said Note on the Books of the Company, with power of
substitution in the premises.
In connection with any transfer of the within Note within two years of
the date of original issuance of such Note, the undersigned confirms that such
Note is being transferred:
|_| To World Access, Inc. or a subsidiary thereof; or
|_| Pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
|_| To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
|_| Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
|_| Pursuant to and in compliance with Rule 144 under the Securities
Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").
|_| The transferee is an Affiliate of the Company;
<PAGE>
Dated: ______________________
-----------------------------------
Signature(s)
Signature(s) must be
guaranteed by an
eligible Guarantor
Institution (banks,
stock brokers, savings
and loan associations
and credit unions)
with membership in an
approved signature
guarantee medallion
program pursuant to
Securities and
Exchange Commission
Rule 17Ad-15 if shares
of Common Stock are to
be issued, or Notes to
be delivered, other
than to and in the
name of the registered
Holder.
-----------------------------------
Signature Guarantee
<PAGE>
OPTION TO ELECT REPURCHASE
UPON A CHANGE IN CONTROL
To: WORLD ACCESS, INC.
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from World Access, Inc. (the Company") as to
the occurrence of a Change in Control with respect to the Company and requests
and instructs the Company to repay the entire principal amount of this Note, or
the portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Note at the repurchase price, together with accrued interest to, but excluding,
such date, to the registered Holder hereof.
Dated: ______________________
----------------------------------------
----------------------------------------
Signature(s)
NOTICE: The above
signatures of the
Holder(s) hereof must
correspond with the
name as written upon
the face of the Note
in every particular
without alteration,
enlargement or any
change whatever.
Principal amount to be
repurchased (if less than all):
$--------------
- -----------------------------------
Social Security or Other Taxpayer
Identification Number
<PAGE>
Exhibit 10.1
$100,000,000
4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2002
WORLD ACCESS, INC.
PURCHASE AGREEMENT
September 26, 1997
BT Alex. Brown Incorporated
Prudential Securities Incorporated
c/o BT Alex. Brown Incorporated
One South Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
World Access, Inc., a Delaware corporation (the "Company"), confirms
its agreement with BT Alex. Brown Incorporated and Prudential Securities
Incorporated (the "Initial Purchasers") with respect to the sale by the Company
and the purchase by the Initial Purchasers, acting severally and not jointly, of
the respective amounts set forth in Schedule A of $100,000,000 aggregate
principal amount of the Company's 4.5% Convertible Subordinated Notes due 2002
(the "Notes") to be issued pursuant to the provisions of an indenture to be
dated as of October 1, 1997 (the "Indenture") between the Company and First
Union National Bank, as trustee (the "Trustee"). Such $100,000,000 aggregate
principal amount of Notes are hereafter referred to as the "Firm Notes". Upon
the request of the Initial Purchasers, as provided in Section 2(b) of this
Agreement, the Company shall also issue and sell to the Initial Purchasers up to
an additional $15,000,000 aggregate principal amount of Notes for the purpose of
covering over-allotments, if any. Such $15,000,000 aggregate principal amount of
Notes are hereinafter referred to as the "Option Notes." The Firm Notes and
Option Notes collectively constitute all of the Notes.
The Notes are convertible into shares of the Company's common stock,
par value $.01 per share (the "Common Stock"), at any time following the latest
date of the original issuance thereof and before the close of business on the
maturity date of the Notes, unless previously redeemed or repurchased. The
Common Stock issuable upon conversion of the Notes is sometimes hereinafter
referred to as the "Underlying Stock." Notes issued in book-entry form will be
issued to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant
to a letter agreement, to be dated as of the Closing Date (as defined in Section
3) among the Company, the Trustee and DTC.
The Company understands that the Initial Purchasers propose to make an
offering of the Notes on the terms and in the manner set forth herein and agrees
that the Initial Purchasers may resell, subject to the conditions set forth
herein, all or a portion of the Notes to purchasers ("Subsequent Purchasers") at
any time after the date of this Agreement. The Notes will be offered and sold
through the Initial Purchasers without being registered under the Securities Act
of 1933, as amended (the "Securities Act"), in reliance upon an exemption
therefrom. Pursuant to the terms of the Notes and the Indenture, investors that
acquire Notes may only resell or otherwise transfer such Notes if such Notes are
hereafter registered under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the
exemption afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S")
of the rules and regulations promulgated under the Securities Act by the
Securities and Exchange Commission (the "Commission")).
The Company has prepared and delivered to the Initial Purchasers copies
of a preliminary offering memorandum dated September 15, 1997 (the "Preliminary
Offering Memorandum"), and has prepared and will deliver to the Initial
Purchasers, on the date hereof, copies of a final offering memorandum dated
September 26, 1997 (the "Offering Memorandum"), setting forth information
regarding the Company, the Notes and the Underlying Stock. Each of the
Preliminary Offering Memorandum and the Offering Memorandum is to be used by the
Initial Purchasers in connection with their solicitation of purchases of, or
offering of, the Notes. "Offering Memorandum," unless stated to the contrary,
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
Offering Memorandum, or any amendment or supplement to such documents),
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. The Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and sale of the Notes.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement"). Pursuant to the Registration Rights Agreement,
the Company has agreed to file with the Commission a shelf registration
statement pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement") to cover public resales of the Notes and the Underlying Stock by the
Holders thereof.
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Offering Memorandum. For purposes hereof,
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), as applicable.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," "stated," or described"
in the Offering Memorandum (or other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Exchange Act which is incorporated by reference in the Offering Memorandum.
Section 1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each of the Initial Purchasers as of the date
hereof, and as of the Closing Date and each Option Closing Date (as defined in
Section 2(b) hereof), if any, as follows:
(a) The Offering Memorandum, as of its date, together with
each amendment or supplement thereto, as of its date, contains all the
information that, if requested by a prospective purchaser, would be required to
be provided pursuant to Rule 144A(d)(4) under the Securities Act. The Offering
Memorandum does not, and at the Closing Date and any Option Closing Date will
not, and any amendment or supplement thereto, if any, as of its date, will not,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The immediately
preceding sentence does not apply to information contained in or omitted from
the Preliminary Offering Memorandum or the Offering Memorandum (or any
supplement or amendment thereto) in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial Purchaser
specifically for use therein (the "Initial Purchaser's Information"). The
parties acknowledge and agree that the Initial Purchaser's Information consists
solely of the last paragraph at the bottom of the front cover page concerning
the terms of the offering by the Initial Purchasers and the text under the
caption "Plan of Distribution" in the Offering Memorandum. The Company is
subject to Sections 13 or 15(d) of the Exchange Act.
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and corporate authority to own or lease its
properties and conduct its business as described in the Offering Memorandum.
Restor-AIT, Inc., Westec Communications, Inc., Sunrise Sierra, Inc. Cellular
Infrastructure Supply, Inc., and Galaxy Personal Communications Services, Inc.
(the "Subsidiaries") constitute all of the Company's corporate subsidiaries.
Each of the Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of the state of its incorporation,
with corporate power and corporate authority to own or lease its properties and
conduct its business as described in the Offering Memorandum. Each of the
Company and the Subsidiaries is duly qualified and licensed and in good standing
as a foreign corporation in each jurisdiction in which its ownership or leasing
of any properties or the character of its operations requires such qualification
or licensing, except where the failure to be so qualified or licensed would not
have a material adverse effect on the condition, financial or otherwise, results
of operations or business of the Company and the Subsidiaries, taken as a whole
(a "Material Adverse Effect"). The outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable, are owned by the Company free and clear of all liens,
charges, claims, encumbrances, pledges, security interests defects or other
restrictions or equities of any kind whatsoever, and were not issued in
violation of any preemptive rights or applicable securities laws; and no
options, warrants or other rights to convert any obligations into shares of
capital stock or ownership interests in any of the Subsidiaries are outstanding.
(c) The information set forth under the caption
"Capitalization" in the Offering Memorandum is true and correct. Neither the
Company nor any Subsidiaries is a party to or bound by any instrument, agreement
or other arrangement, including, but not limited to, any voting trust agreement,
stockholders' agreement or other agreement or instrument, affecting the
securities or rights or obligations of securityholders of the Company or of the
Subsidiaries or providing for any of them to issue, sell, transfer or acquire
any capital stock, rights, warrants, options or other securities of the Company
or the Subsidiaries, except for this Agreement and the Indenture and as set
forth in the Offering Memorandum. The Notes and the Company's capital stock
conform in all material respects to all statements with respect thereto
contained in the Offering Memorandum.
(d) All issued and outstanding shares of capital stock or
other securities evidencing equity ownership of each of the Company or the
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable, as applicable; the holders thereof have no rights of rescission
with respect thereto and are not subject to personal liability by reason of
being such holders; and none of such securities were issued in violation of the
preemptive rights of any securityholder of the Company or any of the
Subsidiaries or similar contractual rights granted by the Company or any of the
Subsidiaries. The Notes will be issued pursuant to the terms and conditions of
the Indenture, and each of the Indenture and the Registration Rights Agreement
conforms, or will conform, to the description thereof contained in the Offering
Memorandum. The Notes have been duly authorized and, when validly authenticated,
issued, delivered and paid for in the manner contemplated by the Indenture, will
be duly authorized, validly issued and outstanding obligations of the Company
entitled to the benefits of the Indenture. The shares of Common Stock issuable
upon conversion of the Notes will, upon such issuance, be duly authorized,
validly issued, fully paid and non-assessable, and the Company has duly
authorized and reserved for issuance upon conversion of the Notes the shares of
Common Stock issuable upon such conversion. The Notes and the Underlying Stock
are not and will not be subject to any preemptive or other similar rights of any
securityholder of the Company or the Subsidiaries; all corporate action required
to be taken for the authorization, issue and sale of the Notes and the
Underlying Stock has been duly and validly taken; and the certificates
representing the Notes and the Underlying Stock will be in due and proper form.
Upon the issuance and delivery pursuant to the terms of this Agreement and the
Indenture of the Notes to be sold by the Company hereunder and thereunder, the
Initial Purchasers will acquire good and marketable title thereto free and clear
of any lien, charge, claim, encumbrance, pledge, security interest, defect or
other restriction or equity of any kind whatsoever.
(e) The consolidated historical financial statements of the
Company and the Subsidiaries, together with the related notes thereto included
in the Preliminary Offering Memorandum and the Offering Memorandum, fairly
present the financial position, income, changes in stockholders' equity, cash
flow and results of operations of the Company and the Subsidiaries at the
respective dates and for the respective periods to which they apply, and such
historical financial statements have been prepared in conformity with generally
accepted accounting principles and the Rules and Regulations, consistently
applied throughout the periods involved. Except as described in the Offering
Memorandum, there has been no material adverse change or development involving a
material prospective change in the condition, financial or otherwise, results of
operations or business of the Company and the Subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, since the date of the
financial statements included in the Offering Memorandum and the outstanding
debt, the property, both tangible and intangible, and the businesses of each of
the Company and the Subsidiaries conform in all material respects to the
descriptions thereof contained in the Offering Memorandum. Financial information
set forth in the Offering Memorandum under the headings "Summary Consolidated
Financial and Operating Data," "Capitalization" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" fairly present, on
the basis stated in the Offering Memorandum, the information set forth therein
and have been derived from or compiled on a basis consistent with that of the
audited financial statements included in the Offering Memorandum.
(f) Since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated or contemplated
therein, (i) there has been no material adverse change in the condition,
financial or otherwise, results of operations or business of the Company and the
Subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, (ii) there have been no transactions entered into by the Company or
any of the Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and the Subsidiaries, taken as a
whole, and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(g) Each of the Company and the Subsidiaries has filed all tax
returns required to be filed by it in any jurisdiction, other than those filings
being contested in good faith, and has paid all federal, state, local and
foreign taxes shown to be due on such returns or claimed to be due from such
entities, other than those (i) currently payable without penalty or interest or
(ii) being contested in good faith, in either case, for which the Company is
liable, and has established adequate reserves in the Company's financial
statements (in accordance with generally accepted accounting principles) for
such taxes which are not due and payable.
(h) No holders of securities of the Company or the
Subsidiaries have any rights to require the Company to register such securities
except as described in (i) the Registration Rights Agreement, dated March 27,
1997, by and among the Company and Thomas R. Canham, Brian A. Schuchman and John
T. Simon, and (ii) the Registration Rights Agreement, dated August 25, 1997, by
and among the Company and Largo Holdings, Ltd., Joseph W. Forbes, Jr., James E.
Bennett, Moore Family Holdings, Ltd., Paul G. Blaser, Drew H. Davis, Lewis L.
Roberts, Jr. and Robert E. Schwartz.
(i) There is no action, suit, proceeding, litigation or
governmental proceeding pending or, to the knowledge of the Company, threatened
against, or involving the properties or businesses of, the Company or the
Subsidiaries which (i) questions the validity of the capital stock of the
Company or any of its Subsidiaries, this Agreement, the Indenture, the
Registration Rights Agreement or of any action taken or to be taken by the
Company or its Subsidiaries pursuant to or in connection with this Agreement,
the Indenture or the Registration Rights Agreement or (ii) would have a Material
Adverse Effect, except as set forth in the Offering Memorandum.
(j) The Company has full legal right, power and authority to
authorize, issue, deliver and sell the Notes and the Underlying Stock upon
conversion of the Notes, to enter into this Agreement, the Indenture and the
Registration Rights Agreement and to consummate the transactions provided for in
such agreements; and this Agreement has been duly and properly authorized,
executed and delivered by the Company, and when the Company has duly executed
and delivered the Registration Rights Agreement and the Indenture, this
Agreement, the Registration Rights Agreement and the Indenture (assuming the due
execution and delivery thereof by the Initial Purchasers) will constitute legal,
valid and binding agreements of the Company enforceable against the Company in
accordance with their respective terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium
or similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and except to
the extent that rights to indemnification and contribution contained in this
Agreement may be limited by federal or state securities laws on public policy
relating thereto.
(k) None of the Company's issue and sale of the Notes and the
Underlying Stock upon the conversion of the Notes, the execution or delivery of
this Agreement, the Indenture and the Registration Rights Agreement, its
performance hereunder and thereunder, its consummation of the transactions
contemplated herein and therein or the conduct by it and the Subsidiaries of
their businesses as described in the Offering Memorandum or any amendments or
supplements thereto conflicts or will conflict with or results or will result in
any breach or violation of any of the terms or provisions of, or constitutes or
will constitute a default under, or results or will result in the creation or
imposition of any lien, charge, claim, encumbrance, pledge, security interest,
defect or other restriction or equity of any kind whatsoever upon any property
or assets of the Company or the Subsidiaries pursuant to the terms of, (i) the
Certificate of Incorporation or by-laws of the Company or of the Subsidiaries,
(ii) any license, contract, indenture, mortgage, deed of trust, voting trust
agreement, stockholders' agreement, note, loan or credit agreement or other
agreement or instrument to which the Company or its Subsidiaries is a party or
by which it is or may be bound or to which its properties or assets is or may be
subject, or any indebtedness, or (iii) any statute, judgment, decree, order,
rule or regulation applicable to the Company or any of the Subsidiaries of any
arbitrator, court, regulatory body or administrative agency or other
governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their respective activities or properties except, in the
case of clauses (ii) and (iii), such defaults, impositions and violations that
would not have a Material Adverse Effect.
(l) No consent, approval, authorization or order of, and no
filing with, any court, arbitrator, regulatory body, government agency or other
body, domestic or foreign, is required for the execution, delivery or
performance of this Agreement, the Indenture, the Registration Rights Agreement
or the transactions contemplated hereby or thereby, except such as may be
required under state securities or Blue Sky laws.
(m) The Company and its Subsidiaries have no material
contingent obligations which are not disclosed in the Company's financial
statements which are included in the Offering Memorandum.
(n) Except as disclosed in the Offering Memorandum, neither
the Company nor its Subsidiaries is or with the giving of notice or lapse of
time or both, will be, in violation of or in default under its Certificate of
Incorporation or by-laws or under any agreement, lease, contract, indenture or
other instrument or obligation to which it is a party or by which it, or any of
its properties, is bound and which default would have a Material Adverse Effect.
(o) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission,
or such additional steps as may be necessary to qualify the Securities for sale
by the Initial Purchasers under state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(p) The Company and its Subsidiaries hold all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses. The Company and the Subsidiaries
own or possess sufficient trademarks, trade names, patent rights, copyrights,
licenses, trade secrets and other similar rights reasonably necessary to conduct
their respective businesses; and the Company has no knowledge that either the
Company or its Subsidiaries has infringed any patents, patent rights, trade
names, trademarks or copyrights, which infringement is material to the business
of the Company and its Subsidiaries taken as a whole. The Company knows of no
material infringement by others of patents, patent rights, trade names,
trademarks or copyrights owned by or licensed to the Company.
(q) Neither the Company nor any of its Subsidiaries is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the Commission thereunder.
(r) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(s) The Company and its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar industries.
(t) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
(u) Each of the Company and its Subsidiaries is in material
compliance with all federal, state, local and foreign laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours. There are no pending investigations involving
the Company or its Subsidiaries by the U.S. Department of Labor or any other
governmental agency responsible for the enforcement of such federal, state,
local or foreign laws and regulations. There is no unfair labor practice charge
or complaint against the Company or its Subsidiaries pending before the National
Labor Relations Board or any strike, picketing, boycott, dispute, slowdown or
stoppage pending or threatened against or involving the Company or its
Subsidiaries. No representation question exists respecting the employees of the
Company or its Subsidiaries, and no collective bargaining agreement or
modification thereof is currently being negotiated by the Company or its
Subsidiaries. No grievance or arbitration proceeding is pending under any
expired or existing collective bargaining agreements of the Company or its
Subsidiaries. Except as disclosed in the Offering Memorandum, no material labor
dispute with the employees of the Company or its Subsidiaries exists or, to the
knowledge of the Company, is imminent.
(v) Neither the Company or any of its Subsidiaries, nor any of
its affiliates has taken or will take, directly or indirectly, any action
designed to or which has constituted or which might be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Notes or otherwise.
(w) Each of the Company and the Subsidiaries has good and
marketable title to, or valid and enforceable leasehold estates in, all items of
real and personal property that are material to its business, in each case,
except as disclosed in the Offering Memorandum, free and clear of all liens,
charges, claims, encumbrances, pledges, security interests, defects and other
restrictions that would have a Material Adverse Effect.
(x) Price Waterhouse LLP, who have certified certain of the
financial statements included as part of the Offering Memorandum, are
independent certified public accountants of the Company as required by the
Securities Act and the Rules and Regulations.
(y) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act, and the Notes are eligible for trading in
the Private Offerings, Resale and Trading through Automated Linkages ("Portal")
market. The Company's Common Stock is included for trading in the Nasdaq Stock
Market (National Market).
(z) Other than payments required or allowed by applicable law
of the United States, neither the Company nor its Subsidiaries has, nor, to the
knowledge of the Company, has any officer, director or employee of the Company
or its Subsidiaries or any other person acting on behalf of the Company or its
Subsidiaries, for the benefit of the Company or such Subsidiaries at any time
during the last five years, (i) made any unlawful gift or contribution to any
candidate for federal, state, local or foreign political office, or failed to
disclose fully any such gift or contribution in violation of law, or (ii) made
any payment to any federal, state, local or foreign governmental officer or
official, which would be reasonably likely to subject the Company or its
Subsidiaries to any damage or penalty in any civil, criminal or governmental
litigation or proceeding (domestic or foreign). Each of the Company's and the
Subsidiaries' internal accounting controls are sufficient to cause the Company
and its Subsidiaries to comply with the Foreign Corrupt Practices Act of 1977,
as amended.
(aa) The minute books of each of the Company and the
Subsidiaries have been made available to the Initial Purchasers, contain a
complete summary of all meetings and actions of the directors and stockholders
of each of the Company and the Subsidiaries since the time of their respective
incorporation and reflect all transactions referred to in such minutes
accurately in all respects.
(bb) Neither the Company nor its Subsidiaries has been
notified or is otherwise aware that it is potentially liable, under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or any similar law ("Environmental Laws"). The Company and the
Subsidiaries are in substantial compliance with all applicable existing
Environmental Laws, except for such instances of non-compliance which would not
have a Material Adverse Effect. The term "Hazardous Material" means (i) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (ii) any "hazardous waste"
as defined by the Resource Conservation and Recovery Act, as amended, (iii) any
petroleum or petroleum product, (iv) any polychlorinated biphenyl and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material,
waste or substance regulation under or within the meaning of any other
Environmental Law. To the best of the Company's knowledge, no disposal, release
or discharge of "Hazardous Material" has occurred on, in, at or about any of the
facilities or properties of the Company or its Subsidiaries.
(cc) Neither the Company nor any affiliate (as such term is
defined in Rule 501(b) under the Securities Act) of the Company has, directly or
through any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any "security" (as defined in the Securities Act),
which is or could reasonably be expected to be integrated with the sale of the
Notes in a manner that would require the registration of the Notes under the
Securities Act. The Company and the Subsidiaries have not incurred any liability
for a fee, commission, or other compensation on account of the employment of a
broker or finder in connection with the transactions contemplated by this
Agreement other than as contemplated hereby.
(dd) None of the Company, any affiliate (as such term is
defined in Rule 501 (b) under the Securities Act) of the Company or any other
person acting on its or their behalf has engaged, in connection with the
offering of the Notes, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(ee) 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, and each 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 complied and will comply with the offering
restrictions requirements of Regulation S. Terms used in this paragraph have the
meanings given to them in Regulation S.
Section 2. Sale to the Initial Purchasers.
(a) On the basis of the representations, warranties and
agreements contained herein, and subject to the terms and conditions set forth
herein, the Company agrees to issue and sell to each Initial Purchaser,
severally and not jointly, and each Initial Purchaser, severally and not
jointly, agrees to purchase from the Company, the Firm Notes at a purchase price
and the aggregate principal amount as set forth in Schedule A opposite the name
of such Initial Purchaser.
(b) In addition, on the basis of the representations,
warranties and agreements contained herein, and subject to the terms and
conditions set forth herein, the Company hereby grants an option to the Initial
Purchasers to purchase any or all of the Option Notes at a price equal to 97% of
the principal amount thereof plus accrued interest from the Closing Date to the
applicable Option Closing Date. Such option will expire thirty days after the
date hereof, and may be exercised in whole or in part from time to time only for
the purpose of covering overallotments which may be made in connection with the
offering and distribution of the Firm Notes upon notice by the Initial
Purchasers to the Company setting forth the aggregate principal amount of Option
Notes as to which the Initial Purchasers are then exercising the option and the
time and date of delivery and payment therefor. Any such time and date of
delivery and payment (an "Option Closing Date") shall be determined by the
Initial Purchasers, but shall not be later than five full business days after
the exercise of such option unless otherwise agreed by the Company and the
Initial Purchasers. If the option is exercised as to all or a portion of the
Option Notes, the Initial Purchasers, acting severally and not jointly, shall
purchase that proportion of the total principal amount of Firm Notes set forth
in Schedule A opposite the name of such Initial Purchaser bears to the total
principal amount of Firm Notes.
(c) The Initial Purchasers have advised the Company that it is
their intention, as promptly as they deem appropriate after the Company shall
have furnished the Initial Purchasers with copies of the Offering Memorandum, to
resell the Notes pursuant to the procedures and upon the terms set forth in the
Offering Memorandum, including not to solicit any offer to buy or offer to sell
the Notes by means of any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act. Each of the Initial Purchasers warrant and agree with the Company that it
has solicited and will solicit offers (the "Exempt Resales") for Notes only
from, and will offer Notes only to, (i) persons that it reasonably believes to
be "Qualified Institutional Buyers" or "QIBs" in transactions that meet the
requirements for an exemption from the registration requirements of the
Securities Act under Rule 144A, (ii) persons who are "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that
execute and deliver a letter containing certain representations and agreements
in the form attached as Annex A of the Offering Memorandum, and (iii) persons
who are not U.S. Persons within the meaning of Regulation S under the Securities
Act. Such persons are referred to herein as "Eligible Purchasers." Each of the
Initial Purchasers represents and warrants, severally and not jointly, that it
is an Institutional Accredited Investor with such knowledge and experience in
financial and business matters as are necessary to evaluate the merits and risks
of an investment in the Notes, and is acquiring its interest in the Notes not
with a view to the distribution or resale thereof, except resales in compliance
with the registration requirements or exemption provisions of the Securities Act
and that neither it, nor anyone acting on its behalf, will offer the Notes so as
to bring the issuance and sale of the Notes within the provisions of Section 5
of the Securities Act. Each of the Initial Purchasers further represents and
warrants, severally and not jointly, that it is not a pension or welfare plan
(as defined in Section 3 of ERISA) and is not acquiring the Notes on behalf of a
pension or welfare plan. The Company acknowledges and agrees that the Initial
Purchasers may sell Notes to any affiliate of the Initial Purchasers and any
such affiliate may sell Notes purchased by it to the Initial Purchasers. The
Initial Purchasers agree that, prior to or simultaneously with the confirmation
of sale by it to any Subsequent Purchaser of any of the Notes purchased from the
Company pursuant hereto, the Initial Purchasers shall furnish to that Subsequent
Purchaser a copy of the Offering Memorandum (and any amendment thereof or
supplement thereto that the Company shall have furnished to the Initial
Purchasers prior to the date of such confirmation of sale). In addition to the
foregoing, the Initial Purchasers agree and understand that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Sections 5(b) and (c) hereof, counsel to the Company and to the Initial
Purchasers, respectively, may rely upon the accuracy and truth of the foregoing
representations, warranties and covenants in this Section 2(c) and in Section
2(d) hereof, and the Initial Purchasers hereby consent to such reliance.
(d) Each Initial Purchaser, severally and not jointly, hereby
represents and warrants to, and agrees with, the Company that (i) no form of
general solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) has been or will be used by the Initial Purchasers or
any of their representatives in connection with the offer and sale of any of the
Notes, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising except pursuant to a
registered public offering as provided in the Registration Rights Agreement; and
(ii) it will otherwise act in accordance with the terms and conditions set forth
in this Agreement in connection with the placement of the Notes contemplated
hereby.
Section 3. Delivery of and Payment for the Notes. Delivery of, and
payment for, the Firm Notes shall be made at 9:00 a.m., Baltimore, Maryland
time, on October 1, 1997, or at such other date or time, not later than ten full
business days thereafter, as shall be agreed by the Initial Purchasers and the
Company (such date and time being referred to herein as the "Closing Date").
Delivery of, and payment for, the Firm Notes and the Option Notes shall be made
at the offices of BT Alex. Brown Incorporated, Baltimore, Maryland, or any such
other place as shall be agreed by the Initial Purchasers and the Company. In
addition, in the event that any or all of the Option Notes are purchased by the
Initial Purchasers, delivery of such Option Notes and payment of the purchase
price for such Option Notes shall be made at the above-mentioned offices of BT
Alex. Brown Incorporated, or any such other place as shall be agreed by the
Initial Purchasers and the Company, on each date of delivery as specified in the
notice from the Initial Purchasers to the Company. Payment shall be made to the
Company by wire transfer of same day funds payable to the order of the Company,
against delivery to the Initial Purchasers of certificates for the Notes to be
purchased by them. On the Closing Date, payment will be made against (i) to the
extent Notes are to be resold outside the United States pursuant to Regulation
S, delivery of a global Note, to a common depository for Morgan Guaranty Trust
Company of New York, Brussels Office, as operator of the Euroclear System, or
Cedel Bank, societe anonyme, for credit to the respective accounts of the
Initial Purchasers or to such other accounts as the Initial Purchasers may
direct, and (ii) to the extent Notes are to be resold in the United States
pursuant to Rule 144A under the Securities Act, delivery of a single global Note
in registered form to be deposited with, or on behalf of, DTC and registered in
the name of Cede & Co., as nominee of DTC, in such denominations and registered
in such names, or otherwise, as the Initial Purchasers shall have requested. The
Company shall make the certificates for the Notes available for examination and
packaging by the Initial Purchasers not later than 10:00 a.m. (New York time) on
the last business day prior to the Closing Date, or Option Closing Date, as the
case may be, at the offices of the Trustee or its agent in New York City.
Section 4. Covenants and Agreements of the Company. The Company
covenants and agrees with the Initial Purchasers as follows:
(a) The Company will furnish promptly to the Initial
Purchasers and counsel for the Initial Purchasers, without charge, as many
copies of the Preliminary Offering Memorandum and the Offering Memorandum (and
of any amendments or supplements thereto) as may be reasonably requested; will
furnish to the Initial Purchasers on the date hereof a copy of the independent
accountants' report included in the Offering Memorandum signed by the
accountants rendering such report; and the Company hereby consents to the use of
the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments and supplements thereto, in connection with Exempt Resales of the
Notes.
(b) The Company will notify BT Alex. Brown Incorporated
promptly, and confirm such advice in writing, of (x) any filing made by the
Company of information relating to the offering of the Notes with any securities
exchange or any other regulatory body in the United States or any other
jurisdiction, and (y) prior to the completion of the placement of the Notes by
the Initial Purchasers as evidenced by a notice in writing from the Initial
Purchasers to the Company, any material adverse changes or developments
involving any material prospective change in the condition, financial or
otherwise, results of operations or business of the Company or its Subsidiaries,
taken as a whole, that (i) make any statement of a material fact made in the
Offering Memorandum false or misleading in any material respect or (ii) if not
disclosed in the Offering Memorandum, would constitute a material omission
therefrom. In such event or if during such time any event shall occur as a
result of which it is necessary, in the reasonable opinion of the Company, its
counsel, the Initial Purchasers or counsel for the Initial Purchasers, to amend
or supplement the Offering Memorandum in order that the Offering Memorandum not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances then existing, the Company will forthwith amend or supplement
the Offering Memorandum by preparing and furnishing to each Initial Purchaser an
amendment or amendments of, or a supplement or supplements to, the Offering
Memorandum (in form and substance satisfactory in the reasonable opinion of
counsel for the Initial Purchasers) so that, as so amended or supplemented, the
Offering Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time it is delivered to a
Subsequent Purchaser, not misleading.
(c) The Company agrees that if the delivery of the Offering
Memorandum is required at any time in connection with the sale of the Notes and
if at such time any events shall have occurred as a result of which the Offering
Memorandum as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when the Offering Memorandum is delivered, not misleading, or if for any
other reason it shall be necessary at such time to amend or supplement the
Offering Memorandum in order to comply with any law, the Company will notify BT
Alex. Brown Incorporated immediately thereof, and to promptly prepare and
furnish to the Initial Purchasers an amended Offering Memorandum or a supplement
to the Offering Memorandum so that statements in the Offering Memorandum, as so
amended or supplemented, will not, in light of the circumstances under which
they were made when it is so delivered, be misleading, or so that the Offering
Memorandum will comply with applicable law. The Initial Purchasers' delivery of
any such amendment or supplement shall not constitute a waiver of any of the
conditions set forth in Section 5 hereof.
(d) The Company agrees to not amend or supplement the Offering
Memorandum without the consent of the Initial Purchasers, which consent shall
not be unreasonably withheld, and to promptly advise the Initial Purchasers when
any document filed under the Exchange Act which is incorporated into the
Offering Memorandum shall have been filed with the Commission.
(e) The Company agrees, during the five-year period following
the Closing Date, to furnish to the Initial Purchasers all reports and other
communications furnished to stockholders and copies of all reports, documents,
information and financial statements filed with the Commission or any national
securities exchange on which any class of securities of the Company shall be
listed.
(f) The Company will use the proceeds from the sale of the
Notes in the manner described in the Offering Memorandum.
(g) The Company will, in connection with the offering of the
Notes, make its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Initial Purchasers.
(h) The Company will use its reasonable best efforts to do and
perform all things required to be done and performed under this Agreement by it
that are within its control prior to or after the Closing Date and to use
reasonable efforts to satisfy all conditions precedent on its part to the
delivery of the Notes.
(i) None of the Company, its affiliates (as defined in Rule
501(b) under the 1933 Act) or any person (other than the Initial Purchasers and
their respective affiliates, as to whom the Company makes no representation)
acting on its behalf will engage, in connection with the offering of the Notes,
in any form of general solicitation or general advertising within the meaning of
Rule 502(c) under the 1933 Act, nor will any person acting on its or their
behalf, directly or indirectly, make offers or sales of any security, or solicit
offers to buy any security, under circumstances that would require the
registration of the Notes under the Securities Act. The Company will not permit
any of its affiliates to resell any Notes that have been acquired by any of
them.
(j) 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) will engage in any directed selling efforts,
and 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) will comply with the offering restrictions requirements of
Regulation S. Terms used in this paragraph have the meanings given them by
Regulation S.
(k) The Company will not, so long as the Notes are
outstanding, be or become, or be or become owned by, an open-end investment
company, unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act, and
will not be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder.
(l) The Company will cooperate with the Initial Purchasers and
counsel for the Initial Purchasers to qualify the Notes and the shares of Common
Stock issuable upon conversion of the Notes for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as the Initial Purchasers may reasonably designate, and to maintain
such qualifications in effect for as long as is required to complete the sale of
the Notes and the sale of the shares of Common Stock issuable upon conversion of
the Notes; provided, however, that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process or to subject it to taxation in any jurisdiction where it is
not so qualified or so subject. In each jurisdiction in which the Notes or such
shares of Common Stock issuable upon conversion of the Notes have been so
qualified, the Company will file such statements and reports as may be required
in connection with the distribution of the Notes.
(m) The Company agrees that no future offer and sale of debt
securities of the Company of any class will be made if, as a result of the
doctrine of "integration" referred to in Rule 502 under the Securities Act, such
offer and sale would render invalid (for the purpose of (i) the sale of the
Notes by the Company to the Initial Purchasers, (ii) the resale of the Notes by
the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the Notes
by such Subsequent Purchasers to others) the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof or by Rule
144A.
(n) So long as any of the Notes or Common Stock issued upon
the conversion of the Notes are "restricted securities" within the meaning of
Rule 144(a)(3) under the Securities Act, the Company will, during any period in
which it is not subject to and in compliance with Sections 13 or 15(d) of the
Exchange Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act.
This covenant is intended to be for the benefit of the holders (and prospective
purchasers designated by such holders) from time to time of such restricted
securities.
(o) The Company will use its reasonable best efforts to comply
with the Registration Rights Agreement and all agreements set forth in any
representation letters of the Company to DTC relating to the approval of the
Notes for "book- entry" transfers;
(p) The Company will not take any action prior to the
execution and delivery of the Indenture which, if taken after such execution and
delivery, would have violated any of the covenants contained in the Indenture.
(q) The Company will not take any action prior to the Closing
Date which in the Company's reasonable judgment would require the Offering
Memorandum to be amended or supplemented pursuant to Section 4(c) hereof.
(r) The Company will maintain a transfer agent and, if
necessary under the laws of the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for the Common
Stock.
(s) The Company will use its reasonable efforts to permit the
Notes to be designated as PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to the PORTAL market.
(t) The Company will cooperate with the Initial Purchasers and
use its reasonable efforts to permit the Shares to be eligible for clearance and
settlement through DTC.
Section 5. Payment of Expenses.
The Company hereby agrees to pay all of the expenses and fees
incident to the performance of its obligations under this Agreement, the
Indenture and the Registration Rights Agreement, including, regardless of
whether any sale of the Notes to the Initial Purchasers is consummated: (i) the
fees and expenses of accountants and counsel for the Company; (ii) all costs and
expenses incurred in connection with the preparation, duplication, printing
(including mailing and handling charges), and delivery to the Initial Purchasers
of each Preliminary Offering Memorandum and the Offering Memorandum and any
amendments and supplements thereto; (iii) all costs and expenses incurred in
connection with the reproduction of this Agreement, the Registration Rights
Agreement, the Indenture and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Notes; (iv) the
printing, issuance and delivery of the Notes; (v) costs and expenses of travel,
food and lodging of Company personnel in connection with the "road show,"
information meetings and presentations; (vi) fees and expenses of the transfer
agent and registrar; (vii) fees and expenses of the Trustee, including the
Trustee's counsel, in connection with the Indenture and the Notes; (viii) the
qualification of the Notes and the shares of Common Stock issuable upon
conversion of the Notes under state securities laws in accordance with the
provisions of Section 4(l), including filing fees and the fees and disbursements
of counsel for the Initial Purchasers; (ix) any fees incurred in connection with
the designation of the Notes as PORTAL securities in connection with the PORTAL
market and designation of the Underlying Stock for quotation on the Nasdaq Stock
Market (National Market); and (x) all other costs and expenses incident to the
performance of its obligations hereunder which are not specifically otherwise
provided for in this Section. The Underwriters shall pay their own costs and
expenses, including costs and expenses of their counsel, any transfer taxes on
Notes which they may sell and expenses incident to their sale of Notes.
Section 6. Conditions of the Initial Purchasers' Obligations. The
obligations of the Initial Purchasers hereunder are subject to the continuing
accuracy of the representations and warranties of the Company herein as of the
date hereof and as of the Closing Date and each Option Closing Date, if any, as
if they had been made on and as of the Closing Date or each Option Closing Date,
as the case may be; and the performance by the Company on and as of the Closing
Date and each Option Closing Date, if any, of its covenants and obligations
hereunder and to the following further conditions:
(a) The Initial Purchasers shall not have advised the Company
that the Offering Memorandum, or any supplement or amendment thereto, contains
an untrue statement of fact which is material, or omits to state a fact which is
material and is required to be stated therein or is necessary to make the
statements, in light of the circumstances under which they were made, not
misleading. No order suspending the sale of the Notes in any jurisdiction shall
have been issued on either the Closing Date or the relevant Option Closing Date,
if any, and no proceedings for that purpose shall have been instituted or shall
be contemplated.
(b) At Closing Date, and the Option Closing Date, if any, the
Initial Purchasers shall have received the favorable opinion of Rogers & Hardin
LLP, counsel to the Company, dated the Closing Date, addressed to the Initial
Purchasers and in form and substance reasonably satisfactory to Morris, Manning
& Martin, L.L.P., counsel to the Initial Purchasers, to the effect that:
(i) The Company is a corporation validly existing
and in good standing under the laws of the State of Delaware. Each Subsidiary is
a corporation duly organized validly existing and in good standing under the
laws of the state of its incorporation.
(ii) Each of the Company and the Subsidiaries has
the full corporate power and corporate authority to own, lease and operate its
business as described in the Offering Memorandum; and each of the Company and
the Subsidiaries is duly qualified to do business as a foreign corporation and
is in good standing in all jurisdictions in the United States in which it is
required to be qualified and in which the failure so to qualify taken in the
aggregate would have a material adverse effect on the business, operations or
financial condition of the Company.
(iii) The outstanding shares of capital stock of the
Company and the Subsidiaries
have been duly and validly authorized and issued and are fully paid and
non-assessable and free of preemptive rights.
(iv) The shares of Common Stock issuable upon
conversion of the Notes (i) have been
duly authorized and validly reserved for issuance upon such conversion, and such
shares, when issued and delivered upon such conversion in the manner provided
for by the Notes and in the Indenture, will be validly issued, fully paid and
non-assessable; and (ii) will conform to the description thereof contained in
the Offering Memorandum.
(v) The issuance of the Notes and the shares
of Common Stock issuable upon conversion of the Notes are not subject to
preemptive or other similar rights that have not been waived.
(vi) There is no restriction upon the voting or
transfer of any securities of the Company pursuant to the Company's Certificate
of Incorporation or by-laws, in each case as amended, or in any agreement or
other instrument of which such counsel has knowledge except as described in the
Offering Memorandum; and, to the best of such counsel's knowledge, no holders of
securities of the Company have rights to the registration thereof except as
described in (i) the Registration Rights Agreement, dated March 27, 1997, by and
among the Company and Thomas R. Canham, Brian A. Schuchman and John T. Simon,
and (ii) the Registration Rights Agreement, dated August 25, 1997, by and among
the Company and Largo Holdings, Ltd., Joseph W. Forbes, Jr., James E. Bennett,
Moore Family Holdings, Ltd., Paul G. Blaser, Drew H. Davis, Lewis L. Roberts,
Jr. and Robert E. Schwartz.
(vii) This Agreement, the Indenture and the
Registration Rights Agreement have been
duly authorized by all necessary corporate action on the part of the Company,
and have been duly executed and delivered by the Company.
(viii) Assuming the accuracy of the Company's
representations and warranties set
forth in subparagraph (y) of Section 1, the accuracy of the Initial Purchasers'
representations and warranties set forth in subparagraph (d) of Section 2, and
compliance with the procedures set forth in Section 7 hereof, and in reliance
upon the acknowledgments, representations and agreements made, or deemed to be
made, by each purchaser of Notes as set forth in the Offering Memorandum, it is
not necessary in connection with the offer, sale and delivery of the Notes to
the Initial Purchasers or the initial offer, resale and delivery of the Notes by
the Initial Purchasers, in each case in the manner contemplated by this
Agreement and the Offering Memorandum, to register the Notes under the
Securities Act or to qualify the Indenture under the 1939 Act, it being
understood that no opinion is expressed as to any subsequent resale of any such
Note.
(ix) The Notes, the Common Stock issuable upon the
conversion of the Notes, the
Registration Rights Agreement and the Indenture conform in all material respects
to the description thereof contained in the Offering Memorandum, and the form of
certificate used to evidence the Common Stock is in due and proper form under
Delaware law.
(x) To the best of such counsel's knowledge, and
except as disclosed in the Offering Memorandum, there is no action, suit or
proceeding at law or in equity or by or before any governmental instrumentality
or other agency now pending or threatened against or affecting the Company which
would require disclosure in the Offering Memorandum.
(xi) The statements in the Offering Memorandum under
the captions "Certain Federal
Income Tax Considerations," "Risk Factors-Subordination," "Risk Factors-Absence
of Public Market for the Notes; Restrictions on Transferability," and "Risk
Factors-Limitations on Repurchase of Notes Upon Change in Control" to the extent
that they constitute a summary of the legal matters, documents, or proceedings
referred to therein, fairly present the information called for with respect to
such legal matters, documents and proceedings. To the best of such counsel's
knowledge, there are no statutes or regulations that are required to be
described in the Offering Memorandum that are not described as required.
(xii) To the best of such counsel's knowledge, there
are no material franchises,
contracts, indentures, mortgages, loan or credit agreements, notes, leases or
other instruments required to be described or referred to in the Offering
Memorandum, other than those described or referred to therein.
(xiii) To the best of such counsel's knowledge, no
authorization, consent, approval
of or qualification with, any governmental authority is required for the
performance by the Company of its obligations under this Agreement, the Notes,
the Indenture or the Registration Rights Agreement, except such as may be
required under state or other blue sky laws in connection with the purchase and
distribution of the Notes (on which such counsel need not express an opinion) by
the Initial Purchasers.
(xiv) The Notes are in the form contemplated by the
Indenture, have been duly
authorized by the Company and, assuming that the Notes have been duly executed
and authenticated by the Trustee in the manner described in its certificate
delivered to you today (which fact such counsel need not determine by an
inspection of the Notes), the Notes will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principals of equity (regardless of whether enforcement is considered in
a proceeding in equity or at laws), and will be entitled to the benefits of the
Indenture.
(xv) Assuming the due authorization, execution
and delivery thereof by the Initial Purchasers, this Agreement is a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (a) as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganizations, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at laws) and (b) rights to indemnity and
contribution thereunder may be limited by federal or state securities laws or
the policies underlying such laws.
(xvi) Assuming the due authorization, execution and
delivery thereof by the Initial
Purchasers, the Registration Rights Agreement is a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except (a) as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganizations, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at laws) and (b) rights to indemnity and contribution
thereunder may be limited by federal or state securities laws or the policies
underlying such laws.
(xvii) Assuming the due authorization, execution and
delivery thereof by the Trustee,
the Indenture is a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except to the
extent that the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganizations, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at laws) and (b) rights to indemnity and contribution
thereunder may be limited by federal or state securities laws or the policies
underlying such laws.
(xviii) The Company is not and will not become, as a
result of the consummation of the
transactions contemplated by this Agreement, and application of the net proceeds
therefrom as described in the Offering Memorandum, an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
1940 Act.
In rendering such opinion, such counsel may rely (i) as to matters of
law other than Georgia law, the Delaware General Corporation Law and federal
law, upon the opinion or opinions of local counsel to the extent specified in
such opinion and (ii) as to matters of fact, to the extent they reasonably deem
proper, on certificates of public officials and of officers of the Company and
its Subsidiaries as specified in such opinion.
(c) On or prior to the Closing Date, and the Option Closing
Date, if any, the Initial Purchasers shall have received from Morris, Manning &
Martin L.L.P., counsel for the Initial Purchasers, such opinion or opinions with
respect to the validity of the Notes, the Underlying Stock, the Offering
Memorandum and other related matters as the Initial Purchasers may request, and
Morris, Manning & Martin L.L.P. shall have received such papers and information
as they request to enable it to pass upon such matters.
(d) Rogers & Hardin LLP shall state in the opinion letter
contemplated by Section 6(b) that such counsel has participated in conferences
with officers and other representatives of each of the Company and its
Subsidiaries and representatives of the independent public accountants for the
Company and its Subsidiaries and the Initial Purchasers, at which conferences
the contents of the Offering Memorandum and related matters were discussed, and,
although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum and have made no independent check or
verification thereof, on the basis of the foregoing, no facts have come to the
attention of such counsel which has lead them to believe that the Offering
Memorandum, as of its date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, in light of the circumstances in
which they were made, except that such counsel need express no opinion or belief
with respect to the financial statements and related notes, the pro forma
financial information and other financial, statistical or accounting data
included the Offering Memorandum or excluded therefrom.
(e) At the Closing Date and each Option Closing Date, if any,
the Initial Purchasers shall have received a certificate of the Company signed
by the principal executive officer and by the chief financial or chief
accounting officer of the Company, in their capacities as such, dated the
Closing Date, to the effect that each of such persons has carefully examined the
Offering Memorandum, this Agreement and the Indenture, and that:
(i) the representations and warranties of the
Company in this Agreement, the Indenture and the Registration Rights Agreement
are true and correct, as if made on and as of the Closing Date or such Option
Closing Date, as the case may be, and the Company has complied with all
agreements and covenants and satisfied all conditions contained in this
Agreement, the Indenture and the Registration Rights Agreement on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the qualification
or exemption from qualification of the Notes shall have been issued, and no
proceedings for that purpose shall have been commenced or, to the knowledge of
the Company, be contemplated;
(iii) since the date of the most recent financial
statements included in the
Offering Memorandum, there has been no material adverse change in the condition,
financial or otherwise, results of operation or business of the Company and the
Subsidiaries, taken as a whole, except as set forth in the Offering Memorandum;
(iv) none of the Offering Memorandum or any such
amendment or supplement includes any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and
(v) subsequent to the respective dates as of
which information is given in the Offering Memorandum: (a) neither the Company
nor its Subsidiaries has incurred up to and including the Closing Date or the
Option Closing Date, as the case may be, other than in the ordinary course of
its business, any material liabilities or obligations, direct or contingent,
except as disclosed in the Offering Memorandum; (b) neither the Company nor its
Subsidiaries has paid or declared any dividends or other distributions on its
capital stock; (c) neither the Company nor its Subsidiaries has entered into any
material transactions not in the ordinary course of business, except as
disclosed in the Offering Memorandum; (d) there has not been any material change
in the capital stock; (e) neither the Company nor its Subsidiaries has sustained
any material loss or damage to its property or assets, whether or not insured;
and (f) there is no litigation which is pending or, to the best of the Company's
knowledge, threatened against the Company, its Subsidiaries or any affiliated
party of any of the foregoing which would have a Material Adverse Effect and
which is required to be set forth in an amended or supplemented Offering
Memorandum which has not been set forth.
(f) On or before the date hereof the Initial Purchasers shall
have received a letter, dated such date, addressed to the Initial Purchasers and
the Company in form and substance reasonably satisfactory in all respects to the
Initial Purchasers and Morris, Manning & Martin L.L.P., from Price Waterhouse
LLP containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Offering
Memorandum, including the following:
(i) confirming that they are independent certified
public accountants with respect to the Company within the meaning of the
Securities Act and the Exchange Act and the applicable Rules and Regulations;
(ii) stating that it is their opinion that the
consolidated financial statements of
the Company and the Subsidiaries included in the Offering Memorandum or
incorporated by reference therein comply as to form in all material respects
with the applicable accounting requirements of the Securities Act; and
(iii) stating that they have compared specific dollar
amounts, numbers of shares,
percentages of revenues and earnings, statements and/or other financial
information pertaining to the Company and the Subsidiaries set forth in the
Offering Memorandum, in each case to the extent that such amounts, numbers,
percentages, statements and information may be derived from the general
accounting records, including work sheets, of the Company and/or the
Subsidiaries and excluding any questions requiring an interpretation by legal
counsel, with the results obtained from the application of specified readings,
inquiries and other appropriate procedures (which procedures need not constitute
an examination in accordance with generally accepted auditing standards) set
forth in the letter and found them to be in agreement.
(g) At the Closing Date and each Option Closing Date, if any,
the Initial Purchasers shall have received from Price Waterhouse LLP a letter,
dated as of the Closing Date or such Option Closing Date, as the case may be, to
the effect that they reaffirm that statements made in the letter furnished
pursuant to subsection (f) of this Section 6, except that the specified date
referred to shall be a date not more than five (5) days prior to the Closing
Date or such Option Closing Date, as the case may be, to the further effect that
they have carried out procedures as specified in clause (iii) of subsection (f)
of this Section 6 with respect to certain amounts, percentages and financial
information as specified by the Initial Purchasers and deemed to be a part of
the Offering Memorandum and have found such amounts, percentages and financial
information to be in agreement with the records specified in such clause (iii).
(h) At the Closing Date and each Option Closing Date, if any,
Morris, Manning & Martin L.L.P. shall have been furnished with such documents
and opinions as they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Notes as herein contemplated and related
proceedings, 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 and with respect to the shares of Common Stock issuable upon
conversion of the Notes as herein contemplated shall be reasonably satisfactory
in form and substance to the Initial Purchasers and Morris, Manning & Martin
L.L.P.
(i) The Notes shall have been approved by the National
Association of Securities Dealers, Inc. for trading in the PORTAL market.
(j) Trading in the Common Stock shall not have been suspended
by the Nasdaq Stock Market (National Market) at any time on or after the date of
this Agreement.
(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq Stock Market (National Market) or the over-the-counter market shall have
been suspended or limited, or minimum prices shall have been established on
either of such exchanges or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having jurisdiction, or
trading in securities of the Company on any exchange or in the over-the- counter
market shall have been suspended; or (ii) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities; or
(iii) an outbreak or escalation of hostilities or a declaration by the United
States of a national emergency or war or such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of the Initial Purchasers, impracticable or
inadvisable to proceed with the offering or the delivery of the Notes on the
terms and in the manner contemplated in the Offering Memorandum.
(l) The Company and the Initial Purchasers shall have executed
and delivered the Registration Rights Agreement on the Closing Date.
(m) The Indenture shall have been duly executed and delivered
by the Company and the Trustee, and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(n) If any event shall have occurred that requires the Company
under Section 4(b) hereof to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the Initial
Purchasers shall have been given a reasonable opportunity to comment thereon,
and copies thereof delivered to the Initial Purchasers.
(o) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Securities Act or the Exchange
Act by the Commission or any amendment or proposed amendment thereof by the
Commission which in the judgment of the Initial Purchasers would materially
impair the ability of the Initial Purchasers to purchase, hold or effect resales
of the Notes as contemplated hereby.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to the Initial Purchasers.
If any condition to the Initial Purchasers' obligations hereunder to be
fulfilled prior to or at the Closing Date or the relevant Option Closing Date,
as the case may be, is not so fulfilled, the Initial Purchasers may terminate
this Agreement upon notice to the Company, and such termination shall be without
liability of any party to any other party or if the Initial Purchasers so elect,
they may waive any such conditions which have not been fulfilled or extend the
time for their fulfillment.
Section 7. Subsequent Offers and Resales of the Notes.
(a) Each of the Initial Purchasers and the Company hereby
establishes and agrees to observe the following procedures in connection with
the offer and sale by the Initial Purchasers of the Notes.
(i) Offers have been and will be, and sales of
the Notes will be, made by the Initial Purchasers only to (i) persons that it
reasonably believes to be "Qualified Institutional Buyers" or "QIBs" in
transactions that meet the requirements for an exemption from the registration
requirements of the Securities Act under Rule 144A, (ii) persons who are
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that execute and deliver a letter containing certain
representations and agreements in the form attached as Annex A of the Offering
Memorandum, and (iii) persons who are not U.S. Persons within the meaning of
Regulation S under the Securities Act.
(ii) The Notes have been and will be offered by the
Initial Purchasers only by
approaching prospective Subsequent Purchasers on an individual basis. No general
solicitation or general advertising within the meaning of Rule 502(c) under the
Securities Act will be used in connection with the offering of the Notes. Each
of the Initial Purchasers agrees with respect to resales made in reliance upon
Rule 144A, other than through the PORTAL Market of any of the Notes purchased
from the Company hereunder, to deliver either with the confirmation of such
resale or otherwise prior to settlement of such resale a notice to the effect
that the resale of such Notes has been made in reliance upon the exemption from
the registration requirements of the Securities Act provided by Rule 144A.
(iii) In connection with the original distribution of
the Notes, the Company agrees
that, prior to any offer or resale of the Notes by the Initial Purchasers, the
Initial Purchasers and their counsel shall have the right to make reasonable
inquiries into the business of the Company and its Subsidiaries. The Company
agrees to provide answers to each prospective Subsequent Purchaser of Notes who
so requests information concerning the Company and its Subsidiaries (to the
extent such information is available or can be acquired and made available to
prospective Subsequent Purchasers without unreasonable effort or expense and to
the extent the provision thereof is not prohibited by applicable law) and the
terms and conditions of the offering of the Notes, as provided in the Offering
Memorandum.
(b) With respect to offers and sales outside the United States
in reliance on Regulation S, each Initial Purchaser understands that the
Securities have not been and will not be registered under the Securities Act and
have not and 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 Regulation S
under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. Each Initial Purchaser represents and agrees
that, except as permitted by this Section 7(b) as set forth below, it has
offered and sold Notes and will offer and sell Notes (i) as part of their
distribution at any time and (ii) otherwise until forty days after the later of
the date upon which the offering of the Notes commences and the Closing Time,
only in accordance with Rule 903 of Regulation S or Rule 144A under the
Securities Act. Accordingly, neither the Initial Purchasers, their affiliates
nor any persons acting on their behalf have engaged or will engage in any
directed selling efforts with respect to the Notes, and the Initial Purchasers,
their affiliates and any person acting on their behalf have complied and will
comply with the offering restriction requirements of Regulation S. Each Initial
Purchaser agrees that, at or prior to confirmation of a sale of Notes (other
than a sale of Notes pursuant to Rule 144A), it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from it or through it during the restricted
period a confirmation or notice to substantially the following effect:
"The securities covered hereby have not been registered under
the United States Securities Act of 1933 (the "Securities
Act") and may not be offered or sold within the United States
or to or for the account or benefit of U.S. persons (i) as
part of their distribution at any time and (ii) otherwise
until forty days after the later of the date upon which the
offering of the securities commenced and the date of closing,
except in either case in accordance with Regulation S or Rule
144A under the Securities Act. Terms used above have the
meaning given to them by Regulation S."
Terms used in the above paragraph have the meanings given to them by Regulation
S.
Section 8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Initial Purchaser (for purposes of this Section 8, "Initial Purchasers" shall
include the officers, directors, partners, employees and agents, and each
person, if any, who controls the Initial Purchaser ("controlling person") within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, from and against any and all losses, claims, damages, expenses or
liabilities, joint or several (and actions, proceedings, suits and litigation in
respect thereof), whatsoever, as the same are incurred, to which the Initial
Purchaser or any such controlling person may become subject, under the
Securities Act, the Exchange Act or any other statute or at common law or
otherwise insofar as such losses, claims, damages, expenses or liabilities arise
out of or are based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in the Offering Memorandum (as from time to time
amended and supplemented) or (ii) the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances under which they were made,
not misleading; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, expense or liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in the Offering Memorandum or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or through the Initial Purchasers
specifically for use in the preparation thereof; and provided, further, that the
foregoing indemnity with respect to the Preliminary Offering Memorandum, the
Offering Memorandum or any amendment or supplement thereto shall not inure to
the benefit of any Initial Purchaser (or any controlling person thereof) from
whom the person asserting any such loss, claim, damage or liability purchased
Notes which are the subject thereof to the extent that any such loss, claim,
damage or liability (i) results from the fact that such Initial Purchaser failed
to send or give a copy of the Offering Memorandum (as amended or supplemented)
to such person at or prior to the confirmation of the sale of such Notes to such
person and (ii) arises out of or is based upon an untrue statement or omission
of a material fact contained in the Offering Memorandum that was corrected in
any amendment or supplement thereto. The parties acknowledge and agree that the
Initial Purchaser's Information consists solely of the last paragraph at the
bottom of the front cover page concerning the terms of the offering by the
Initial Purchasers and the text under the caption "Plan of Distribution" in the
Offering Memorandum. The indemnity agreement shall be in addition to any
liability which the Initial Purchasers may have at common law or otherwise.
(b) Each Initial Purchaser severally and not jointly will
indemnify and hold harmless the Company, each of its directors, each of its
executive officers, each person, if any, who controls the Company within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer, or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Preliminary Offering
Memorandum, the Offering Memorandum or any amendment or supplement thereto, or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by the Company,
or any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Initial Purchaser will be liable in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission has been made in the
Preliminary Offering Memorandum, the Offering Memorandum or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Initial Purchasers specifically for
use in the preparation thereof; and provided, further, that the immediately
preceding proviso shall not be applicable if the person asserting any such loss,
claim, damage or liability purchased Notes from such Initial Purchaser and a
copy of the Offering Memorandum (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Initial Purchaser to such person, at or prior to
the written confirmation of the sale of the Notes to such person, and if the
Offering Memorandum (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability. The parties acknowledge
and agree that the Initial Purchaser's Information consists solely of the last
paragraph at the bottom of the front cover page concerning the terms of the
offering by the Initial Purchasers and the text under the caption "Plan of
Distribution" in the Offering Memorandum. This indemnity agreement will be in
addition to any liability which such Initial Purchaser may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 8(a) and by the Company in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
Initial Purchasers on the other from the offering of the Notes. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Initial Purchasers on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total commissions
received by the Initial Purchasers, in each case as set forth in the Plan of
Distribution section of the Offering Memorandum. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Initial Purchasers on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 8(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 8(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Initial Purchaser shall be required to
contribute any amount in excess of the commissions applicable to the Notes
purchased by such Initial Purchaser, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations in this
Section 8(d) to contribute are several in proportion to their respective
obligations as Initial Purchasers and not joint.
(e) In any proceeding relating to the Preliminary Offering
Memorandum, the Offering Memorandum or any supplement or amendment thereto, each
party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court already having jurisdiction over the
Company.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser, the Company, its directors or executive
officers or any persons controlling the Company, (ii) acceptance of any Notes
and payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Initial Purchaser, to the Company, its directors or executive
officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 8.
Section 9. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto
shall be deemed to be representations, warranties and agreements at the Closing
Date and each Option Closing Date, as the case may be, and the agreements of the
Company and the provisions with respect to the payment of expenses contained in
Sections 5 and 10 and the respective indemnity agreements contained in Section 8
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchasers, the Company, its
Subsidiaries or any controlling person, and shall survive termination of this
Agreement or the issuance and delivery of the Notes to the Initial Purchasers.
Section 10. Termination.
(a) Subject to subsection (b) of this Section 10, the Initial
Purchasers shall have the right to terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Date (i) if any domestic or
international event or act or occurrence has disrupted, or in the Initial
Purchasers' opinion will in the immediate future disrupt the financial markets;
(ii) if the United States shall have become involved in a war or major
hostilities, or there shall have been an escalation in an existing war or major
hostilities, or a national emergency shall have been declared in the United
States; (iii) if the Company or its Subsidiaries shall have sustained a loss
material or substantial to the Company or its Subsidiaries by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity or malicious
act which, whether or not such loss shall have been insured, will, in the
Initial Purchasers' opinion, make it inadvisable to proceed with the delivery of
the Notes; or (iv) if there shall have been such a material adverse change in
the general market, political or economic conditions in the United States or
elsewhere, as in the Initial Purchasers' judgment, would make it inadvisable to
proceed with the offering, sale and/or delivery of the Notes.
(b) If this Agreement is terminated by the Initial Purchasers
in accordance with the provisions of Section 10(a), such termination shall be
without liability of any party to any other party provided that Sections 1 and 8
hereof shall survive such termination and remain in full force and effect.
Section 11. Default by the Company. If the Company shall fail at the
Closing Date or any Option Closing Date, as applicable, to sell and deliver the
number of Notes which it is obligated to sell hereunder on such date, then this
Agreement shall terminate (or, if such default shall occur with respect to any
Option Notes to be purchased on an Option Closing Date, the Initial Purchasers
may, at their option, by notice from the Initial Purchasers to the Company,
terminate the Initial Purchasers' obligation to purchase Option Notes from the
Company on such date) without any liability on the part of any non-defaulting
party other than pursuant to Section 5, Section 8 and Section 10 hereof. No
action taken pursuant to this Section 11 shall relieve the Company from
liability, if any, in respect of such default.
Section 12. Default by Initial Purchasers. If one of the Initial
Purchasers shall fail at the Closing Date to purchase the Notes which it is
obligated to purchase under this Agreement (the "Defaulted Securities"), the
non-defaulting Initial Purchaser shall have the right, but not the obligation,
within 24 hours thereafter, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the non-defaulting Initial Purchaser 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.
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 the non-defaulting Initial Purchaser or the Company
shall have the right to postpone the Closing Date for a period not exceeding
seven (7) days in order to effect any required changes in the Offering
Memorandum or in any other documents or arrangements. As used herein, the term
"Initial Purchaser" includes any person substituted for an Initial Purchaser
under this Section 12.
Section 13. Notices. All notices and communications hereunder,
except as herein otherwise specifically provided, shall be given in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchasers shall be directed
to them c/o BT Alex. Brown Incorporated, 1 South Street, Baltimore, Maryland
21202, Attention: General Counsel, with a copy to Morris, Manning & Martin,
L.L.P., Attention: Grant W. Collingsworth. Notices to the Company shall be
directed to the Company at 945 East Paces Ferry Road, Suite 2240, Atlanta,
Georgia 30326, Attention: Mr. Steven A. Odom, Chairman and Chief Executive
Officer, with a copy to Rogers & Hardin LLP, Attention: Steven E. Fox, Esq.
Section 14. Parties. This Agreement shall inure to the benefit of and
shall be binding upon the Initial Purchasers and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors, heirs and legal
representatives, and the controlling persons and officers and directors referred
to in Sections 8 and 9 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof is intended to be for the sole and exclusive benefit of the Initial
Purchasers and the Company and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Notes from the Initial Purchasers shall be deemed to be a successor by reason
merely of such purchase.
Section 15. Governing Law and Time. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF MARYLAND. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS OTHERWISE
SPECIFIED.
Section 16. Entire Agreement; Amendments. This Agreement constitutes
the entire agreement of the parties hereto and supersedes all prior written or
oral agreements, understandings and negotiations with respect to the subject
matter hereof. This Agreement may not be amended except in a writing signed by
the Initial Purchasers and the Company.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
WORLD ACCESS, INC.
By: /s/ Steven A. Odom
-----------------------
Name: Steven A. Odom
Title: Chairman and Chief
Executive Officer
Confirmed and accepted as of the date first above written.
BT ALEX. BROWN INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
By: BT ALEX. BROWN INCORPORATED
By: /s/ Alexander Daignault
Authorized Signatory
<PAGE>
SCHEDULE A
Initial Purchasers Purchase Price Principal Amount
BT Alex. Brown Incorporated $48,500,000.00 $ 50,000,000.00
Prudential Securities Incorporated $48,500,000.00 $ 50,000,000.00
-------------- ---------------
Total $97,000,000.00 $100,000,000.00
============== ===============
<PAGE>
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of October 1, 1997, by and among World Access, Inc., a Delaware
corporation (the "Company"), BT Alex. Brown Incorporated and Prudential
Securities Incorporated (collectively, the "Initial Purchasers") pursuant to the
Purchase Agreement dated as of September 26, 1997 (the "Purchase Agreement"),
between the Company and the Initial Purchasers. In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement. The execution of
this Agreement is a condition to the closing under the Purchase Agreement.
The Company agrees with the Initial Purchasers, (i) for their benefit
as Initial Purchasers and (ii) for the benefit of the holders from time to time
of the Notes (including the Initial Purchasers) and the holders from time to
time of the Common Stock issued upon conversion of the Notes (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:
Affiliate: With respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person or (ii) any officer or
director of such other Person. For purposes of this definition, the term
"control" of a Person means the possession, direct or indirect, of the power
(whether or not exercised) to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract, or otherwise, and the terms "controlling," "controlled by," and
"under direct or indirect common control with" have meanings correlative
thereto.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in the City of New York
are authorized or obligated by law or executive order to close.
Common Stock: The shares of common stock, $.01 par value, of
the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, in each case, as issuable or issued upon
conversion of the Notes.
Damages Accrual Period: See Section 2(d) hereof.
Damages Payment Date: Each of the semi-annual interest
payment dates provided in the Indenture, whether or not Liquidated Damages
are payable on such date.
Effectiveness Period: The period commencing with the date
hereof and ending on the earlier of the date that is two years after the latest
date of original issuance of the Notes and the date that all Registrable
Securities have ceased to be Registrable Securities.
Effectiveness Target Date: See Section 2(a) hereof.
Event: See Section 2(d) hereof.
Event Date: See Section 2(d) hereof.
Exchange Act: The Securities Exchange Act of 1934,as amended,
and the rules and regulations of the SEC promulgated thereunder.
Filing Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indemnified Party: See Section 5(c) hereof.
Indemnifying Party: See Section 5(c) hereof.
Indenture: The Indenture, dated as of October 1, 1997, between
the Company and First Union National Bank, as trustee, pursuant to which the
Notes are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: See the first paragraph of this Agreement.
Initial Shelf Registration: See Section 2(a) hereof.
Liquidated Damages: See Section 2(d) hereof.
Losses: See Section 5(a) hereof.
Majority of Registrable Securities: A majority of the then
outstanding aggregate principal amount of Registrable Securities. For purposes
of this calculation, Registrable Securities which have been converted into
shares of Common Stock shall be deemed to bear the principal amount at which
such Registrable Securities were converted.
Managing Underwriters: The investment banking firm or firms
that shall manage or co-manage an Underwritten Offering.
Notes: The 4.5% Convertible Subordinated Notes due 2002 of
the Company being issued and sold pursuant to the Purchase Agreement and the
Indenture.
Person: Any natural person, corporation, partnership, limited
liability partnership, limited liability company, trust or other legal entity.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the first paragraph of this Agreement.
Record Holder: (i) with respect to any Damages Payment Date
relating to the Notes, each Person who is a registered holder of such Notes on
the record date with respect to the interest payment date under the Indenture on
which such Damages Payment Date shall occur and (ii) with respect to any Damages
Payment Date relating to the Common Stock, each Person who is a registered
holder of such Common Stock 15 days prior to such Damages Payment Date.
Registrable Securities: Each Note and each share of Common
Stock into which the Notes are convertible or converted upon original issuance
thereof, and at all times subsequent thereto, and any Common Stock issued with
respect thereto upon any stock dividend, split or similar event, until, in the
case of any such Note or share of Common Stock, (i) it is effectively registered
under the Securities Act and disposed of in accordance with the Registration
Statement covering it, (ii) it is salable by the holder thereof pursuant to Rule
144(k) or (iii) it is sold to the public pursuant to Rule 144, and, as a result
of an event or circumstance described in any of the foregoing clauses (i)
through (iii), the legends with respect to transfer restrictions required under
the Indenture (other than any such legends required solely as the consequences
of the fact that the Registrable Securities are owned by, or were previously
owned by, the Company or an Affiliate of the Company) are removed or removable
in accordance with the terms of the Indenture.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Selling Expenses: All underwriting discounts, selling
commissions and stock transfer taxes applicable to the Registrable Securities.
Selling Holder: A Holder offering to sell Registrable
Securities.
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Morris, Manning & Martin, L.L.P., or such
other successor counsel as shall be specified by the Holders of a Majority of
Registrable Securities, the fees and expenses of which will be paid by the
Company pursuant to Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
Suspension Period: See Section 2(c).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Trustee under the Indenture.
Underwritten Registration or Underwritten Offering: A
registration in which the Registrable Securities are sold by Holders thereof to
an underwriter for reoffering to the public.
2. Shelf Registration.
(a) The Company shall prepare and file with the SEC, as soon
as practicable but in any event on or prior to the date 90 days following the
latest date of original issuance of the Notes (the "Filing Date"), a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 of the Securities Act (a "Shelf Registration") registering the
resale from time to time by the Holders thereof of all of the Registrable
Securities (the "Initial Shelf Registration"). The Initial Shelf Registration
shall be on an appropriate SEC Registration Statement form permitting
registration of such Registrable Securities for resale by such Holders in the
manner or manners designated by them (including, without limitation, one or more
Underwritten Offerings). The Company shall use its best efforts to cause the
Initial Shelf Registration to be declared effective under the Securities Act as
soon as practicable but in any event on or prior to the date 120 days following
the Filing Date (the "Effectiveness Target Date"), and shall use its reasonable
efforts to keep the Initial Shelf Registration continuously effective under the
Securities Act, subject to the provisions of Section 2(c), until the earlier of
the expiration of the Effectiveness Period or the date a Subsequent Shelf
Registration (as defined below) covering all of the Registrable Securities has
been declared effective under the Securities Act. Subject to the right of the
Company to have the Initial Shelf Registration not be effective, or not to be
updated, amended or supplemented, for periods of time set forth in Section 2(c),
the Company further agrees to use its best efforts to prevent the happening of
any event that would cause the Initial Shelf Registration to contain a material
misstatement or omission or to be not effective and usable for resale of the
Registrable Securities during the Effective Period.
(b) If the Initial Shelf Registration or any subsequent Shelf
Registration ceases to be effective for any reason as a result of the issuance
of a stop order by the SEC at any time during the Effectiveness Period, the
Company shall use its best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 30 days of
such cessation of effectiveness amend the Shelf Registration in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration covering all of
the Registrable Securities (a "Subsequent Shelf Registration"). If a Subsequent
Shelf Registration is filed, the Company shall use its best efforts to cause the
Subsequent Shelf Registration to be declared effective as soon as practicable
after such filing and to keep such Registration Statement continuously effective
until the end of the Effectiveness Period.
(c) In the event (A) of the happening of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) hereof
or (B) that, in the good faith-judgment of the Company, it is advisable to
suspend the use of the Prospectus for a discrete period of time due to pending
material corporate developments or similar material events that have not yet
been publicly disclosed and as to which the Company believes public disclosure
will be prejudicial to the Company, the Company shall deliver a certificate in
writing, signed by an authorized executive officer of the Company, to the
Special Counsel, the Initial Purchasers and the Managing Underwriters, if any,
to the effect of the foregoing and thereafter the use of the Prospectus shall be
suspended, and the Company, subject to the terms of this Section 2(c), shall
thereafter not be required to maintain the effectiveness or update the Shelf
Registration. The Company will use its best efforts to ensure that the use of
the Prospectus may be resumed as soon as practicable, in the case of suspension
under Section 2(c)(A), and, in the case of a pending development or event
referred to in Section 2(c)(B) hereof, as soon as, in the good faith-judgment of
the Company, public disclosure of such material corporate development or similar
material event would not have a material adverse effect on the Company.
Notwithstanding the foregoing, the Company shall not under any circumstances be
entitled to exercise its right under this Section 2(c) to suspend the use of the
Prospectus (whether as a result of events referred to in Section 2(c)(A) hereof
or as a result of the pending development or event referred to in Section
2(c)(B) hereof) more than one (1) time in any three (3) month period, and the
periods in which the use of the Prospectus is suspended shall not exceed 15 days
in any three-month period (a "Suspension Period").
(d) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
has not been filed on or prior to the Filing Date, (ii) the Initial Shelf
Registration has not been declared effective by the Effectiveness Target Date,
(iii) prior to the end of the Effectiveness Period, the SEC shall have issued a
stop order suspending the effectiveness of the Shelf Registration or proceedings
have been initiated with respect to the Shelf Registration under Section 8(d) or
8(e) of the Securities Act, (iv) the aggregate number of days in any one
Suspension Period exceeds the period permitted pursuant to Section 2(c) hereof
or (v) the number of Suspension Periods exceeds the number permitted pursuant to
Section 2(c) hereof (each of the events of a type described in any of the
foregoing clauses (i) through (v) are individually referred to herein as an
"Event," and the Filing Date in the case of clause (i), the Effectiveness Target
Date in the case of clause (ii), the date on which the effectiveness of the
Shelf Registration has been suspended or proceedings with respect to the Shelf
Registration under Section 8(d) or 8(e) of the Securities Act have been
commenced in the case of clause (iii), the date on which the duration of a
Suspension Period exceeds the period permitted by Section 2(c) hereof in the
case of clause (iv), and the date of the commencement of a Suspension Period
that causes the limit on the number of Suspension Periods under Section 2(c)
hereof to be exceeded in the case of clause (v), being referred to herein as an
"Event Date").
Notwithstanding the foregoing, the parties hereto agree that an Event
shall be deemed not to have occurred to the extent that the direct, proximate
cause of said Event was the act or failure to act of one or more Holders, the
Initial Purchasers or the Managing Underwriters. An Event shall be deemed to
continue until the date of the termination of such Event, which shall be the
following dates with respect to the respective types of Events: the date the
Initial Registration Statement is filed in the case of an Event of the type
described in clause (i), the date the Initial Shelf Registration is declared
effective in the case of an Event of the described in clause (ii), the date that
all stop orders suspending effectiveness of the Shelf Registration have been
removed and the proceedings initiated with respect to the Shelf Registration
under Section 8(d) or 8(e) of the Securities Act have terminated, as the case
may be, in the case of Events of the types described in clause (iii),
termination of the Suspension Period which caused the aggregate number of days
in any one Suspension Period to exceed the number permitted by Section 2(c) to
be exceeded in the case of Events of the types described in clause (iv), and
termination of the Suspension Periods, the commencement of which caused the
number of Suspension Periods permitted by Section 2(d) to be exceeded in the
case of Events of the types described in clause (v).
Accordingly, upon the occurrence of any Event and until such time as
there are no Events which have occurred and are continuing (a "'Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): (i) to each holder of Notes
that are Registrable Securities, accruing at a rate equal to one-half of one
percent per annum (50 basis points) on the aggregate principal amount of Notes
that are Registrable Securities held by such Holder and (ii) to each holder of
shares of Common Stock that are Registrable Securities, accruing at a rate equal
to one-half of one percent per annum (50 basis points) calculated on an amount
equal to the product of (x) the then-applicable Conversion Price (as defined in
the Indenture), times (y) the number of shares of Common Stock that are
Registrable Securities held by such holder. Notwithstanding the foregoing, no
Liquidated Damages shall accrue as to any Registrable Securities from and after
the earlier of (x) the date such securities are no longer Registrable
Securities, and (y) the expiration of the Effectiveness Period. The rate of
accrual of the Liquidated Damages with respect to any period shall not exceed
the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events.
The Company shall pay the Liquidated Damages due on any Notes or Common
Stock by depositing with the Trustee under the Indenture, in trust, for the
benefit of the holders of Notes or Common Stock, as the case may be, entitled
thereto, at least one Business Day prior to the applicable Damages Payment Date,
sums sufficient to pay the Liquidated Damages accrued or accruing since the last
preceding Damages Payment Date through such Damages Payment Date. The Liquidated
Damages shall be paid by the Company to the Record Holders on each Damages
Payment Date by wire transfer of immediately available funds to the account
specified by them, or if no such accounts have been specified on or before the
Damage Payment Date by mailing checks to their registered addresses as they
appear in the Note register (as defined in the Indenture), in the case of the
Notes, and in the register of the Company for the Common Stock, in the case of
the Common Stock; provided, however, that any Liquidated Damages accrued with
respect to any Note or portion thereof called for redemption on a redemption
date, or repurchased in connection with a Change in Control (as defined in the
Indenture) on a repurchase date, or converted into Common Stock on a conversion
date prior to the Damages Payment Date, shall, in any such event, be paid
instead to the holder who submitted such Note or portion thereof for redemption,
repurchase or conversion on the applicable redemption date, repurchase date or
conversion date, as the case may be, on such date (or promptly following the
conversion date, in the case of conversion of a Note). If a holder of a Note
submits a Note for conversion during the period between a record date for the
payment of Liquidated Damages and the related Damages Payment Date, Liquidated
Damages for the period from the conversion date through the next succeeding
Damages Payment Date shall accrue and be payable to the holder of Common Stock
received on conversion on the next succeeding Damages Payment Date,
notwithstanding that such holder was not a Record Holder with respect to such
Damages Payment Date. The Trustee shall be entitled, on behalf of the Holders of
Notes and Common Stock to seek any available remedy for the enforcement of this
Agreement, including for the payment of such Liquidated Damages. Nothing shall
preclude a Holder of Registrable Securities from pursuing or obtaining specific
performance or other equitable relief with respect to this Agreement.
All of the Company's obligations set forth in this Section 2(d) which
are outstanding with respect to any Registrable Securities at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section 7(o)).
The parties hereto agree that the Liquidated Damages provided for in
this Section 2(d) constitute a reasonable estimate of the damages that may be
incurred by holders of Registrable Securities (other than the Initial
Purchasers) by reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical matter) for
effecting resales of Registrable Securities, as the case may be, in accordance
with the provisions hereof.
1. Registration Procedures. In connection with the Company's
registration obligations under Section 2 hereof, the Company shall effect such
registrations to permit the sale of the Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Company shall as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders thereof in
accordance with the intended method or methods of distribution thereof and shall
include all required financial statements, and use its best efforts to cause
each such Registration Statement to become effective and remain effective as
provided herein; provided that before filing any such Registration Statement or
Prospectus or any amendments or supplements thereto the Company shall furnish
within a reasonable time period to each Selling Holder (if requested by such
Selling Holder), the Initial Purchasers, the Special Counsel and the Managing
Underwriters of such offering, if any, copies of all such documents proposed to
be filed, which documents will be subject to the review of each Selling Holder
(if requested by such Selling Holder), the Initial Purchasers, the Special
Counsel and such Managing Underwriters, and the Company shall not file any such
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto to which the Holders of a Majority of Registrable Securities covered by
such Registration Statement, the Initial Purchasers or the Special Counsel shall
reasonably object in writing within five Business Days after the receipt
thereof. In addition, the Company shall use its best efforts to reflect in each
such document referenced in this paragraph so filed with the SEC such comments
as the Initial Purchasers, Special Counsel and the Managing Underwriters, if
any, may propose.
(b) Subject to Section 2(c), prepare and file with the SEC
such amendments and post-effective amendments to each Registration Statement as
may be necessary to keep such Registration Statement continuously effective for
the applicable period specified in Section 2; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended methods or
disposition by the sellers thereof set forth in such Registration Statement as
so amended or such Prospectus as so supplemented. The Company shall ensure that
(i) any Shelf Registration and any amendment thereto and any Prospectus forming
a part thereof and any amendment or supplement thereto complies in all material
respects with the Act and the rules and regulations thereunder, (ii) any Shelf
Registration and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading and (iii)
any Prospectus forming part of any Shelf Registration, and any amendment or
supplement to such Prospectus, does not include an untrue statement or a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(c) Notify the Holders, the Initial Purchasers, the Special
Counsel and the Managing Underwriters, if any, promptly, and (if requested by
any such Person) confirm such notice in writing, (i) when a Prospectus, any
Prospectus supplement, a Registration Statement or a post-effective amendment to
a Registration Statement has been filed with the SEC, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC or any other federal or state
governmental authority for amendments or supplements to a Registration Statement
or related Prospectus or for additional information, (iii) of the issuance by
the SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation or
threatening of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceedings for such
purpose, (v) of the existence of any fact or happening of any event which makes
any statement of a material fact in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
Registration Statement or Prospectus in order that the Registration Statement
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that the Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (vi) of the
Company's determination that a post-effective amendment to a Registration
Statement would be appropriate.
(d) Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.
(e) If requested by the Initial Purchasers or the Managing
Underwriters, if any, or the Holders of a Majority of the Registrable Securities
being sold, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
Initial Purchaser, the Special Counsel, the Managing Underwriters, if any, or
such Holders and the Company mutually agree should be included therein, and (ii)
make all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters proposed to be incorporated in such Prospectus supplement or
post-effective amendment.
(f) Furnish to each Selling Holder (if requested by such
Selling Holder), the Special Counsel, the Initial Purchasers, and each Managing
Underwriter, if any, without charge, at least one conformed copy of the
Registration Statement or Statements and any amendment thereto, including
financial statements but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits.
(g) Deliver to each Selling Holder, the Special Counsel, the
Initial Purchasers and each Managing Underwriter, if any, in connection with any
offering of Registrable Securities, without charge, as many copies of the
Prospectus or Prospectuses relating to such Registrable Securities (including
each preliminary prospectus) and any amendment or supplement thereto as such
Persons may reasonably request; and the Company hereby consents to the use of
such Prospectus or each amendment or supplement thereto by each of the Selling
Holders of Registrable Securities and the Underwriters, if any, in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the Selling Holders, the Managing
Underwriters, if any, and the Special Counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Selling Holder or Managing Underwriter reasonably requests in writing, keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
applicable Registration Statement, provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it is
not then so qualified (ii) take any action that would subject it to general
service of process in suits or to taxation in any such jurisdiction where it is
not then so subject.
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies in addition to the SEC or authorities within the United
States as may be necessary to enable the Selling Holder or Holders thereof or
the Managing Underwriters, if any, to consummate the disposition of such
Registrable Securities.
(j) During the Effectiveness Period (subject to the provisions
of Section 2(c)), immediately upon the existence of any fact or the occurrence
of any event as a result of which (i) a Registration Statement shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or (ii) a
Prospectus shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, promptly prepare and file a post-effective amendment to
each Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
(such as a Current Report on Form 8K) that would be incorporated by reference
into the Registration Statement so that the Registration Statement shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, in light of the circumstances under which they were made, and so
that the Prospectus will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder; and in the case of a
post-effective amendment to a Registration Statement, use its best efforts to
cause it to become effective as soon as practicable.
(k) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including, in the event of an the Underwritten Offering,
those reasonably requested by the Managing Underwriters, if any, or the Holders
of a Majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into, and if the
registration is an Underwritten Registration, (i) make such representations and
warranties to the Holders of such Registrable Securities and the underwriters
with respect to the business of the Company and its subsidiaries, the
Registration Statement, Prospectus and documents incorporated by reference or
deemed incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings and confirm the same if and when requested; (ii) use its reasonable
efforts to obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any, Special Counsel and the
Holders of a Majority of Registrable Securities being sold) addressed to each of
the underwriters covering the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably requested
by such Special Counsel and Managing Underwriters; (iii) use its reasonable
efforts to obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary, any
other certified public accountants of any subsidiary of the Company or any
business acquired or to be acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each of the Managing Underwriters, if any,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with Underwritten
Offerings, and (iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registrable Securities being sold,
the Special Counsel and the Managing Underwriters, if any, to evidence the
continued validity of the representations and warranties of the Company and its
subsidiaries made pursuant to clause (i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company. The above shall be done at each closing
under such underwriting or similar agreement as and to the extent required
thereunder.
(1) Make available for inspection by a representative of the
Holders of Registrable Securities being sold, any Managing Underwriter
participating in any disposition of Registrable Securities, and any attorney or
accountant retained by such Selling Holders or underwriter, financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the executive officers, directors and employees of the
Company and its subsidiaries to supply all information reasonably requested by
any such representative, Managing Underwriter, attorney or accountant in
connection with such disposition; provided, however, that any information that
is reasonable and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such Persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to federal
securities laws in connection with the filing of any Registration Statement or
the use of any prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of disclosure
or failure to safeguard by any such Person or (iv) such information becomes
available to any such Person from a source other than the Company and such
source is not bound by a confidentiality agreement.
(m) Comply with all applicable rules and regulations of the
SEC in all material respects and make generally available to its securityholders
earnings statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in 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
commencing after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(n) Cooperate with the Selling Holders of Registrable
Securities, the Initial Purchasers, the Special Counsel and the Managing
Underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends, and enable such Registrable Securities to be in such
denominations and registered in such names as the Holders may request.
(o) Not later than the effectiveness date of any Registration
Statement hereunder, provide a CUSIP number for the Registrable Securities
registered under such Registration Statement, and provide the Trustee under the
Indenture and the transfer agent for the Common Stock with printed certificates
for the Registrable Securities which are in a form eligible for deposit with The
Depository Trust Company.
(p) Cause all shares of Common Stock covered by the
Registration Statement to be listed on each securities exchange or quotation
system on which the Company's Common Stock is then listed or quoted no later
than the date the Registration Statement is declared effective, and, in
connection therewith, to the extent applicable, to make such findings under the
Exchange Act (e.g., the filing of a Registration Statement on Form 8-A) and to
have such filings declared effective thereunder.
(q) Cooperate and assist in any filing required to be made
with the National Association of Securities Dealers, Inc.
(r) Cause the Indenture to be qualified under the TIA, and, in
connection therewith, cooperate with the Trustee and the Holders, the Initial
Purchasers, the Special Counsel and the Managing Underwriters, if any, to effect
such changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute all documents as may be required to
effect such changes and all other forms and documents required to be filed with
the SEC to enable such Indenture to be so qualified in a timely manner.
The Company may require each Holder of securities to be sold pursuant
to any Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of such securities as the Company may
from time to time reasonably require for inclusion in such Registration
Statement. Any Holder who fails to provide such information shall not be
entitled to use the Prospectus.
2. Registration Expenses. All fees and expenses (other than Selling
Expenses) incident to the Company's obligations under this Agreement shall be
borne by the Company whether or not any of the Registration Statements become
effective. Such fees and expenses shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
with respect to filings required to be made with the National Association of
Securities Dealers, Inc.), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with The Depository Trust Company and of printing
Prospectuses if the printing of Prospectuses is requested by the Special
Counsel, the Initial Purchasers, the Managing Underwriters or the holders of a
Majority of Registrable Securities included in any Registration Statement),
(iii) reasonable fees and disbursements of counsel for the Company and the
Special Counsel in connection with the Shelf Registration (provided that the
Company shall not be liable for the fees and expenses of more than one separate
firm for all parties (other than the Company) participating in any transaction
hereunder), and (iv) fees and disbursements of all independent certified public
accountants referred to in Section 3(k)(iii) hereof (including the expenses of
any special audit and "cold comfort" letters required by or incident to such
performance). In addition, the Company shall pay the fees and expenses incurred
in connection with the listing or quotation of the securities to be registered
on any securities exchange or quotations system on which similar securities
issued by the Company are then listed and the fees and expenses of any Person,
including special experts, retained by the Company.
3. Indemnification.
(a) Indemnification by the Company. The Company shall
indemnify and hold harmless each Holder, the directors, officers, employees and
agents of each such Holder and each Person, if any, who controls any such Holder
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) from and against all losses, liabilities, damages and expenses
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim)
(collectively, "Losses"), arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or in any amendment or supplement thereto, or arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances under which they were
made, except insofar as such Losses arise out of or are based upon the
information relating to any Holder furnished to the Company in writing by any
Holder expressly for use therein; provided, however, that the Company shall not
be liable in any such case to the extent that any such loss, damage, liability
or expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus if
(i) such holder failed to send or deliver a copy of the Prospectus with or prior
to the delivery of written confirmation of the sale of Registrable Securities
and (ii) the Prospectus would have corrected such untrue statement or omission;
and provided further, that the Company shall not be liable in any such case to
the extent that any such loss, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if such untrue statement or alleged untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and if, having previously been furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, such holder thereafter fails to deliver such Prospectus, as so
amended or supplemented, prior to or concurrently with the sale of a Registrable
Security to the person asserting such loss, damage, liability or expense who
purchased such Registrable Security which is the subject thereof from such
holder. The Company shall also indemnify each underwriter, their officers and
directors, and each Person who controls such Person (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent and with the same limitations as provided above with respect to the
indemnification of the Holders of Registrable Securities.
(b) Indemnification by Holder of Registrable Securities. Each
Holder, agrees severally and not jointly to indemnify and hold harmless the
Company, its directors, its officers who sign a Registration Statement and each
Person, if any, who controls the Company (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act), from and against
all losses arising out of or based upon any untrue statement of a material fact
contained in any Registration Statement, Prospectus or arising out of or based
upon any omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, in light of the circumstances
under which they were made, to the extent, but only to the extent, that such
untrue statement or omission is contained in any information relating to such
Holder so furnished in writing by such Holder to the Company expressly for use
in such Registration Statement or Prospectus. In no event shall the liability of
any Selling Holder of Registrable Securities hereunder be greater in amount than
the dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "Indemnified Party")
shall promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing, but failure so to notify an Indemnifying Party
shall not relieve such Indemnifying Party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof. The Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel satisfactory
to the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention to such counsel (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, or (iii) the Indemnifying Party shall not have
employed counsel satisfactory to the Indemnified Party to represent the
Indemnified Party within a reasonable time after notice of commencement of the
action. It is understood that the Indemnifying Party shall not, in respect of
the legal expenses of any Indemnified Party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties under Section 5(a) or 5(b) hereof who are parties to
such proceeding or proceedings, and that all such fees and expenses shall be
reimbursed as they are incurred. The Indemnifying Party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Party shall have requested
an Indemnifying Party to reimburse the Indemnified Party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
such Indemnifying Party agrees that it shall be liable for any settlements of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such Indemnifying Party of the
aforesaid request and (ii) such Indemnifying Party shall not have reimbursed the
Indemnified Party in accordance with such request prior to the date of such
settlement. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
proceeding.
(d) Contribution. If the indemnification provided for in this
Section 5 is unavailable to an Indemnified Party under Section 5(a) or 5(b)
hereof in respect of any Losses or is insufficient to hold such Indemnified
Party harmless, then each applicable Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
or Indemnifying Parties on the one hand and the Indemnified Party or Indemnified
Parties an the other hand or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Indemnifying Party or Indemnified Parties on the one
hand and of the Indemnified Party or Indemnifying Parties on the other hand in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the initial
placement of the Notes pursuant to the Purchase Agreement. Benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions received by them pursuant to the Purchase Agreement
and benefits received by any other Holders shall be deemed to be equal to the
value of receiving Notes registered under the Securities Act. Benefits received
by any underwriter shall be deemed to be equal to the total underwriting
discounts and commissions, as set forth on the cover page of the Prospectus
forming a part of the Registration Statement which resulted in such Losses. The
relative fault of the Holders on the one hand and the Company on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Holders or by
the Company and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this paragraph are several in
proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 5(d), an
Indemnifying Party that is a Selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such Indemnifying Party and
distributed to the public were offered to the public exceeds the amount of any
damages which such Indemnifying Party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The
indemnity, contribution and expense reimbursement obligations of the Company
hereunder shall be in addition to any liability the Company may otherwise have
hereunder, under the Purchase Agreement or otherwise.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any Person controlling any Holder, or the Company, its officers or
directors or any Person controlling the Company and (iii) the sale of any
Registrable Securities by any Holder.
4. Information Requirements.
(a) The Company shall file the reports required to be filed by
it under the Securities Act and the Exchange Act, and if at any time the Company
is not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act.
The Company further covenants that it will cooperate with any
Holder of Registrable Securities and take such further reasonable action as any
Holder of Registrable Securities may reasonably request (including, without
limitation, making such reasonable representations as any such Holder may
reasonably request), all to the extent required from time to enable such Holder
to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 and Rule 144A under
the Securities Act. Notwithstanding the foregoing, nothing in this Section 6
shall be deemed to require the Company to register any of its securities under
any section of the Exchange Act.
(b) The Company shall file the reports required to be filed by
it under the Exchange Act and shall comply with all other requirements set forth
in the instructions to the appropriate SEC Registration Statement form
permitting registration of the Registrable Securities for resale by the Holders
thereof in the manner or manners designated by them.
5. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason or a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(b) No Conflicting Agreements. The Company has not entered, as
of the date hereof and shall not, on or after the date of this Agreement, enter
into any agreement with respect to its securities which conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement. The
Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities under any other agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a Majority of Registrable Securities. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders; provided, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing and shall be deemed given (i)
when made, if made by hand delivery, (ii) upon confirmation, if made by
telecopier or (iii) one business day after being deposited with a reputable next
day courier, postage prepaid, to the parties as follows:
(x) if to a holder of Registrable Securities, at the
most current address given by such holder to the Company in accordance with the
provisions of Section 7(e):
<PAGE>
(y) if to the Company, to:
World Access , Inc.
Suite 2240
945 East Paces Ferry Road
Atlanta, Georgia 30326
Attention:
Telecopy No.: (404) 262-2598
with a copy to:
Rogers & Hardin LLP
2700 International Tower
229 Peachtree Street, NE
Atlanta, Georgia 30303
Attention: Steven E. Fox, Esq.
Telecopy No.: (404) 525-2224
and
(z) if to the Special Counsel to:
Morris, Manning & Martin, L.L.P.
3343 Peachtree Road, N.E.
Suite 1600
Atlanta, Georgia 30326
Attention: Grant W. Collingsworth, Esq.
Telecopy No.: (404) 365-9532
or to such other address as such Person may have furnished to the other Persons
identified in this Section 7(d) in writing in accordance herewith.
Copies of all notices, demands or other communications shall be
concurrently delivered by the Person given the same to the Trustee under the
Indenture at the address specified in the Indenture.
(e) Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a register
with respect to the Registrable Securities in which all transfers of Registrable
Securities of which the Company has received notice will be recorded. The
Company may deem and treat the Person in whose name Registrable Securities are
registered in such register of the Company as the owner thereof for all
purposes, including, without limitation, the giving of notices under this
Agreement.
(f) Approval of Holders. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (as such
term is defined in Rule 405 under the Securities Act) (other than the Initial
Purchasers or subsequent holders of Registrable Securities if such subsequent
holders are deemed to be such affiliates solely by reason of their holdings of
such Registrable Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(g) Successors and Assigns. Any Person who purchases any
Registrable Securities from an Initial Purchaser shall be deemed, for purposes
of this Agreement to be an assignee of such Initial Purchaser. The Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
holder of any Registrable Securities.
(h) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be original and all of which taken
together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF GEORGIA WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
(k) Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect, and shall
in no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, illegal, void or unenforceable.
(l) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. Except as
provided in the Purchase Agreement and the Indenture, there are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company with
respect to the securities sold pursuant to the Purchase Agreement and the
Indenture. This Agreement supersedes all prior agreements and understandings
among the parties with respect to such subject matter.
(m) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) Further Assurances. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate the make effective the transactions
contemplated hereby.
(o) Termination. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Sections 2(d), 4 or 5 hereof,
each of which shall remain in effect in accordance with their terms.
(P) Third Party Beneficiaries. The Company and the Initial
Purchasers agree that each Holder shall be a third party beneficiary of this
Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
WORLD ACCESS, INC.
By: /s/ Mark A. Gergel
----------------------------
Name: Mark A. Gergel
Title: Executive Vice President and
Chief Financial Officer
Accepted as of the date first above written:
BT ALEX. BROWN INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
By: BT Alex. Brown Incorporated
By: /s/ Alexander Daignault
Authorized Signatory
<PAGE>
Exhibit 99.1
SUMMARY: COMPANY ANNOUNCES THAT IT
WILL SELL $100 MILLION OF
CONVERTIBLE SUBORDINATED NOTES
CONTACT: Steven A. Odom Chairman & CEO
Hensley E. West President & COO
Mark A. Gergel Exec. VP & CFO
(404) 231-2025
FOR IMMEDIATE RELEASE
ATLANTA, GEORGIA -September 26, 1997 - WORLD ACCESS, INC. (NASDAQ: WAXS),
announced today that it will sell $100 million aggregate principal amount of
convertible subordinated notes under Rule 144A of the Securities Act of 1933
(plus up to an additional $15 million to cover over-allotments, if any). The
transaction is expected to close on October 1, 1997.
The net proceeds from the sale of the notes are expected to be used primarily
for potential acquisitions of businesses and technology licenses and other
strategic initiatives related to the growth and development of the Company's
telecommunications products business. The net proceeds will also be used for
general corporate purposes, including new product development, the expansion of
domestic and international sales and marketing efforts and working capital.
The notes bear interest at the rate of 4.5% per annum, are convertible into
common stock of the Company at an initial common price of $37.03125 per share
and will be due on October 1, 2002. The Company may not call the notes prior to
October 1, 2000. The notes will not be registered under the United States
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
The issuance of the notes will be structured to allow secondary market trading
under Rule 144A of the Securities Act of 1933.
World Access, Inc. develops, manufactures and markets wireline and wireless
switching, transport and access products primarily for the United States,
Caribbean Basin and Latin American telecommunications markets. The Company
offers digital switches, cellular base stations, fixed wireless local loop
systems, intelligent multiplexers, digital loop carriers, microwave and
millimeterwave radio equipment and other wireless communications products. To
support and complement its product sales, the Company also provides its
customers with a broad range of design, engineering, manufacturing, testing,
installation, repair and other value-added services. The Company is
headquartered in Atlanta, Georgia and conducts its principal operations from
facilities located strategically throughout the United States.
This press release does not constitute an offer to sell or the solicitation of
an offer to buy any security and shall not constitute an offer, solicitation or
sales of any securities in any jurisdiction in which such offering would be
unlawful.
