<PAGE>
As filed with the Securities and Exchange Commission on September 20, 1996
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
CORPORATE EXPRESS, INC.
(Exact name of registrant as specified in its charter)
Colorado 5112 84-0978360
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
---------------------------
325 Interlocken Parkway
Broomfield, Colorado 80021
(303) 373-2800
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Jirka Rysavy
Chief Executive Officer
Corporate Express, Inc.
325 Interlocken Parkway
Broomfield, Colorado 80021
(303) 373-2800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------------
Copies to:
Justin P. Klein, Esq. William L. Hudson, Esq.
Gerald J. Guarcini, Esq. Brobeck, Phleger & Harrison
Ballard Spahr Andrews & Ingersoll One Market
1735 Market Street, 51st Floor Spear Street Tower
Philadelphia, Pennsylvania 19103 San Francisco, California 94105
(215) 665-8500 (415) 442-0900
-----------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
-----------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
---------
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
-------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C>
Title of each class of Proposed maximum aggregate Amount of
securities to be registered Amount to be registered offering price(1) registration fee
- -----------------------------------------------------------------------------------------------------------------------------------
4 1/2% Convertible Notes due 2000 $325,000,000 $325,000,000 $112,068.97
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.0002 per share 6,500,000 shares (2) - -
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(i).
(2) Such number represents the number of shares of Common Stock initially
issuable upon conversion of the Notes registered hereby and, pursuant to
Rule 416 under the Securities Act of 1933, as amended, such indeterminate
number of shares of Common Stock as may be issued from time to time upon
conversion of the Notes by reason of adjustment of the conversion price
under certain circumstances outlined in the Prospectus.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+Information contained herein is subject to completion or amendment. A +
+registration statement relating to these securities has been filed with the +
+Securities and Exchange Commission. These securities may not be sold nor may +
+offers to buy be accepted prior to the time the registration statement +
+becomes effective. This prospectus shall not constitute an offer to sell or +
+the solicitation of an offer to buy nor shall there be any sale of these +
+securities in any State in which such offer, solicitation or sale would be +
+unlawful prior to registration or qualification under the securities laws of +
+any such State. +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS Subject to Completion, Dated September 20, 1996
, 1996
- -----------
$325,000,000 4 1/2% Convertible Notes due 2000
6,500,000 shares of Common Stock
LOGO
--------------------
This Prospectus relates to the offering by the selling securityholders
named herein (the "Selling Securityholders") of 4 1/2% Convertible Notes due
2000 of Corporate Express, Inc. (the "Company" or "Corporate Express") in the
aggregate principal amount of up to $325 million (the "Notes" or the "Offered
Notes"). In addition, this Prospectus relates to the offering by the Selling
Securityholders of 6,500,000 shares (subject to adjustment under certain
circumstances) of common stock, par value $.0002 per share (the "Common Stock"
and, together with the Offered Notes, the "Securities"), issued or issuable upon
conversion of the Offered Notes. This Prospectus does not cover the initial
issuance of shares of Common Stock upon conversion of the Offered Notes.
The Offered Notes were issued and sold in June 1996 in transactions exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), to persons reasonably believed by the managers who
placed the Offered Notes (the "Managers") to be "qualified institutional buyers"
(as defined in Rule 144A under the Securities Act) or institutional accredited
investors or to persons in offshore transactions in reliance upon Regulation S
under the Securities Act.
The Offered Notes are convertible into shares of Common Stock of the
Company prior to redemption or maturity, at a conversion price of $50.00 per
share, subject to adjustment under certain conditions. See "Description of the
Notes -Conversion." The Notes are listed on the Luxembourg Stock Exchange and,
prior to their resale pursuant to this Prospectus, the Offered Notes were
eligible for trading on the Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") Market. The Offered Notes resold pursuant to this
Prospectus will no longer be eligible for trading on the PORTAL Market.
The Company will not receive any of the proceeds from the sale of the
Securities offered hereby. The Selling Securityholders directly, through agents
designated from time to time, or through dealers or underwriters to be
designated, may sell the Securities from time to time on terms to be determined
at the time of sale. To the extent required, the specific amount of Securities
to be sold, the respective purchase price and public offering price, the names
of any such agent, dealer or underwriter, and any applicable commission or
discount with respect to the particular offer will be set forth in a Prospectus
Supplement. The Company has agreed to bear all expenses of registration of the
Securities under federal and state securities laws and to indemnify the Selling
Securityholders against certain liabilities under the Securities Act. See "Plan
of Distribution."
The Selling Securityholders and any broker-dealer, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
Securities may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by them and any profits on the
resale of the Securities purchased by them may be deemed to be underwriting
commission or discounts under the Securities Act.
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "CEXP." On September 18, 1996, the last reported sale price of the
Common Stock was $36.125 per share.
--------------------
See "Risk Factors" commencing on page 11 for a discussion of certain
factors that should be considered by prospective investors in the Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") in Washington, D.C. a Registration Statement on Form S-3
under the Securities Act with respect to the Securities offered hereby. This
Prospectus, which constitutes part of the Registration Statement, omits certain
of the information contained in the Registration Statement and the exhibits and
schedules thereto on file with the Commission pursuant to the Securities Act and
the rules and the regulations of the Commission thereunder. Statements contained
in this Prospectus as to the contents of any contract or other document referred
to are not necessarily complete and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the Registration
Statement, and each such statement is qualified in all respects by such
reference. The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements, information statements and other
information with the Commission. Such reports, proxy and information statements
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Seven World Trade Center, Suite 1300, New York, New York 10048;
and 500 West Madison Avenue, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the public reference section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates, or from the
Commission's internet web site at http://www.sec.gov. In addition, such
materials also may be inspected and copied at the offices of the Nasdaq National
Market, 1735 K Street, N.W., Washington, D.C. 20006.
-----------------------------
As used in this Prospectus, "fiscal 1991," "fiscal 1992," "fiscal 1993,"
"fiscal 1994," "fiscal 1995" and "fiscal 1996" refer to the Company's fiscal
years ended or ending February 29, 1992, February 28, 1993, February 28, 1994,
February 25, 1995, March 2, 1996 and March 1, 1997 respectively. All
information in this Prospectus has been adjusted to reflect a one for two
reverse stock split on August 29, 1994 and a 50% share dividend distributed on
June 21, 1995. All references in this Prospectus to "$" refer to United States
dollars.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents of the Company filed with the Commission
(File No. 0-24642) are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 2, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 1, 1996;
(c) The Company's Current Report on Form 8-K/A filed on June 19,
1996 and the Company's current reports on Form 8-K filed on September 14, 1996
and September 20, 1996, respectively; and
(d) The description of the Company's Common Stock which is
contained in the Company's Registration Statement on Form 8-A filed under the
Exchange Act, including any amendment or reports filed for the purpose of
updating such description.
In addition, all reports and other documents subsequently filed
by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the termination of the offering made hereby, shall be deemed to be
incorporated by reference into this Prospectus. Any statement incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM THE COMPANY BY CONTACTING THE SECRETARY OF THE COMPANY AT 325
INTERLOCKEN PARKWAY, BROOMFIELD, COLORADO 80021. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD ALLOW AT LEAST FIVE (5) BUSINESS
DAYS FOR DELIVERY.
<PAGE>
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
The Company
Corporate Express is a leading provider of office products and services to
large corporations. Since 1991, Corporate Express has expanded through
acquisitions from a regional operation in Colorado to operations throughout the
United States, Canada, the United Kingdom, Australia, Germany and New Zealand.
Corporate Express believes it has developed a substantially different business
model from traditional contract stationers, defining itself as a "Corporate
Supplier" which provides a broad array of nonproduction goods and services to
its customers while reducing overall procurement costs and providing a high
level of customer service. The Company's current offering includes office
supplies, computer and imaging supplies, computer software, office furniture,
forms management, printing, same-day local delivery service and distribution
logistics management. Corporate Express markets to its existing and prospective
customers through a direct sales force and fulfills its products and services
through over 500 locations and a fleet of approximately 7,000 owned or
contracted vehicles.
The Company's target customers are large corporations with over 100
employees. The Company believes that these large corporations increasingly are
seeking to reduce the cost of procuring nonproduction goods and services and
decrease the time and effort spent managing functions that are not considered
core competencies. To that end, corporations are seeking to reduce the number of
their suppliers in order to eliminate the internal costs associated with
multiple invoices, deliveries, ordering procedures, uneven service levels and
inconsistent product availability. Many large corporations operate from multiple
locations and can benefit from selecting a single supplier who can service them
nationally or internationally.
In many non-production goods and services sectors, including office
products and same-day local delivery, competition is often highly fragmented and
consists primarily of smaller local or regional providers. The Company believes
that the desire of large corporations to reduce their number of suppliers to a
small group of reliable and cost-effective partners will lead to a further
consolidation of currently fragmented sectors, as well as initiate
consolidations between sectors where the ultimate requirement will be the
ability to meet customers' needs rather than to supply a particular product or
service.
The Company's Corporate Supplier strategy is designed to reduce its
customers' total costs and the internal effort necessary to manage the
procurement of non-production goods and services. The Company believes that its
target customers value a high level of service including account relationship
managers, delivery services and customized pricing, electronic interfaces,
reporting formats and product catalogs. Corporate Express' broad product and
service offering permits the Company to reduce the procurement costs its
customers incur in dealing with multiple vendors while servicing customers'
broad geographical service and delivery requirements.
Corporate Express also seeks to continually reduce its merchandise and
operating costs which should permit it to offer its customers lower prices. By
purchasing most of its products directly from manufacturers in large volumes and
limiting the number of manufacturers represented in its In-Stock Catalog and
other specialty catalogs, Corporate Express is increasingly able to earn volume
discounts and advertising allowances from its vendors. Corporate Express
believes its computer systems represent a key strategic advantage which
differentiates the Company from its competitors and permits it to achieve cost
savings, provide superior customer service and centrally manage its operations.
The Company historically has grown and intends to continue to grow in the
future through a combination of acquisitions and internal growth. The Company
plans to increase sales to existing customers by cross-selling its expanded
product and service offering and developing existing customers into
international, national or
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
multi-regional accounts. Corporate Express seeks to gain new customers,
including national and international accounts, through the marketing efforts of
its direct sales force and through acquisitions of other suppliers and companies
offering complementary products and services. Further, the recent merger with
U.S. Delivery Systems, Inc. ("Delivery") has expanded the Company's delivery
capabilities and geographic coverage in the United States and Corporate Express
intends to develop sales efforts in these new geographic areas. In addition,
the Company may open additional satellite sales offices and distribution
breakpoints to serve new accounts and to continue to add new product and service
capabilities.
In order to better service its multi-national customers and to take
advantage of the fragmented nature of many international markets, Corporate
Express has devoted substantial resources to expanding outside of the United
States, principally through acquisitions. The Company has acquired or made
investments in companies in Canada and Australia in calendar 1995, and the
United Kingdom, Germany and New Zealand in calendar 1996. In addition, the
Company has recently entered into agreements to acquire two office products
suppliers in Italy. The Company plans to enter additional international markets
in the future. Over time, the Company plans to implement appropriate aspects of
the Corporate Supplier business model in its international operations, including
creating in-stock catalogs, consolidating warehouses, upgrading information
systems, acquiring companies offering complementary products and services and
focusing on larger customers and national and international accounts.
The Company was incorporated under the laws of Colorado in 1985. The
Company operates its business through various subsidiaries. The Company's
executive offices are located at 325 Interlocken Parkway, Broomfield, Colorado
80021, and its telephone number is (303) 373-2800.
Recent Developments
Acquisition Activity. Since the beginning of fiscal 1996, the Company has
completed 56 acquisitions, including 45 office products companies, ten delivery
companies and one software reseller. Of these acquisitions, 26 were in the
United States, four were in Canada, seven were in the United Kingdom, six were
in Australia, two were in New Zealand and one was in Germany.
4
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<PAGE>
- --------------------------------------------------------------------------------
Corporate Reorganization. As of June 18, 1996, the Company consummated a
reorganization pursuant to which the Company formed CEX Holdings, Inc., a
wholly-owned subsidiary organized under the laws of Colorado ("CEX Holdings"),
and contributed substantially all of its assets, including the capital stock of
most of its operating subsidiaries, and assigned substantially all of its
liabilities, to CEX Holdings. The Company believes that the reorganization will
enable the Company to achieve certain tax advantages, provide the Company more
flexibility to engage in certain financing transactions and allow the Company to
better manage its operating subsidiaries.
Proposed Merger. On September 11, 1996, the Company announced that it had
signed a definitive agreement providing for the merger of the Company with
United Transnet, Inc., a same-day local delivery service company based in
Roswell, Georgia and having operations in 39 states. The merger agreement
provides that each share of United Transnet's common stock will be exchanged for
0.45 of a share of the Company's common stock. The consummation of the merger
is subject to approval by United Transnet stockholders, receipt of all necessary
regulatory approvals, satisfactory confirmation that the merger will be treated
as a tax-free reorganization and accounted for as a pooling of interests, and
other customary conditions.
Important Factors Regarding Forward-Looking Statements
Some of the information presented in this Prospectus constitutes forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Although the Company believes that its expectations are
based on reasonable assumptions within the bounds of its knowledge of its
business and operations, there can be no assurance that actual results of the
Company's operations will not differ materially from its expectations. Factors
which could cause actual results to differ from expectations include, among
others, uncertainties related to integrating recent acquisitions, uncertainties
relating to the introduction of Company's new product and service offerings,
uncertainties related to future domestic and international acquisitions,
uncertainties related to the Company's systems and proprietary software,
uncertainties related to legislation with respect to independent contract
drivers, uncertainty of whether the Company's activities will continue to be
successful, and uncertainties related to competition and the demand for the
products and services offered by the Company. Specific reference is made to
the risks and uncertainties described under "Risk Factors."
5
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<PAGE>
The Offering
THIS PROSPECTUS RELATES TO THE OFFERING BY THE SELLING SECURITY
HOLDERS OF BOTH THE OFFERED NOTES AND, TO THE EXTENT THE OFFERED NOTES HAVE
BEEN, OR ARE, CONVERTED, THE COMMON STOCK. THE FOLLOWING SUMMARY OF CERTAIN
TERMS OF THE OFFERED NOTES IS NOT COMPLETE AND IS QUALIFIED BY ALL OF THE TERMS
AND CONDITIONS CONTAINED IN THE OFFERED NOTES AND IN THE INDENTURE (AS DEFINED
HEREIN). FOR A MORE DETAILED DESCRIPTION OF THE TERMS OF THE OFFERED NOTES, SEE
"DESCRIPTION OF THE NOTES."
<TABLE>
<CAPTION>
The Common Stock
<S> <C>
Common Stock outstanding as of September 18, 1996(1)..................... 71,287,760 shares
Common Stock to be outstanding assuming conversion of the Notes(1)...... 77,787,760 shares
Nasdaq National Market symbol........................................... CEXP
</TABLE>
- --------------
(1) Excludes 11,374,204 shares of Common Stock issuable upon exercise of stock
options and other warrants outstanding at September 18, 1996.
The Offered Notes
Securities Offered...... U.S. $325,000,000 principal amount of 4 1/2%
Convertible Notes due July 1, 2000 (the "Notes"),
with interest payable on January 1 and July 1,
commencing on January 1, 1997.
Issuer.................. Corporate Express, Inc., a Colorado corporation.
Offering Price.......... 100% of principal amount plus accrued interest from
June 24, 1996, if any.
Conversion.............. The Notes are convertible into the Company's Common
Stock, par value $.0002 per share, at any time after
90 days following the Settlement Date and prior to
maturity or five business days prior to any
redemption or repurchase at a conversion price
of U.S. $50.00 per share, subject to adjustment
under certain conditions.
Optional Redemption by
the Company............. The Notes are not redeemable prior to July 1, 1998.
Thereafter, the Notes are redeemable at the Company's
option, in whole or in part, at any time and from
time to time, at redemption prices as described
herein, plus accrued interest, except that, until
July 1, 1999 the Notes cannot be redeemed at the
Company's option unless the closing sale price of the
Common Stock equals or exceeds 150%, of the then
effective conversion price for at least 15 out of 30
consecutive trading days ending within 20 days before
the notice of redemption is first mailed.
6
<PAGE>
Additional Amounts and Redemption
For Taxation Reasons..... The Company will pay Additional Amounts (as defined),
subject to certain exceptions, in order that the non-
U.S. Holders of Notes or coupons receive the full
amount of the principal, premium, if any, and
interest specified therein (including any amount
payable upon a repurchase of the Notes as described
below under "Repurchase at Option of Holders Upon
Change in Control") without deduction for or on
account of U.S. withholding taxes. In the event that
the Company must pay such Additional Amounts as a
result of a change in or amendment to the tax laws,
the affected Notes will be redeemable at the option
of the Company, in whole but not in part, at 100% of
the principal amount thereof, plus any accrued
interest to the redemption date (but without
reduction for U.S. withholding taxes). If U.S.
information reporting requirements are changed so as
to require disclosure of the nationality, residence
or identity of the beneficial owners of Bearer Notes
or coupons, the Company is required to either, at its
option, (a) redeem the Bearer Notes, in whole but not
in part, at 100% of the principal amount thereof,
plus accrued interest to the redemption date; or (b)
if such disclosure may be avoided by payment of a
backup withholding tax or similar charge, withhold
and pay (subject to certain limited exceptions) any
additional amounts necessary to cause the holders of
the Bearer Notes or coupons to receive the full
amount of the principal, premium, if any, and
interest specified therein when due.
Repurchase at Option of Holders
Upon Change in Control.. Upon a Change in Control (as defined), holders of
Notes ("Holders") will have the right, subject to
certain restrictions and conditions, to require the
Company to repurchase all or any part of their Notes
at the principal amount thereof, plus accrued and
unpaid interest thereon to the date of repurchase.
Structural Subordination. The Notes are general unsecured obligations of the
Company which rank pari passu with the Company's
other unsecured indebtedness and general liabilities,
including trade payables. The Notes have not been
guaranteed by and do not constitute an obligation of
any of the Company's subsidiaries. Since the Company
is a holding company which conducts substantially all
of its operations through the operating subsidiaries
of CEX Holdings, the Notes are effectively
subordinated to all of the obligations and
liabilities of the Company's subsidiaries, including
the secured and unsecured indebtedness of such
subsidiaries. Neither the Indenture nor the Notes
limit the Company's or any subsidiary's right to
incur secured or unsecured indebtedness. While the
Company had no indebtedness which was senior to the
Notes as of the date of this Prospectus, the
indebtedness of the Company's subsidiaries included,
but was not limited to, approximately U.S. $90.0
million of principal due under certain 9 1/8% Senior
Subordinated Notes due 2003.
Events of Default........ Events of Default (as defined): (i) failure of the
Company to pay interest for 30 days after the same is
due or failure to pay all or any part of the
principal or repurchase price when due; (ii) failure
of the Company to comply with any of its other
agreements contained in the Notes or the Indenture
for 30 days after receipt of notice of such failure;
(iii) default by the Company or any Material
Subsidiary (as defined in the Indenture) of the
Company with respect to its obligation to pay
principal of, premium, if any, or interest on certain
other
7
<PAGE>
indebtedness aggregating more than $30,000,000,
or the acceleration of such indebtedness under the
terms of the instruments evidencing such
indebtedness, which has not been withdrawn within the
30 days from the date of such default; and (iv)
certain events of bankruptcy or insolvency, including
without limitation, appointment of a custodian of the
Company's property or liquidation of the Company or
any Material Subsidiary.
Listing.................. The Notes are traded on the Luxembourg Stock
Exchange. The Notes issued in transactions complying
with Rule 144A have been designated for trading on
the PORTAL System of the National Association of
Securities Dealers, Inc. The Offered Notes sold
pursuant to this Prospectus will no longer be
eligible for trading on the PORTAL Market.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the
sale of the Securities offered hereby.
8
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share data)
The following selected consolidated financial data for fiscal 1995, fiscal
1994, and fiscal 1993 have been derived from the Company's consolidated
financial statements which have been audited by independent auditors. The
selected consolidated financial data for fiscal 1992 and fiscal 1991 are derived
from unaudited consolidated financial statements. The unaudited consolidated
financial statements have been prepared on the same basis as the audited
consolidated financial statements and, in the opinion of management, contain all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation of the financial position and results of operations for these
periods. The Delivery acquisition (effective March 1, 1996), the Richard Young
Journal, Inc. ("Young") acquisition (effective February 2, 1996) and the
acquisition of Lucas Bros., Inc. ("Lucas") (effective November 30, 1993) were
accounted for as poolings of interests and, accordingly, the Delivery, Young and
Lucas accounts and results are included for all periods presented. The
information set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements of the Company which has been incorporated
by reference into the Registration Statement filed in connection with these
Securities.
<TABLE>
<CAPTION>
Fiscal Year(8)
-------------------------------------------------------
1991 1992 1993 1994 1995
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Statements of Operations Data:
Net Sales......................................... $195,783 $237,473 $337,094 $927,918 $1,590,104
Cost of Sales(1).................................. 144,418 175,309 254,698 681,962 1,173,255
Merger related inventory provisions(2)............ --- --- 1,146 --- 5,952
-------- -------- -------- -------- ----------
Gross profit..................................... 51,365 62,164 81,250 245,956 410,897
Warehouse operating and selling expenses.......... 38,489 49,383 69,851 188,464 297,275
Corporate general and administrative expenses..... 5,088 7,139 8,690 23,852 46,980
Merger and other nonrecurring charges(3).......... --- 2,592 1,928 --- 36,838
-------- -------- -------- -------- ----------
Operating profit................................. 7,788 3,050 781 33,640 29,804
Interest expense, net............................. 5,109 4,087 4,463 15,610 15,396
Other expenses (income)(4)........................ 480 1,737 (126) (352) (724)
-------- -------- -------- -------- ----------
Income (loss) before income taxes................ 2,199 (2,744) (3,556) 18,382 15,132
Income tax expense................................ 1,326 947 1,894 6,164 10,952
-------- -------- -------- -------- ----------
Income (loss) before minority interest........... 873 (3,721) (5,450) 12,218 4,180
Minority Interest................................. --- --- 152 69 1,436
-------- -------- -------- -------- ----------
Income (loss) from continuing operations......... 873 (3,721) (5,602) 12,149 2,744
Income (loss) from discontinued operations(5)..... (435) (4,571) 138 --- ---
-------- -------- -------- -------- ----------
Income (loss) before extraordinary item.......... 438 (8,292) (5,464) 12,149 2,744
Extraordinary item(6)............................. --- --- (1,169) 586 ---
-------- -------- -------- -------- ----------
Net income (loss)................................ $ 438 $ (8,292) $ (6,633) $ 12,735 $ 2,744
======== ======== ======== ======== ==========
Per common share:
Income (loss) from continuing operations......... $ (.21) $ .24 $ .04
======== ======== ==========
Net Income (loss)................................ $ (.25) $ .25 $ .04
======== ======== ==========
Shares used to compute per share amounts.......... 32,265 49,195 68,057
======== ======== ==========
Balance Sheet Data:
Working capital................................... $ 21,061 $ 25,560 $ 68,084 $131,202 $ 217,243
Total assets...................................... 83,682 108,811 387,477 568,161 910,523
Long-term debt and capital lease obligations...... 39,339 38,576 161,881 166,427 137,468
Shareholders' equity and redeemable preferred(7).. 14,502 25,528 100,045 240,470 496,514
Ratio of earnings to fixed charges................ 1.4 .4 .2 1.9 1.7
</TABLE>
(footnotes appear on next page)
9
<PAGE>
Selected Quarterly Financial Data (8)
<TABLE>
<CAPTION>
Fiscal Quarter Ended (9)
-----------------------------------------------
May 25, August 24, November 25, March 2,
1995 1995 1995 1996
--------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Statement of Operations Data:
Net sales..................................... $330,394 $371,058 $420,185 $468,467
Cost of sales................................. 243,586 274,923 308,504 346,242
Merger related inventory provision............ -- -- -- 5,952
-------- -------- -------- --------
Gross profit................................ 86,808 96,135 111,681 116,273
Warehouse operating and selling expenses...... 62,810 70,204 78,572 85,689
Corporate, general and administrative expenses 9,044 10,620 12,750 14,566
Merger and other nonrecurring charge.......... -- -- -- 36,838
-------- -------- -------- --------
Operating profit (loss)..................... 14,954 15,311 20,359 (20,820)
Interest expense, net......................... 4,203 5,075 3,398 2,720
Other expense (income)........................ (167) (96) 71 (532)
-------- -------- -------- --------
Income (loss) before income taxes........... 10,918 10,332 16,890 (23,008)
Income tax expense (benefit).................. 4,297 4,128 6,048 (3,521)
-------- -------- -------- --------
Income (loss) before minority interest...... 6,621 6,204 10,842 (19,487)
Minority interest............................. 115 449 467 405
-------- -------- -------- --------
Net income (loss)........................... $ 6,506 $ 5,755 $ 10,375 $(19,892)
======== ======== ======== ========
Net income (loss) per common share.......... $ 0.10 $ 0.09 $ 0.14 $ (0.29)
======== ======== ======== ========
</TABLE>
(1) Cost of sales include occupancy and delivery expenses.
(2) Reflects the write-down to market value of certain inventory which the
Company has decided to eliminate from its product line in connection
with the Delivery, Young and Lucas mergers.
(3) Merger and other nonrecurring charges relate primarily to the mergers
with Delivery and Young in fiscal 1995 and Lucas in fiscal 1993 and
include, among other things, costs to complete the acquisitions,
merging and closing redundant facilities, and centralizing certain
administrative functions.
(4) Includes a write-off of $1.2 million of investments in fiscal 1992.
(5) In November 1990, Corporate Express made a strategic decision to close
all of its retail operations and, in February 1993, Lucas adopted a
plan to discontinue its retail operations.
(6) Reflects extraordinary loss related to a write-off of an unamortized
discount on debt in fiscal 1993 and extraordinary gain related to the
repurchase by the Company of $10 million principal amount of 9 1/8%
Senior Subordinated Notes in fiscal 1994.
(7) Redeemable preferred stock was converted to Common Stock in fiscal
1994.
(8) Includes results of Young and Delivery.
(9) Operating results for any fiscal quarter are not necessarily
indicative of the results that may be achieved for any subsequent
fiscal quarter or for a full fiscal year. See "Risk Factors--
Fluctuations in Quarterly Operating Results."
10
<PAGE>
RISK FACTORS
In addition to other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the Notes.
Rapid Expansion; Integration of Acquisitions; Dependence on
Acquisitions for Future Growth. Through numerous acquisitions completed since
1991, Corporate Express significantly increased the scope of its operations from
a regional operation in Colorado to operations throughout the United States,
Canada, the United Kingdom, Australia, Germany and New Zealand. The majority of
these acquisitions have occurred within the past two years. To date in fiscal
1996, the Company has completed 56 acquisitions. In fiscal 1995, the Company
completed 51 acquisitions. In fiscal 1994, the Company completed 26
acquisitions. There can be no assurance that Corporate Express' management and
financial controls, personnel, computer systems and other corporate support
systems will be adequate to manage the increase in the size and scope of
Corporate Express' operations and acquisition activity.
An important part of Corporate Express' strategy is to integrate its
acquisitions in North America into its operations and implement the Corporate
Express business model. The Company has not fully implemented the Corporate
Express business model in many of its North American regions, which regions
generally are not performing as favorably as the regions in which the Corporate
Express business model has been implemented. There can be no assurance that the
Company's management and financial controls, personnel, computer systems and
other corporate support systems will be adequate to manage the increase in the
size and scope of the Company's operations and acquisition activity. In
addition, there can be no assurance that Corporate Express will be able to
implement key aspects of the Corporate Express business model in a timely manner
without substantial costs, delays or other problems. Recent acquisitions may
not achieve sales, profitability or asset productivity commensurate with
Corporate Express' more mature regions. In addition, acquisitions involve a
number of special risks, including adverse short-term effects on Corporate
Express' reported operating results, the diversion of management's attention,
the dependence on retention, hiring and training of key personnel, the
amortization of acquired intangible assets and risks associated with
unanticipated problems or legal liabilities, some or all of which could have a
material adverse effect on Corporate Express' operations and financial
performance.
A major element of Corporate Express' business strategy is to continue
to pursue acquisitions that either expand or complement its business in new or
existing regions. Acquisitions have constituted, and the Company expects that
acquisitions will continue to constitute in the future, a principal component of
growth in revenue and operating income. There can be no assurance that
Corporate Express will be able to identify and acquire acceptable acquisition
candidates on terms favorable to it and in a timely manner to the extent
necessary to fulfill its expansion plans. A substantial portion of Corporate
Express' capital resources could be used for these acquisitions. Consequently,
the Company may require additional debt or equity financing for future
acquisitions, which additional financing may not be available on favorable
terms, if at all. The failure to complete acquisitions and continue its
expansion could have a material adverse effect on Corporate Express' financial
performance. As the Company proceeds with its acquisition strategy, it will
continue to encounter the risks associated with the integration of acquisitions
described above.
International Expansion. The Company acquired or made investments in
companies in Canada and Australia in calendar 1995 and the United Kingdom,
Germany and New Zealand in calendar 1996. In addition, the Company recently
entered into definitive agreements to purchase two office products companies in
Italy and plans to enter additional international markets in the future. Over
time, the Company plans to implement appropriate aspects of the Corporate
Supplier business model in its international operations, including creating in-
stock catalogs, consolidating warehouses, upgrading information systems,
acquiring companies offering complementary products and services and focusing on
larger customers and national and international accounts. Expansion into
international markets may involve additional risks relating to implementing key
aspects of the Corporate Express business model, as well as risks relating to
currency exchange rates, new and different legal, tax, accounting and regulatory
requirements, difficulties in staffing and managing foreign operations,
operating difficulties and other factors. Due
11
<PAGE>
to a review of competition in the Australian office products market by the
Australian Competition and Consumer Commission, future acquisitions of office
products suppliers by the Company's majority-owned subsidiary, Corporate Express
Australia, may be subject to heightened regulatory scrutiny.
Expanded Product and Service Offering. In recent months, the Company
has significantly expanded its product and service offering through the
acquisition of Young, a computer products distributor, Delivery, a same-day
local delivery company, and ASAP Software Express, Inc. ("ASAP"), a direct
reseller of computer software and provider of related services. Certain
complementary products now offered by the Company, such as computer software,
have lower gross profit margins than the products traditionally sold by the
Company. The Company intends to continue to make additions to its product and
service offering in the future. Moreover, the addition by the Company to its
product and service offering presents certain risks and uncertainties involving
the Company's relative unfamiliarity with these new products and services and
the market for such new products and services. There can be no assurance that
the Company will be successful in developing or integrating these or other
additions, or that its existing customers will accept such additions, to the
products and services currently offered by the Company.
Dependence on Systems. During April 1996, Corporate Express began the
implementation of a new 3.0 release of its "ISIS" computer software which is
being developed to incorporate three-tier client/server architecture that is
expected to permit customers and suppliers to better communicate with Corporate
Express. ISIS is intended to give Corporate Express the ability to more readily
customize its product offering, operating procedures and customer services. This
is expected to give Corporate Express the ability to integrate various product
and service offerings, enabling it to reduce procurement costs for its customers
and add value as a service provider. There can be no assurance that the
Company's goals with respect to the systems will be attained. Pending full
introduction of the ISIS upgrades, which should take approximately 24 months
substantially to complete in North America, various of the Company's operations
will be dependent upon different hardware or software operating systems which
may be costly to maintain or integrate. Further, the Company anticipates that
ongoing modifications to its computer systems such as the introduction of the
new release of ISIS will continue to be made in the future and such
modifications may cause disruptions in operations, delay the integration of
acquisitions, or cost more to design, implement or operate than currently
budgeted. Any such disruptions, delays or costs could have a material adverse
effect on the Company's operations and financial performance.
Although Corporate Express uses computers which have been reliable to
date, it does not currently have redundant computer systems or redundant
dedicated communication lines linking one of its computers to each regional
warehouse. Corporate Express has taken precautions to protect itself from
events that could interrupt its operations, including back-up power supplies
that allow its computer system to function in the event of a power outage, off-
site storage of back-up data, fire protection, physical security systems and an
early warning detection and fire extinguishing system. Notwithstanding these
precautions, there can be no assurance that a fire, flood or other natural
disaster affecting Corporate Express' system or its dedicated communication line
would not disable the system or prevent the system from communicating with the
regional warehouses. The occurrence of any of these events could have a
material adverse effect on the Company's operations and financial performance.
Substantial Competition. Corporate Express operates in a highly
competitive environment. The Company's principal competitors in North America
for office supplies and computer products are regional and national contract
stationers, including the contract stationer operations of office products
superstores, large direct resellers, privately-held companies that generally
operate in only one location, and distributors of business software for personal
computers. In the delivery services sector the Company has numerous
competitors, certain of which have service capabilities which are equal to or
greater than the Company's and others which provide different types or levels of
service.
Each of the Company's major product and service categories are within
fragmented industries which are currently experiencing a trend toward
consolidation. Certain of the Company's competitors have greater financial
resources than Corporate Express. In addition, there may be increasing
competition for acquisition candidates and there can be no assurance that
acquisitions will continue to be available on favorable terms, if at all.
12
<PAGE>
Fluctuations in Quarterly Operating Results. Corporate Express'
product distribution business is subject to seasonal influences. In particular,
net sales and profits in the United States and Canada are typically lower in the
three months ending in late August due to lower levels of business activity
during the summer months. Because cost of sales includes delivery and occupancy
expenses, gross profit as a percentage of net sales may be impacted by seasonal
fluctuations in net sales and the acquisition of less efficient operations.
Quarterly results may be materially affected by the timing of acquisitions and
the timing and magnitude of acquisition assimilation costs. Therefore, the
operating results for any three month period are not necessarily indicative of
the results that may be achieved for any subsequent fiscal quarter or for a full
fiscal year.
Dependence on Key Management. Corporate Express' success will
continue to depend to a significant extent on its executive officers and other
key management. Corporate Express has entered into employment agreements with
certain executive officers. There can be no assurance that Corporate Express
will be able to retain its executive officers and key personnel or attract
additional qualified members of management in the future. In addition, the
success of certain of Corporate Express' acquisitions may depend, in part, on
Corporate Express' ability to retain management personnel of the acquired
companies. The loss of the services of any key managers could have a material
adverse effect upon Corporate Express' business.
Possible Volatility of Stock Price. The market price of the Company's
Common Stock has been, and can be expected to continue to be, subject to
significant fluctuations caused by variations in quarterly operating results,
litigation involving the Company, announcements by the Company or its
competitors, general conditions in the office products and services industry and
other factors. Since the beginning of fiscal 1996, the Common Stock has traded
in the range of $28.88 to $46.75. The stock market in recent years has
experienced extreme price and volume fluctuations that often have been unrelated
or disproportionate to the operating performance of publicly traded companies.
These broad fluctuations may adversely affect the market price of Corporate
Express Common Stock and the Notes.
Structural Subordination of Notes. The Notes are general unsecured
obligations of the Company which are ranked pari passu with the Company's other
unsecured indebtedness and general liabilities, including trade payables. The
Notes have not been guaranteed by and do not constitute an obligation of any of
the Company's subsidiaries. Since the Company is a holding company which
conducts all of its operations through its operating subsidiaries, the Notes are
effectively subordinated to all of the obligations and liabilities of the
Company's subsidiaries, including the secured and unsecured indebtedness of such
subsidiaries. The Company's ability to pay the interest and principal
obligations under the Notes is dependent upon (i) the Company's use of the
proceeds received from this offering in a manner which is not prohibited or
restricted under any agreement or instrument to which the Company or any of its
subsidiaries is currently or subsequently becomes a party, (ii) the use of
proceeds received from subsequent financing transactions, or (iii) the receipt
of funds from the Company's subsidiaries, whether from dividends, distributions,
the repayment of loans made by the Company to such subsidiaries or other
payments from such subsidiaries. Certain agreements or instruments to which the
Company's principal subsidiary, CEX Holdings, is currently a party prohibit or
restrict (and other agreements or instruments to which CEX Holdings or its
operating subsidiaries are currently parties may prohibit or restrict), CEX
Holdings' and its operating subsidiaries' ability to borrow funds and limit
their right, based upon the amount of cash flows and certain other factors, to
make dividend payments, distributions, loan repayments or other payments to the
Company, causing the Notes to be effectively subordinated to all of such
subsidiaries' obligations, including all unsecured indebtedness and general
liabilities of such subsidiaries. Neither the Indenture nor the Notes limit the
Company's or any subsidiary's right to incur secured or unsecured indebtedness.
The subsidiaries are separate and distinct legal entities from the Company and
have no obligation, contingent or otherwise, to pay any amounts due pursuant to
the Notes or to make any funds available therefor, whether by dividends the
repayment of loans or other payments. In addition, the payment of dividends and
the making of loans and advances to the Company by its subsidiaries, or the
repayment of loans from the Company to the subsidiaries, may be subject to
statutory, contractual or other restrictions, are dependent upon the earnings of
those subsidiaries and are subject to various business considerations. There can
be no assurance that the Company will have sufficient funds, be able to
consummate subsequent financings or receive sufficient funds from subsidiaries
13
<PAGE>
necessary to satisfy its obligations to pay interest on the Notes when due or to
repay the outstanding principal amount of the Notes at maturity or upon a
redemption or repurchase of the Notes. See "Description of the Notes--
Structural Subordination of Notes."
Change In Control. The Indenture provides Holders with the right to
require the Company to repurchase all or a portion of the Notes upon a Change in
Control. However, if a Change in Control were to occur, there can be no
assurance that the Company would have sufficient funds to pay the Change in
Control Purchase Price (as defined) for all Notes tendered by the Holders
thereof. See "Description of the Notes--Structural Subordination of Notes."
Further, the terms of future indebtedness ranking pari passu in right of payment
with the Notes could require that such indebtedness be repaid upon the
occurrence of a Change in Control. Failure by the Company to repurchase the
Notes when required will result in an Event of Default with respect to the
Notes.
Possible Nondeductibility of Interest on the Notes. Section 279 of
the Internal Revenue Code of 1986, as amended (the "Code"), limits the deduction
of interest paid or incurred by a corporation on "corporate acquisition
indebtedness" ("CAD") to $5 million per year (less interest paid on obligations
not classified as CAD which are issued to provide consideration for certain
stock or asset acquisitions). The Notes will be classified as CAD only if the
Notes are deemed, for tax purposes, to meet the requirements of each of four
tests, an acquisition test, a subordination test, a convertibility test and a
debt-earnings or interest coverage test. In issuing the Notes, the Company
anticipates that one or more of these tests will not be satisfied and,
accordingly, the Company intends to take the position that the Notes do not
constitute CAD and that its deductions for interest paid on the Notes are not
limited by Section 279 of the Code. The Company does not intend to apply to the
IRS for a ruling on this issue and has not received an opinion from counsel as
to the deductibility of the interest on the Notes. If the IRS, upon audit, were
to disallow the Company's interest deductions on the Notes pursuant to Section
279 of the Code, the Company believes that such disallowance would not be
sustained, but the Company can offer no assurance in this regard. Any such
disallowance would have a material adverse effect on the Company.
Absence of Existing Market for Notes. The Notes are listed on the
Luxembourg Stock Exchange and the Restricted Notes (as defined) are eligible
for trading on the PORTAL System. The Restricted Notes sold pursuant to this
Prospectus will no longer be eligible for trading on the PORTAL Market. There
can be no assurance that an active trading market for the Notes will develop, or
if such market develops, as to the liquidity or sustainability of such market.
The Managers have advised the Company that they currently intend to make a
market in the Notes, but they are not obligated to do so and may discontinue
such market-making at any time. There can be no assurance that an active market
for the Notes will develop and continue upon completion of this offering or that
the market price of the Notes will not decline. Various factors and events such
as increased competition, quarter-to-quarter variations in financial results,
changes in prevailing interest rates, change in perceptions of the Company's
creditworthiness, or a decline in the market price of the Common Stock could
cause the market price of the Notes to fluctuate significantly.
14
<PAGE>
PRICE RANGE OF COMMON STOCK
Since the Company's initial public offering of its Common Stock on
September 23, 1994, the Company's Common Stock has traded on the Nasdaq National
Market under the symbol "CEXP." The following table sets forth, for the fiscal
quarters indicated, the high and low closing sale prices for the Common Stock,
as reported by the Nasdaq National Market:
<TABLE>
<CAPTION>
High Low
------ ------
<S> <C> <C>
Fiscal 1994
Third Quarter (from September 23) $15.83 $12.83
Fourth Quarter 17.50 11.00
Fiscal 1995
First Quarter 20.00 15.33
Second Quarter 25.75 19.00
Third Quarter 29.88 20.00
Fourth Quarter 31.63 23.13
Fiscal 1996
First Quarter 42.25 28.88
Second Quarter 45.81 32.75
Third Quarter (through September 18) 38.00 32.63
</TABLE>
As of September 18, 1996, the Company's Common Stock was held by 573
holders of record.
DIVIDEND POLICY
The Company has never paid a dividend on its Common Stock. The Company
does not anticipate paying any cash dividends on its Common Stock in the
foreseeable future because it intends to retain its earnings to finance the
expansion of its business and for general corporate purposes. Any payment of
future dividends will be at the discretion of the Company's Board of Directors
and will depend upon, among other things, the Company's earnings, financial
condition, capital requirements, level of indebtedness, contractual restrictions
with respect to the payment of dividends and other relevant factors. The
Company's Senior Credit Facility prohibits the distribution of dividends without
the prior written consent of the lenders and the indenture governing the 9 1/8%
Senior Subordinated Notes due 2004 (the "Notes") prohibits the Company from
paying a dividend which would cause a default under such indenture or which
would cause the Company to fail to comply with certain financial covenants.
15
<PAGE>
DESCRIPTION OF THE NOTES
The Notes, including the Offered Notes, were issued pursuant to the
Indenture dated as of June 24, 1996 (the "Indenture") between the Company, as
issuer, and Bankers Trust Company, as trustee (the "Trustee"). The terms of the
Notes include those stated in the Indenture and those made a part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"TIA"). Copies of the form of the Indenture, and the Registration Rights
Agreement (the "Registration Rights Agreement") entered into as of June 24, 1996
between the Company and the Underwriters, are filed as exhibits to the
Registration Statement of which this Prospectus forms a part. The following
summary of the Notes does not purport to be complete and is qualified in its
entirety by reference to the Notes, the Indenture and the Registration Rights
Agreement, including the definitions therein of certain terms not otherwise
defined in this Prospectus.
General
The Notes are general unsecured obligations of the Company which rank pari
passu with the Company's other unsecured indebtedness and liabilities, including
trade payables, are limited to an aggregate principal amount of U.S.
$325,000,000 and will mature on July 1, 2000. The Notes bear interest from the
date of issuance at the rate per annum shown on the cover page hereof. Interest
will be payable semiannually on January 1 and July 1 of each year (each an
"Interest Payment Date"), commencing on January 1, 1997.
The Notes are convertible into Common Stock initially at the conversion
price of $50.00 per share, subject to adjustment upon the occurrence of certain
events described under "--Conversion Rights," at any time on or after (a) in the
case of all Notes, the 90th day following the Settlement Date and prior to
maturity (subject to prior redemption) and (b) in the case of Notes initially
issued in temporary global form, the receipt of definitive Bearer Notes, and
prior to maturity (subject to prior redemption or repurchase). The right to
convert a Note called for redemption will terminate at the close of business on
the fifth business day immediately preceding the redemption date for such Note.
See "--Delivery and Form of Restricted Notes" and "--Delivery and Form of
Regulation S Notes," respectively.
The Notes are redeemable (a) in the event of certain developments involving
U.S. withholding taxes or certification requirements as described below under "-
- -Redemption--Redemption for Taxation Reasons," at a redemption price of 100% of
the principal amount of the Notes to be redeemed, plus accrued interest to the
redemption date and any Additional Amounts (as described below under "--Payment
of Additional Amounts") and (b) at the option of the Company, on or after July
1, 1998, in whole or in part, at the redemption prices set forth below under "--
Redemption--Optional Redemption by the Company," plus accrued and unpaid
interest up to but not including the redemption date; provided, however, that
until July 1, 1999, the Notes cannot be redeemed at the option of the Company
unless the closing sale price of the Company's Common Stock equals or exceeds
150% of the then existing Conversion Price per share for at least 15 out of 30
consecutive Trading Days ending within 20 days before the notice of redemption
is first mailed.
Beneficial interests in the Notes issued and sold otherwise than in
reliance on Regulation S trade in the Same Day Funds Settlement System of The
Depository Trust Company and beneficial interests in the Notes issued and sold
in reliance on Regulation S trade through the facilities of CEDEL and Euroclear
and secondary market transactions in such interests are effected pursuant to
conventional Eurobond practice.
The terms of the Notes include those stated in the Indenture, those stated
in the Registration Rights Agreement, and those provisions required by, or made
a part of the Indenture by reference to, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
The Indenture and the Registration Rights Agreement are governed by and
construed under the laws of the State of New York, United States of America.
16
<PAGE>
Delivery and Form of Restricted Notes
The Notes initially offered to certain institutions in the United States in
reliance on certain exemptions from the registration requirements of the
Securities Act were issued only in fully registered form, without coupons, in
minimum denominations of U.S. $1,000 or multiples thereof.
Global Note; Book Entry Form. Registered Notes held by "qualified
institutional buyers," as defined in Rule 144A under the Securities Act ("QIBs")
or by a person who is not a U.S. person who acquired such Note in an "offshore
transaction" in reliance on Regulation S under the Securities Act (a "Non-U.S.
Person"), but not by other purchasers, were evidenced by a global note (the
"Global Note") which was deposited with, or on behalf of, The Depository Trust
Company, New York, New York ("DTC") and registered in the name of Cede & Co.
("Cede") as DTC's nominee. Except as set forth below, the record ownership of
the Global Note may be transferred, in whole or in part, only to another nominee
of DTC or to a successor of DTC or its nominee.
QIBs and Non-U.S. Persons may hold their interests in the Global Note
directly through DTC if such holder is a participant in DTC, or indirectly
through organizations which are participants in DTC (the "Participants").
Transfers between Participants are effected in the ordinary way in accordance
with DTC rules and will be settled in same day funds.
QIBs and Non-U.S. Persons who are not Participants may beneficially own
interests in the Global Note held by DTC only through Participants or certain
banks, brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC,
is the registered owner of the Global Note, Cede for all purposes is considered
the sole holder of the Global Note. Owners of beneficial interests in the
Global Note are entitled to have certificates registered in their names and to
receive physical delivery of certificates in definitive form. The laws of some
states require that certain persons take physical delivery of securities in
definitive form.
Payment of interest on and the redemption price of the Global Note is made
to Cede, the nominee for DTC, as the registered owner of the Global Note, by
wire transfer of immediately available funds on each Interest Payment Date.
Neither the Company, the Trustee nor any Paying Agent has any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interest.
The Company has been informed by DTC, that, with respect to any payment of
interest on or the redemption price of the Global Note, DTC's practice is to
credit Participants' accounts on the payment date therefor with payments in
amounts proportionate to their respective beneficial interests in the principal
amount represented by the Global Note as shown on the records of DTC, unless DTC
has reason to believe that it will not receive payment on such payment date.
Payments by Participants to owners of beneficial interests in the principal
amount represented by the Global Note held through such Participants are the
responsibility of such Participants, as is now the case with securities held for
the accounts of customers registered in street name.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in the principal amount represented by the Global
Note to pledge such interest to persons or entities that do not participate in
the DTC system, or otherwise take actions in respect of such interest, may be
affected by the lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar, Paying Agent or
conversion agent under the Indenture) has any responsibility for the performance
of DTC, or its Participants or Indirect Participants of their respective
obligations under the rules and procedures governing their operations. DTC has
advised the Company that it will take any action permitted to be taken by a
Holder of Registered Notes (including, without limitation, the presentation of
Notes for exchange as described below) only at the direction of one or more
Participants to whose account with DTC interests in the Global Note are credited
and only in respect of the principal amount of the Notes represented by the
Global Note as to which such Participant or Participants has or have given such
direction.
17
<PAGE>
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic book-entry
changes to accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Underwriters. Certain of such
Participants (or their representatives), together with other entities, own DTC.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through, or maintain a custodial
relationship with a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among Participants, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days, the Company will cause the Notes to be issued in
definitive form in exchange for the Global Note.
Certificated Notes. Registered Notes sold to investors that are neither
QIBs nor Non-U.S. Persons are issued in definitive registered form and may not
be represented by the Global Note. In addition, QIBs and Non-U.S. Persons may
request that certificated Notes be issued in exchange for Registered Notes
represented by the Global Note. Furthermore, certificated Notes may be issued
in exchange for Registered Notes represented by the Global Note if no successor
depositary is appointed by the Company as set forth above.
Delivery and Form of Regulation S Notes
The Notes sold in offshore transactions pursuant to Regulation S are
represented initially by the Temporary Global Note, without interest coupons or
conversion rights, which was deposited with a depository for CEDEL and
Euroclear, for the accounts of the subscribers of the Notes on the date of
payment for and delivery of the Notes on June 24, 1996 (the "Settlement Date").
Upon deposit of the Temporary Global Note, CEDEL or Euroclear, as the case may
be, credited each subscriber with a principal amount of Notes equal to the
principal amount thereof for which it has subscribed and paid. The Temporary
Global Note is exchangeable for Bearer Notes only in denominations of U.S.
$5,000, with coupons attached, commencing on the date 40 days after the
Settlement Date (the "Exchange Date"). Such exchange will be made in each case
only upon certification in the form required by the Indenture that the
beneficial owners of such Notes are (A) not U.S. persons (as defined below under
"--Payment of Additional Amounts"), (B) persons described in Section
1.1635(c)(2)(i)(D)(6) of the Treasury Regulations or (C) financial institutions
holding for purposes of resale during the restricted period (as defined in
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7) (a financial institution
described in this clause (C) (whether or not also described in (A) or (B)) must
also certify that it has not acquired the Notes for purposes of resale directly
or indirectly to a United States person or to a person within the United
States). A beneficial owner must exchange its interest in the Temporary Global
Note for definitive Bearer Notes before interest payments or other payments will
be made or conversion rights may be exercised. A beneficial owner may take
delivery of Bearer Notes only at such paying agency outside the United States as
the Company may appoint from time to time. Bearer Notes are exchangeable for
Registered Notes as provided in the Indenture. In addition, an interest in the
Temporary Global Notes is exchangeable for an interest in the Global Note as
provided in the Indenture upon certification that the person that acquires such
interest in the Global Note is a QIB or a non-U.S. Person who acquired the Note
in accordance with Regulation S. Registered Notes may not be exchanged for
Bearer Notes. See "--Transfer and Exchange."
Each Bearer Note and coupon carries the following legend: "Any United
States person who holds this obligation will be subject to limitations under the
United States income tax laws, including the limitations provided in Section
165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in
that legend provide that a U.S. person who holds such Bearer Notes, with certain
exceptions, will not be entitled to deduct any loss on the Bearer Notes and will
not be entitled to any capital gains treatment that might otherwise be
applicable to any gain on any sale, exchange, redemption or other disposition of
the Bearer Notes.
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Conversion Rights
The Holder of any Note has the right, at the Holder's option, to convert,
with respect to a Registered Note, any portion of the principal amount of such
Registered Note that is an integral multiple of U.S. $1,000 or, with respect to
a Bearer Note, the entire amount of such Bearer Note, into shares of Common
Stock at any time on or after (a) in the case of all Notes, the 90th day
following the later of the Settlement Date or the latest issuance of Notes upon
exercise of the Underwriters' over-allotment option and prior to maturity
(subject to prior redemption or repurchase) and (b) in the case of Notes
represented by the Temporary Global Note, the receipt of definitive Bearer
Notes, and prior to maturity (subject to prior redemption or repurchase) at the
conversion price of $50.00 per share, subject to adjustment as described below
(the "Conversion Price"). The right to convert a Note called for redemption will
terminate at the close of business on the fifth business day immediately
preceding the redemption date for such Note.
A Note for which a Holder has delivered a Change in Control Purchase Notice
(as defined) exercising the option of such Holder to require the Company to
purchase such Note may be converted only if such notice is withdrawn by a
written notice of withdrawal delivered by the Holder to the Paying Agent prior
to the close of business on the Business Day (as defined) prior to a Change in
Control Repurchase Date (as defined) in accordance with the Indenture.
The right of conversion attaching to any Note may be exercised by the
Holder by delivering the Note at the specified office of a Conversion Agent
(which in the case of a Bearer Note will only be the office of any Conversion
Agent (as defined) outside the United States (see "--Payment and Conversion")),
accompanied by a duly signed and completed notice of conversion. The conversion
date will be the date on which the Note and the duly signed and completed notice
of conversion are so delivered. As promptly as practicable on or after the
conversion date, the Company will issue and deliver to the Trustee a certificate
or certificates for the number of full shares of Common Stock issuable upon
conversion, together with a cash payment in lieu of any fraction of a share.
Such certificate will be sent by the Trustee to the appropriate Conversion Agent
for delivery to the Holder. Each Bearer Note delivered for conversion must be
delivered with all coupons maturing after the date of conversion except in the
case of Notes called for redemption during the period from the Record Date to
and including the five days after the next succeeding Interest Payment Date, the
single coupon maturing on such succeeding Interest Payment Date. Coupons
maturing on or before the date of conversion and not in default are payable
against surrender thereof, and coupons so maturing but in default will continue
to be payable, as set forth in the Indenture, notwithstanding the exercise of
the right of conversion by the Holder of the Note to which the coupons
appertain, but coupons payable after the date of conversion will not be paid
except in the case of Notes called for redemption during the period from the
Record Date to and including the five days after the next succeeding Interest
Payment Date, the single coupon maturing on such succeeding Interest Payment
Date. Any Registered Note surrendered for conversion during the period from the
close of business on any Record Date (as defined) to the opening of business on
the next succeeding Interest Payment Date (other than Notes called for
redemption during the period from the Record Date to and including the fifth day
after the next succeeding Interest Payment Date) must be accompanied by payment
of an amount equal to the interest payable on such Interest Payment Date on the
principal amount of Registered Notes being surrendered for conversion. In the
case of any Registered Note which has been converted after any Record Date but
before the next Interest Payment Date, the interest payable on such Interest
Payment Date shall be paid to the Holder of such Registered Note on such Record
Date. As a result, Holders that surrender Notes for conversion on a date that
is not an Interest Payment Date do not receive any interest for the period from
the Interest Payment Date next preceding the date of conversion to the date of
conversion or for any later period, except for the Notes which are called for
redemption between a Record Date and the fifth day after the Interest Payment
Date to which it relates. In all cases the Holders receive the interest payment
due on July 1, 1998 even if they surrender securities for conversion as a result
of the Company's exercise of its right to redeem securities on or after July 1,
1998. No other payment or adjustment for interest, or for any dividends in
respect of Common Stock, will be made upon conversion. Holders of Common Stock
issued upon conversion are not entitled to receive any dividends payable to
Holders of Common Stock as of any record time before the close of business on
the conversion date. No fractional shares are issued upon conversion but, in
lieu thereof, an appropriate amount will be paid in cash by the Company based on
the market price of Common Stock at the close of business on the day of
conversion.
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A Holder delivering a Note for conversion is not required to pay any taxes
or duties in respect of the issue or delivery of Common Stock on conversion but
is required to pay any tax or duty which may be payable in respect of any
transfer involved in the issue or delivery of the Common Stock in a name other
than that of the Holder of the Note. Certificates representing shares of Common
Stock will not be issued or delivered unless all taxes and duties, if any,
payable by the Holder have been paid.
The Conversion Price is subject to adjustment upon the occurrence of
certain events, including (i) the issuance of shares of Common Stock as a
dividend or distribution on the Common Stock, (ii) the subdivision or
combination of the outstanding Common Stock, (iii) the issuance to all or
substantially all Holders of Common Stock of rights or warrants to subscribe for
or purchase Common Stock (or securities convertible into Common Stock) at a
price per share less than the then current market price per share, (iv) the
distribution to all or substantially all Holders of Common Stock of shares of
capital stock of the Company (other than Common Stock), evidences of
indebtedness or other noncash assets (including securities of any company other
than the Company), (v) the distribution to all or substantially all Holders of
Common Stock of rights or warrants to subscribe for its securities (other than
those referred to in (iii) above), and (vi) the distribution to all or
substantially all Holders of Common Stock of cash in an aggregate amount that,
together with all other cash distributions to all or substantially all Holders
of Common Stock made within the preceding 12 months not triggering a Conversion
Price adjustment, exceeds an amount equal to 20% of the Company's market
capitalization on the Business Day immediately preceding the day on which the
Company declares such distribution. In the event of a distribution pro rata to
Holders of Common Stock of rights to subscribe for additional shares of the
Company's capital stock (other than those referred to in (iii) above), the
Company may, instead of making any adjustment in the Conversion Price, make
proper provisions so that each Holder who converts a Note (or any portion
thereof) after the Record Date for such distribution and prior to the expiration
or redemption of such rights shall be entitled to receive upon such conversion,
in addition to the shares of Common Stock issuable upon conversion, an
appropriate number of such rights. No adjustment of the Conversion Price is
required to be made until the cumulative adjustments require an increase or
decrease of at least 1% in the Conversion Price as last adjusted. The Company
reserves the right to make such reductions in the Conversion Price in addition
to those required in the foregoing provisions as it considers to be advisable in
order that any event treated for federal income tax purposes as a dividend of
stock or stock rights will not be taxable to the recipients. Notices of any
adjustments to the Conversion Price pursuant to this paragraph will be given by
publication in Authorized Newspapers (as set forth in the Indenture) in London
and, so long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of the Luxembourg Stock Exchange shall so require, in Luxembourg or, if
publication in either London or Luxembourg is not practical, elsewhere in
western Europe.
Subject to any applicable right of the Holders upon a Change in Control, if
the Company reclassifies or changes its outstanding Common Stock, or
consolidates with or merges into or sells or conveys all or substantially all of
the assets of the Company as an entirety to any person, or is a party to a
merger that reclassifies or changes its outstanding Common Stock, the Notes,
without the consent of the Holder of any Note or coupon, will become convertible
into the kind and amount of shares of stock and other securities and property
(including cash) that the Holders would have owned immediately after the
transaction if the Holders had converted the Notes immediately before the
effective date of the transaction.
If at any time the Company makes a distribution of property to its
shareholders which would be taxable to such shareholders as a dividend for
federal income tax purposes (e.g., distributions of evidences of indebtedness or
assets of the Company, but generally not stock dividends on Common Stock or
rights to subscribe for Common Stock) and, pursuant to the anti-dilution
provisions of the Indenture, the number of shares into which Notes are
convertible is increased, such increase may be deemed for federal income tax
purposes to be the payment of a taxable dividend to Holders of Notes.
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Redemption
Optional Redemption by the Company
Except as described under "--Redemption for Taxation Reasons" below, the
Notes may not be redeemed at the option of the Company prior to July 1, 1998.
Thereafter, the Notes may be redeemed at the option of the Company, in whole or
in part, upon not less than 20 nor more than 60 days' notice by mail as provided
under "--Notices" below, provided that until July 1, 1999, the Notes cannot be
redeemed at the option of the Company unless the closing sale price of the
Company's Common Stock equals or exceeds 150% of the then existing Conversion
Price per share for at least 15 out of 30 consecutive Trading Days ending within
20 days before the notice of redemption is first mailed.
The redemption prices (expressed as a percentage of principal amount) are
as follows for the 12-month period beginning on July 1 of the following years:
Year Redemption Price
1998................... 102.250%
1999................... 101.125%
in each case together with accrued and unpaid interest up to but not including
the date of redemption.
Redemption for Taxation Reasons
If the Company has or will become obligated to pay Additional Amounts as a
result of any change in, or amendment to, the laws (including any regulations or
rulings promulgated thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or any
change in, or amendment to, the application or official interpretation of such
laws, regulations or rulings (any such change or amendment being herein referred
to as a "Tax Law Change"), and such obligation cannot be avoided by the Company
taking reasonable measures available to it, the Notes held by Non-United States
Holders to whom such Additional Amounts have or will become payable (the "Tax
Affected Notes") may be redeemed at the option of the Company, in whole but not
in part. Such redemption of Tax Affected Notes shall be upon not less than 20
nor more than 60 days' prior notice as provided under "--Notices" below, at a
redemption price equal to 100% of the principal amount of the Tax Affected
Notes, plus accrued interest to the redemption date and any Additional Amounts
then payable; provided, however, that (1) no such notice of redemption shall be
given earlier than 90 days prior to the earliest date on which the Company would
be obligated to pay any such Additional Amounts were a payment in respect of the
Tax Affected Notes then due and (2) at the time such notice of redemption is
given, the obligation to pay such Additional Amounts remains in effect. Prior
to the publication of any notice of redemption pursuant to this paragraph, the
Company shall deliver to the Trustee (a) a certificate stating that the Company
is entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Company so to redeem
have occurred and (b) an opinion of counsel selected by the Company, which
counsel shall be reasonably acceptable to the Trustee, to the effect that the
Company has or will become obligated to pay such Additional Amounts as a result
of a Tax Law Change. The Company's right to redeem the Tax Affected Notes shall
continue as long as the Company is obligated to pay such Additional Amounts,
notwithstanding that the Company shall have theretofore made payments of
Additional Amounts.
In addition, if the Company determines, based upon a written opinion of
counsel selected by the Company, which counsel shall be reasonably acceptable to
the Trustee, that, as a result of a Tax Law Change, any payment made outside the
United States by the Company or any of its Paying Agents of the full amount of
principal, premium, if any, or interest due with respect to any Bearer Note or
coupon appertaining thereto would be subject to any certification,
identification or other information reporting requirement of any kind, the
effect of which is the disclosure to the Company, any Paying Agent or any
governmental authority of the nationality, residence or identity of a beneficial
owner of such Bearer Note or coupon who is not a U.S. person (as defined below
under "--Payment
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of Additional Amounts") (other than such a requirement (a) which would not be
applicable to a payment made by the Company or any one of its Paying Agents (i)
directly to the beneficial owner or (ii) to any custodian, nominee or other
agent of the beneficial owner, (b) which can be satisfied by the custodian,
nominee or other agent certifying that the beneficial owner is not a U.S.
person, provided that in each case referred to in clauses (a) (ii) and (b)
payment by such custodian, nominee or other agent to such beneficial owner is
not otherwise subject to any such requirement, or (c) which would not be
applicable but for the fact that a Bearer Note constitutes a "United States real
property interest," as defined in Section 897(c)(1) of the Code, with respect to
the beneficial owner of such Bearer Note), the Company at its election will
either (x) redeem the Bearer Notes, as a whole but not in part, at a redemption
price equal to 100%, of the principal amount thereof, plus accrued interest to
the redemption date, or (y) if and so long as the conditions of the third
paragraph under "--Payment of Additional Amounts" are satisfied, pay the
additional amounts specified in such paragraph. The Company will make such
determination and election and notify the Trustee thereof in writing as soon as
practicable, and the Trustee will promptly give notice of such determination
(the "Determination Notice"), in each case stating the effective date of such
certification, identification or information reporting requirement, whether the
Company will redeem the Bearer Notes or will pay the additional amounts
specified in the third paragraph under "--Payment of Additional Amounts" and (if
applicable) the last date by which the redemption of the Bearer Notes shall take
place. If the Company elects to redeem the Bearer Notes, such redemption shall
take place on a date not later than one year after publication of the
Determination Notice, as the Company elects by notice in writing to the Trustee
at least 75 days before that date, unless shorter notice is acceptable to the
Trustee. Notwithstanding the foregoing, the Company shall not be required to so
redeem the Bearer Notes if the Company, based upon a written opinion of counsel
selected by the Company, which counsel shall be reasonably acceptable to the
Trustee, subsequently determines, not less than 30 days prior to the Redemption
Date, that subsequent payments would not be subject to any such requirement, in
which case the Company will notify the Trustee in writing of its determination
not to so redeem the Bearer Notes, and the Trustee will promptly give notice to
the Holders of the Bearer Notes of that determination and any earlier redemption
notice will thereupon be revoked and of no further effect. If the Company elects
as provided in clause (y) above to pay Additional Amounts, the Company may
redeem all the Bearer Notes, at any time, in whole but not in part, at a
redemption price equal to 100% of the principal amount thereof plus accrued
interest to the redemption date and any Additional Amounts then payable.
Repurchase at the Option of Holders upon a Change in Control
In the event of a Change in Control, each Holder has the option, subject to
the terms and conditions of the Indenture, to require the Company to purchase
any number of such Holder's whole Bearer Notes, or any portion (provided that
the principal amount must be $1,000 or an integral multiple thereof) of such
Holder's Registered Notes on the date that is the 30th day after the giving of
notice to Holders of such Change in Control (the "Change in Control Purchase
Date") for a purchase price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest up to but not including the Change in Control
Purchase Date.
Within 30 days after the occurrence of a Change in Control, the Company
shall mail to the Trustee and to each registered Holder and cause to be
published a written notice as provided under "--Notices" below, of the Change in
Control, setting forth, among other things, the terms and conditions of, and the
procedures required for exercise of, the Holder's right to require the purchase
of such Holder's Notes.
To exercise the purchase right upon a Change in Control, a Holder must
deliver written notice of such exercise to the Paying Agent at any time prior to
the close of business on the day immediately preceding the Change in Control
Purchase Date, specifying the Notes with respect to which the purchase right is
being exercised. Such notice of exercise may be withdrawn by the Holder by a
written notice of withdrawal delivered to the Paying Agent at any time prior to
the close of business on the day immediately preceding the Change in Control
Purchase Date.
A Change in Control shall be deemed to have occurred if any of the
following occur after the original issuance of the Notes:
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(i) the acquisition by any Person (including any syndicate or
group deemed to be a "person" under Section 13(d)(3) or 14(d)(2) of the
Exchange Act or any successor provision) of beneficial ownership, directly
or indirectly, through a purchase, merger, or other acquisition transaction
or series of transactions of shares of capital stock of the Company
entitling such Person to exercise more than 50% of the total voting power
of all shares of capital stock of the Company entitling the holders thereof
to vote generally in elections of directors; or
(ii) 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, lease, or exchange of all or substantially all of the
property and assets of the Company to another Person (other than a merger
that (x) does not result in a material reclassification, conversion,
exchange, or cancellation of outstanding shares of capital stock, (y) 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, or (z) does not
result in a substantial (i.e., over 50%) change in the beneficial ownership
of the Company);
provided, however, that a Change in Control shall not be deemed to have occurred
(a) if the closing price per share of the Common Stock for each of any five
trading days within the period of ten consecutive trading days ending
immediately after the later of the Change in Control or the public announcement
of the Change in Control (in case of a Change in Control under clause (i) above)
or ending immediately before the effective date of the Change in Control (in the
case of a change in control under clause (ii) above) shall equal or exceed 105%
of the Conversion Price in effect on such trading day, or (b) at least 90% of
the consideration (excluding cash payments for fractional shares) to be paid for
the Common Stock in the transaction or transactions constituting the Change in
Control consists of shares of common stock traded on a national securities
exchange or quoted on the Nasdaq National Market, and, as a result of such
transaction or transactions, the Notes become convertible solely into such
common stock.
"Beneficial ownership" shall be determined in accordance with Rule 13d-3
promulgated by the Commission under the Exchange Act, as in effect on the date
of execution of the Indenture, except that the Indenture requires that the
number of shares of capital stock of the Company entitling the Holders thereof
to vote generally in the election of directors shall be deemed to include, in
addition to all outstanding shares of capital stock of the Company entitling the
Holders thereof to vote generally in the election of directors and Unissued
Shares of the Person with respect to which the Change in Control determination
is being made, all Unissued Shares of all other Persons. As defined in the
Indenture, "Unissued Shares" means shares of capital stock of the Company not
outstanding that are subject to options, warrants, rights to purchase, or
conversion privileges exercisable within 60 days of the date of determination of
a Change in Control and that, upon issuance, will entitle the Holders hereof to
vote generally in the election of directors.
The Company will comply with the provisions of Rule 13e-4 and Rule 14e-1
under the Exchange Act, will file Schedule 13E-4 or any successor or similar
schedule required thereunder, and will otherwise comply with all federal and
state securities laws in connection with any offer by the Company to purchase
Notes at the option of the Holders upon a Change in Control.
The Change in Control purchase feature of the Notes may in certain
circumstances make more difficult or discourage a takeover of the Company and
the removal of incumbent management. The Company is not aware of any specific
effort to accumulate shares of Common Stock or to obtain control of the Company
by means of a merger, tender offer, solicitation, or otherwise, nor is the
Change in Control purchase feature part of a plan by management to adopt a
series of anti-takeover provisions. Instead, the Change in Control purchase
feature is a result of negotiations between the Company and the Underwriters.
Depending on the terms of the transaction, a future highly leveraged
transaction, reorganization, restructuring, merger, or similar transaction
involving the Company's present management or directors could constitute a
Change in Control. Neither the Company nor its current management has any
present intention
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to engage in a transaction involving a Change in Control, although it is
possible that the Company or its management may decide to do so in the future.
Subject to the limitation on mergers and consolidations discussed below,
the Company could, in the future, enter into certain transactions, including
certain recapitalizations, the sale of all or substantially all of its assets,
or the liquidation of the Company, that would not constitute a Change in Control
under the Indenture.
If a Change in Control were to occur, there can be no assurance that the
Company would have sufficient funds to pay the Change in Control Purchase Price
for all Notes tendered by the Holders thereof. Contractual restrictions on the
ability of the Company to purchase Notes upon a Change in Control could prevent
the Company from utilizing its funds which could result in an Event of Default.
In addition, the right to require the Company to repurchase Notes as a result of
the occurrence of a Change in Control could create an event of default under
other indebtedness of the Company. The terms of future indebtedness could
require that such indebtedness be repaid upon the occurrence of a Change in
Control. Failure by the Company to repurchase the Notes when required will
result in an Event of Default with respect to the Notes.
Structural Subordination of Notes
The Notes are general unsecured obligations of the Company which rank pari
passu with the Company's other unsecured indebtedness and general liabilities,
including trade payables. The Notes have not been guaranteed by and do not
constitute an obligation of any of the Company's subsidiaries. Since the Company
is a holding company which conducts all of its operations through its operating
subsidiaries, including CEX Holdings, the Notes are effectively subordinated to
all of the obligations and liabilities of the Company's subsidiaries, including
the secured and unsecured indebtedness of such subsidiaries. The Company's
ability to pay the interest and principal obligations under the Notes is
dependent upon (i) the Company's use of the proceeds received from its offering
of the Notes in a manner which is not prohibited or restricted under any
agreement or instrument to which the Company or any of its subsidiaries
(including CEX Holdings) is currently or subsequently becomes a party, (ii) the
use of proceeds received from subsequent financing transactions, or (iii) the
receipt of funds from the Company's subsidiaries, whether from dividends,
distributions, the repayment of loans made by the Company to such subsidiaries
or other payments from such subsidiaries. Certain agreements or instruments to
which CEX Holdings is currently a party prohibit or restrict (and other
agreements or instruments to which CEX Holdings or its operating subsidiaries
are currently parties may prohibit or restrict) CEX Holdings' or its operating
subsidiaries' ability to borrow funds and limit their right, based upon the
amount of cash flows and certain other factors, to make dividend payments,
distributions, loan repayments or other payments to the Company, causing the
Notes to be effectively subordinated to all of such subsidiaries' obligations,
including all unsecured indebtedness and general liabilities of such
subsidiaries. Specifically, CEX Holdings is currently a party to the Subsidiary
Credit Facility, which is currently being renegotiated. The Subsidiary Credit
Facility prohibits the payment of dividends by CEX Holdings to the Company.
While the Company anticipates that it will use a portion of the proceeds from
the offering to repay the outstanding indebtedness under the Subsidiary Credit
Facility, certain covenants contained in such facility will continue to prohibit
CEX Holdings from paying dividends to the Company unless such facility is
amended or terminated. There can be no assurance that the Company or CEX
Holdings will be successful in amending this facility or negotiating a less
restrictive facility. CEX Holdings is also a party to an indenture relating to
certain 9 1/8% Senior Subordinated Notes, which indenture limits borrowings by
CEX Holdings from the Company and restricts the payment of dividends and certain
other payments by CEX Holdings to the Company, thereby limiting the funds
available to the Company to make payments of principal and interest on the
Notes.
Neither the Indenture nor the Notes limit the Company's or any subsidiary's
right to incur secured or unsecured indebtedness. While the Company has no
indebtedness which is senior to the Notes as of the date of this Prospectus, the
indebtedness of the Company's subsidiaries included, but was not limited to,
approximately U.S. $90.0 million of principal due under certain 9 1/8% Senior
Subordinated Notes due 2003. To the extent the Notes are not converted prior to
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<PAGE>
maturity, the Company may not have sufficient funds, be able to raise additional
capital through additional financing transactions, or receive sufficient funds
from its subsidiaries to satisfy its obligations under the Notes.
The Company primarily conducts its operations through the operating
subsidiaries of CEX Holdings and other subsidiaries, and presently expects that
its future operating activities will be similarly structured to involve
operating subsidiaries. The rights of the Company and its creditors, including
Holders of the Notes, to participate in the assets of any subsidiary,
partnership or other joint venture in which the Company has interests upon any
liquidation or reorganization of any such entity or otherwise will be
effectively subordinated to and subject to the prior claims of creditors of such
entity, except to the extent that the Company may itself be a creditor with
recognized claims against such entity, in which case the claims of the Company
would still be subordinated to any holder of a security interest in the assets
of such entity and any other indebtedness of such entity senior to that held by
the Company. The ability of the Company to pay principal of and premium, if any,
and interest on the Notes or any coupon (including, without limitation, the
payment of the redemption price or repurchase price with respect to the Notes)
will be dependent upon the Company having or obtaining sufficient funds, whether
by consummating additional financing transactions or receiving such funds from
its subsidiaries and the partnerships and ventures in which it participates by
way of dividends, distributions, the repayment of loans or otherwise.
Payment and Conversion
Bearer Notes and coupons are payable in U.S. dollars against surrender
thereof, subject to any applicable laws and regulations, at such paying agencies
outside the United States as the Company may appoint from time to time and, at
the option of the Holder, such payment will be made by dollar check drawn on a
bank in New York City or by transfer to a dollar account (such transfer to be
made only to Holders of an aggregate principal amount of Notes in excess of U.S.
$5,000,000) maintained by the payee with a bank outside the United States. It
is the responsibility of the payee to establish and maintain such a dollar
account. No payment with respect to any Bearer Note or coupon will be made at
the Corporate Trust Office of the Trustee or any other Paying Agent maintained
by, the Company in the United States, or will any payment be made by transfer to
an account, or by mail to an address, in the United States. Notwithstanding the
foregoing, payments with respect to Bearer Notes and coupons may be made at an
office or agency of the Corporate Trust Office of the Trustee in the City of New
York, if payment at all Paying Agents outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
The principal of Registered Notes are payable in U.S. dollars, against
surrender thereof at the Corporate Trust Office of the Trustee in the City of
New York, or, subject to any applicable laws and regulations, at the office of
any Paying Agent, by dollar check drawn on, or by transfer to a dollar account
(such transfer to be made only to Holders of an aggregate principal amount of
Registered Notes in excess of U.S. $5,000,000) maintained by the Holder with a
bank in New York City. Payment of any installment of interest on Registered
Notes will be made to the Person in whose name such Note (or any predecessor
Note) is registered at the close of business on the June 15 or December 15
(whether or not a Business Day) immediately preceding the relevant Interest
Payment Date (a "Record Date"). Payments of such interest will be made by a
dollar check drawn on a bank in New York City mailed to the Holder at such
Holder's registered address or, upon application by the Holder thereof to the
Trustee not later than the applicable Record Date, by transfer to a dollar
account (such transfer to be made only to Holders of an aggregate principal
amount of Registered Notes in excess of U.S. $5,000,000) maintained by the
Holder with a bank in New York City. No transfer to a dollar account will be
made unless the Trustee has received written wire instructions not less than 15
days prior to the relevant payment date.
Any payment on the Notes due on any day which is not a Business Day need
not be made on such day, but may be made on the next succeeding Business Day
with the same force and effect as if made on such due date, and no interest
shall accrue on such payment for the period from and after such date. "Business
Day," when used with respect to any place of payment, place of conversion or any
other place, as the case may be, means each Monday, Tuesday, Wednesday, Thursday
or Friday which is not a day on which banking institutions in such place of
payment, place of conversion or other place, as the case may be, are authorized
or obligated by law or executive order to close; provided, however, that a day
on which banking institutions in New York City, New York or
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London, England are authorized or obligated by law or executive order to close
shall not be a Business Day for certain purposes.
Notes may be surrendered for conversion, subject to any applicable laws and
regulations, at the office of any Conversion Agent outside the United States.
In addition, Registered Notes may be surrendered for conversion at the Corporate
Trust Office of the Trustee in the City of New York, and, if conversion at the
offices of all Conversion Agents outside the United States is illegal or
effectively precluded by exchange controls or similar restrictions, Bearer Notes
may be surrendered for conversion at such Corporate Trust Office. Notes
surrendered for conversion must be accompanied by appropriate notices, any
unmatured coupons and any payments in respect of interest or taxes, as
applicable, as described above under "--Conversion Rights."
The Company has initially appointed as Paying Agents and Conversion Agents
the Bankers Trust Company and Bankers Trust Luxembourg. The Company may at any
time terminate the appointment of any Paying Agent or Conversion Agent and
appoint additional or other Paying Agents and Conversion Agents, provided that
until the Notes have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of, premium, if any, and interest on the Notes
have been made available for payment and either paid or returned to the Company
as provided in the Indenture, the Company agrees to maintain an office or agency
in the City of New York for surrender of Notes for conversion (but only in the
circumstances described in the second sentence of the immediately preceding
paragraph, and not otherwise, with respect to Bearer Notes), and in a Western
European city (which, so long as the Notes are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange shall so require, will
be Luxembourg) for payments with respect to the Notes and for the surrender of
Notes for conversion. Notice of any such termination or appointment and of any
change in the office through which any Paying Agent or Conversion Agent will act
will be given in accordance with "Notices" below.
Bearer Notes must be presented for payment upon redemption or repurchase
together with all unmatured coupons, failing which the amount of any missing
unmatured coupons will be deducted from the sum due for payment. Each amount so
deducted will be paid in the manner described in the first paragraph under this
heading against surrender of the related missing coupon. Interest payable on
any Bearer Notes on any redemption date or repurchase date which is an Interest
Payment Date will be paid to the Holders of record as of the immediately
preceding Record Date.
All moneys deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of principal of, premium, if any, or
interest on any Notes which remain unclaimed at the end of two years after such
payment has become due and payable will be repaid to the Company, and the Holder
of such Note or any coupon appertaining thereto will thereafter look only to the
Company for payment thereof.
Payment of Additional Amounts
The Company will pay to the Holder of any Note or any coupon appertaining
thereto who is not a U.S. person such additional amounts ("Additional Amounts")
as may be necessary in order that every net payment of the principal of, premium
if any, and interest on such Note, after deduction or withholding for or on
account of any present or future tax, assessment or governmental charge imposed
upon or as a result of such payment by the United States or any political
subdivision or taxing authority thereof or therein, will not be less than the
amount provided for in such Note or in such coupon to be then due and payable;
provided, however, that the foregoing obligation to pay Additional Amounts will
not apply to:
(a) any tax, assessment or other governmental charge which would not
have been so imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, shareholder of or possessor of a power over such
Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and the United States and any political subdivision or taxing
authority thereof or therein, including, without limitation, such Holder
(or such fiduciary, settlor, beneficiary, member, shareholder of or
possessor) being or having been a citizen or resident of the United States
or treated as a resident thereof, or being or having been engaged in trade
or business or present
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therein, or having or having had a permanent establishment therein, or (ii)
such Holder's present or former status as a personal holding company, a
foreign personal holding company with respect to the United States, a
controlled foreign corporation, a passive foreign investment company, or a
foreign private foundation or foreign tax exempt entity for United States
tax purposes, or a corporation which accumulates earnings to avoid United
States federal income tax:
(b) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the Holder of such Notes
or any coupon appertaining thereto for payment on a date more than 15 days
after the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal property
or similar tax, assessment or governmental charge;
(d) any tax, assessment, or other governmental charge which would not
have been imposed but for the failure to comply with any certification,
identification or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the Holder or
beneficial owner of such Note or any coupon appertaining thereto, if
compliance is required by statute or by regulation or by ruling of the
United States Treasury Department as a precondition to exemption from such
tax, assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is payable
otherwise than by deduction or withholding from payments of principal of,
premium, if any, or interest on such Note,
(f) any tax, assessment or other governmental charge imposed as a
result of a person's past or present actual or constructive ownership
(including by virtue of the right to convert Notes) of 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote;
(g) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of the principal of, premium,
if any, or interest on any Note, if such payment can be made without such
withholding by any other Paying Agent in Western Europe;
(h) any tax, assessment or other governmental charge imposed on a
Holder that is a partnership or a fiduciary, but only to the extent that
any beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the payment
of Additional Amounts had the beneficial owner, member, beneficiary or
settlor directly received its beneficial or distributive share of payments
on the Note;
(i) any tax, assessment or other governmental charge which would not
have been imposed but for the fact that such Note constitutes a "United
States real property interest" as defined in Section 897 of the Code and
the regulations thereunder with respect to the beneficial owner of such
Note (see "United States Taxation"); or
(j) any combination of items (a), (b), (c), (d), (e), (f), (g), (h),
and (i).
For purposes of this Prospectus, "United States" means the United States of
America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction and a "U.S. person"
is a person that is, for United States federal income tax purposes, (a) a
citizen or resident of the United States, (b) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof or (c) an estate or trust the income of
which is subject to United States federal income taxation regardless of source.
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Notwithstanding the foregoing, if and so long as a certification,
identification, or other information reporting requirement referred to in the
second paragraph under "--Redemption--Redemption for Taxation Reasons" above
would be fully satisfied by payment of a backup withholding tax or similar
charge, the Company may elect, by so stating in the Determination Notice, to
have the provisions of this paragraph apply in lieu of redeeming the Bearer
Notes pursuant to such second paragraph. In such event, the Company will pay as
additional amounts such amounts as may be necessary so that every net payment
made, following the effective date of such requirements, outside the United
States by the Company or any Paying Agent of principal of, and premium, if any,
due in respect of any Bearer Note, or interest represented by any coupon, the
beneficial owner of which is not a U.S. person (but without any requirement that
the nationality, residence or identity of such beneficial owner be disclosed to
the Company, any Paying Agent or any governmental authority), after deduction or
withholding for or on account of such backup withholding tax or similar charge,
other than a backup withholding tax or similar charge which is (a) the result of
a certification, identification or information reporting requirement described
in the first parenthetical clause of such second paragraph, (b) imposed as a
result of the fact that the Company or any Paying Agent has actual knowledge
that the beneficial owner of such Bearer Note or coupon is within the category
of persons described in clause (a) of the first paragraph under this heading or
(c) imposed as a result of presentation of such Bearer Note or coupon for
payment more than 15 days after the date on which such payment becomes due and
payable or on which payment thereof is duly provided for, whichever occurs
later, will not be less than the amount provided for in such Bearer Note or
coupon to be then due and payable.
Events of Default; Notice and Waiver
If an Event of Default (other than an Event of Default resulting from
bankruptcy, insolvency, or reorganization) occurs and is continuing, the
Trustee, or the Holders of not less than 25% in outstanding principal amount of
the Notes may, by notice to the Company (and to the Trustee if given by the
Holders), declare all unpaid principal of and accrued interest to the date of
acceleration on the Notes then outstanding to be due and payable immediately.
If an Event of Default resulting from certain events of bankruptcy, insolvency,
or reorganization shall occur, all unpaid principal of and accrued interest on
the Notes then outstanding shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.
The Indenture provides that the Holders of a majority in principal amount
of the Notes may on behalf of all Holders waive any existing default or Event of
Default and its consequences, except a default in the payment of principal of or
interest on the Notes or any default (as defined in the Indenture) in respect of
any provision of the Indenture that cannot be modified or amended without the
consent of the Holder of each Note affected.
Other than granting Holders the option to require the Company to purchase
all or part of their Notes upon the occurrence of a Change in Control as
described in "Repurchase at the Option of Holders upon a Change in Control," the
Indenture does not contain any covenants or other provisions designed to afford
Holders protection in the event of takeovers, recapitalizations, highly
leveraged transactions, or similar restructurings involving the Company.
The following are Events of Default under the Indenture: (i) failure of
the Company to pay interest on the Notes for 30 days after the same is due or
failure to pay all or any part of the principal or repurchase price when due;
(ii) failure of the Company to comply with any of its other agreements contained
in the Notes or the Indenture for 30 days after receipt of notice of such
failure; (iii) default by the Company or any Material Subsidiary of the Company
with respect to its obligation to pay principal of, premium, if any, or interest
on certain other indebtedness aggregating more than $30,000,000, or the
acceleration of such indebtedness under the terms of the instruments evidencing
such indebtedness, which has not been withdrawn within 30 days from the date of
such default; and (iv) certain events of bankruptcy or insolvency, including
without limitation appointment of a Custodian (as defined) of the Company's
property or liquidation, of the Company or any Material Subsidiary.
The Trustee shall, within 90 days after the occurrence of any default known
to it, give to the Holders notice, as provided under "--Notice" below, of such
default; provided that, except in the case of a default in the
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payment of principal of or interest on any of the Notes, the Trustee may
withhold such notice if it in good faith determines that the withholding of such
notice is in the interests of the Holders.
No Holder may pursue any remedy under the Indenture against the Company
(except actions for payment of overdue principal or interest or for the
conversion of the Notes), unless (i) the Holder gives to the Trustee written
notice of a continuing Event of Default, (ii) the Holders of at least 25% in
principal amount of the outstanding Notes make a written request to the Trustee
to pursue the remedy, (iii) such Holder or Holders offer satisfactory indemnity
to the Trustee against any loss, liability, or expense, (iv) the Trustee does
not comply with the request within 60 days after receipt of the request and the
offer of indemnity, and (v) the Trustee shall not have received a contrary
direction from the Holders of at least a majority in principal amount of the
outstanding Notes.
The Company must deliver an Officers' Certificate to the Trustee within 105
days after the end of each fiscal year of the Company as to the signer's
knowledge of the Company's compliance with all conditions and covenants on its
part contained in the 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.
Meetings, Modification and Waiver
The Indenture contains provisions for convening meetings of the Holders of
Notes to consider matters affecting their interests.
Modifications and amendments of the Indenture may be made, and certain past
defaults by the Company may be waived, either (i) with the written consent of
the Holders of not less than a majority in aggregate principal amount of the
Notes at the time outstanding or (ii) by the adoption of a resolution, at a
meeting of Holders of the Notes at which a quorum is present, by the Holders of
at least 66 2/3% in aggregate principal amount of the Notes represented at such
meeting. However, no such modification or amendment may, without the consent of
the Holder of each outstanding Note or coupon affected thereby, (a) change the
Stated Maturity (as defined) of the principal of, or any installment of interest
on, any Note or coupon, (b) reduce the principal amount of, or the premium, if
any, or interest on, any Note or coupon, (c) reduce the amount payable upon an
optional redemption or the consideration payable to any Holder converting after
a notice of redemption has been given, (d) modify the provisions with respect to
the repurchase right of the Holders in a manner adverse to the Holders, (e)
change the obligation of the Company to pay Additional Amounts described above,
(f) change the place or currency of payment of principal of, premium, if any, or
interest on, any Note or coupon, (g) impair the right to institute suit for the
enforcement of any payment on or with respect to any Note or coupon, (h) modify
the obligation of the Company to maintain an office or agency in New York City
and in a Western European City, (i) adversely affect the right to convert Notes,
(j) reduce the above-stated percentage of outstanding Notes necessary to modify
or amend the Indenture, (k) reduce the percentage of aggregate principal amount
of outstanding Notes necessary for waiver of compliance with certain provisions
of the Indenture or for waiver of certain defaults, (l) reduce the percentage in
aggregate principal amount of Notes outstanding required for the adoption of a
resolution or the quorum required at any meeting of Holders of Notes at which a
resolution is adopted, or (m) modify the obligation of the Company to deliver
information required under Rule 144A to permit resales of Notes and Common Stock
issuable upon conversion thereof in the event the Company ceases to be subject
to certain reporting requirements under the United States securities laws. The
quorum at any meeting called to adopt a resolution will be persons holding or
representing a majority in aggregate principal amount of the Notes at the time
outstanding and, at any reconvened meeting adjourned for lack of quorum, 25% of
such aggregate principal amount.
In addition to the foregoing, the Holders of a majority in aggregate
principal amount of the outstanding Notes may waive compliance by the Company
with certain restrictive provisions of the Indenture. The Holders of a majority
in aggregate principal amount of the outstanding Notes may waive any past
default under the Indenture, except a default in the payment of principal,
premium, if any, or interest.
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The Company and the Trustee may amend or supplement the Indenture or the
Notes without notice to or consent of any Holder in certain events, such as to
comply with certain conversion adjustment, liquidation and merger provisions
described in the Indenture, to provide for uncertificated Notes in addition to
or in place of certificated Notes, to cure any ambiguity, defect, or
inconsistency or to make any other change that does not adversely affect the
rights of the Holders, to comply with the provisions of the Trust Indenture Act,
or to appoint a successor Trustee.
Transfer and Exchange
At the option of the Holder upon request confirmed in writing, and subject
to the terms of the Indenture, Bearer Notes (with all unmatured coupons, except
as provided below) will be exchangeable at any time after the Exchange Date into
an equal aggregate principal amount of Registered Notes, and Registered Notes
will be exchangeable at any time into an equal aggregate principal amount of
Registered Notes of different authorized denominations. See "--Delivery and
Form of Regulation S Notes" and "--Delivery and Form of Restricted Notes."
Bearer Notes surrendered in exchange for Registered Notes between a Record Date
or Special Record Date and the relevant Interest Payment Date or date on which
Defaulted Interest (as defined) will be paid, as the case may be, will not be
required to be surrendered with the coupons relating to such Interest Payment
Date or payment date, as the case may be, Registered Notes may not be exchanged
for Bearer Notes.
Bearer Notes may be presented for exchange at the office of any transfer
agent outside the United States, Registered Notes may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed) or exchange, at the office of any transfer agent or at the office of
the security registrar, without service charge but, in the case of a transfer,
upon payment of any taxes and other governmental charges as described in the
Indenture. Any registration of transfer or exchange will be effected upon the
transfer agent or the security registrar, as the case may be, being satisfied
with the documents of title and identity of the person making the request, and
subject to such reasonable regulations as the Company may from time to time
agree upon with the transfer agents and the security registrar, all as described
in the Indenture. Registered Notes may be transferred in whole or in part in
authorized denominations.
The Company has initially appointed the Trustee as security registrar and
transfer agent, acting through its Corporate Trust Offices in New York City, and
has appointed the other banks as set out at the end of this Prospectus in London
and Luxembourg as transfer agents. The Company reserves the right to vary or
terminate the appointment of the security registrar or of any transfer agent or
to appoint additional or other transfer agents or to approve any change in the
office through which any security registrar or any transfer agent acts, provided
that there will at all times be a security registrar in and a transfer agent in
a Western European city (which, so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange shall
so require, will be Luxembourg).
In the event of a redemption of less than all of the Notes for any of the
reasons set forth above under "--Redemption," the Company will not be required
(a) to register the transfer or exchange of Registered Notes or to exchange
Bearer Notes for Registered Notes for a period of 15 days immediately preceding
the date notice is given identifying the serial numbers of the Notes called for
such redemption, (b) to register the transfer of or exchange of any Registered
Note, or portion thereof, called for redemption, or (c) to exchange any Bearer
Note called for redemption; provided, however, that a Bearer Note called for
redemption may be exchanged for a Registered Note which is simultaneously
surrendered to the security registrar or transfer agent making such exchange
with written instructions for conversion consistent with the provisions
described under "--Conversion Rights" and "--Payment and Conversion" above.
Title
Title to the Temporary Global Note, the Bearer Notes and the coupons will
pass by delivery. The Company, the Trustee, any Paying Agent and any Conversion
Agent may treat the Holder of any Bearer Note, the Holder of any coupon and the
registered owner (as reflected in the Security Register) of any Registered Note
as the
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absolute owner thereof (whether or not such Note or coupon shall be overdue) for
the purpose of making payment and for all other purposes.
Notices
Except as set forth in the second paragraph under "--Redemption--Redemption
for Taxation Reasons," redemption, repurchase and other notices will be given by
publication in Authorized Newspapers (as set forth in the Indenture) in London,
England and, so long as the Notes are listed on the Luxembourg Stock Exchange
and the rules of the Luxembourg Stock Exchange shall so require, in Luxembourg
or, if publication in either London or Luxembourg is not practical, elsewhere in
Western Europe. Such publication is expected to be made in the Financial Times
and the Luxemborger Wort. Notices to Holders of Registered Notes will also be
given by mail to the addresses of such Holders as they appear in the Security
Register. Such notices will be deemed to have been given on the date of such
publication or, if published in such Authorized Newspapers on different dates,
on the date of the first such publication or on the date of such mailing, as the
case may be.
Notice of a redemption of Notes will be given at least once not less than
20 nor more than 60 days prior to the redemption date (which notice shall be
irrevocable except as otherwise provided in the second paragraph under "--
Redemption--Redemption for Taxation Reasons") and will specify the redemption
date.
Replacement of Notes and Coupons
Notes (including any coupons appertaining to Bearer Notes) that become
mutilated, destroyed, stolen or lost will be replaced by the Company at the
expense of the Holder upon delivery to the Trustee (or in the case of a Bearer
Note, to a transfer agent outside the United States) of the mutilated Notes and
coupons or evidence of the loss, theft or destruction thereof satisfactory to
the Company and the Trustee. In the case of a lost, stolen or destroyed Note or
coupon, indemnity satisfactory to the Trustee and the Company may be required at
the expense of the Holder of such Note or coupon before a replacement Note (with
the relevant coupons appertaining thereto, if any) or coupon will be issued.
Payment of Stamp and Other Taxes
The Company shall pay all stamp and other duties, if any, which may be
imposed by the United States or the United Kingdom or any political subdivision
thereof or taxing authority thereof or therein with respect to the issuance of
the Notes. Except as described under "--Payment of Additional Amounts," the
Company will not be required to make any payment with respect to any other tax,
assessment or governmental charge imposed by any government or any political
subdivision thereof or taxing authority therein.
Registration Rights
This Prospectus is part of a shelf registration statement filed by the
Company with the Commission (the "Shelf Registration Statement") with respect to
the resale of the Offered Notes and the shares of the Common Stock issued or
issuable upon conversion of the Offered Notes. The Company has agreed to keep
such Shelf Registration Statement effective until three years from the latest
date of original issuance of the Offered Notes or until the Shelf Registration
Statement is no longer required for transfer of the Offered Notes or the shares
of the Common Stock. The Company will be required to pay liquidated damages to
the holders of the Offered Notes or the Common Stock issuable upon conversion of
the Offered Notes, as the case may be, under certain circumstances of The
Company is not in compliance with its registration obligations.
Satisfaction and Discharge
The Indenture will be discharged and canceled upon payment or conversion of
all the Notes. The Company may terminate all of its obligations under the
Indenture, other than its obligation to pay the principal of and interest on the
Notes and certain other obligations (including its obligation to deliver shares
of Common Stock upon
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conversion of the Notes), at any time, by depositing with the Trustee or a
Paying Agent other than the Company, money or non-callable U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes then
outstanding to maturity.
Mergers and Consolidations
Subject to the right of the Holders to require the Company to purchase the
Notes in the event of a Change in Control, the Company may consolidate or merge
with or into any other corporation, and the Company may transfer its property
and assets substantially as an entirety to any person, provided (i) either the
Company is the resulting or surviving corporation, or the successor corporation
is a domestic corporation and the successor expressly assumes, by supplemental
indenture executed and delivered to the Trustee, payment of the principal of and
interest on the Notes and performance and observance of every covenant of the
Indenture, and (ii) immediately before and immediately after giving effect to
such transaction, no default or Event of Default shall have occurred and be
continuing. Thereafter, all obligations of the Company under the Indenture and
the Notes will terminate.
Concerning the Trustee
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee is permitted to engage in other
transactions; provided, however, if it acquires any conflicting interest (as
defined) and there exists a default with respect to the Notes, it must eliminate
such conflict or resign.
The Holders of a majority in principal amount of all outstanding Notes have
the right to direct the time, method and place of conducting any proceeding for
exercising any remedy or power available to the Trustee, provided that such
direction does not conflict with any rule of law or with the Indenture, is not
prejudicial to the rights of another Holder or the Trustee, and does not involve
the Trustee in personal liability.
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DESCRIPTION OF CAPITAL STOCK
General
The Company is authorized to issue 300,000,000 shares of common stock, par
value $.0002 per share, 25,000,000 shares of preferred stock, par value $.0001
per share (the "Preferred Stock") and 3,000,000 shares of nonvoting common
stock, par value $.0002 per share. All outstanding shares of Common Stock are
fully paid and nonassessable. As of September 18, 1996, there were 71,287,760
shares of Common Stock outstanding and no shares of Preferred Stock or nonvoting
common stock outstanding.
The following summary description of the Company's capital stock does not
purport to be complete and is subject to and qualified in its entirety by the
description of the Company's capital stock contained in the Corporate Express
Articles of Amendment and Restatement, a copy of which has been filed with the
Commission. Reference is made to the Company's Articles of Amendment and
Restatement, for a detailed description of the provisions summarized below.
Common Stock
Each holder of Common Stock is entitled to one vote for each share owned of
record on all matters submitted to the vote of shareholders. There are no
cumulative voting rights. Accordingly, the holders of a majority of the shares
voting for the election of directors can elect all the directors if they choose
to do so, subject to voting rights, if any, of holders of Preferred Stock, if
any, to elect directors. Subject to preferences that may be applicable to any
Preferred Stock that may be issued in the future and any restrictions on payment
of dividends imposed by credit facilities and other agreements which may be
entered into, the holders of Common Stock will be entitled to such dividends as
may be declared from time to time by the Board of Directors from funds legally
available therefor and will be entitled, after payment of all prior claims, to
receive, on a pro rata basis, all assets of the Company upon its liquidation,
dissolution or winding up. Common Stock is not redeemable, does not have any
conversion rights and is not subject to call. Holders of shares of Common Stock
generally have no preemptive rights to maintain their respective percentage of
ownership in future offers and sales of stock by the Company. The rights,
preferences and privileges of holders of Common Stock are subject to the rights,
preferences and privileges of any Preferred Stock which may be issued in the
future.
The Common Stock is quoted on the Nasdaq National Market and trades under
the symbol "CEXP."
Nonvoting Common Stock
Corporate Express, J.P. Morgan and certain other designated shareholders
are parties to Recapitalization Agreements dated as of December 3, 1991 and
August 29, 1992, pursuant to which J.P. Morgan, or any transferee of J.P.
Morgan, may exchange its voting shares of the Company's capital stock for
nonvoting shares of the same number and class to comply with regulatory
constraints. If such exchange rights are exercised, the voting shares held by
J.P. Morgan, or its transferee, would be exchanged for an equal number of shares
of nonvoting common stock. The rights of any holder of nonvoting common stock,
if issued, would be identical to the rights of the holders of Common Stock,
except that there would be no voting rights with respect to the nonvoting common
stock. No shares of nonvoting common stock have been issued.
Preferred Stock
None of the Company's authorized Preferred Stock is issued or outstanding.
The Board of Directors is authorized to divide the Preferred Stock into one or
more series and to determine the preferences and rights and the qualifications,
limitations or restrictions thereof, including any dividend rights, conversion
rights, voting rights, redemption rights, liquidation preferences, sinking fund
provisions, the number of shares constituting the series and the designation of
such series. The Board of Directors may, without shareholder approval, issue
Preferred Stock
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with voting and other rights that could adversely affect the voting power of the
holders of Common Stock and could have certain anti-takeover effects. The
Company has no present plans to issue any shares of Preferred Stock.
Registration Rights of Certain Holders
The holders of certain shares of Common Stock (the "Registrable
Securities"), or their transferees, are entitled to certain rights with respect
to the registration under the Securities Act of their shares. These rights are
provided under the terms of agreements between the Company and the holders of
Registrable Securities. Whenever the Company proposes to register any shares of
Common Stock, it is required to give notice to the holders of Registrable
Securities and to include their shares of Common Stock in the registration
statement ("Piggyback Registration Rights"). A holder's Piggyback Registration
Rights are subject to certain conditions, including the ability of the
underwriters for a public offering to limit the number of shares included in the
offering or to exclude certain Registrable Securities from the offering.
Subject to certain limitations in the agreements, the holders of certain
Registrable Securities are also entitled, on no more than two occasions (three
occasions, in limited circumstances), to require that the Company use its
reasonable best efforts to file a registration statement under the Securities
Act, at Company expense, covering the registration of the Registrable
Securities. All registration expenses, other than the fees of the holder's own
counsel and any transfer taxes and underwriting discounts and commissions,
incurred in connection with a registration of the Registrable Securities
required by the holder shall be borne by the Company. The Company will
indemnify the holder against all claims resulting from any untrue statement of a
material fact or material omission made in connection with any registration
statement covering the Registrable Securities.
Information Rights
Corporate Express is obligated to provide certain holders of Common Stock
and warrants exercisable for Common Stock, with copies of all proxy statements,
registration statements, publicly filed notifications, information provided to
security holders of the Company or the financial community generally, and a
detailed budget for each fiscal year.
Limitations on Directors' Liabilities and Indemnification
As permitted by the Colorado Business Corporation Act, the Company's
Articles of Amendment and Restatement and By-Laws provide that no director or
officer will be liable to the Company or its shareholders for monetary damages
for breach of fiduciary duty as a director or officer, except for liability (i)
for any breach of the director's or officer's duty of loyalty to the Company or
its shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases, and (iv)
for any transaction from which the director or officer derives an improper
personal benefit. The effect of this provision is to eliminate the rights of
the Company and its shareholders to recover monetary damages against a director
or officer for breach of the fiduciary duty of care as a director or officer
(including breaches resulting from negligent or grossly negligent behavior),
except in the situations described in clauses (i), (ii), (iii) and (iv) above.
This provision does not limit or eliminate the rights of the Company or any
shareholder to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's or officer's duty of care. The Company's
Articles of Amendment and Restatement and By-Laws also provide that the Company
shall, to the fullest extent permitted by law, indemnify and advance expenses to
each of its currently acting and former directors and officers and may indemnify
and advance expenses to each of its currently acting and former employees and
agents. The Company has entered into agreements to provide indemnification for
its directors and certain officers consistent with the Company's Articles of
Amendment and Restatement and By-Laws and has obtained director's and officer's
liability insurance.
34
<PAGE>
UNITED STATES TAXATION
The following is a summary of certain United States federal income and
estate tax considerations relating to the purchase, ownership and disposition of
the Notes and of Common Stock into which Notes may be converted, but does not
purport to be a complete analysis of all the potential tax considerations
relating thereto. This summary is based on laws, regulations, rulings and
decisions now in effect (or, in the case of certain United States Treasury
Regulations ("Treasury Regulations"), now in proposed form), all of which are
subject to change. This summary deals only with Holders that will hold Notes and
Common Stock into which Notes may be converted as "capital assets" (within the
meaning of Section 1221 of the Code) and does not address tax considerations
applicable to investors that may be subject to special tax rules, such as banks,
tax-exempt organizations, insurance companies, dealers in securities or
currencies, persons that will hold Notes as a position in a "straddle" or
"conversion transaction" for tax purposes, or persons that have a "functional
currency" other than the U.S. dollar. This summary discusses the tax
considerations applicable to the initial purchasers of the Notes and does not
discuss the tax considerations applicable to subsequent purchasers of the Notes.
INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME AND
ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES
ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
United States Holders
As used herein, the term "United States Holder" means the beneficial owner
of a Note or Common Stock that for United States federal income tax purposes is
(i) a citizen or resident of the United States, (ii) treated as a domestic
corporation, or (iii) otherwise subject to United States federal income taxation
on a net income basis in respect of a Note or Common Stock. For purposes of the
following, it is assumed that a United States Holder will own only Registered
Notes. Generally, a United States Holder who owns Bearer Notes will not be
entitled to deduct any loss sustained on the sale, exchange, or redemption of a
Bearer Note, and any gain to such a Holder on the sale, exchange, or redemption
of a Bearer Note will be treated as ordinary income as opposed to capital gain.
Payment of Interest
Interest on a Note generally will be taxable to a United States Holder as
ordinary income at the time such interest is paid or accrues, in accordance with
such Holder's method of accounting for United States federal income tax
purposes.
Sale, Exchange or Redemption of the Notes
Upon the sale, exchange or redemption of a Note, a United States Holder
generally will recognize capital gain or loss equal to the difference between
the amount of cash proceeds and the fair market value of any property received
on the sale, exchange or redemption (except to the extent such amount is
attributable to accrued interest income which is taxable as ordinary income) and
such Holders' adjusted tax basis in the Note. Such capital gain or loss will be
long-term capital gain or loss if the United States Holder's holding period in
the Note is more than one year at the time of sale, exchange or redemption.
Conversion of the Notes
A United States Holder's conversion of a Note into Common Stock generally
will not be a taxable event. Such Holder's tax basis in the Common Stock
received on conversion of a Note will be the same as such Holder's adjusted tax
basis in the Note at the time of conversion (reduced by any basis allocable to a
fractional share interest), and the holding period for the Common Stock received
on conversion will generally include the holding period of the Note converted.
35
<PAGE>
Cash received in lieu of a fractional share of Common Stock upon conversion
should be treated as a payment in exchange for the fractional share of Common
Stock. Accordingly, the receipt of cash in lieu of a fractional share of Common
Stock generally should result in capital gain or loss (measured by the
difference between the cash received for the fractional share and the United
States Holder's adjusted tax basis in the fractional share).
Dividends
Dividends paid on the Common Stock generally will be taxable to a United
States Holder as ordinary income to the extent of the Company's current or
accumulated earnings and profits.
If at any time (i) the Company makes a distribution of property to its
shareholders or purchases Common Stock in a tender offer and such distribution
or purchase would be taxable to such shareholders as a dividend for United
States federal income tax purposes (e.g., distributions of evidences of
indebtedness or assets of the Company, but generally not stock dividends or
rights to subscribe for Common Stock) and, pursuant to the antidilution
provisions of the Indenture, the conversion price of the Notes is decreased, or
(ii) the conversion price of the Notes is decreased at the discretion of the
Company, such decrease may be deemed to be the payment of a taxable dividend to
Holders of Notes (pursuant to Section 305 of the Code). Holders of Notes could
therefore have taxable income as a result of an event pursuant to which they
received no cash or property.
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of
principal, premium, if any, and of interest on a Note, payments of dividends on
Common Stock, payments of the proceeds of the sale of a Note and payments of the
proceeds of the sale of Common Stock to certain non-corporate United States
Holders, and a 31% backup withholding tax may apply to such payments if the
United States Holder (i) fails to furnish or certify his correct taxpayer
identification number to the payor in the manner required, (ii) is notified by
the Internal Revenue Service (the "IRS") that he has failed to report payments
of interest and dividends properly, or (iii) under certain circumstances, fails
to certify that he has not been notified by the IRS that he is subject to backup
withholding for failure to report interest and dividend payments.
Non-United States Holders
As used herein, the term "Non-United States Holder" means the beneficial
owner of a Note, coupon or Common Stock that for United States federal income
tax purposes is (i) a nonresident alien individual, (ii) a foreign corporation,
(iii) a foreign partnership, or (iv) an estate or trust that is not subject to
United States federal income tax on a net income basis in respect of a Note or
Common Stock.
Payment of Interest
Payment of interest on a Note or coupon by the Company or any Paying Agent
to a Non-United States Holder will qualify for the "portfolio interest
exemption" and therefore will not be subject to United States federal income tax
or withholding tax, provided that the Non-United States Holder (i) does not
actually or constructively own 10% or more of the combined voting power of all
classes of stock of the Company entitled to vote, (ii) is not a controlled
foreign corporation related to the Company through stock ownership and (iii) in
the case of a Registered Note, provides a statement signed under penalties of
perjury that includes its name and address and certifies as to its non-United
States status in compliance with applicable law and regulations.
A Non-United States Holder generally will be taxed in the same manner as a
United States corporation or resident with respect to interest if the interest
income is effectively connected with a United States trade or business.
Effectively connected interest received by a corporate Non-United States Holder
may also, under certain circumstances, be subject to an additional "branch
profits tax" at a 30% rate (or, if applicable, a lower treaty rate). Even
though such effectively connected interest is subject to income tax, and may be
subject to the branch profits tax, it is not subject to withholding tax if the
recipient delivers IRS Form 4224 to the payor.
36
<PAGE>
Interest income that is not effectively connected with a United States
trade or business and that does not qualify for the portfolio interest exemption
described above will generally be subject to a 30% (or lower treaty rate)
withholding tax.
Sale, Exchange or Redemption of the Notes
A Non-United States Holder of a Note or coupon will generally not be
subject to United States federal income tax or withholding tax on any gain
realized on the sale, exchange or redemption of the Note or coupon (including
the receipt of cash in lieu of fractional shares upon conversion of a Note into
Common Stock) unless (1) the gain is effectively connected, or treated as
effectively connected, with a United States trade or business of the Non-United
States Holder or (2) in the case of a Non-United States Holder who is an
individual, such Holder is present in the United States for a period or periods
aggregating 183 days or more during the taxable year of the disposition, and
such holder has a "tax home" in the United States or the disposition is
attributable to an office or other fixed place of business maintained by such
Holder in the United States or (3) the Holder is subject to tax pursuant to the
provisions of the Code applicable to certain United States expatriates. See
"United States Foreign Investment in Real Property Tax Act" below for a
discussion of when the foregoing may not apply.
Conversion of the Notes
No United States federal income tax will be imposed upon the conversion of
a Note into Common Stock by Non-United States Holders except with respect to the
receipt of cash in lieu of fractional shares by Non-United States Holders upon
conversion of a Note where such Non-United States Holders have a connection
with, or status with respect to, the United States as described above under
"Non-United States Holders--Sale, Exchange or Redemption of the Notes." See
"United States Foreign Investment in Real Property Tax Act" below for a
discussion of when the foregoing may not apply.
Dividends
Dividends to a Non-United States Holder paid on Common Stock (excluding
dividends that are effectively connected with the conduct of a trade or business
in the United States by such Holder) will be subject to United States federal
withholding tax at a 30% rate (or lower rate provided under any applicable
income tax treaty). Dividends that are effectively connected with the conduct
of a trade or business in the United States by a Non-United States Holder will
be subject to United States federal income tax at ordinary United States federal
income tax rates and may also be subject to information reporting and possible
backup withholding at a rate of 31%. If such Non-United States Holder is a
foreign corporation, it may also be subject to a United States branch profits
tax at a 30% rate or such lower rate as may be specified by an applicable income
tax treaty. Even though such effectively connected dividends are subject to
income tax, and may be subject to the branch profits tax, they will not be
subject to U.S. withholding tax described above, provided that the Holder
delivers IRS Form 4224 to the payor.
Dividends deemed paid, as described above under "United States Holders--
Dividends" to a Non-United States Holder may be subject to United States federal
withholding tax at the rate set forth in the preceding paragraph.
Death of a Non-United States Holder
A Note or coupon will not be subject to United States federal estate tax as
a result of the death of a Non-United States Holder who is not a citizen or
resident of the United States for United States estate tax purposes at the time
of death, provided that such Holder or beneficial owner did not at the time of
death actually or constructively own 10% or more of the combined voting power of
all classes of stock of the Company entitled to vote, and if at the time of
death payments with respect to such Note or coupon would not have been
effectively connected with the conduct by such Non-United States Holder of a
trade or business within the United States.
37
<PAGE>
Common Stock actually or beneficially held by a Non-United States Holder at
the time of his or her death (or previously transferred subject to certain
retained rights or powers) will be subject to United States federal estate tax
unless otherwise provided by an applicable estate tax treaty.
Information Reporting and Backup Withholding Tax
United States information reporting requirements and backup withholding tax
will not apply to payments on a Bearer Note or coupon made outside the United
States by the Company or by any Paying Agent (acting in its capacity as such) to
a Non-United States Holder. Payments on a Registered Note to a Non-United
States Holder will be subject to such requirements but will not be subject to
such tax if the statement described in "Non-United States Holders--Payment of
Interest" is duly provided by the beneficial owner. Information reporting and
backup withholding tax also will not apply to any payment on a Bearer Note or
coupon outside the United States by a foreign office of a custodian, nominee or
other agent of the beneficial owner of such Note or coupon, unless such
custodian, nominee or agent (i) is a United States person, (ii) derives 50% or
more of its gross income for certain periods from the conduct of a trade or
business in the United States or (iii) is a controlled foreign corporation as to
the United States. Payment on a Bearer Note or coupon outside the United States
to the beneficial owner thereof by a foreign office of any custodian, nominee or
agent that is described in (i), (ii), or (iii) of the preceding sentence will
not be subject to backup withholding tax, but will be subject to information
reporting requirements unless such custodian, nominee or agent has documentary
evidence in its records that the beneficial owner is a Non-United States Holder
and certain other conditions are met, or the beneficial owner otherwise
establishes an exemption. Payment on a Note or coupon to the beneficial owner
thereof by a United States office of a custodian, nominee or agent is subject to
information reporting and backup withholding requirements, unless the beneficial
owner of the Note or coupon certifies that it is a NonUnited States Holder and
certain other conditions are met or the beneficial owner otherwise establishes
an exemption.
Information reporting requirements and backup withholding tax will not
apply to any payment of the proceeds of the sale of a Registered or Bearer Note
or coupon or any payment of the proceeds of the sale of Common Stock effected
outside the United States by a foreign office of a "broker" (as defined in
applicable Treasury Regulations), unless such broker (i) is a United States
person, (ii) derives 50% or more of its gross income for certain periods from
the conduct of a trade or business in the United States or (iii) is a controlled
foreign corporation as to the United States. Payment of the proceeds of any
such sale effected outside the United States by a foreign office of any broker
that is described in (i), (ii) or (iii) of the preceding sentence will not be
subject to backup withholding tax, but will be subject to information reporting
requirements unless such broker has documentary evidence in its records that the
beneficial owner is a Non-United States Holder and certain other conditions are
met, or the beneficial owner otherwise establishes an exemption. Payment of the
proceeds of any such sale to or through the United States office of a broker is
subject to information reporting and backup withholding requirements, unless the
beneficial owner of the Note or coupon certifies that it is a Non-United States
Holder or otherwise establishes an exemption.
If paid to an address outside the United States, dividends on Common Stock
held by a Non-United States Holder will be subject to a 30% rate (or lower
treaty rate) of withholding as described in "Dividends" above, but will not be
subject to the information reporting and backup withholding requirements
described in this section.
The United States withholding and information reporting rules discussed
above are under review by the United States Department of the Treasury, and
their application to the Notes, coupons and Common Stock could be changed
prospectively by future regulations. On April 22, 1996, the Department of the
Treasury issued Proposed Regulations which would revise in certain respects the
rules governing the United States withholding and information reporting on
payments to foreign persons. The Proposed Regulations would, if adopted in
their present form, generally be effective for payments made to foreign persons
after 1997. In particular, the Proposed Regulations would generally require a
payor of dividends to presume that a payee is a U.S. person subject to the 31%
backup withholding tax in the absence of adequate documentation of foreign
status. If adopted in their present form, such proposed regulations would not
apply to dividends paid prior to January 1, 2000, on stock traded on a U.S.
38
<PAGE>
established financial market with respect to accounts established on or before
the sixtieth day after the promulgation of final regulations.
United States Foreign Investment in Real Property Tax Act
Under the Foreign Investment in Real Property Tax Act ("FIRPTA"), any
person who acquires a "United States real property interest" (as described
below) from a foreign person must deduct and withhold a tax equal to 10% of the
amount realized by the foreign transferor. In addition, a foreign person who
disposes of a United States real property interest generally is required to
recognize gain or loss that is subject to United States federal income tax. A
"United States real property interest" generally includes any interest (other
than an interest solely as a creditor) in a United States corporation unless it
is established under specific procedures that the corporation is not (and was
not for the prior five-year period) a "United States real property holding
corporation." The Company does not believe that it is a United States real
property holding corporation as of the date hereof, although it has not
determined or established whether it is now or will be a United States real
property holding corporation. If it is not established that the Company is not
a United States real property holding corporation, then, unless an exemption
applies, both the Common Stock and the Notes would be treated as United States
real property interests.
An interest in a United States corporation generally will not be treated as
a United States real property interest if, any time during the calendar year,
any class of stock of the corporation is "regularly traded" on an established
securities market (the "regularly-traded exemption"). The regularly-traded
exemption is not available to a regularly traded interest (such as the Common
Stock) if such interest is owned by a person who beneficially owns (actually or
constructively) more than 5% of the total fair market value of that class of
interests at any time during the five-year period ending on the date of
disposition of such interest or other applicable determination date.
Accordingly, except with respect to a sale or other disposition of Common Stock
by a Non-United States Holder whose aggregate beneficial ownership has exceeded
that 5% threshold, no withholding or income taxation under the FIRPTA rules
should be required with respect to the sale, exchange or other disposition of
Common Stock by a Non-United States Holder.
The regularly-traded exemption will apply to a "non-regularly traded class
of interests" in a United States corporation that is convertible into a
regularly traded class of interests in the corporation unless, on the date such
non-regularly traded interest was acquired by its present holder, such interest
had a fair market value greater than the fair market value on that date of 5% of
the regularly traded class of the corporation's stock into which it is
convertible. (Interests of a non-regularly traded class acquired over a period
of time will be aggregated for purposes of applying the 5% test described
above.) This discussion assumes that the Notes constitute interests that are
non-regularly traded interests convertible into a regularly traded class of
interests. (Rules beyond the scope of this discussion will apply if the Notes
become "regularly traded" within the meaning of the FIRPTA rules.) Accordingly,
except with respect to the sale, exchange, conversion or redemption of the Notes
by a Non-United States Holder whose aggregate actual or constructive ownership
of such Notes on an applicable determination date had a fair market value
greater than 5% of the Common Stock, no withholding or income taxation under the
FIRPTA rules should be required with respect to the sale, exchange, conversion
or redemption of Notes by a Non-United States Holder. A Non-United States
Holder who sells or otherwise disposes of Notes may be required to inform its
transferee whether such Notes constitute a United States real property interest
to avoid withholding taxation.
Any investor that may approach or exceed 5% ownership, either alone or in
conjunction with related persons, should consult its own tax advisor concerning
the United States tax consequences that may result.
39
<PAGE>
SELLING SECURITYHOLDERS
The Offered Notes were originally issued by the Company in transactions
exempt from the registration requirements of the Securities Act to persons
believed by the Managers to be "qualified institutional buyers" (as defined in
Rule 144A under the Securities Act) or to institutional accredited investors.
The Selling Securityholders (which term includes their transferees, pledgees,
donees and their successors) may from time to time offer and sell pursuant to
this Prospectus any or all of the Offered Notes and the shares of Common Stock
initially issued or issuable upon conversion of the Offered Notes (the
"Conversion Shares").
The following table sets forth information, as of September 17, 1996, with
respect to the Selling Securityholders and the respective principal amount of
Offered Notes beneficially owned by each Selling Securityholder and the number
of Conversion Shares that may be offered pursuant to this Prospectus. None of
the Selling Securityholders has, or within the past three years, has had, any
position, office or other material relationship with the Company or any of its
predecessors or affiliates, except as set forth below. Because the Selling
Securityholders may offer all or some portion of the Offered Notes or the
Conversion Shares pursuant to this Prospectus, no estimate can be given as to
the amount of Offered Notes or the Conversion Shares that will be held by the
Selling Securityholders upon termination of any such sales. In addition, the
Selling Securityholders identified below may have sold, transferred or otherwise
disposed of all or a portion of their Offered Notes since June 19, 1996 in
transactions exempt from the registration requirements of the Securities Act.
The table has been prepared based upon information furnished to the Company by
the Trustee, and by The Depositary Trust Company on behalf of the Selling
Securityholders.
<TABLE>
<CAPTION>
PRINCIPAL NUMBER OF
AMOUNT CONVERSION
OF NOTES PERCENT OF SHARES
BENEFICIALLY OUTSTANDING THAT MAY
NAME/(1)/ OWNED/(2)/ NOTES BE SOLD/(3)/
- -------------------------------- ----------- ----------- ------------
<S> <C> <C> <C>
Alex. Brown & Sons,
Incorporated/(4)/ 5,245,000 1.6 104,900
Bank of New York $35,005,000 10.8% 700,100
Bankers Trust Company 17,415,000 5.4 348,300
Bear, Stearns 17,739,000 5.5 354,780
Boston Safe Deposit &
Trust Co. 12,580,000 3.9 251,600
Brown Brothers Harriman 6,350,000 2.0 127,000
Bankers Trust/New York
Holdings, Inc. 2,600,000 * 52,000
BT Securities Corporation 3,560,000 1.1 71,200
Chase Manhattan 150,000 * 3,000
Chase Manhattan Bank N.A.
Trust 310,000 * 6,200
Chase Manhattan Bank Trust
Company of California 500,000 * 10,000
Chemical Bank 37,785,000 11.6 755,700
Citibank NA 3,875,000 1.2 77,500
Corestates Bank N.A. 1,100,000 * 22,000
Custodian Trust Company 1,115,000 * 22,300
Deutsche Morgan Grenfell/C.J.
Lawrence, Inc. 24,500,000 7.5 490,000
Donaldson Lufkin & Jenrette
Securities Corp./(4)/ 1,000,000 * 20,000
Firstar Trust Co. 5,310,000 1.6 106,200
Fleet Bank 60,000 * 1,200
First National Bank of Boston 140,000 * 2,800
Investors Bank & Trust/M.F.
Custody 1,300,000 * 26,000
Julius Baer Securities 400,000 * 8,000
J.P. Morgan Securities Inc.
S.L./(4)/ 3,055,000 * 61,100
J.P. Morgan Securities Inc.
W.F./(4)/ 5,000,000 1.5 100,000
Key Bank 1,525,000 * 30,500
Key Bank N.A. Regional 200,000 * 4,000
Lazard Freres & Co. LLC 115,000 * 2,300
Lehman Brothers 8,590,000 2.6 171,800
Lehman Brothers International 3,045,000 * 60,900
M & I Marshall & Ilsley Bank 750,000 * 15,000
Mercantile Bank 735,000 * 14,700
Merrill Lynch Pierce, Fenner &
Smith, Inc. Safekeeping 5,461,000 1.7 109,220
Merrill Lynch Pierce, Fenner &
Smith, Inc./DS 4,280,000 1.3 85,600
Montgomery Securities/(4)/ 500,000 * 10,000
Morgan Stanley & Co. Inc. 4,750,000 1.5 95,000
NBD Bank, N.A. 210,000 * 4,200
Nomura Int'l Trust Co. 14,500,000 4.5 290,000
Northern Trust Co. 1,570,000 * 31,400
PaineWebber Incorporated 1,500,000 * 30,000
Prudential Securities, Inc. 10,000 * 200
Republic New York Securities
Corp. 665,000 * 13,300
Robertson, Stephens &
Company LLC 250,000 * 5,000
Saloman Brothers, Inc. 1,750,000 * 35,000
Sanwa Bank California 3,210,000 * 64,200
Societe Generale Securities
Corp. 3,250,000 1.0 65,000
State Street Bank 15,025,000 4.6 300,500
Suntrust 105,000 * 2,100
UBS Securities LLC 6,900,000 2.1 138,000
Wagner Stott Clearing Corp. 13,850,000 4.3 277,000
First Trust NA 70,000 * 1,400
</TABLE>
_____________
* Less than 1%.
(1) The information set forth herein is as of September 17, 1996 and will be
updated as required.
(2) In addition to the amounts shown, there are approximately $48 million of
Notes which were originally offered and sold to non-U.S. persons pursuant
to Regulation S under the Securities Act. The holders of such Notes will
be listed in a supplement to this Prospectus in the event that any such
Notes are to be sold pursuant to this Prospectus.
(3) Assumes conversion of the full amount of Notes held by such holder at the
initial rate of $50.00 in principal amount of Notes per share of Common
Stock.
(4) Alex. Brown & Sons Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Montgomery Securities and J.P. Morgan & Co. served as Managers
for the private placement of the Notes and served as underwriters in prior
public offerings of the Company's securities.
Information concerning the Selling Securityholders may change from time to
time and will be set forth in supplements to this Prospectus. In addition,
the per share conversion price, and therefore the number of shares of
Common Stock, are subject to adjustment under certain circumstances.
Accordingly, the number of shares of Common Stock offered hereby may
increase or decrease. As of the date of this Prospectus, the aggregate
principal amount of Offered Notes is $325 million and the number of shares
of Common Stock into which the Offered Notes may be converted is 6,500,000
shares.
It is not possible to predict the principal amount of Offered Notes or the
number of shares of Common Stock that will be sold hereby. Consequently, it
is not possible to predict the amount of Offered Notes or the number of
shares of Common Stock that will be owned by the Selling Securityholders
following completion of the Securities offered hereby.
40
<PAGE>
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds of the sale of the
Securities offered hereby. The Securities may be sold from time to time to
purchasers directly by the Selling Securityholders. Alternatively, the Selling
Securityholders may from time to time offer the Securities through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Securityholders and/or
the purchasers of the Securities for whom they may act as agent. The Selling
Securityholders and any such underwriters who participate in the distribution of
the Securities may be deemed to be underwriters, and any profits on the sale of
the Securities by them and any discounts, commissions or concessions received by
any such underwriters, dealers or agents might be deemed to be underwriting
discounts and commissions under the Securities Act. To the extent the Selling
Securityholders may be deemed to be underwriters, the Selling Securityholders
may be subject to certain statutory liabilities of the Securities Act,
including, but not limited to, Sections 11, 12 and 17 of the Securities Act and
Rule 10b-5 under the Exchange Act.
The Securities offered hereby may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
Securities may be sold by one or more of the following methods, without
limitation: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (d) an exchange
distribution in accordance with the rules of such exchange; and (e) face-to-face
transactions between sellers and purchasers without a broker-dealer. At any time
a particular offer of the Securities is made, a Prospectus Supplement, if
required, will be distributed which will set forth the aggregate amount of
Securities being offered and the terms of the offering, including the name or
names of any underwriters, dealers or agents, any discounts, commissions and
other items constituting compensation from the Selling Securityholders and any
discounts, commission or concessions allowed or reallowed or paid to dealers.
Such Prospectus Supplement and, if necessary, a post-effective amendment to the
registration statement of which this Prospectus is a part will be filed with the
Commission to reflect the disclosure of additional information with respect to
the distribution of the Securities. In addition, the Securities covered by this
Prospectus may be sold in private transactions or under Rule 144 rather than
pursuant to this Prospectus.
The Selling Securityholders and any other persons participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Rules 10b-
6, 10b-7 and 10b-21(T), which may limit the timing or purchases and sales of any
of the Securities by the Selling Securityholders and any other such person.
Furthermore, under Rule 10b-6 under the Exchange Act, any person engaged in the
distribution of the Securities may not simultaneously engage in market-making
activities with respect to the particular Securities being distributed for a
period of nine business days prior to the commencement of such distribution. All
of the foregoing may affect the marketability of the Securities and the ability
of any person or entity to engage in market-making activities with respect to
the Securities.
The Company has agreed to pay substantially all of the expenses incidental
to the registration, offering and sale of the Securities to the public other
than commissions, fees and discounts of underwriters, dealers and agents and has
agreed to indemnify the Selling Securityholders against certain liabilities
under the Securities Act.
41
<PAGE>
LEGAL MATTERS
The validity of the issuance of the Securities offered hereby will be
passed upon for the Company by Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania and Denver, Colorado.
EXPERTS
The consolidated financial statements and financial statement schedule of
Corporate Express, Inc. as of March 2, 1996 and February 25, 1995 and for the
years ended March 2, 1996, February 25, 1995 and February 28, 1994 included in
the report on Form 10-K of the Company for the fiscal year ended March 2, 1996
have been audited by Coopers & Lybrand L.L.P., independent accountants, as set
forth in its report dated June 11, 1996. In its report, that firm states that
with respect to Corporate Express of the East, Inc. (formerly Corporate Express
of Delaware, Inc.) and subsidiaries, its opinion is based on the report of
Arthur Andersen LLP, independent public accountants. The financial statements
and financial statement schedule referred to above have been incorporated herein
by reference in reliance upon the authority of those firms as experts in
accounting and auditing in giving said reports.
The financial statements of Check Office Equipment Company as of February
29, 1996 and for the year ended February 29, 1996 incorporated herein by
reference have been so included in reliance on the report dated August 30, 1996
of Coopers & Lybrand L.L.P., independent accountants, given on the authority of
such firm as experts in auditing and accounting.
The financial statements of Forms and Supplies Inc. as of December 31, 1995
and for the year ended December 31, 1995 incorporated herein by reference have
been so included in reliance on the report dated February 21, 1996 of Horne CPA
Group, independent accountants, given on the authority of such firm as experts
in auditing and accounting.
The financial statements of Virginia Impression Products Co., Inc. as of
December 31, 1995 and 1994 and for the years ended December 31, 1995 and 1994
incorporated herein by reference have been so included in reliance on the report
dated March 4, 1996 of Schutrumpf & Koren, P.C., independent accountants, given
on the authority of such firm as experts in auditing and accounting.
The financial statements of Dock Truck Express Inc., Pronto Delivery
Service, Inc., and RUSHTRUCKING, Inc., incorporated by reference in this Form
S-3 registration statement have been audited by Arthur Anderson LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
The financial statements of Miller Stationers Ltd. as of January 31, 1996
and for the year ended January 31, 1996 incorporated herein by reference have
been so included in reliance on the report dated April 4, 1996 of KPMG,
chartered accountants, given on the authority of such firm as experts in
auditing and accounting.
The financial statements of Enbee Company as of December 31, 1995 and for
the year ended December 31, 1995 incorporated herein by reference have been so
included in reliance on the report dated February 26, 1996, except for Note 13
as to which the date is March 4, 1996, of McGee, Wheeler & Co., P.C.,
independent accountants, given on the authority of such firm as experts in
auditing and accounting.
The financial statements of ASAP Software Express, Inc. as of December 31,
1995 and 1994 and for the three years ended December 31, 1995 incorporated
herein by reference have been so included in reliance on the report dated
February 19, 1996, except Note 9 for which the date is April 22, 1996, of Ernst
& Young L.L.P., independent accountants, given on the authority of such firm as
experts in auditing and accounting.
The financial statements of Boulevard Office Products Inc. as at October
31, 1995 and for the year ended October 31, 1995 incorporated herein by
reference have been so included in reliance on the report dated December 5, 1995
of Samson Belair Deloitte & Touche, chartered accountants, given on the
authority of such firm as experts in auditing and accounting.
42
<PAGE>
No person has been authorized in connection with the offerings made hereby
to give any information or to make any representation not contained in this
Prospectus, and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company, any Selling Shareholder
or any U.S. Underwriter. This Prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any of the securities offered hereby to any
person or by anyone in any jurisdiction in which it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any date subsequent to the date
hereof.
---------------
TABLE OF CONTENTS
Page
----
Prospectus Summary ..................................................... 3
The Offering ........................................................... 6
Use of Proceeds ........................................................ 8
Selected Consolidated Financial Data ................................... 9
Risk Factors ........................................................... 11
Description of the Notes ............................................... 16
Description of Capital Stock ........................................... 33
United States Taxation ................................................. 35
Selling Securityholders ................................................ 40
Plan of Distribution ................................................... 41
Legal Matters .......................................................... 42
Experts ................................................................ 42
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the amounts of expenses in connection with
the issuance of the Securities offered pursuant to this Registration Statement
which shall be borne by the Company. All of the expenses listed below, except
the Securities and Exchange Commission Registration Fee, represent estimates
only.
<TABLE>
<CAPTION>
Estimated
---------
<S> <C>
Securities and Exchange Commission Registration Fee..... $ 112,068.97
Printing and Engraving Expenses......................... *
Accounting Fees and Expenses............................ *
Legal Fees and Expenses................................. *
Miscellaneous Fees and Expenses......................... *
------------
Total................................................ $ *
</TABLE>
* To be provided by amendement.
Item 15. Indemnification of Directors and Officers.
Section 7-109-101, et seq., of the Colorado Business Corporation Act
generally provides that a corporation may indemnify its directors, officers,
employees, fiduciaries and agents against liabilities and reasonable expenses
incurred in connection with any threatened, pending, or completed action, suit
or proceeding whether civil, criminal, administrative or investigative and
whether formal or informal (a "Proceeding"), by reason of being or having been a
director, officer, employee, fiduciary or agent of the corporation, if such
person acted in good faith and reasonably believed that his conduct, in his
official capacity, was in the best interests of the corporation (or, with
respect to employee benefit plans, was in the best interests of the participants
of the plan), and in all other cases his conduct was at least not opposed to the
corporation's best interests. In the case of a criminal proceeding, the
director, officer, employee, fiduciary or agent must have had no reasonable
cause to believe his conduct was unlawful. Under Colorado law, the corporation
may not indemnify a director, officer, employee, fiduciary or agent in
connection with a Proceeding by or in the right of the corporation if the
director is adjudged liable to the corporation, or in a proceeding in which the
director, officer, employee or agent is adjudged liable for an improper personal
benefit.
The Company's Articles of Amendment and Restatement to the Articles of
Incorporation and By-Laws provide that the Company shall indemnify its officers
and directors to the full extent permitted by the law. The indemnification
provisions in the Company's By-Laws are substantially similar to the provisions
of Section 7-109-101, et seq. The Company has entered into agreements to provide
indemnification for the Company's directors and certain officers consistent with
the Company's Articles of Amendment and Restatement to the Articles of
Incorporation and By-Laws.
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
Exhibit
Number Description
- ------ -----------
4.1 Indenture dated as of June 24, 1996 relating to the Company's 4 1/2%
Convertible Notes due July 1, 2000 (including forms of Notes).
4.2 First Amendment to Indenture relating to the Company's 4 1/2% Covertible
Notes.
4.3 Registration Rights Agreement dated as of June 24, 1996 by and among the
Company and Alex. Brown & Sons Incorporated, Donaldson Lufkin & Jenrette
Securities Corporation, Montgomery Securities and J.P. Morgan & Co.
5.1 Opinion of Ballard Spahr Andrews & Ingersoll.*
12.1 Statement Re Earnings to Fixed Charges.*
23.1 Consent of Coopers & Lybrand.
23.2 Consent of Horne CPA Group.
23.3 Consent of Schutrumpf & Koren, P.C.
23.4 Consent of Arthur Andersen LLP.
23.5 Consent of KPMG
23.6 Consent of McGee, Wheeler & Co., P.C.
23.7 Consent of Ernst & Young LLP.
23.8 Consent of Samson Belair Deloitte & Touche
23.9 Consent of Ballard Spahr Andrews & Ingersoll (contained in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
25.1 Form T-1, Statement of Eligibility and Qualification of Bankers Trust
Company.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to Colorado law, the Registrant's
Bylaws and the underwriting agreement or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of that time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.
- -----------------------------
* To be filed by amendment
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Broomfield, State of Colorado, on September 20, 1996.
CORPORATE EXPRESS, INC.
By: /s/ Jirka Rysavy
-----------------------------------------
Jirka Rysavy, Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on September 20, 1996 by the following
persons in the capacities indicated. Each person whose signature appears below
hereby authorizes and appoints Jirka Rysavy, Robert L. King and Gary M. Jacobs,
and any one of them, as his or her attorneys-in-fact, to sign and file on his or
her behalf, in the capacities stated below, any and all pre-effective amendments
and post-effective amendments to this Registration Statement.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Jirka Rysavy Chairman of the Board and Chief Executive Officer
- ------------------------------- (Principal Executive Officer)
Jirka Rysavy
/s/ Robert L. King President, Chief Operating Officer and Director
- -------------------------------
Robert L. King
/s/ Sam R. Leno Executive Vice President and Chief Financial Officer
- ------------------------------- (Principal Financial Officer)
Sam R. Leno
/s/ Joanne C. Farver Vice President and Controller
- ------------------------------- (Principal Accounting Officer)
Joanne C. Farver
/s/ Janet A. Hickey Director
- -------------------------------
Janet A. Hickey
/s/ Mo Siegel Director
- -------------------------------
Mo Siegel
</TABLE>
II-3
<PAGE>
Exhibit 4.1
CORPORATE EXPRESS, INC.
4 1/2% Convertible Notes
due July 1, 2000
________________
INDENTURE
Dated as of June 24, 1996
________________
BANKERS TRUST COMPANY
Trustee
______________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
RECITALS OF THE COMPANY................................................................ 1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION............................................ 1
SECTION 1.1 Definitions.................................................. 1
Act..................................................................... 2
Additional Amounts..................................................... 2
Affiliate.............................................................. 2
Authenticating Agent................................................... 2
Authorized Newspaper................................................... 2
Bearer Additional Amounts.............................................. 2
Bearer Security........................................................ 2
Board of Directors..................................................... 2
Board Resolution....................................................... 3
Business Day........................................................... 3
CEDEL.................................................................. 3
Closing Price Per Share................................................ 3
Code................................................................... 3
Commission............................................................. 3
Common Depositary...................................................... 3
Common Stock........................................................... 3
Company................................................................ 4
Company Request........................................................ 4
Constituent Person..................................................... 4
Conversion Agent....................................................... 4
Conversion Price....................................................... 4
Corporate Trust Office................................................. 4
Corporation............................................................ 4
Coupon................................................................. 4
Defaulted Interest..................................................... 4
Definitive Security.................................................... 4
Determination Notice................................................... 4
Distribution Date...................................................... 4
Dollar................................................................. 5
U.S.$.................................................................. 5
EUROCLEAR.............................................................. 5
Event of Default....................................................... 5
Exchange Act........................................................... 5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Exchange Date.......................................................... 5
Holder................................................................. 5
Indenture............................................................... 5
Interest Payment Date................................................... 5
Interest Period......................................................... 5
Material Subsidiary..................................................... 5
Maturity................................................................ 5
Non-electing Share...................................................... 5
Officers' Certificate................................................... 5
Opinion of Counsel...................................................... 6
Outstanding............................................................. 6
Paying Agent............................................................ 6
Person.................................................................. 7
Place of Conversion..................................................... 7
Place of Payment........................................................ 7
Predecessor Security.................................................... 7
Purchase Price.......................................................... 7
QIB..................................................................... 7
Record Date............................................................. 7
Redemption Date......................................................... 7
Redemption Price........................................................ 7
Registered Security..................................................... 7
Registration Rights Agreement........................................... 7
Regular Record Date..................................................... 7
Repurchase Date......................................................... 7
Responsible Officer..................................................... 8
Restricted Securities................................................... 8
Rights.................................................................. 8
Rule 144A Information................................................... 8
Securities.............................................................. 8
Securities Act.......................................................... 8
Security Register....................................................... 8
Security Registrar...................................................... 8
Settlement Date......................................................... 8
Special Record Date..................................................... 8
Stated Maturity......................................................... 8
Tax Affected Security................................................... 8
Tax Law Change.......................................................... 8
Temporary Global Bearer Security........................................ 9
Trading Days............................................................ 9
</TABLE>
ii.
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Transfer Agent.......................................................... 9
Trust Indenture Act..................................................... 9
Trustee................................................................. 9
United States........................................................... 9
United States person.................................................... 9
Vice President.......................................................... 9
Western Europe.......................................................... 9
</TABLE>
<TABLE>
<S> <C> <C> <C>
SECTION 1.2 Compliance Certificates and Opinions........................... 9
SECTION 1.3 Form of Documents Delivered to the Trustee..................... 10
SECTION 1.4 Acts of Holders of Securities.................................. 11
SECTION 1.5 Notices, Etc., to Trustee and Company.......................... 12
SECTION 1.6 Notice to Holders of Securities; Waiver........................ 13
SECTION 1.7 Effect of Headings and Table of Contents....................... 14
SECTION 1.8 Successors and Assigns......................................... 14
SECTION 1.9 Separability Clause............................................ 14
SECTION 1.10 Benefits of Indenture.......................................... 15
SECTION 1.11 Governing Law.................................................. 15
SECTION 1.12 Legal Holidays................................................. 15
ARTICLE TWO SECURITY FORMS.................................................. 15
SECTION 2.1 Forms Generally................................................ 15
SECTION 2.2 Forms of Securities............................................ 16
SECTION 2.3 Form of Coupon................................................. 46
SECTION 2.4 Form of Certificate of Authentication.......................... 47
SECTION 2.5 Form of Conversion Notice...................................... 48
SECTION 2.6 Legend on Restricted Securities................................ 50
.............................................................................. 51
ARTICLE THREE THE SECURITIES................................................. 51
SECTION 3.1 Title and Terms................................................ 51
SECTION 3.2 Denominations.................................................. 52
SECTION 3.3 Execution, Authentication, Delivery and Dating................. 52
SECTION 3.4 Temporary Global Security...................................... 53
SECTION 3.5 Registration, Registration of Transfer and Exchange;
Restrictions on Transfer....................................... 57
SECTION 3.6 Mutilated, Destroyed, Lost or Stolen Securities and
Coupons........................................................ 60
SECTION 3.7 Payment of Interest, Interest Rights Preserved................. 62
</TABLE>
iii.
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
SECTION 3.8 Persons Deemed Owners......................................... 64
SECTION 3.9 Cancellation.................................................. 64
SECTION 3.10 Computation of Interest....................................... 64
SECTION 3.11 Form of Certification......................................... 65
SECTION 3.12 CUSIP Numbers................................................. 66
SECTION 3.13 Notification of Withholding................................... 67
ARTICLE FOUR SATISFACTION AND DISCHARGE......................................... 67
SECTION 4.1 Satisfaction and Discharge of Indenture....................... 67
SECTION 4.2 Application of Trust Money.................................... 68
ARTICLE FIVE REMEDIES........................................................... 69
SECTION 5.1 Events of Default............................................. 69
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment............ 71
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee.................................................... 72
SECTION 5.4 Trustee May File Proofs of Claim.............................. 72
SECTION 5.5 Trustee May Enforce Claims Without Possession of
Securities or Coupons......................................... 73
SECTION 5.6 Application of Money Collected................................ 74
SECTION 5.7 Limitation on Suits........................................... 74
SECTION 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert........................... 75
SECTION 5.9 Restoration of Rights and Remedies............................ 75
SECTION 5.10 Rights and Remedies Cumulative................................ 75
SECTION 5.11 Delay or Omission Not Waiver.................................. 76
SECTION 5.12 Control by Holders of Securities.............................. 76
SECTION 5.13 Waiver of Past Defaults....................................... 76
SECTION 5.14 Undertaking for Costs......................................... 77
SECTION 5.15 Waiver of Stay or Extension Laws.............................. 77
ARTICLE SIX
THE TRUSTEE........................................... 77
SECTION 6.1 Certain Duties and Responsibilities........................... 77
SECTION 6.2 Notice of Defaults............................................ 79
SECTION 6.3 Certain Rights of Trustee..................................... 79
SECTION 6.4 Not Responsible for Recitals or Issuance of Securities........ 80
</TABLE>
iv.
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
SECTION 6.5 May Hold Securities, Act as Trustee Under Other
Indentures..................................................... 81
SECTION 6.6 Money Held in Trust............................................ 81
SECTION 6.7 Compensation and Reimbursement................................. 81
SECTION 6.8 Corporate Trustee Required; Eligibility........................ 82
SECTION 6.9 Resignation and Removal; Appointment of Successor.............. 82
SECTION 6.10 Acceptance of Appointment by Successor......................... 84
SECTION 6.11 Merger, Conversion, Consolidation or Succession to
Business....................................................... 84
SECTION 6.12 Authenticating Agents.......................................... 84
ARTICLE SEVEN CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE.............................................. 86
SECTION 7.1 Company May Consolidate, Etc., Only on Certain
Terms.......................................................... 86
SECTION 7.2 Successor Substituted.......................................... 87
ARTICLE EIGHT SUPPLEMENTAL INDENTURES............................................. 87
SECTION 8.1 Supplemental Indentures Without Consent of Holders of
Securities or Coupons.......................................... 87
SECTION 8.2 Supplemental Indentures with Consent of Holders of
Securities..................................................... 89
SECTION 8.3 Execution of Supplemental Indentures........................... 90
SECTION 8.4 Effect of Supplemental Indentures.............................. 90
SECTION 8.5 Reference in Securities to Supplemental Indentures............. 90
SECTION 8.6 Notice of Supplemental Indentures.............................. 90
ARTICLE NINE MEETINGS OF HOLDERS OF SECURITIES..................................... 91
SECTION 9.1 Purposes for Which Meetings May Be Called...................... 91
SECTION 9.2 Call, Notice and Place of Meetings............................. 91
SECTION 9.3 Persons Entitled to Vote at Meetings........................... 91
SECTION 9.4 Quorum; Action................................................. 92
SECTION 9.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings........................................ 92
SECTION 9.6 Counting Votes and Recording Action of Meetings................ 93
ARTICLE TEN COVENANTS............................................................. 94
</TABLE>
v.
<PAGE>
<TABLE>
Page
----
<S> <C> <C> <C>
SECTION 10.1 Payment of Principal, Premium and Interest..................... 94
SECTION 10.2 Maintenance of Offices or Agencies............................. 94
SECTION 10.3 Money for Security Payments to Be Held in Trust................ 96
SECTION 10.4 Additional Amounts and Bearer Additional Amounts............... 97
SECTION 10.5 Existence...................................................... 98
SECTION 10.6 Maintenance of Properties...................................... 98
SECTION 10.7 Payment of Taxes and Other Claims.............................. 98
SECTION 10.8 Registration and Listing....................................... 99
SECTION 10.9 Statement by Officers as to Default............................ 99
SECTION 10.10 Delivery of Certain Information................................ 99
SECTION 10.11 Resale of Certain Securities; Reporting Issuer................ 100
SECTION 10.12 Waiver of Certain Covenants................................... 100
ARTICLE ELEVEN REDEMPTION OF SECURITIES...................................... 101
SECTION 11.1 Right of Redemption........................................... 101
SECTION 11.2 Applicability of Article...................................... 101
SECTION 11.3 Election to Redeem; Notice to Trustee......................... 101
SECTION 11.4 Selection by Trustee of Securities to Be Redeemed............. 101
SECTION 11.5 Notice of Redemption.......................................... 102
SECTION 11.6 Deposit of Redemption Price................................... 103
SECTION 11.7 Securities Payable on Redemption Date......................... 103
SECTION 11.8 Registered Securities Redeemed in Part........................ 104
ARTICLE TWELVE CONVERSION OF SECURITIES...................................... 105
SECTION 12.1 Conversion Privilege and Conversion Price..................... 105
SECTION 12.2 Exercise of Conversion Privilege.............................. 105
SECTION 12.3 Fractions of Shares........................................... 107
SECTION 12.4 Adjustment of Conversion Price................................ 108
SECTION 12.5 Notice of Adjustments of Conversion Price..................... 113
SECTION 12.6 Notice of Certain Corporate Action............................ 113
SECTION 12.7 Company to Reserve Common Stock............................... 114
SECTION 12.8 Taxes on Conversions.......................................... 114
SECTION 12.9 Covenant as to Common Stock................................... 114
SECTION 12.10 Cancellation of Converted Securities.......................... 115
SECTION 12.11 Provision in Case of Consolidation, Merger or Sale of
Assets........................................................ 115
</TABLE>
vi.
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE THIRTEEN REPURCHASE OF SECURITIES AT THE OPTION
OF THE
HOLDER UPON A CHANGE IN CONTROL............................... 116
SECTION 13.1 Right to Require Repurchase................................... 116
SECTION 13.2 Notices; Method of Exercising Repurchase Right, Etc........... 117
SECTION 13.3 Certain Definitions........................................... 120
ARTICLE FOURTEEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY................................................... 121
SECTION 14.1 Company to Furnish Trustee Names and Addresses of
Holders....................................................... 121
SECTION 14.2 Preservation of Information................................... 122
</TABLE>
/*/ This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
vii.
<PAGE>
Corporate Express, Inc.
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- -----------
<S> <C> <C>
(S) 310 (a)(1) ................................ 6.8
(a)(2) ................................ 6.8
(a)(3) ................................ Not Applicable
(a)(4) ................................ Not Applicable
(a)(5) ................................ Not Applicable
(b) ................................ 14.3*
(c) ................................ Not Applicable
(S) 311 (a) ................................ 14.3*
(b) ................................ 14.3*
(c) ................................ Not Applicable
(S) 312 (a) ................................ 14.1; 14.2
(b) ................................ 14.3*
(c) ................................ 14.3*
(S) 313 (a) ................................ 14.3*
(b)(1) ................................ Not Applicable
(b)(2) ................................ 14.3*
(c) ................................ 1.6; 14.3*
(d) ................................ 14.3*
(S) 314 (a) ................................ 1.6; 14.3*
(b) ................................ Not Applicable
(c)(1) ................................ 1.2
(c)(2) ................................ 1.2
(c)(3) ................................ Not Applicable
(d) ................................ Not Applicable
(e) ................................ 1.2
(f) ................................ Not Applicable
(S) 315 (a) ................................ 6.1
(b) ................................ 1.6; 6.2
(c) ................................ 6.1
(d) ................................ 6.1
(e) ................................ 5.14
(S) 316 (a)(1)(A) ................................ 5.12
(a)(1)(B) ................................ 5.13
(a)(2) ................................ Not Applicable
(a)(last sentence) ................................ 1.1
(b) ................................ 5.8
(c) ................................ 1.1
(S) 317 (a)(1) ................................ 5.3
(a)(2) ................................ 5.4
(b) ................................ 14.3*
(S) 318 (a) ................................ 14.3*
</TABLE>
- ------------------------
Note: This reconciliation and tie sheet shall not for any purpose, be
deemed to be a part of the Indenture.
*Section 14.3 will be added by an amendment to the Indenture, to be
filed amendment to this Registration Statement.
<PAGE>
INDENTURE, dated as of June 24, 1996, between CORPORATE EXPRESS, INC.,
a corporation duly organized and existing under the laws of the State of
Colorado (the "Company"), and Bankers Trust Company, a New York banking
corporation, as Trustee hereunder (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 4 1/2%
Convertible Notes due July 1, 2000 (the "Securities") and the coupons, if any,
thereto appertaining, of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary to make the Securities and the coupons thereto
appertaining, when the Securities are executed by the Company and authenticated
and delivered hereunder, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done. Further, all things necessary to duly authorize the
issuance of the Common Stock of the Company issuable upon the conversion of the
Securities, and to duly reserve for issuance the number of shares of Common
Stock issuable upon such conversion, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities and the coupons
thereto appertaining, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) each of the terms defined in this Article has the meaning
assigned to it in this Article and include the plural as well as the
singular;
(2) each accounting term not otherwise defined herein has the meaning
assigned to it in accordance with generally accepted accounting principles
in the United
1.
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States, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of this instrument; and
(3) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.
"Additional Amounts" has the meaning specified in Section 2.2(a).
"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.
"Authenticating Agent" means any Person authorized pursuant to Section
6.12 to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper, in an official language of
the country of publication or in the English language, customarily published on
each Monday, Tuesday, Wednesday, Thursday and Friday, whether or not published
on Saturdays, Sundays or holidays, and of general circulation in the place in
connection with which the term is used or in the financial community of such
place. Where successive publications are required to be made in Authorized
Newspapers, the successive publications may be made in the same or in different
newspapers in the same city meeting the foregoing requirements and in each case
on any Monday, Tuesday, Wednesday, Thursday and Friday. For purposes of
publication in London and Luxembourg, such term shall mean the Financial Times
and the Luxemborger Wort, respectively, unless such newspapers are not
available.
"Bearer Additional Amounts" has the meaning specified in
Section 2.2(a).
"Bearer Security" means any Security issued in substantially the form
set forth in Section 2.2(a).
2.
<PAGE>
"Board of Directors" means either the board of directors of the
Company or any committee of that board empowered to act for it with respect to
this Indenture.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, shall have been
delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, Place
of Conversion or any other place, as the case may be, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in such Place of Payment, Place of Conversion or other place, as
the case may be, are authorized or obligated by law or executive order to close;
provided, however, that a day on which banking institutions in New York City,
New York are authorized or obligated by law or executive order to close shall
not be a Business Day for purposes of Section 13.5; provided, further, that a
day on which banking institutions in New York City, New York or London, England
are authorized or obligated by law or executive order to close shall not be a
Business Day for purposes of Sections 10.1, 10.3 or 11.6.
"CEDEL" has the meaning specified in Section 3.4.
"Closing Price Per Share" means, with respect to the Common Stock of
the Company, for any day, the reported last sales price regular way per share
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case (i) on the
Nasdaq National Market or, if the Common Stock is not listed or admitted to
trading on the Nasdaq National Market, on the principal (as determined by the
Company's Board of Directors) national securities exchange on which the Common
Stock is listed or admitted to trading or (ii) if not quoted on the Nasdaq
National Market or listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member firm selected
from time to time by the Company for that purpose.
"Code" has the meaning specified in Section 2.1.
"Commission" means the United States Securities and Exchange
Commission.
"Common Depositary" has the meaning specified in Section 3.4.
"Common Stock" means the Common Stock, par value $.0002 per share, of
the Company authorized at the date of this instrument as originally executed.
Subject to the provisions of Section 12.11, shares issuable on conversion of
Securities shall include only shares of Common Stock or shares of any class or
classes of common stock resulting from any
3.
<PAGE>
reclassification or reclassifications thereof; provided, however, that if at any
time there shall be more than one such resulting class, the shares so issuable
on conversion of Securities shall include shares of all such classes, and the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or a Vice
President, and by its principal financial officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Constituent Person" has the meaning specified in Section 12.11.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Twelve. The Company has initially
appointed the Trustee as its Conversion Agent in the City of New York, and as
its Conversion Agent in London, England.
"Conversion Price" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at Four Albany
Street, New York, New York 10006, Attention: Corporate Trust and Agency Group -
Corporate Market Services).
"Corporation" means a corporation, company, including, without
limitation, a limited liability company, association, joint-stock company or
business trust.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Definitive Security" means any Security that is a Bearer Security
(other than the Temporary Global Bearer Security) or a Registered Security.
"Determination Notice" has the meaning specified in Section 2.2(a).
4.
<PAGE>
"Distribution Date" has the meaning specified in Section 12.4(4).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.
"EUROCLEAR" has the meaning specified in Section 3.4.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time.
"Exchange Date" means the date 40 days after the latest date of
issuance of the Securities upon exercise of the over-allotment option.
"Holder," when used with respect to any Registered Security, means the
Person in whose name the Security is registered in the Security Register, when
used with respect to any Bearer Security or Temporary Global Bearer Security,
means the bearer thereof and, when used with respect to any coupon, means the
bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Period" has the meaning specified in Section 2.2(b).
"Material Subsidiary" means a corporation or other entity which would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the Securities and Exchange Commission.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Thirteen or otherwise.
"Non-electing Share" has the meaning specified in Section 12.11.
5.
<PAGE>
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, its Chief Executive Officer, the
President or a Vice President and by the principal financial officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Company.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities and any coupons thereto appertaining, provided
that if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with
6.
<PAGE>
respect to such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company and, except
as otherwise specifically set forth herein, such term shall include the Company
if it shall act as its own Paying Agent. The Company has initially appointed the
Trustee as its Paying Agent in the City of New York, and as its Paying Agent in
London, England.
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 3.1.
"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Price" has the meaning specified in Section 13.1.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Record Date" means any Regular Record Date or Special Record Date.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security issued in substantially the
form set forth in Section 2.2(b) and registered in the Security Register.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of June 24, 1996, between the Company and Alex. Brown & Sons
Incorporated.
7.
<PAGE>
"Regular Record Date" for interest payable in respect of any
Registered Security on any Interest Payment Date means the December 15 or June
15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 13.1.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Office (or any successor group) of the
Trustee including any managing director, vice president, assistant vice
president, secretary, assistant secretary, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"Restricted Securities" has the meaning specified in Section 2.6.
"Rights" has the meaning specified in Section 12.4(4).
"Rule 144A Information" has the meaning specified in Section 10.10.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933, as
amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Settlement Date" means June 24, 1996, or such later date mutually
agreed to by the Company and Alex. Brown & Sons Incorporated, on behalf of the
several underwriters.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Company pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security or a
coupon representing such installment of interest as the fixed date on which the
principal of such Security or such installment of interest is due and payable.
"Tax Affected Security" means any Security held by a non-United States
person to whom Additional Amounts or Bearer Additional Amounts have or will
become payable.
8.
<PAGE>
"Tax Law Change" means any change in, or amendment to, the laws
(including any regulations or rulings promulgated thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in, or amendment to, the application or
official interpretation of such laws, regulations or rulings.
"Temporary Global Bearer Security" means any Security issued in
substantially the form set forth in Section 2.2(c).
"Trading Days" means (i) if the Common Stock is quoted on the Nasdaq
National Market or any similar system of automated dissemination of quotations
of securities prices, days on which trades may be effected through such system,
(ii) if the Common Stock is listed or admitted for trading on any national
securities exchange, days on which such national securities exchange is open for
business or (iii) if the Common Stock is not quoted on the Nasdaq National
Market or similar system or listed or admitted to trading on any national
securities exchange, days on which the Common Stock is traded regular way in the
over-the-counter market and for which a closing bid and a closing asked price
for the Common Stock are available.
"Transfer Agent" has the meaning specified in Section 2.2(a). The
Company has initially appointed the Trustee as its Transfer Agent in the City of
New York, and as its Transfer Agent in London, England.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990 and as in effect on the date
of this Indenture, 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.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"United States" has the meaning specified in Section 2.2(a).
"United States person" has the meaning specified in Section 2.2(a).
"Vice President," when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".
"Western Europe" means Austria, Belgium, Denmark, France, Germany,
Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom.
9.
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SECTION 1.2 Compliance Certificates and Opinions.
------------------------------------
(a) Upon any application or request by the Company to the Trustee or
the Paying Agent in London to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee or the Paying Agent in
London, as the case may be, 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, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 10.9) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, 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, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 0.3 Form of Documents Delivered to the Trustee.
------------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the
10.
<PAGE>
certificate or opinion or representations with respect to the matters upon which
such certificate or opinion is based are erroneous. Any such certificate or
opinion of counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Company stating that the information with respect to such factual matters is
in the possession of the Company, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 0.4 Acts of Holders of Securities.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Securities may be embodied in and evidenced by (1) one or
more instruments of substantially similar tenor signed by such Holders in person
or by an agent or proxy duly appointed in writing by such Holders or (2) the
record of Holders of Securities voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities duly
called and held in accordance with the provisions of Article Nine. Such action
shall become effective when such instrument or instruments or record is
delivered to the Trustee and, where it is hereby expressly required, to the
Company. The Trustee shall promptly deliver to the Company copies of all such
instruments and records delivered to the Trustee. Such instrument or
instruments and record (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the Holders of Securities
signing such instrument or instruments and so voting at such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy, or of the holding by any Person of a Security, shall be sufficient for
any purpose of this Indenture and (subject to Section 6.1) conclusive in favor
of the Trustee and the Company if made in the manner provided in this Section.
The record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 9.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The principal amount and serial number of any Bearer Security
held by any Person, and the date of his holding the same, may be proved by the
production of such
11.
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Bearer Security or by a certificate executed by any trust company, bank, broker
or other depositary, wherever situated, if such certificate shall be deemed by
the Trustee or the Paying Agent in London to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Security therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Security, if such certificate or affidavit is deemed by the Trustee or the
Paying Agent in London to be satisfactory. The Trustee, the Paying Agent in
London and the Company may assume that any Bearer Security continues to be held
by such Person until (1) another certificate or affidavit bearing a later date
issued in respect of such Bearer Security is produced, or (2) such Bearer
Security is produced to the Trustee or the Paying Agent in London by some other
Person, or (3) such Bearer Security is surrendered in exchange for a Registered
Security, or (4) such Bearer Security is no longer Outstanding.
(d) The principal amount and serial number of any Registered Security
held by any Person, and the date of his holding the same, shall be proved by the
Security Register.
(e) The principal amount and serial numbers of Bearer Securities held
by the Person so executing such instrument or writing and the date of holding
the same may also be proved in any other manner which the Paying Agent in London
deems sufficient; and the Paying Agent in London may in any instance require
further proof with respect to any of the matters referred to in this Section
1.4.
(f) The fact and date of execution of any such instrument or writing
and the authority of the Person executing the same may also be proved in any
other manner which the Trustee or the Paying Agent in London deems sufficient;
and the Trustee or the Paying Agent in London may in any instance require
further proof with respect to any of the matters referred to in this Section
1.4.
(g) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and any coupon appertaining thereto and the
Holder of every Security or coupon issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security or
coupon.
(h) The provisions of this Section 1.4 are subject to the provisions
of Section 9.5.
12.
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SECTION 0.5 Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee or the Paying Agent in London by any Holder of
Securities or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the
Trustee and received at its Corporate Trust Office, Attention: Corporate
Trust and Agency Group, or to or with the Paying Agent in London and
received at 1 Appold Street, Broadgate, London EC2A 2HE, England,
Attention: Corporate Trust and Agency Group, or
(2) the Company by the Trustee or by any Holder of Securities shall
be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing, mailed, first-class postage prepaid, or
telecopied and confirmed by mail, first-class postage prepaid, or delivered
by hand or overnight courier, addressed to the Company at 325 Interlocken
Parkway, Broomfield, Colorado, Attention: Chief Executive Officer and Chief
Financial Officer, or at any other address previously furnished in writing
to the Trustee by the Company.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice (other than a notice
published in Luxembourg) may be in an official language of the country of
publication.
SECTION 0.6 Notice to Holders of Securities; Waiver.
---------------------------------------
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event,
(1) such notice with respect to Bearer Securities shall be
sufficiently given if published in an Authorized Newspaper in the City of
London, England, and, so long as the Securities are listed on the
Luxembourg Stock Exchange and such stock exchange shall so require, in
Luxembourg or, if not practicable in either London, England, or Luxembourg,
elsewhere in any country in Western Europe, on a Business Day at least
twice, the first such publication to be not earlier than the earliest date
and the second such publication to be not later than the latest date herein
prescribed for the giving of such notice; and
(2) such notice with respect to Registered Securities shall be
sufficiently given if in writing and mailed, first-class postage prepaid,
to each Holder of a
13.
<PAGE>
Registered Security affected by such event, at the address of such Holder
as it appears in the Security Register, not earlier than the earliest date
and not later than the latest date prescribed for the giving of such
notice.
Neither the failure to give notice by publication to Holders of Bearer
Securities or any Temporary Global Bearer Security as provided above, nor any
defect in any notice so published, shall affect the sufficiency of any notice
mailed to Holders of Registered Securities as provided above. In case by reason
of the suspension of publication of any Authorized Newspaper or Authorized
Newspapers or by reason of any other cause it shall be impracticable to publish
any notice as provided above, then such notification as shall be given with the
approval of the Trustee, which approval shall not be unreasonably withheld,
shall constitute sufficient notice to such Holders for every purpose hereunder.
In any case where notice to Holders of Registered Securities is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice by publication to Holders of Bearer
Securities or any Temporary Global Bearer Security given as provided above. In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification to Holders of Registered Securities as shall be made with the
approval of the Trustee, which approval shall not be unreasonably with held,
shall constitute a sufficient notification to such Holders for every purpose
hereunder.
In the case of paragraph (1) of this section, such notice shall be
deemed to have been given on the date of such publication or, if published in
Authorized Newspapers on different dates, on the date of the first such
publication.
In the case of paragraph (2) of this section, such notice shall be
deemed to have been given when such notice is mailed.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.7 Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
14.
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SECTION 1.8 Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.9 Separability Clause.
-------------------
In case any provision in this Indenture or the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.10 Benefits of Indenture.
---------------------
Except as provided in the Article Thirteen, nothing in this Indenture
or in the Securities or coupons, express or implied, shall give to any Person,
other than the parties hereto and their successors and assigns hereunder and the
Holders of Securities and coupons, any benefit or legal or equitable right,
remedy or claim under this Indenture.
SECTION 1.11 Governing Law.
-------------
This Indenture shall be governed by and construed in accordance with
the laws of the State of New York, the United States of America, without regard
to the principles of conflicts of laws.
SECTION 1.12 Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or coupon or the last day on
which a Holder of a Security has a right to convert his Security shall not be a
Business Day at a Place of Payment or Place of Conversion, as the case may be,
then (notwithstanding any other provision of this Indenture or of the Securities
or coupons) payment of interest or principal and premium, if any, or delivery
for conversion of such Security need not be made at such Place of Payment or
Place of Conversion, as the case may be, on or by such day, but may be made on
or by the next succeeding Business Day at such Place of Payment or Place of
Conversion, as the case may be, with the same force and effect as if made on the
Interest Payment Date, Redemption Date or Repurchase Date, or at the Stated
Maturity or by such last day for conversion; provided, however, that in the case
that payment is made on such succeeding Business Day, no interest shall accrue
on the amount so payable for the period from and after such Interest Payment
Date, Redemption Date, Repurchase Date, Stated Maturity or last day for
conversion, as the case may be.
15.
<PAGE>
ARTICLE TWO
SECURITY FORMS
SECTION 2.1 Forms Generally.
---------------
The Securities and the coupons shall be in substantially the forms set
forth in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange, the Internal Revenue Code of 1986, as
amended (the "Code"), and regulations thereunder, or as may, consistently
herewith, be determined by the officers executing such Securities and coupons,
as evidenced by their execution thereof.
The Trustee's certificates of authentication shall be in substantially
the form set forth in Section 2.4.
Conversion notices shall be in substantially the form set forth in
Section 2.5.
Registered Securities that are Restricted Securities shall bear the
legend required by Section 2.6.
The Temporary Global Security may be printed, lithographed,
typewritten, mimeographed or otherwise produced, as determined by the officers
of the Company executing such Security, as evidenced by their execution thereof.
The format and spacing of the text of a Definitive Security may be varied to
facilitate such production.
The Definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities and coupons, as evidenced by their
execution thereof.
16.
<PAGE>
SECTION 2.2 Forms of Securities.
-------------------
(a) Form of Bearer Security
FORM OF FACE
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
CORPORATE EXPRESS, INC.
4 1/2% CONVERTIBLE NOTE
DUE JULY 1, 2000
No. B- U.S.$5,000
-------------
ISIN No.
-----------
Corporate Express, Inc., a corporation duly organized and existing
under the laws of the State of Colorado (the "Company," which term includes any
successor Person under the Indenture referred to on the reverse hereof), for
value received, hereby promises to pay to bearer upon presentation and surrender
of this Security the principal sum of Five Thousand United States Dollars on
July 1, 2000 and to pay interest thereon, from June 24, 1996, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, semi-annually in arrears on January 1 and July 1 in each
year (an "Interest Payment Date"), commencing January 1, 1997, at the rate of 4
1/2% per annum, until the principal hereof is due, and at the rate of 4 1/2% per
annum on any overdue principal and, to the extent permitted by law, on any
overdue interest. Such payments shall be made, subject to any laws or
regulations applicable thereto and to the right of the Company (limited as
provided in the Indenture) to terminate the appointment of any such Paying
Agent, at the option of the Holder at the office of Bankers Trust Company, 1
Appold Street, Broadgate, London EC2A 2HE, England, or at such other offices or
agencies outside the United States (as defined below) as the Company may
designate, at the option of the Holder by United States Dollar check drawn on a
bank in the City of New York or by transfer of United States Dollars to an
account maintained by the payee with a bank located outside the United States
(such transfers to be made only to Holders of an aggregate principal amount of
Securities in excess of U.S.$5,000,000 provided that such Holder shall have
furnished wire instructions in writing to the Paying Agent in London by no later
than 15 days prior to the relevant payment date). Interest on this Security due
on or before Maturity shall be payable only upon presentation and surrender at
such an office or agency of the interest coupons hereto attached as they
severally mature. No payment of principal of, premium, if any, or interest on,
including Additional
17.
<PAGE>
Amounts and Bearer Additional Amounts (in each case, as defined below) with
respect to, this Security shall be made at the Corporate Trust Office of the
Trustee under the Indenture referred to on the reverse hereof or at any other
office or agency of the Company in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a bank
located in the United States; provided, however, that payment of principal of,
premium, if any, or interest on this Security and payment of any such Additional
Amounts or Bearer Additional Amounts may be made at the office of the Paying
Agent in the City of New York, if (but only if) payment of the full amount of
such principal, premium, if any, interest, Additional Amounts or Bearer
Additional Amounts, as the case may be, at all offices outside the United States
maintained for such purpose by the Company in accordance with the Indenture is
illegal or effectively precluded by exchange controls or other similar
restrictions on the full payment or receipt of such amounts in United States
Dollars, as determined by the Company.
The Company will pay to the Holder of this Security or any coupon
appertaining hereto who is not a United States person (as defined below) such
additional amounts ("Additional Amounts") as may be necessary in order that
every net payment of the principal of, and premium, if any, and interest
represented by a coupon appertaining thereto, as the case may be (including
payment on redemption or repurchase), after deduction or withholding for or on
account of any present or future tax, assessment or governmental charge imposed
upon or as a result of such payment by the United States or any political
subdivision or taxing authority thereof or therein, will not be less than the
amount provided for in this Security or in such coupon to be then due and
payable; provided, however, that the foregoing obligation to pay Additional
Amounts will not apply to:
(a) any tax, assessment or other governmental charge which would not
have been so imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, shareholder of or possessor of a power over such
Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and the United States or any political subdivision or taxing
authority thereof or therein, including, without limitation, such Holder
(or such fiduciary, settlor, beneficiary, member, shareholder or possessor)
being or having been a citizen or resident of the United States or treated
as a resident thereof, or being or having been engaged in trade or business
or present therein, or having or having had a permanent establishment
therein, or (ii) such Holder's present or former status as a personal
holding company, a foreign personal holding company with respect to the
United States, a controlled foreign corporation, a passive foreign
investment company, or a foreign private foundation or foreign tax exempt
entity for United States tax purposes, or a corporation which accumulates
earnings to avoid United States Federal income tax;
18.
<PAGE>
(b) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the Holder of this
Security or any coupon appertaining hereto for payment on a date more than
15 days after the date on which such payment became due and payable or the
date on which payment thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with any certification,
identification or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the Holder or
beneficial owner of this Security or any coupon appertaining hereto, if
compliance is required by statute or by regulation or ruling of the United
States Treasury Department as a precondition to exemption from such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on this Security;
(f) any tax, assessment or other governmental charge imposed as a
result of a Person's past or present actual or constructive ownership,
including by virtue of the right to convert Securities, of 10% or more of
the total combined voting power of all classes of stock of the Company
entitled to vote;
(g) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of the principal of, premium,
if any, or interest on this Security, if such payment can be made without
such withholding by any other Paying Agent in Western Europe;
(h) any tax, assessment or other governmental charge imposed on a
Holder that is a partnership or a fiduciary, but only to the extent that
any beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the payment
of Additional Amounts had the beneficial owner, member, beneficiary or
settlor directly received its beneficial or distributive share of payments
on this Security;
(i) any tax, assessment or other governmental charge which would not
have been imposed but for the fact that this Security constitutes a "United
States real property interest," as defined in Section 897(c)(1) of the
United States Internal Revenue
19.
<PAGE>
Code of 1986, as amended, and the regulations thereunder, with respect to
the beneficial owner of this Security; or
(j) any combination of items (a), (b), (c), (d), (e), (f), (g), (h)
and (i).
For purposes of this Security, "United States" means the United States
of America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction (its "possessions"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands), and "United States person" is a Person
that is, for United States Federal income tax purposes, (a) a citizen or
resident of the United States, (b) a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof or (c) an estate or trust the income of which is subject to
United States Federal income taxation regardless of source.
Notwithstanding the foregoing, if and so long as a certification,
identification or other information reporting requirement referred to in the
fourth paragraph of the reverse hereof would be fully satisfied by payment of a
backup withholding tax or similar charge, the Company may elect, by so stating
in the Determination Notice (as defined on the reverse hereof), to have the
provisions of this paragraph apply in lieu of redeeming this Security pursuant
to such fourth paragraph. In such event, the Company will pay as additional
amounts ("Bearer Additional Amounts") such amounts as may be necessary so that
every net payment made, following the effective date of such requirements,
outside the United States by the Company or any Paying Agent of principal and
premium, if any, due in respect of this Security, or interest represented by any
coupon, the beneficial owner of which is not a United States person (but without
any requirement that the nationality, residence or identity of such beneficial
owner be disclosed to the Company, any Paying Agent or any governmental
authority), after deduction or withholding for or on account of such backup
withholding tax or similar charge, other than a backup withholding tax or
similar charge which is (a) the result of a certification, identification or
information reporting requirement described in the first parenthetical clause of
such fourth paragraph, (b) imposed as a result of the fact that the Company or
any Paying Agent has actual knowledge that the beneficial owner of this Security
or such coupon is within the category of Persons described in clause (a) of the
second preceding paragraph or (c) imposed as a result of presentation of this
Security or such coupon for payment more than 15 days after the date on which
such payment becomes due and payable or on which payment thereof is duly
provided for, whichever occurs later, will not be less than the amount provided
for in this Security or such coupon to be then due and payable.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to
20.
<PAGE>
the payment of the principal of, premium, if any, or interest on, or in respect
of, any Security or any coupon appertaining thereto, such mention shall be
deemed to include mention of the payment of Additional Amounts and Bearer
Additional Amounts payable pursuant to the first and third preceding paragraphs,
respectively, to the extent that, in such context, such Additional Amounts or
Bearer Additional Amounts, as the case may be, are, were or would be payable in
respect of this Security pursuant to such paragraphs, and express mention of the
payment of such Additional Amounts or Bearer Additional Amounts (if applicable),
as the case may be, in any provisions of this Security shall not be construed as
excluding such Additional Amounts or Bearer Additional Amounts, as the case may
be, in those provisions of this Security where such express mention is not made.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or its Authenticating Agent by the
manual signature of one of its authorized signatories, neither this Security,
nor any coupon appertaining hereto, shall be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal and coupons bearing the facsimile signature of
its Treasurer to be annexed hereto.
Dated as of June ____, 1996
CORPORATE EXPRESS, INC.
Corporate Seal
By:__________________________
Name:
Title:
Attest:
____________________________
Name:
Title:
21.
<PAGE>
FORM OF REVERSE
This Security is one of a duly authorized issue of securities of the
Company designated as its "4 1/2% Convertible Notes due July 1, 2000" (the
"Securities"), limited in aggregate principal amount to U.S.$325,000,000
(U.S.$373,750,000 aggregate principal amount assuming the full exercise of the
over-allotment option), issued and to be issued under an Indenture, dated June
24, 1996 (the "Indenture"), between the Company and Bankers Trust Company, as
Trustee (the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, and the Holders of
the Securities and any coupons appertaining thereto and of the terms upon which
the Securities are, and are to be, authenticated and delivered. Reference is
further made to the Registration Rights Agreement dated June 24, 1996, between
the Company and Alex. Brown & Sons Incorporated for additional rights, duties
and immunities. Each Holder of any Security or any coupon, whether upon original
issuance or upon transfer or assignment thereof, accepts and agrees to be bound
by the provisions contained in the Indenture and in the Registration Rights
Agreement. The Securities are issuable as Bearer Securities, with interest
coupons attached, in the denomination of U.S.$5,000 and as Registered
Securities, without coupons, in denominations of (a) U.S.$1,000 and integral
multiples of U.S.$1,000 in excess thereof if such Registered Securities are
Restricted Securities; and (b) U.S.$1,000 and any multiples thereof if such
Registered Securities are not Restricted Securities. As provided in the
Indenture and subject to certain limitations therein set forth, Bearer
Securities are exchangeable for a like aggregate principal amount of Registered
Securities of any authorized denominations as requested by the Holder
surrendering the same upon surrender of the Security or Securities to be
exchanged, with all unmatured coupons and all matured coupons in default thereto
appertaining, except as provided below, (a) at the Corporate Trust Office of the
Trustee or at such other office or agency of the Company as may be designated by
it for such purpose in The City of New York or (b) subject to any laws or
regulations applicable thereto and to the right of the Company to terminate the
appointment of any Transfer Agent (as defined below), the office of Bankers
Trust Company, 1 Appold Street, Broadgate, London EC2A 2HE, England, or at such
other offices or agencies outside the United States as the Company may designate
(each a "Transfer Agent"); provided, however, that such surrender may be made at
the Corporate Trust Office of the Trustee in the City of New York, if (but only
if) such surrender at all offices outside the United States maintained for such
purpose by the Company in accordance with the Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions. Bearer
Securities surrendered in exchange for Registered Securities between a Record
Date and the relevant Interest Payment Date or date for payment of Defaulted
Interest will not be required to be surrendered with the coupon relating to such
Interest Payment Date or date for payment of Defaulted Interest. Bearer
Securities may not be issued in exchange for Registered Securities.
22.
<PAGE>
No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company at any time on or after July
1, 1998, in whole or in part, upon not less than 20 nor more than 60 days'
notice to the Holders prior to the Redemption Date; provided, however, that
until July 1, 1999 the Securities cannot be redeemed at the option of the
Company unless the closing sale price of the Common Stock (determined in
accordance with the provisions of Article 12 of this Indenture) for at least 15
out of 30 consecutive Trading Days ending within 20 days before the notice of
redemption is first mailed to Holders equalled or exceeded 150% of the then-
existing Conversion Price per share of Common Stock. The Redemption Prices
(expressed as percentages of the principal amount) beginning July 1 of the year
indicated are as follows:
Redemption
Period Price
------ -------------
7/1/98 through 6/30/1999 102.250%
7/1/99 through 6/30/2000 101.125%
together, in each case, with accrued interest to the Redemption Date, and
Securities held by non-United States persons and Bearer Securities are also
redeemable in whole but not in part, under the circumstances described in the
next two succeeding paragraphs, respectively, at a Redemption Price equal to
100% of the principal amount thereof plus interest accrued to the Redemption
Date; provided, however, that interest installments on Bearer Securities whose
Stated Maturity is on or prior to such Redemption Date will be payable only upon
presentation and surrender of coupons for such interest (at an office or agency
outside the United States except as herein provided otherwise).
If as a result of a Tax Law Change, the Company has or will become
obligated to pay to the Holder of any Security or coupon Additional Amounts, as
described in the second paragraph of the face of this Security, and such
obligation cannot be avoided by the Company taking reasonable measures available
to it, then the Company may, at its option, redeem the Tax Affected Securities
as a whole, but not in part, upon not less than 20 nor more than 60 days' notice
to the Holders prior to the Redemption Date, at a Redemption Price equal to 100%
of the principal amount plus interest accrued to the Redemption Date, and any
Additional Amounts then payable; provided, that (i) no such notice of redemption
shall be given earlier than 90 days prior to the earliest date on which the
Company would be obligated to pay any such Additional Amounts were a payment in
respect of the Tax Affected Securities then due and (ii) at the time such notice
of redemption is given, such obligation to pay such Additional Amounts remains
in effect. Prior to the publication of any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee (a) an Officers'
Certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right of the Company so to redeem have occurred and (b) an Opinion of Counsel
selected by the Company to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of
23.
<PAGE>
such Tax Law Change. The Company's right to redeem the Tax Affected Securities
shall continue as long as the Company is obligated to pay such Additional
Amounts, notwithstanding that the Company shall have made payments of Additional
Amounts specified in such second paragraph.
In addition, if the Company determines, based upon an Opinion of
Counsel, that, as a result of a Tax Law Change, any payment made outside the
United States by the Company or any of its Paying Agents of the full amount of
principal, premium, if any, or interest due with respect to any Bearer Security
or coupon appertaining thereto would be subject to any certification,
identification or other information reporting requirement of any kind, the
effect of which requirement is the disclosure to the Company, any Paying Agent
or any governmental authority of the nationality, residence or identity of a
beneficial owner of such Bearer Security or coupon who is not a United States
person (other than such a requirement (a) which would not be applicable to a
payment made by the Company or any one of its Paying Agents (i) directly to the
beneficial owner or (ii) to any custodian, nominee or other agent of the
beneficial owner, (b) which can be satisfied by the custodian, nominee or other
agent certifying that such beneficial owner is not a United States person,
provided that, in each case referred to in clauses (a)(ii) and (b), payment by
such custodian, nominee or agent to such beneficial owner is not otherwise
subject to any such requirement, or (c) which would not be applicable but for
the fact that such Bearer Security constitutes a "United States real property
interest," as defined in Section 897(c)(1) of the United States Internal Revenue
Code of 1986, as amended, with respect to the beneficial owner of such Bearer
Security), the Company at its election will either (x) redeem the Bearer
Securities, as a whole but not in part, upon not less than 20 nor more than 60
days' notice prior to the Redemption Date, at a Redemption Price equal to 100%
of the principal amount thereof plus interest accrued to the Redemption Date, or
(y) if and so long as the conditions of the fourth paragraph on the face hereof
are satisfied, pay the Bearer Additional Amounts specified in such paragraph.
The Company will make such determination and election and notify the Trustee and
the Paying Agent in London, England, thereof in writing as soon as practicable,
and the Trustee will promptly give notice of such determination in the manner
provided in the second following paragraph (the "Determination Notice"), in each
case stating the effective date of such certification, identification or
information reporting requirement, whether the Company will redeem the Bearer
Securities or will pay the Bearer Additional Amounts specified in the fourth
paragraph on the face hereof and (if applicable) the last date by which the
redemption of the Bearer Securities must take place. If the Company elects to
redeem the Bearer Securities pursuant to clause (x) above, such redemption shall
take place on a date, not later than one year after the publication of the
Determination Notice, as the Company elects by notice in writing to the Trustee
and the Paying Agent in London at least 75 days before the Redemption Date,
unless shorter notice is acceptable to the Trustee. Notwithstanding the
foregoing, the Company will not so redeem the Bearer Securities if the Company,
based upon an Opinion of Counsel, subsequently determines, not less than 30 days
prior to the Redemption Date, that subsequent payments would not be subject to
any such requirement, in which case the
24.
<PAGE>
Company will notify the Trustee in writing of its determination not to so redeem
the Securities, and the Trustee will promptly give notice to the Holders of the
Bearer Securities of that determination and any earlier redemption notice will
thereupon be revoked and of no further effect. If the Company elects as provided
in clause (y) above to pay Bearer Additional Amounts, the Company may, as long
as the Company is obligated to pay such Bearer Additional Amounts, subsequently
redeem the Bearer Securities, at any time, as a whole but not in part, upon not
less than 20 nor more than 60 days' notice prior to the Redemption Date, at a
Redemption Price equal to 100% of the principal amount thereof plus interest
accrued to the Redemption Date, and any Additional Amounts or Bearer Additional
Amounts.
In the event of a redemption of less than all of the Securities, the
Company will not be required (a) to register the transfer or exchange of
Registered Securities or to exchange Bearer Securities for Registered Securities
for a period of 15 days immediately preceding the date notice is given
identifying the serial numbers of the Securities called for such redemption,
(b) to register the transfer or exchange of any Registered Security, or portion
thereof, called for redemption, or (c) to exchange any Bearer Security called
for redemption; provided, however, that a Bearer Security called for redemption
may be exchanged for a Registered Security which is simultaneously surrendered
to the Registrar or Transfer Agent making such exchange with written
instructions for conversion consistent with the provisions described in Sections
2.5 and 12.2 of the Indenture.
Notice of redemption of Bearer Securities will be given by publication
in Authorized Newspapers in the City of London, England, and, so long as the
Securities are listed on the Luxembourg Stock Exchange and the rules of such
stock exchange shall so require, in Luxembourg, or, if not practicable in either
London, England, or Luxembourg, elsewhere in any country in Western Europe.
Notice will be given at least once not less than 20 nor more than 60 days prior
to the Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the principal,
premium, if any, of or interest, including Additional Amounts and Bearer
Additional Amounts, on any Security or the last day on which a Holder of a
Security has a right to convert his Security shall be, at any Place of Payment
or Place of Conversion, as the case may be, a day on which banking institutions
at such Place of Payment or Place of Conversion are authorized or obligated by
law or executive order to close, then payment of principal, premium, if any, or
interest, including Additional Amounts and Bearer Additional Amounts, or
delivery for conversion of such Security need not be made on or by such date at
such place but may be made on or by the next succeeding day at such place which
is not a day on which banking institutions are authorized or obligated by law or
executive order to close, with the same force and effect as if made on the date
for such payment or the date fixed for redemption or repurchase, or by such last
day for conversion, and no interest shall accrue on the amount so payable for
the period after such date.
25.
<PAGE>
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or after
(a) in the case of all Securities, the 90th day following the latter of the
Settlement Date or the latest issuance of Securities upon exercise of the
Underwriters' over-allotment option and prior to maturity, and (b) in the case
of Securities represented by a Temporary Global Bearer Security, the receipt of
definitive Bearer Securities, and prior to maturity, in each case subject to
prior redemption or repurchase, to convert this Security into fully paid and
nonassessable shares of Common Stock of the Company at an initial Conversion
Price of U.S. $50.00 for each share of Common Stock (or at the current adjusted
Conversion Price if an adjustment has been made as provided in the Indenture).
The right to convert a Security called for redemption shall terminate at the
close of business on the fifth Business Day immediately preceding the Redemption
Date for such security. The right of conversion attached to any Security may be
exercised by surrender of this Security, together with all coupons appertaining
hereto that mature after the date of conversion, except in the case of
Securities called for redemption during the period from the Record Date to and
including the next succeeding Interest Payment Date, the coupon maturing on such
succeeding Interest Payment Date, and also the conversion notice hereon, duly
executed to the Company, subject to any laws or regulations applicable thereto
and subject to the right of the Company to terminate the appointment of any
Conversion Agent (as defined below), at (a) the office of Bankers Trust Company,
1 Appold Street, Broadgate, London EC2A 2HE, England, or at such other offices
or agencies outside the United States as the Company may designate (each a
"Conversion Agent"); provided, however, that such surrender for conversion may
be made at the Corporate Trust Office of the Trustee in the City of New York, if
(but only if) such surrender for conversion at all offices outside the United
States maintained for such purpose by the Company in accordance with the
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions. Subject to the aforesaid requirement to surrender coupons
and except as provided in the Indenture, no cash payment or adjustment is to be
made on conversion, if the date of conversion is not an Interest Payment Date,
for interest accrued hereon from the Interest Payment Date next preceding the
date of conversion, or for dividends on the Common Stock issued on conversion
hereof. The Company shall thereafter deliver to the Holder the fixed number of
shares of Common Stock (together with any cash adjustment, as provided in the
Indenture) into which this Security is convertible and such delivery will be
deemed to satisfy the Company's obligation to pay the principal amount of this
Security. No fractions of shares or scrip representing fractions of shares will
be issued on conversion, but instead of any fractional interest (calculated to
the nearest 1/100th of a share) the Company shall pay a cash adjustment as
provided in the Indenture. The Conversion Price is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that in case of
certain consolidations or mergers to which the Company is a party or the
transfer of all or substantially all of the assets of the Company, the Indenture
shall be amended, without the consent of any Holders of Securities, so that this
Security, if then Outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger or transfer by a holder of the
26.
<PAGE>
number of shares of Common Stock of the Company into which this Security could
have been converted immediately prior to such consolidation, merger or transfer
(assuming such holder of Common Stock is not a Constituent Person, failed to
exercise any rights of election and received per share the kind and amount
received per share by a plurality of Non-electing Shares and further assuming,
if such consolidation, merger or transfer occurs prior to the later of the
Exchange Date and the receipt of Securities in definitive form (in the case of
Securities initially represented by a Temporary Global Bearer Security), that
the Security was convertible at the time of such occurrence at the Conversion
Price specified above as adjusted from the issue date of such Security to such
time as provided in the Indenture). No adjustment in the Conversion Price will
be made until such adjustment would require an increase or decrease of at least
one percent of such price, provided that any adjustment that would otherwise be
made will be carried forward and taken into account in the computation of any
subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of shares of Common Stock issued upon conversion thereof,
the Company will promptly furnish or cause to be furnished Rule 144A Information
(as defined below) to such Holder of Restricted Securities or such holder of
shares of Common Stock issued upon conversion of Restricted Securities, or to a
prospective purchaser of any such security designated by any such Holder or
holder, as the case may be, to the extent required to permit compliance by any
such Holder or holder with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), in connection with the resale of any
such security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision
thereto).
If a Change in Control occurs, the Holder of this Security shall have
the right, in accordance with the provisions of the Indenture, to require the
Company to repurchase this Security at a Purchase Price equal to 100% of the
principal amount plus accrued interest to the Repurchase Date; provided,
however, that interest installments on Bearer Securities whose Stated Maturity
is on or prior to such Repurchase Date will be payable only upon presentation
and surrender of coupons for such interest (at an office or agency outside the
United States except as herein provided otherwise). Whenever in this Security
there is a reference, in any context, to the principal of any Security as of any
time, such reference shall be deemed to include reference to the Purchase Price
payable in respect of such Security to the extent that such Purchase Price is,
was or would be so payable at such time, and express mention of the Purchase
Price in any provision of this Security shall not be construed as excluding the
Purchase Price in those provisions of this Security when such express mention is
not made.
If an Event of Default shall occur and be continuing, the principal of
all the Securities, together with accrued interest to the date of declaration,
may be declared due and payable in the manner and with the effect provided in
the Indenture. Upon payment (i) of the
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amount of principal so declared due and payable, together with accrued interest
to the date of declaration, and (ii) of interest on any overdue principal and
overdue interest, all of the Company's obligations in respect of the payment of
the principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities and coupons under the
Indenture at any time by the Company and the Trustee with either (a) the written
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding, or (b) by the adoption of a resolution, at a meeting of
Holders of the Outstanding Securities at which a quorum is present, by the
Holders of 66-2/3% in principal amount of the Outstanding Securities represented
and entitled to vote at such meeting. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the
Securities and coupons, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and any coupon appertaining hereto and of any Security issued in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security or any coupon appertaining hereto shall not have the
right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a
continuing Event of Default, the Holders of not less than 25% in principal
amount of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee indemnity satisfactory to it and the Trustee shall not
have received from the Holders of a majority in principal amount of the
Securities Outstanding a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security or any coupon appertaining hereto
for the enforcement of any payment of principal hereof, premium, if any, or
interest hereon (including any Additional Amounts and Bearer Additional Amounts)
on or after the respective due dates expressed herein or for the enforcement of
the right to convert this Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on (including Additional Amounts and Bearer Additional Amounts, as
described in the second and fourth paragraph,
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respectively, on the face hereof) this Security at the times, places and rate,
and in the coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.
Title to this Security and the coupons appertaining hereto shall pass
by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of this Security and any coupon appertaining
thereto as the owner thereof for all purposes, whether or not this Security or
such coupon be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture shall be governed by and construed in accordance with
the laws of the State of New York, United States of America, without regard to
the principles of conflicts of laws.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 13.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Paying Agent in London to pay
bearer an amount in cash or, at the Company's election, shares of Common Stock
equal to 100% of the principal amount hereof, plus interest accrued to the
Repurchase Date, as provided in the Indenture.
Dated: _______________________ ________________________
Signature
(b) Form of Registered Security
FORM OF FACE
THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED SECURITY ISSUED
IN GLOBAL FORM:
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
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CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY PAYMENT
HEREON 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.
THE FOLLOWING LEGENDS (THE "RULE 144A LEGEND") SHALL APPEAR ON THE FACE OF EACH
RESTRICTED SECURITY:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY SHARES OF
COMMON STOCK ISSUABLE UPON ITS CONVERSION MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. THIS SECURITY MAY ONLY BE SOLD IN ACCORDANCE WITH THE INDENTURE,
COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF
THE TRUSTEE. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF CORPORATE
EXPRESS, INC. (THE "COMPANY") THAT (A) THIS SECURITY AND ANY SHARES OF COMMON
STOCK ISSUABLE UPON ITS CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE
TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (III) IN THE CASE OF ANY PURCHASER OTHER THAN A PURCHASER WHO
HAS OTHERWISE AGREED WITH THE COMPANY IN WRITING, TO AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A) UNDER THE SECURITIES ACT
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, OR (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), AND IN EACH OF CASES (I) THROUGH
(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS OF THE UNITED STATES, AND THAT (B) THE HOLDER WILL,
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AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
AND ANY COMMON STOCK ISSUABLE UPON ITS CONVERSION FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION
AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME
TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF
THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS
SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY
AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
CORPORATE EXPRESS, INC.
4 1/2% CONVERTIBLE NOTE
DUE JULY 1, 2000
No. R-____________
U.S.$___________
CUSIP No._________
CORPORATE EXPRESS, INC., a corporation duly organized and existing
under the laws of the State of Colorado (the "Company," which term includes any
successor Person under the Indenture referred to on the reverse hereof), for
value received, hereby promises to pay to _______________, or registered
assigns, the principal sum of _____________ United States Dollars on July 1,
2000 and to pay interest thereon, from June 24, 1996, or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or duly
provided for, semi-annually in arrears on January 1 and July 1 in each year (the
"Interest Payment Date"), commencing January 1, 1997, at the rate of 4 1/2% per
annum, until the principal hereof is due, and at the rate of 4 1/2% per annum on
any overdue principal and premium, if any, and, to the extent permitted by law,
on any overdue interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Record Date for such
interest, which shall be the December 15 or June 15 (whether or not a Business
Day) next preceding such Interest Payment Date. Except as otherwise provided in
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the Indenture, any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Company, notice whereof shall be given to Holders of Registered Securities not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture. Payments
of principal shall be made upon the surrender of this Security at the option of
the Holder at the Corporate Trust Office of the Trustee, or at such other office
or agency of the Company as may be designated by it for such purpose in the City
of New York, 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, or at such other offices or agencies as the Company may designate, by
United States Dollar check drawn on, or transfer to a United States Dollar
account (such transfers to be made only to Holders of an aggregate principal
amount of Securities in excess of U.S.$5,000,000, provided that such Holder
shall have furnished wire instructions in writing to the Trustee no later than
15 days prior to the relevant payment date) maintained by the payee with, a bank
in the City of New York. Payment of interest on this Security may be made by
United States Dollar check drawn on a bank in the City of New York mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register, or, upon written application by the Holder to the Security
Registrar setting forth wire instructions not later than the relevant Record
Date, by transfer to a United States Dollar account (such transfers to be made
only to Holders of an aggregate principal amount of Securities in excess of
U.S.$5,000,000 provided that such Holder shall have furnished wire instructions
in writing to the Trustee no later than 15 days prior to the relevant payment
date) maintained by the payee with a bank in the City of New York.
The Company will pay to the Holder of this Security who is not a
United States person (as defined below) such additional amounts ("Additional
Amounts") as may be necessary in order that every net payment of the principal
of, premium, if any, and interest on this Security (including payment on
redemption or repurchase), after deduction or withholding for or on account of
any present or future tax, assessment or governmental charge imposed upon or as
a result of such payment by the United States or any political subdivision or
taxing authority thereof or therein, will not be less than the amount provided
for in this Security to be then due and payable; provided, however, that the
foregoing obligation to pay Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which would not
have been so imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, shareholder of or possessor of a power over such
Holder, if such Holder is an estate, a trust, a
32.
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partnership or a corporation) and the United States or any political
subdivision or taxing authority thereof or therein, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) being or having been a citizen or resident of the
United States or treated as a resident thereof, or being or having been
engaged in trade or business or present therein, or having or having had a
permanent establishment therein, or (ii) such Holder's present or former
status as a personal holding company, a foreign personal holding company
with respect to the United States, a controlled foreign corporation, a
passive foreign investment company, or a foreign private foundation or
foreign tax exempt entity for United States tax purposes, or a corporation
which accumulates earnings to avoid United States Federal income tax;
(b) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the Holder of this
Security for payment on a date more than 15 days after the date on which
such payment became due and payable or the date on which payment thereof is
duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with any certification,
identification or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the Holder or
beneficial owner of this Security, if compliance is required by statute or
by regulation or ruling of the United States Treasury Department as a
precondition to exemption from such tax, assessment or other governmental
charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on this Security;
(f) any tax, assessment or other governmental charge imposed as a
result of a Person's past or present actual or constructive ownership,
including by virtue of the right to convert Securities, of 10% or more of
the total combined voting power of all classes of stock of the Company
entitled to vote;
(g) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of the principal of, premium,
if any, or interest on this Security, if such payment can be made without
such withholding by any other Paying Agent in Western Europe;
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(h) any tax, assessment or other governmental charge imposed on a
Holder that is a partnership or a fiduciary, but only to the extent that
any beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the payment
of Additional Amounts had the beneficial owner, member, beneficiary or
settlor directly received its beneficial or distributive share of payments
on this Security;
(i) any tax, assessment or other governmental charge which would not
have been imposed but for the fact that this Security constitutes a "United
States real property interest," as defined in Section 897(c)(1) of the
United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder, with respect to the beneficial owner of this
Security; or
(j) any combination of items (a), (b), (c), (d), (e), (f), (g), (h)
and (i).
For purpose of this Security, "United States" means the United States
of America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction (its "possessions"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands), and "United States person" is a Person
that is, for United States Federal income tax purposes, (a) a citizen or
resident of the United States, (b) a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof or (c) an estate or trust the income of which is subject to
United States Federal income taxation regardless of source.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to the payment of the principal
of, premium, if any, or interest on, or in respect of, any Security such mention
shall be deemed to include mention of the payment of Additional Amounts payable
as described in the second preceding paragraph to the extent that, in such
context, Additional Amounts are, were or would be payable in respect of such
Security and express mention of the payment of Additional Amounts (if
applicable) in any provisions of this Security shall not be construed as
excluding Additional Amounts in those provisions of this Security where such
express mention is not made.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of
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their respective authorized signatories, this Security shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal.
Dated:
CORPORATE EXPRESS, INC.
Corporate Seal
By:__________________________
Name:
Title:
Attest:
________________________
Name:
Title:
FORM OF REVERSE
This Security is one of a duly authorized issue of securities of the
Company designated as its "4 1/2% Convertible Notes due July 1, 2000" (the
"Securities"), limited in aggregate principal amount to U.S.$325,000,00
(U.S.$373,750,000 aggregate principal amount assuming full exercise of the over-
allotment option), issued and to be issued under an Indenture, dated June 24,
1996 (the "Indenture"), between the Company and Bankers Trust Company, as
Trustee (the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, the Holders of the
Securities and any coupons appertaining thereto and of the terms upon which the
Securities are, and are to be, authenticated and delivered. Reference is
further made to the Registration Rights Agreement dated June 24, 1996, between
the Company and Alex. Brown & Sons Incorporated for additional rights, duties
and immunities. Each Holder of any Security or any coupon, whether upon
original issuance or upon transfer or assignment thereof, accepts and agrees to
be bound by the provisions contained in the Indenture and in the Registration
Rights Agreement. The
35.
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Securities are issuable as Bearer Securities, with interest coupons attached, in
the denomination of U.S.$5,000, and as Registered Securities, without coupons,
in denominations of (a) U.S.$1,000 and integral multiples of U.S.$1,000 in
excess thereof if such Registered Securities are Restricted Securities; and (b)
U.S.$1,000 and any multiple thereof if such Registered Securities are not
Restricted Securities. As provided in the Indenture and subject to certain
limitations therein set forth, Registered Securities are exchangeable for a like
aggregate principal amount of Registered Securities of any authorized
denominations as requested by the Holder surrendering the same upon surrender of
the Registered Security or Securities to be exchanged, at the Corporate Trust
Office of the Trustee or at such other office or agency of the Company as may be
designated by it for such purpose in the City of New York or at such other
offices or agencies as the Company may designate (each a "Transfer Agent"). The
Transfer Agent will then forward such surrendered Registered Securities
(together with any payment surrendered therewith) to the Trustee who in turn
will issue the new Registered Securities. Bearer Securities may not be issued in
exchange for Registered Securities.
No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company at any time on or after July
1, 1998, in whole or in part, upon not less than 20 nor more than 60 days'
notice to the Holders prior to the Redemption Date; provided, however, that
until July 1, 1999 the Securities cannot be redeemed at the option of the
Company unless the closing sale price of the Common Stock (determined in
accordance with the provisions of Article 12 of this Indenture) for at least 15
out of 30 consecutive Trading Days ending within 20 days before the notice of
redemption is first mailed to Holders equalled or exceeded 150% of the then-
existing Conversion Price per share of Common Stock. The Redemption Prices
(expressed as percentages of the principal amount), beginning July 1 of the
years indicated are as follows:
Redemption
Period Price
------ -------------
7/1/98 through 6/30/1999 102.250%
7/1/99 through 6/30/2000 101.125%
together, in each case, with accrued interest to the Redemption Date, and
Securities held by non-United States persons are also redeemable, in whole but
not in part, in the circumstances described in the next succeeding paragraph, at
a Redemption Price equal to 100% of the principal amount plus interest accrued
to the Redemption Date; provided, however, that interest installments on
Registered Securities whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
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If as a result of a Tax Law Change, the Company has or will become
obligated to pay to the Holder of any Security or coupon Additional Amounts, as
described in the second paragraph of the face of this Security, and such
obligation cannot be avoided by the Company taking reasonable measures available
to it, then the Company may, at its option, redeem the Tax Affected Securities
as a whole, but not in part, upon not less than 20 nor more than 60 days' notice
to the Holders prior to the Redemption Date, at a Redemption Price equal to 100%
of the principal amount plus interest accrued to the Redemption Date, and any
Additional Amounts then payable; provided, that (i) no such notice of redemption
shall be given earlier than 90 days prior to the earliest date on which the
Company would be obligated to pay any such Additional Amounts were a payment in
respect of the Tax Affected Securities then due and (ii) at the time such notice
of redemption is given, such obligation to pay such Additional Amounts remains
in effect. Prior to the giving of any notice of redemption pursuant to this
paragraph, the Company shall deliver to the Trustee (a) an Officers' Certificate
stating that the Company is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and (b) an Opinion of Counsel selected by the
Company to the effect that the Company has or will become obligated to pay such
Additional Amounts as a result of such Tax Law Change. The Company's right to
redeem the Tax Affected Securities shall continue as long as the Company is
obligated to pay such Additional Amounts, notwithstanding that the Company shall
have made payments of Additional Amounts specified in such second paragraph.
In the event of a redemption of the Securities as provided in the two
preceding paragraphs, the Company will not be required (a) to register the
transfer or exchange of Registered Securities or to exchange Bearer Securities
for Registered Securities for a period of 15 days immediately preceding the date
notice is given identifying the serial numbers of the Securities called for such
redemption, (b) to register the transfer or exchange of any Registered Security,
or portion thereof, called for redemption, or (c) to exchange any Bearer
Security called for redemption; provided, however, that a Bearer Security called
for redemption may be exchanged for a Registered Security which is
simultaneously surrendered to the Registrar or Transfer Agent making such
exchange with written instructions for conversion consistent with the provisions
described in Sections 2.5 and 12.2 of the Indenture.
Notice of redemption will be given by mail to Holders of Registered
Securities. Notice to the Holders will be given at least once not less than 20
nor more than 60 days prior to the Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the principal of,
premium, if any, or interest, including Additional Amounts, on any Security or
the last day on which a Holder of a Security has a right to convert his Security
shall be, at any Place of Payment or Place of Conversion, as the case may be, a
day on which banking institutions at such Place of Payment or Place of
Conversion are authorized or obligated by law or executive order to
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close, then payment of principal, premium, if any, or interest, including
Additional Amounts, or delivery for conversion of such Security need not be made
on or by such date at such place but may be made on or by the next succeeding
day at such place which is not a day on which banking institutions are
authorized or obligated by law or executive order to close, with the same force
and effect as if made on the date for such payment or the date fixed for
redemption, or by such last day for conversion, and no interest shall accrue on
the amount so payable for the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or after
(a) in the case of all Securities, the 90th day following the latter of the
Settlement Date or the latest issuance of securities upon exercise of the
Underwriters' over-allotment option, and (b) in the case of Securities
represented by a Temporary Global Bearer Security, the receipt of definitive
Bearer Securities, and in each case prior to maturity, subject to prior
redemption or repurchase, to convert this Security into fully paid and
nonassessable shares of Common Stock of the Company at an initial Conversion
Price of U.S.$50.00 for each share of Common Stock (or at the current adjusted
Conversion Price if an adjustment has been made as provided in the Indenture).
The right to convert a Security called for redemption shall terminate at the
close of business on the fifth Business Day immediately preceding the Redemption
Date for such security. The right of conversion attached to any Security may be
exercised by surrender of this Security, duly endorsed or assigned to the
Company or in blank and, in case such surrender shall be made during the period
from the close of business of any Record Date next preceding any Interest
Payment Date to the opening of business on such Interest Payment Date ("Interest
Period"), also accompanied by payment in same day 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 of this Security then being
converted (or, if this Security was issued in exchange for a Bearer Security
after the close of business on such Record Date, by surrender of one or more
coupons relating to such Interest Payment Date or by both payment in such funds
and surrender of such coupon or coupons, in either case, in an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
this Security then being converted), and also the conversion notice hereon duly
executed, to the Company at the Corporate Trust Office of the Trustee, or at
such other office or agency of the Company as may be designated by it for such
purpose in the City of New York, or at such other offices or agencies as the
Company may designate (each a "Conversion Agent"). In the case of any Security
which has been converted after any Record Date but before the next Interest
Payment Date, the interest payable on such Interest Payment Date shall be paid
to the Holder of such Security on such Record Date. The Company shall
thereafter deliver to the Holder the fixed number of shares of Common Stock
(together with any cash adjustment, as provided in the Indenture) into which
this Security is convertible and such delivery will be deemed to satisfy the
Company's obligation to pay the principal amount of this Security. No fractions
of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest (calculated to the nearest
1/100th of a share) the Company shall pay a cash adjustment as provided in the
38.
<PAGE>
Indenture. The Conversion Price is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the transfer of all
or substantially all of the property and assets of the Company, the Indenture
shall be amended, without the consent of any Holders of Securities, so that this
Security, if then Outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger or transfer by a holder of the number of shares of Common
Stock of the Company into which this Security could have been converted
immediately prior to such consolidation, merger or transfer (assuming such
holder of Common Stock is not a Constituent Person, failed to exercise any
rights of election and received per share the kind and amount received per share
by a plurality of Non-electing Shares and further assuming, if such
consolidation, merger or transfer occurs prior to the later of the Exchange Date
and the receipt of Securities in definitive form (in the case of Securities
initially represented by a Temporary Global Bearer Security), that the Security
was convertible at the time of such occurrence at the Conversion Price specified
above as adjusted from the issue date of such Security to such time as provided
in the Indenture). No adjustment in the Conversion Price will be made until such
adjustment would require an increase or decrease of at least one percent of such
rate, provided that any adjustment that would otherwise be made will be carried
forward and taken into account in the computation of any subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of shares of Common Stock issued upon conversion thereof,
the Company will promptly furnish or cause to be furnished Rule 144A Information
(as defined below) to such Holder of Restricted Securities or such holder of
shares of Common Stock issued upon conversion of Restricted Securities, or to a
prospective purchaser of any such security designated by any such Holder or
holder, as the case may be, to the extent required to permit compliance by such
Holder or holder with Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), in connection with the resale of any such security.
"Rule 144A information" shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).
If a Change in Control occurs, the Holder of this Security shall have
the right, in accordance with the provisions of the Indenture, to require the
Company to repurchase this Security (or any portion of the principal amount
hereof that is an integral multiple of $1,000) for cash at a Purchase Price
equal to 100% of the principal amount thereof plus interest accrued to the
Repurchase Date. Whenever in this Security there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Purchase Price payable in respect of such
Security to the extent that such Purchase Price is, was or would be so payable
at such time, and express mention of the
39.
<PAGE>
Purchase Price in any provision of this Security shall not be construed as
excluding the Purchase Price in those provisions of this Security when such
express mention is not made.
In the event of redemption, repurchase or conversion of this Security
in part only, a new Registered Security or Securities for the unredeemed,
unrepurchased or unconverted portion hereof will be issued in the name of the
Holder hereof.
If an Event of Default shall occur and be continuing, the principal of
all the Securities, together with accrued interest to the date of declaration,
may be declared due and payable in the manner and with the effect provided in
the Indenture. Upon payment (i) of the amount of principal so declared due and
payable, together with accrued interest to the date of declaration, and (ii) of
interest on any overdue principal and overdue interest, all of the Company's
obligations in respect of the payment of the principal of and interest on the
Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities and coupons under the
Indenture at any time by the Company and the Trustee with either (a) the written
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding, or (b) by the adoption of a resolution, at a meeting of
Holders of the Outstanding Securities at which a quorum is present, by the
Holders of 66-2/3% in principal amount of the Outstanding Securities
represented, and entitled to vote at such meeting. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities at the time Outstanding, on behalf of the Holders of all the
Securities and coupons, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security or
such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee indemnity satisfactory to it and
the Trustee shall not have received from the Holders of a majority in principal
amount of the Securities Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any
40.
<PAGE>
payment of principal hereof, premium, if any, or interest hereon (including any
Additional Amounts) on or after the respective due dates expressed herein or for
the enforcement of the right to convert this Security as provided in the
Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on (including Additional Amounts, as described on the face hereof) this
Security at the times, places and rate, and in the coin or currency, herein
prescribed or to convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Registered Securities is registrable on the
Security Register upon surrender of a Registered Security (a) at the Corporate
Trust Office of the Trustee or at such other office or agency of the Company as
may be designated by it for such purpose in the City of New York, or (b) subject
to any laws or regulations applicable thereto and to the right of the Company to
terminate the appointment of any Transfer Agent, at the offices of the Transfer
Agents described herein or at such other offices or agencies as the Company may
designate, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing, and thereupon one
or more new Registered Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees by the Registrar. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to recover any tax or other governmental charge payable in
connection therewith.
Prior to due presentation of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered, as
the owner thereof for all purposes, whether or not such Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
The Indenture shall be governed by and construed in accordance with
the laws of the State of New York, United States of America, without regard to
the principles of conflicts of laws.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
41.
<PAGE>
1. Pursuant to Section 13.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or Paying Agent to pay
it or __________________ an amount in cash equal to 100% of the principal amount
hereof, plus interest accrued to the Repurchase Date, as provided in the
Indenture.
Dated: _______________________ ________________________
Signature
________________________
Signature Guaranteed
Principal amount to be repurchased: ______________________
Remaining principal amount following such repurchase: ______________
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
(c) Form of Temporary Global Bearer Security
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) and 1287(a) OF THE INTERNAL REVENUE CODE.
CORPORATE EXPRESS, INC.
4 1/2% CONVERTIBLE NOTE
DUE JULY 1, 2000
TEMPORARY GLOBAL BEARER SECURITY
ISIN No.___________
Corporate Express, Inc., a corporation duly organized and existing
under the laws of the State of Colorado (the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to
42.
<PAGE>
bearer upon presentation and surrender of this Temporary Global Bearer Security
the principal sum of _________________, ______________________ United States
Dollars (U.S.$__________) on July 1, 2000, and to pay interest thereon, from
June 24, 1996, or from the most recent Interest Payment Date (as defined below)
to which interest has been paid or duly provided for, semi-annually in arrears
on January 1 and July 1 in each year (each an "Interest Payment Date"),
commencing January 1, 1997, at the rate of 4 1/2% per annum, until the principal
hereof is due and at the rate of 4 1/2% per annum on any overdue principal and,
to the extent permitted by law, on any overdue interest; provided, however, that
interest on this Temporary Global Bearer Security shall be payable only after
the issuance of the Definitive Securities in bearer form for which this
Temporary Global Bearer Security is exchangeable and, in the case of Definitive
Securities in bearer form, only upon presentation and surrender (at an office or
agency outside the United States, except as otherwise provided in the Indenture)
of the interest coupons thereto attached as they severally mature.
This Temporary Global Bearer Security is one of a duly authorized
issue of Securities of the Company designated as specified in the title hereof,
issued and to be issued under the Indenture, dated June 24, 1996 (the
"Indenture"), between the Company and Bankers Trust Company, as Trustee. This
Temporary Global Bearer Security is a temporary security and is exchangeable in
whole or from time to time in part without charge upon request of the holder
hereof for definitive Securities in bearer form, with interest coupons attached,
of authorized denominations, (a) not earlier than 40 days after June 24, 1996
and (b) as promptly as practicable following presentation of certification, in
one of the forms set forth in the Indenture for such purpose, that the
beneficial owner or owners of this Temporary Global Bearer Security (or, if such
exchange is only for a part of this Temporary Global Bearer Security, of such
part) are not United States persons, are persons described in Section 1.163-
5(c)(2)(i)(D)(6) of the United States Treasury Regulations or are financial
institutions that are holding such Security for resale during the restricted
period (as defined in Section 1.163- 5(c)(2)(i)(D)(7) of the United States
Treasury Regulations) and that have not acquired such Securities for purposes of
resale directly or indirectly to a United States person or within the United
States. Definitive Securities in bearer form to be delivered in exchange for
any part of this Temporary Global Bearer Security shall be delivered only
outside the United States. Upon any exchange of a part of this Temporary Global
Bearer Security for definitive Securities, the portion of the principal amount
hereof so exchanged shall be endorsed by the Paying Agent in London or its agent
on the Schedule hereto, and the principal amount hereof shall be reduced for all
purposes by the amount so exchanged.
This Temporary Global Bearer Security is exchangeable in whole, but
not in part, for an interest in the Global Note upon certification that the
person who acquires such interest in the Global Note is a QIB or a Non-U.S.
person who acquired in accordance with Regulation S.
43.
<PAGE>
Until exchanged in full for definitive Securities, this Temporary
Global Bearer Security shall in all respects be entitled to the same benefits
under, and subject to the same terms and conditions of, the Indenture and the
Registration Rights Agreement, dated June 24, 1996, between the Company and
Alex. Brown & Sons Incorporated, as Bearer Securities authenticated and
delivered thereunder, except that neither the Holder hereof nor the beneficial
owners of this Temporary Global Bearer Security shall be entitled to receive
payment of interest or other payments hereon or to convert this Temporary Global
Bearer Security into Common Stock of the Company or any other security, cash or
other property. Each Holder of any Security or any coupon, whether upon original
issuance or upon transfer, accepts and agrees to be bound by the provisions
contained in the Indenture and in the Registration Rights Agreement.
The Indenture shall be governed by and construed in accordance with
the laws of the State of New York, United States of America, without regard to
the principles of conflicts of laws.
All terms used in this Temporary Global Bearer Security which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee or an Authenticating Agent by the manual signature of one of their
respective authorized signatories, this Temporary Global Bearer Security shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this Temporary Global
Bearer Security to be duly executed under its corporate seal.
Dated as of June ____, 1996
CORPORATE EXPRESS, INC.
Corporate Seal By:___________________________
Name:
Title:
Attest:
____________________________
Name:
Title:
44.
<PAGE>
SCHEDULE OF EXCHANGES
<TABLE>
<CAPTION>
Made
Principal Amount Remaining on Behalf of
Exchanged for Principal Paying Agent
Date Bearer Amount Following in London,
Made Securities Such Exchange England
- ---- ---------- ------------- -------
<S> <C> <C> <C>
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
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- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
- ----- ---------------- ------------------ ---------------
</TABLE>
45.
<PAGE>
SECTION 2.3 Form of Coupon.
--------------
FORM OF FACE
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) and 1287(a) OF THE INTERNAL REVENUE CODE.
No.- ____________________
ISIN No. ____________
CORPORATE EXPRESS, INC. U.S.$ _______
Due ________ __, ____
4 1/2% CONVERTIBLE NOTE
DUE JULY 1, 2000
Unless the Security to which this coupon appertains shall have been
redeemed, repurchased or converted prior to the date set forth hereon, Corporate
Express, Inc. (the "Company") shall, subject to and in accordance with the terms
and conditions of such Security and the Indenture referred to therein, pay to
the bearer on the date set forth hereon, upon surrender hereof, the amount shown
hereon (together with any Additional Amounts and any Bearer Additional Amounts
payable in respect thereof which the Company may be required to pay according to
the terms of said Security) at the paying agencies set out on the reverse hereof
or at such other places outside the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction as the Company may determine from time to
time.
CORPORATE EXPRESS, INC.
By: ________________________________
Treasurer
46.
<PAGE>
REVERSE OF COUPON
TRANSFER, PAYING AND CONVERSION AGENTS
_______________________________________
_______________________________________
_______________________________________
_______________________________________
London _____________
England
SECTION 2.4 Form of Certificate of Authentication.
-------------------------------------
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: _______________*
BANKERS TRUST COMPANY,
as Trustee
By: Authenticating Agent, as
Authenticating Agent**
By:___________________________
Authorized Signatory
* For Registered Securities only.
** For the Temporary Global Bearer Security or Bearer Securities in definitive
form.
47.
<PAGE>
SECTION 2.5 Form of Conversion Notice.
-------------------------
CONVERSION NOTICE
(a) For Bearer Securities:
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security into shares of Common Stock in accordance
with the terms of the Indenture referred to in this Security and directs that
such shares be registered in the name of and delivered, together with a check in
payment for any fractional share, to the undersigned unless a different name has
been indicated below. The address for payment of any such check must be outside
the United States. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Dated: ___________________ _________________________
Signature
If shares are to be registered HOLDER
in the name of and delivered
to a Person other than the
Holder, please print such Please print name and
Person's name and address: address of Holder:
________________________________ _______________________________
Name Name
________________________________ _______________________________
Address Address
________________________________ _______________________________
________________________________ ________________________________
Social Security or other Social Security or other
Taxpayer Identification Taxpayer Identification
Number, if any Number, if any
48.
<PAGE>
Name and address (outside the
United States) to where any
check referred to in the first
paragraph of this Conversion
Notice should be mailed:
___________________________
Name
___________________________
Address
___________________________
Social Security or other
Taxpayer Identification
Number, if any
(b) For Registered Securities:
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or any portion of the principal amount
hereof (which is an integral multiple of U.S.$1,000, provided that the
unconverted portion of such principal amount is U.S.$1,000 or any integral
multiple of U.S.$1,000 in excess thereof) below designated, into shares of
Common Stock in accordance with the terms of the Indenture referred to in this
Security, and directs that such shares, together with a check in payment for any
fractional share and any Securities representing any unconverted principal
amount hereof, be delivered to and be registered in the name of the undersigned
unless a different name has been indicated below. If shares of Common Stock or
Securities are to be registered in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated: _____________________ ______________________
Signature
49.
<PAGE>
If shares or Registered If only a portion of the
Securities are to be Securities is to be
registered in the name of a converted, please indicate:
Person other than the
Holder, please print such
Person's name and address: 1. Principal amount to be
converted:
_________________________ U.S.$___________
Name
2. Principal amount and
denomination of
Registered Securities
representing unconverted
_________________________ principal amount
Address to be issued:
_________________________ Amount: U.S.$________
Social Security or other
Taxpayer Identification Denominations:
Number, if any U.S.$______
(any integral multiple of
U.S.$1,000, provided that
the unconverted portion of
such principal amount is
U.S.$1,000 or any integral
multiple of U.S.$1,000 in
excess thereof)
___________________________ Signature Guaranteed
SECTION 2.6 Legend on Restricted Securities.
-------------------------------
During the period beginning on June 24, 1996 and ending on the date
three years from such date (or such shorter period as the Company may direct in
an Officers' Certificate), any Security originally issued otherwise than in
reliance on Regulation S under the Securities Act, including any Security issued
in exchange therefor or in lieu thereof, shall be a Registered Security, shall
be deemed a "Restricted Security" and shall be subject to the restrictions on
transfer provided in the legends set forth on the face of the form of Registered
50.
<PAGE>
Security in Section 2.2(b); provided, however, that the term "Restricted
Securities" shall not include Registered Securities as to which restrictions
have been terminated in accordance with Section 3.5. All Restricted Securities
shall bear the applicable legends set forth on the face of the form of
Registered Security in Section 2.2(b). Securities which are not Restricted
Securities shall not bear such legend. The Trustee shall not issue any
unlegended Registered Security until it has received an Officers' Certificate
from the Company directing it to do so.
ARTICLE THREE
THE SECURITIES
SECTION 3.1 Title and Terms.
---------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to U.S.$325,000,000
($373,750,000 aggregate principal amount assuming the full exercise of the over-
allotment option), except for Securities authenticated and delivered in exchange
for, or in lieu of, other Securities pursuant to Section 3.4, 3.5, 3.6, 11.8 or
14.2(f).
The Securities shall be known and designated as the "4 1/2%
Convertible Notes due July 1, 2000" of the Company. Their Stated Maturity shall
be July 1, 2000 and they shall bear interest on their principal amount from June
24, 1996, payable semi-annually in arrears on January 1 and July 1 in each year,
commencing January 1, 1997, at the rate of 4 1/2% per annum until the principal
thereof is due and at the rate of 4 1/2% per annum on any overdue principal and,
to the extent permitted by law, on any overdue interest; provided, however, that
payments shall only be made on Business Days as provided in Section 1.12.
The principal of, premium, if any, and interest on the Securities
shall be payable as provided in the forms of Securities and coupon set forth in
Sections 2.2 and 2.3 (any city in which any Paying Agent is located being herein
called a "Place of Payment").
The Securities are entitled to the benefits of a Registration Rights
Agreement. The Securities are entitled to the payment of Liquidated Damages and
additional interest as provided in the Registration Rights Agreement.
The Securities shall be redeemable at the option of the Company at any
time on or after July 1, 1998, in whole or in part; provided, however, that
until July 1, 1999 the Securities cannot be redeemed at the option of the
Company unless the closing sale price of the Common Stock (determined in
accordance with the provisions of Article 12 of this Indenture) for at least 15
out of 30 consecutive Trading Days ending within 20 days before the notice of
redemption is first mailed to Holders equalled or exceeded 150% of the then-
existing
51.
<PAGE>
Conversion Price per share of Common Stock. In addition, the Securities shall be
redeemable, at the Company's option or otherwise in the event of certain
developments, including developments with respect to changes in U.S. withholding
taxes or certification requirements, as provided in Article Eleven and in the
forms of Securities set forth in Section 2.2.
The Securities shall be convertible as provided in Article Twelve (any
city in which any Conversion Agent is located being herein called a "Place of
Conversion").
The Securities shall be subject to repurchase by the Company at the
option of the Holders as provided in Article Thirteen.
SECTION 3.2 Denominations.
-------------
The Definitive Securities shall be issuable (i) in bearer form, with
interest coupons attached, in the denomination of U.S.$5,000 and (ii) as
Registered Securities, without coupons, in denominations of U.S.$1,000 and any
multiple thereof (U.S.$1,000 and integral multiples of U.S.$1,000 in excess
thereof if such Registered Security is a Restricted Security (other than a
Restricted Security issued in connection with a partial conversion, redemption
or repurchase of a Restricted Security)).
SECTION 3.3 Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents, under a facsimile of its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The Coupons shall be executed on behalf of the Company
by its Treasurer. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee or to its order for authentication (or to the Paying Agent in
London, in the case of Bearer Securities or the Temporary Global Bearer
Security), together with a Company Order for the authentication and delivery of
such Securities, and the Trustee or an Authenticating Agent in accordance with
such Company Order shall authenticate and make available for delivery such
Securities as in this Indenture provided and not otherwise. In connection with
any Company Order for authentication, an Officers' Certificate and Opinion of
Counsel pursuant to Section 1.2 shall not be required.
52.
<PAGE>
Each Bearer Security and the Temporary Global Bearer Security shall be
dated June 24, 1996. Each Registered Security shall be dated the date of its
authentication.
No Security (or coupon attached thereto) shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein executed by the Trustee or an Authenticating Agent
by manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Except as permitted by
Section 3.4 or 3.6, neither the Trustee nor an Authenticating Agent shall
authenticate and make available for delivery any Bearer Security unless all
coupons appurtenant thereto for interest then matured have been detached and
canceled.
SECTION 3.4 Temporary Global Security.
-------------------------
(a) The Securities (other than the Registered Securities) shall be
issued initially in the form of one Temporary Global Bearer Security, which
Temporary Global Bearer Security shall be deposited on behalf of the subscribers
for the Securities represented thereby with Bankers Trust Company, London
Office, as common depositary (the "Common Depositary"), for credit to their
respective accounts (or to such other accounts as they may direct) at MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS OFFICE, as operator of the
EUROCLEAR CLEARANCE SYSTEM ("EUROCLEAR"), or CEDEL BANK, SOCIETE ANONYME
("CEDEL").
On or before the Exchange Date, the Company shall deliver to the
Paying Agent in London at its principal London office located at 1 Appold
Street, Broadgate, London EC2A 2HE, England, or its designated agent, Bearer
Securities executed by the Company. On or after the Exchange Date, the Temporary
Global Bearer Security shall be surrendered by the Common Depositary to the
Trustee or its agent, as the Company's agent for such purpose, to be exchanged,
in whole or from time to time in part, for Bearer Securities without charge to
Holders, and the Trustee or the Paying Agent in London or other Paying Agent
outside the United States shall authenticate and deliver (at an office or agency
outside the United States), in exchange for the Temporary Global Bearer Security
or the portions thereof to be exchanged, an equal aggregate principal amount of
Bearer Securities, as shall be specified by the beneficial owners thereof;
provided, however, that upon such presentation by the Common Depositary, the
Temporary Global Bearer Security is accompanied by a certificate dated the
Exchange Date or a subsequent date and signed by EUROCLEAR as to the portion of
the Temporary Global Bearer Security held for its account then to be exchanged
and a certificate dated the Exchange Date or a subsequent date and signed by
CEDEL as to the portion of the Temporary Global Bearer Security held for its
account then to be exchanged, each to the effect hereinafter provided. The
Company hereby appoints the principal office of the Paying Agent in London,
England, or its designated agent, as its agent outside the United States where
53.
<PAGE>
Bearer Securities may be delivered in exchange for the Temporary Global Bearer
Security or portions thereof. Each beneficial owner of any portion of the
Temporary Global Bearer Security shall be entitled to take delivery of Bearer
Securities only at such office. Notwithstanding any other provision hereof or of
the Securities, no Security initially represented by the Temporary Global Bearer
Security will be mailed to or otherwise delivered in connection with its
original issuance to any location within the United States. The Trustee agrees
that it will cause the Paying Agent in London to retain each certificate
provided by EUROCLEAR or CEDEL for a period of four calendar years following the
year in which the certificate is received and not to destroy or otherwise
dispose of any such certificate without first offering to deliver it to the
Company.
Each certificate to be provided by EUROCLEAR and CEDEL shall be
substantially to the following effect or with such changes therein as shall be
approved by the Company and be satisfactory to the Trustee:
"CERTIFICATE
CORPORATE EXPRESS, INC.
4 1/2% CONVERTIBLE NOTE
DUE JULY 1, 2000
This is to certify that, based on certificates we have received from
our member organizations substantially in the form set out in Section 3.11 of
the Indenture relating to the above-captioned Securities, as of the date hereof,
U.S.$_____________ principal amount of the above-captioned Securities acquired
from Corporate Express, Inc. (i) are owned by persons that are not United States
persons (as defined below), (ii) are owned by United States persons that are (a)
foreign branches of United States financial institutions (as defined in United
States Treasury Regulations Section 1.165-12(c)(1)(v) ("financial
institutions")) purchasing for their own account or for resale or (b) United
States persons who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such financial
institutions on the date hereof (and in the case of either clause (a) or (b),
each financial institution has agreed for the benefit of Corporate Express, Inc.
to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder) or (iii) are owned by financial institutions for purposes of resale
during the restricted period (as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)). Financial institutions described in clause
(iii) of the preceding sentence (whether or not also described in clause (i) or
(ii)) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to United States persons or to persons within the
United States.
As used in this Certificate, "United States person" is a person that
is, for United States federal income tax purposes, (a) a citizen or resident of
the United States, (b) a
54.
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corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or (c) an estate
or trust the income of which is subject to United States Federal income taxation
regardless of the source; "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction (its "possessions"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands).
We further certify that (i) we are not making available herewith for
exchange any portion of the Temporary Global Bearer Security excepted in such
certificates and (ii) as of the date hereof, we have not received any
notification from any of our member organizations to the effect that the
statements made by such member organizations with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.
We understand that this certificate is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceedings. We
agree to retain each statement provided by a member organization for a period of
four calendar years following the year in which the statement is received.
Dated: ________, 19__*
*To be dated no
earlier than the
Exchange Date.
[MORGAN GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS
OFFICE, AS OPERATOR OF THE EUROCLEAR CLEARANCE SYSTEM]
[CEDEL BANK SOCIETE ANONYME]
By __________________________"
Each certificate received by EUROCLEAR and CEDEL from Persons
appearing in their records as Persons entitled to a portion of the Temporary
Global Bearer Security shall be substantially to the effect set forth in Section
3.11.
55.
<PAGE>
Upon any such exchange of a portion of the Temporary Global Bearer
Security for Bearer Securities, the Temporary Global Bearer Security shall be
endorsed to reflect the reduction of the principal amount evidenced thereby.
Until so exchanged in full, the Temporary Global Bearer Security shall in all
respects be entitled to the same benefits under, and subject to the same terms
and conditions of, this Indenture as Bearer Securities authenticated and
delivered hereunder, except that none of EUROCLEAR, CEDEL or the beneficial
owners of the Temporary Global Bearer Security shall be entitled to receive
payment of interest or other payments thereon or to convert the Temporary Global
Bearer Security, or any portion thereof, into Common Stock of the Company or any
other security, cash or other property.
Bearer Securities shall be exchangeable for Registered Securities as
provided in Section 3.5.
(b) The following provisions shall apply with respect to the
registration of any proposed transfer of a Security to a QIB:
(i) If the Security to be transferred consists of an interest in
the Temporary Global Bearer Security, the Trustee shall register the
transfer if the Trustee receives from the Company or the transferee a
certificate in substantially the form attached hereto as Exhibit A,
certifying that such transfer is being made by a proposed transferor who
has advised the Company and the Trustee in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a transferee who has
advised the Company and the Trustee in writing, that it is purchasing the
Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that it is aware
that the transferor is relying upon its foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
(ii) If the Security to be transferred consists of an interest in
the Temporary Global Bearer Security, upon receipt by the Trustee of the
documents referred to in clause (i) and instructions given in accordance
with the Depository Trust Company's and the Trustee's procedures, the
Trustee shall record in the securities register the date and an increase in
the principal amount of the U.S. Global Note in an amount equal to the
principal amount of the Temporary Global Bearer Security to be transferred,
and Morgan Guaranty Trust Company of New York, Brussels Office, as operator
of EUROCLEAR or CEDEL, shall decrease the amount of the Temporary Global
Bearer Security so transferred.
56.
<PAGE>
(c) Pending the preparation of definitive Registered Securities, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Registered Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Registered Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
The Company will make available to the Trustee a reasonable supply of Registered
Securities in definitive form.
If temporary Registered Securities are issued, the Company will cause
definitive Registered Securities to be prepared without unreasonable delay.
After the preparation of definitive Registered Securities, the temporary
Registered Securities shall be exchangeable for definitive Registered Securities
upon surrender of the temporary Registered Securities at any office or agency of
the Company designated pursuant to Section 10.2, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Registered
Securities the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Registered Securities of authorized denominations. Until so
exchanged the temporary Registered Securities shall in all respects be entitled
to the same benefits under this Indenture as definitive Registered Securities.
SECTION 3.5 Registration, Registration of Transfer and Exchange; Restrictions
-----------------------------------------------------------------
on Transfer.
-----------
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency of the Company designated pursuant to Section 10.2 being
herein sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers and exchanges of
Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security
at an office or agency of the Company designated pursuant to Section 10.2 for
such purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities of any authorized denominations and of a like
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture (including Section 2.6).
At the option of the Holder, and subject to the other provisions of
this Section 3.5, Registered Securities may be exchanged for other Registered
Securities of any authorized
57.
<PAGE>
denomination and of a like aggregate principal amount, upon surrender of the
Registered Securities to be exchanged at any such office or agency. Whenever any
Registered Securities are so surrendered for exchange, and subject to the other
provisions of this Section 3.5, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive. Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing.
Bearer Securities may not be issued in exchange for Registered
Securities.
At the option of the Holder, upon written request, Bearer Securities
may be exchanged for Registered Securities, of any authorized denomination and
of a like aggregate principal amount, upon surrender of the Bearer Securities to
be exchanged at any office or agency outside the United States designated
pursuant to Section 10.2, with all unmatured coupons and all matured coupons in
default thereto appertaining. If the Holder of a Bearer Security is unable to
produce any such unmatured coupon or coupons or matured coupon or coupons in
default, such exchange may be effected if such Bearer Security is accompanied by
payment in funds acceptable to the Company in an amount equal to the face amount
of such missing coupon or coupons or the surrender of such missing coupon or
coupons may be waived by the Company, the Trustee, and the Paying Agent in
London, if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Bearer Security shall surrender to any Paying Agent outside the
United States any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in the form of
Bearer Security set forth in Section 2.2(a), interest represented by coupons
shall be payable only upon presentation and surrender of such coupons at an
office or agency of the Company outside the United States. Notwithstanding the
foregoing, in case a Bearer Security is surrendered in exchange for a Registered
Security at an office or agency of the Company outside the United States
designated pursuant to Section 10.2 after the close of business at such office
or agency on (i) any Record Date and before the opening of business at such
office or agency on the next succeeding Interest Payment Date, or (ii) any
Special Record Date and before the opening of business at such office or agency
on the related date for payment of Defaulted Interest, such Bearer Security
shall be surrendered without the coupon relating to such Interest Payment Date
or proposed date of payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or such related date for payment of Defaulted Interest, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
58.
<PAGE>
Whenever any Bearer Securities are so surrendered for exchange,
subject to the other provisions of this Section 3.5, the Company shall execute,
and the Trustee or the Trustee's Authenticating Agent shall, if required,
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and subject to the other provisions of this Section 3.5, entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 11.8 or 12.2 or Article 13 (other than, in
the case of Registered Securities, where the shares of Common Stock are to be
issued or delivered in a name other than that of the Holder of the Registered
Security) not involving any transfer and other than any stamp and other duties,
if any, which may be imposed in connection with any such transfer or exchange by
the United States or the United Kingdom or any political subdivision thereof or
therein, which shall be paid by the Company.
In the event of a redemption of the Securities in part (other than, in
the cases of the Registered Securities, a redemption pursuant to the fourth
paragraph on the reverse of the Form of Bearer Security set forth in Section
2.2(a)), the Company will not be required (a) to register the transfer of or
exchange Registered Securities or to exchange Bearer Securities for Registered
Securities for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Securities called for such
redemption, (b) to register the transfer of or exchange any Registered Security,
or portion thereof, called for redemption, or (c) to exchange any Bearer
Security called for redemption; provided, however, that a Bearer Security called
for redemption may be exchanged for a Registered Security which is
simultaneously surrendered to the Registrar or Transfer Agent making such
exchange with written instructions for conversion consistent with the provisions
described in Sections 2.5 and 12.2.
(b) Every Restricted Security shall be subject to the restrictions on
transfer provided in the legends required to be set forth on the face of each
Restricted Security pursuant to Section 2.6, unless such restrictions on
transfer shall be waived by the written consent of the Company, and the Holder
of each Restricted Security, by such Holder's acceptance thereof, agrees to be
bound by such restrictions on transfer.
The restrictions imposed by this Section 3.5 and Section 2.6 upon the
transferability of any particular Restricted Security shall cease and terminate
upon delivery by
59.
<PAGE>
the Company to the Trustee of an Officers' Certificate stating that such
Restricted Security has been sold pursuant to an effective registration
statement under the Securities Act or transferred in compliance with Rule 144
under the Securities Act (or any successor provision thereto). Any Restricted
Security as to which the Company has delivered to the Trustee an Officers'
Certificate that such restrictions on transfer shall have expired in accordance
with their terms or shall have terminated may, upon surrender of such Restricted
Security for exchange to the Security Registrar or any Transfer Agent in
accordance with the provisions of this Section 3.5 be exchanged for a new
Registered Security, of like tenor and aggregate principal amount, which shall
not bear the restrictive legends required by Section 2.6. The Company shall
inform the Trustee in writing of the effective date of any registration
statement registering the Securities under the Securities Act. The Trustee shall
not be liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned registration statement.
As used in the preceding two paragraphs of this Section 3.5, the term
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Restricted Security.
(c) Neither the Trustee, the Paying Agent in London nor any of their
agents shall (1) have any duty to monitor compliance with or with respect to any
federal or state or other securities or tax laws or (2) have any duty to obtain
documentation on any transfers or exchanges other than as specifically required
hereunder.
SECTION 3.6 Mutilated, Destroyed, Lost or Stolen Securities and Coupons.
-----------------------------------------------------------
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or to a Transfer Agent outside
the United States, the Company shall execute, the Trustee or an Authenticating
Agent shall authenticate and the Trustee or Transfer Agent shall deliver in
exchange therefor a new Security of like tenor and principal amount and bearing
a number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to the surrendered Security; provided, however,
that any Bearer Security or any coupon shall be delivered only outside the
United States and, so long as the Securities are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange so require, such
delivery shall occur at the Transfer Agent in Luxembourg; and provided, further,
that all Bearer Securities shall be delivered and received in person.
If there be delivered to the Company and either to the Trustee or to a
Transfer Agent outside the United States:
(1) evidence to their satisfaction of the destruction, loss or theft
of any Security or coupon, and
60.
<PAGE>
(2) such security or indemnity as may be satisfactory to the Company
and the Trustee and such Transfer Agent to save each of them and any agent
of either of them harmless,
then, in the absence of actual notice to the Company, the Trustee or the
Transfer Agent that such Security or coupon has been acquired by a bona fide
purchaser, the Company shall execute, the Trustee or an Authenticating Agent
shall authenticate and the Trustee or Transfer Agent shall deliver, in lieu of
any such destroyed, lost or stolen Security or in exchange for the Security to
which such coupon appertains (together with all appurtenant coupons not
destroyed, lost or stolen), a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or appertaining to the Security to which such destroyed, lost or
stolen coupon appertains; provided, however, that any Bearer Security or any
coupon shall be delivered only outside the United States and, so long as the
Securities are listed on the Luxembourg Stock Exchange and the rules of the
Luxembourg Stock Exchange so require, such delivery shall occur at the Transfer
Agent in Luxembourg; and provided, further, that all Bearer Securities shall be
delivered and received in person.
In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in its
discretion, but subject to any conversion rights, may, instead of issuing a new
Security, pay such Security or coupon, upon satisfaction of the conditions set
forth in the preceding paragraph; provided, however, that, except as otherwise
provided in the form of Securities set forth in Section 2.2(a), the principal of
and interest on Bearer Securities shall be payable only at an office or agency
outside the United States and, in the case of interest, only upon presentation
and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto (other than any
stamp and other duties, if any, which may be imposed in connection therewith by
the United States or the United Kingdom or any political subdivision thereof or
therein, which shall be paid by the Company) and any other expenses (including
the fees and expenses of the Trustee, the Paying Agent in London and the
Transfer Agent) connected therewith.
Every new Security with its coupons, if any, issued pursuant to this
Section 3.6 in lieu of any mutilated, destroyed, lost or stolen Security or in
exchange for a Security to which a mutilated, destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the mutilated, destroyed, lost or stolen Security
and its coupons, if any, or the mutilated, destroyed, lost or stolen coupon
shall be at any time enforceable by anyone, and such new Security and coupons,
if any, shall
61.
<PAGE>
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities and coupons duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies of any Holder with respect
to the replacement or payment of mutilated, destroyed, lost or stolen Securities
or coupons.
SECTION 3.7 Payment of Interest, Interest Rights Preserved.
----------------------------------------------
Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Record Date for such
interest. In case a Bearer Security is surrendered in exchange for a Registered
Security at an office or agency of the Company designated pursuant to Section
10.2 for the purpose after the close of business (at such office or agency) on
any Record Date and before the opening of business (at such office or agency) on
the next succeeding Interest Payment Date, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date and
interest will not be payable on such Interest Payment Date in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due.
Interest on the Temporary Global Bearer Security shall be payable only
after the issuance of the Bearer Securities for which it is exchangeable as
provided in the form of Temporary Global Bearer Security set forth in Section
2.2(c).
Any interest on any Registered Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (the
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Registered Security, the date of the proposed payment and the Special
Record Date, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted
62.
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Interest as in this Clause provided. The Special Record Date for the
payment of such Defaulted Interest shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to
each Holder of Registered Securities at such Holder's address as it appears
in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Registered
Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2). In case a Bearer Security is
surrendered in exchange for a Registered Security at an office or agency of
the Company designated pursuant to Section 10.2 for such purpose after the
close of business (at such office or agency) on any Special Record Date and
before the opening of business (at such office or agency) on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall
be surrendered outside the United States without the coupon relating to
such proposed date of payment and Defaulted Interest will not be payable on
such proposed date of payment in respect of the Registered Security issued
in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon upon surrender thereof.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
In the case of any Registered Security which is converted after any
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Registered Security whose Maturity is prior to such Interest Payment
Date), interest whose Stated Maturity is on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name such Registered Security (or one or more Predecessor
Securities) is registered at the close of business on such Record Date.
63.
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Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Security which is converted, interest whose Stated Maturity is
after the date of conversion of such Security shall not be payable.
SECTION 3.8 Persons Deemed Owners.
---------------------
Title to any Bearer Security or coupon shall pass by delivery. The
Company, the Trustee, the Paying Agent in London and any other agent of the
Company or the Trustee may treat the bearer of any Bearer Security or the
Temporary Global Bearer Security and the bearer of any coupon as the absolute
owner of such Security or coupon, as the case may be, for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee, the Paying Agent in London nor any other agent of the
Company or the Trustee shall be affected by notice to the contrary. Prior to
due presentment of a Registered Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Registered Security is registered as the owner of such
Registered Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Sections 3.5 and 3.7) interest on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.9 Cancellation.
------------
All Securities and coupons surrendered for payment, redemption,
repurchase, registration of transfer or exchange or conversion shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Bearer Securities and coupons so surrendered shall be immediately cancelled
by such Person upon receipt prior to being forwarded to the Trustee. All
Registered Securities so delivered to the Trustee shall be canceled promptly by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section 3.9. Unless otherwise
requested by the Company and confirmed in writing in a timely fashion, the
Trustee shall, from time to time but not less than once annually, destroy all
cancelled Securities and coupons and deliver to the Company a certificate of
destruction, which certificate shall specify the number, principal amount and,
in the case of Securities, the form of each cancelled Security and coupon so
destroyed.
SECTION 3.10 Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
64.
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SECTION 3.11 Form of Certification.
---------------------
Whenever any provision of this Indenture or the form of Temporary
Global Bearer Security contemplates that certification be given by a beneficial
owner of a portion of the Temporary Global Bearer Security, such certification
shall be provided substantially in the form of the following certificate, with
only such changes as shall be approved by the Company and the Trustee:
"CERTIFICATE
CORPORATE EXPRESS, INC.
4 1/2% CONVERTIBLE NOTE
DUE JULY 1, 2000
This is to certify that as of the date hereof and except as provided
in the fourth paragraph hereof, the above-captioned Securities held by you for
our account (i) are owned by a person that is not a United States person (as
defined below), (ii) are owned by a United States person that is (A) a foreign
branch of a United States financial institution (as defined in United States
Treasury Regulations Section 1.165-12(c)(1)(v) (a "financial institution"))
purchasing for its own account or for resale or (B) a United States person who
acquired the Securities through a foreign branch of a United States financial
institution and who holds the Securities through such financial institution on
the date hereof (and in the case of either clause (A) or (B), the financial
institution hereby agrees for the benefit of Corporate Express, Inc. to comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder) or
(iii) are owned by a financial institution for purposes of resale during the
restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)). In addition, a financial institution described in
clause (iii) of the preceding sentence (whether or not also described in clause
(i) or (ii)) certifies that it has not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States.
As used in this certificate, "United States person" is a Person that
is, for United States federal income tax purposes, (a) a citizen or resident of
the United States, (b) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof or (c) an estate or trust the income of which is subject to United
States Federal income taxation regardless of the source; "United States" means
the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction (its "possessions" including Puerto Rico, the U.S. Virgin Islands,
Guam, American Samoa, Wake Island and the Northern Mariana Islands).
65.
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We undertake to advise you by telecopy, on or before the date on which
you intend to submit your certification relating to the above-captioned
Securities then appearing in your books as being held for our account, if the
above statement as to beneficial ownership is not correct on such date as to all
such Securities.
This certificate excepts and does not relate to U.S.$________
principal amount of the above-captioned Securities appearing on your books as
being held for our account as to which we are not yet able to certify and as to
which we understand that exchange and delivery of definitive Securities cannot
be made until we are able so to certify.
We understand that this certificate is required in connection with
certain tax regulations in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy hereof to any interested party in such proceedings.
Dated: ___________________, 19__*
*To be dated on or after
the 15th day before the
Exchange Date.
Name of Account Holder
________________________
(Authorized Signatory)
Name:
Title: "
SECTION 3.12 CUSIP Numbers.
-------------
The Company in issuing Registered Securities may use "CUSIP" numbers
(if then generally in use) in addition to serial numbers, and in issuing Bearer
Securities may use "ISIN" numbers (if then generally in use); if so, the Trustee
shall use such "CUSIP" and "ISIN" numbers in addition to serial numbers in
notices of redemption and repurchase as a convenience to Holders; provided that
any such notice may state that no representation is made as to the correctness
of such CUSIP and ISIN numbers either as printed on the Securities or as
contained in any notice of a redemption or repurchase and that reliance may be
placed only on the serial or other identification numbers printed on the
Securities, and any such redemption or
66.
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repurchase shall not be affected by any defect in or omission of such CUSIP or
ISIN numbers.
SECTION 3.13 Notification of Withholding.
---------------------------
The Company shall notify the Trustee in writing of the necessity, if
any, to withhold any amounts from payments to Holders (and the amount of any
such withholding) arising from the delivery by a Holder of any certificate
pursuant to Section 2.5 or 3.11.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, or registration of
transfer or exchange, or replacement of Securities herein expressly provided for
and any right to receive Additional Amounts and Bearer Additional Amounts as
provided in the forms of Securities set forth in Section 2.2 and the Company's
obligations to the Trustee pursuant to Section 6.7), and the Trustee, at the
expense of the Company, shall execute proper instruments in form and substance
satisfactory to the Trustee acknowledging satisfaction and discharge of this
Indenture, when
(1) either
(a) all Securities theretofore authenticated and delivered and
all coupons appertaining thereto (other than (i) Securities and
coupons which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6, (ii) coupons appertaining
to Securities called for redemption or repurchased and maturing after
the relevant Redemption Date or Repurchase Date, as the case may be,
whose surrender has been waived as provided in Section 11.6 and (iii)
Securities and coupons for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(b) all such Securities and all coupons appertaining thereto not
theretofore delivered to the Trustee or the Paying Agent in London or
its agent
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for cancellation (other than Securities or coupons referred to in
clauses (i) through (iii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of clause (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
(immediately available to the Holders in the case of clause (i)) in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities and coupons not theretofore
delivered to the Trustee for cancellation, for principal, premium, if
any, and interest (including any applicable Additional Amounts and
Bearer Additional Amounts) to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.12, the obligation of
the Company to pay Additional Amounts and Bearer Additional Amounts and, if
money shall have been deposited with the Trustee pursuant to clause (1)(B) of
this Section 4.1, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
SECTION 4.2 Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the
68.
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payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to the Persons entitled thereto, of the
principal, premium, if any, and interest for whose payment such money has been
deposited with the Trustee.
All moneys deposited with the Trustee pursuant to Section 4.1 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
SECTION 5.1 Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events by the Company or any Material Subsidiary of the Company
(whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Thirteen or 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):
(1) default in the payment of any interest (including any Additional
Amount or Bearer Additional Amount) upon any Security when it becomes due
and payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of or premium, if any, on
any Security at its Maturity; or
(3) default in the performance, or breach, of any covenant or warranty
in this Indenture (other than a covenant or warranty a default in the
performance or breach of which is specifically dealt with elsewhere in this
Section), and continuance of such default or breach for a period of 30 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
10% in principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(4) a default by the Company or any Material Subsidiary with respect
to its obligation to pay principal of, premium, if any, or interest on any
bond, debenture, note or other evidence of indebtedness for money borrowed
by or under any mortgage, indenture or instrument under which there may be
issued or by which there may be
69.
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secured or evidenced any indebtedness for money borrowed by the Company or
a Material Subsidiary, whether such indebtedness now exists or shall
hereafter be created, which default shall have resulted in indebtedness in
an amount in excess of U.S.$30,000,000 becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged, or the
acceleration of such indebtedness under the terms of the instrument
evidencing such indebtedness, which has not been withdrawn within a period
of 30 days after there shall have been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 10% in principal amount of the Outstanding
Securities a written notice specifying such default and requiring the
Company to cause such indebtedness to be discharged or cause such default
to be cured or waived or such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company or any Material
Subsidiary of the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Material Subsidiary of
the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(6) the commencement by the Company or any Material Subsidiary of the
Company of a voluntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect of
the Company or any Material Subsidiary of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency proceedings against it, or the filing by it of
a petition or answer or consent seeking reorganization or similar relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Material Subsidiary of the Company
or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due, or the
taking of corporate action
70.
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by the Company or any Material Subsidiary of the Company in furtherance of
any such action.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default under clauses (1)-(4) of Section 5.1 above
occurs and is continuing, then in every such case the Trustee or the Holders of
not less than 25% in principal amount of the Outstanding Securities may declare
the principal of all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by the Holders),
and upon any such declaration such principal and all accrued interest thereon
shall become immediately due and payable. If an Event of Default under clauses
(5) or (6) of Section 5.1 above occurs, then in every such case the principal,
and all accrued interest thereon, of all the Securities shall become immediately
due and payable.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as herein after in this Article Five provided, the Holders of a
majority in principal amount of the Outstanding Securities, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at a rate of 4 1/2% per annum, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non payment of the principal
of, and any interest on, Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
71.
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No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest (including any
Additional Amounts and Bearer Additional Amounts) on any Security when it
becomes due and payable and such default continues for a period of 30 days,
or
(2) default is made in the payment of the principal of or premium, if
any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and any coupons appertaining thereto, the whole
amount then due and payable on such Securities and coupons for principal and
interest (including any Additional Amounts and Bearer Additional Amounts) and
interest on any overdue principal and premium, if any, and on any overdue
interest (including any Additional Amounts and Bearer Additional Amounts), at a
rate of 4 1/2% per annum, and in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities and coupons by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 5.4 Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding
72.
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relative to the Company or any other obligor upon the Securities or coupons or
the property of the Company or of such other obligor or either of their
creditors, the Trustee (irrespective of whether the principal of, and any
interest on, the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(1) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Securities
and take such other actions, including participating as a member, voting or
otherwise, of any official committee of creditors appointed in such matter,
and to file such other papers or documents, in each of the foregoing cases,
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of Securities and coupons allowed in such judicial proceeding,
and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons 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 of Securities and coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the coupons or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding; provided, however, that the Trustee
may, on behalf of such Holders, vote for the election of a trustee in bankruptcy
or similar official.
SECTION 5.5 Trustee May Enforce Claims Without Possession of Securities or
--------------------------------------------------------------
Coupons.
-------
All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express
73.
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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 of
the Securities and coupons in respect of which judgment has been recovered.
SECTION 5.6 Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article Five shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium,
if any, or interest, upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of 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
6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal, premium, if any, or interest on the Securities and coupons in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities and coupons for principal,
premium, if any, and interest, respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 5.7 Limitation on Suits.
-------------------
No Holder of any Security or coupon shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been given
to the Trustee during such 60- day period by the Holders of a majority in
principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium and
----------------------------------------------------------------
Interest and to Convert.
-----------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of, premium, if any, and
(subject to Section 3.7) interest on such Security or payment of such coupon on
the respective Stated Maturities expressed in such Security or coupon (or, in
the case of redemption or repurchase, on the Redemption Date or Repurchase Date,
as the case may be), and to convert such Security in accordance with Article
Twelve, and to institute suit for the enforcement of any such payment and right
to convert, and such rights shall not be impaired without the consent of such
Holder.
SECTION 5.9 Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder of a Security or coupon has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities and coupons shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and such Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or
75.
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otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11 Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
or coupon to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or any acquiescence therein. Every right and remedy given by this
Article Five or by law to the Trustee or to the Holders of Securities or coupons
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or (subject to the limitations contained in this Indenture) by the
Holders of Securities or coupons, as the case may be.
SECTION 5.12 Control by Holders of Securities.
--------------------------------
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 5.13 Waiver of Past Defaults.
-----------------------
The Holders, either (a) through the written consent of not less than a
majority in principal amount of the Outstanding Securities, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
by the Holders of not less than a majority in principal amount of the
Outstanding Securities, may on behalf of the Holders of all the Securities and
coupons waive any past default hereunder and its consequences, except a default
(1) in the payment of the principal of, premium, if any, or interest on any
Security, or (2) in respect of a covenant or provision hereof which under
Article Eight cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
76.
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SECTION 5.14 Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
or coupon by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.14 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities, or to any suit instituted by any
Holder of any Security or coupon for the enforcement of the payment of the
principal of, premium, if any, or interest on any Security or the payment of any
coupon on or after the respective Stated Maturity or Maturities expressed in
such Security or coupon (or, in the case of redemption or repurchase, on or
after the Redemption Date or Repurchase Date, as the case may be) or for the
enforcement of the right to convert any Security in accordance with Article
Twelve.
SECTION 5.15 Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 6.1 Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided
by this Indenture and the Trust Indenture Act.
77.
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(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision 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, but not to verify the
contents thereof.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) 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 wilful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) 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 a majority in principal amount of the Outstanding
Securities 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
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or other wise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it
against such risk or liability is not reasonably assured to it.
78.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.2 Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has received written notice, the Trustee shall give to all
Holders of Securities, in the manner provided in Section 1.6, notice of such
default, unless such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of,
premium, if any, or interest on any Security or coupon, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders; and provided, further, that in the
case of any default of the character specified in Section 5.1(3), no such notice
to Holders of Securities shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
SECTION 6.3 Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 6.1:
(1) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, Officers'
Certificate, other certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, coupon,
other evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, conclusively rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and
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protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities or coupons pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security
or indemnity satisfactory to it against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon, other evidence of indebtedness or other
paper or document, but the Trustee 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;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
attorneys, custodians or nominees and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent, attorney,
custodian or nominees appointed with due care by it hereunder;
(8) the permissive right of the Trustee to take or refrain from
taking any actions enumerated in this Indenture shall not be construed as a
duty and the Trustee shall not be answerable in such actions other than for
its own negligence or willful misconduct;
(9) the Trustee shall not be liable for any action taken, suffered
or omitted to be taken by it in good faith and reasonably believed by it to
be authorized or within the discretion or rights or powers conferred upon
it by the Indenture; and
(10) the Trustee shall not be liable for the performance of or any
losses on any investments made in its capacity as Trustee hereunder.
SECTION 6.4 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) and in the coupons shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes
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no representations as to the validity or sufficiency of this Indenture, of the
Securities or coupons, or of the Common Stock issuable upon the conversion of
the Securities. The Trustee shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
SECTION 6.5 May Hold Securities, Act as Trustee Under Other Indentures.
----------------------------------------------------------
The Trustee, any Authenticating Agent, any Paying Agent, any
Conversion Agent or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Conversion Agent or such other agent.
The Trustee may become and act as trustee under other indentures
under which other securities, or certificates of interest or participation in
other securities, of the Company are outstanding in the same manner as if it
were not Trustee hereunder.
SECTION 6.6 Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder 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
otherwise agreed in writing with the Company.
SECTION 6.7 Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith;
(3) to indemnify the Trustee and its officers, directors, employees
and agents for, and to hold it and them harmless against, any loss,
liability or expense
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incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust, including
the costs, expenses and reasonable attorneys' fees and expenses of
defending itself or them against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder; and
(4) as security for the performance of the obligations of the
Company under this Section the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee in
its capacity as Trustee, except property and funds held in trust to pay
principal of, and premium, if any, and interest on the Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(5) or Section 5.1(6), the
expenses (including the reasonable charges of its counsel) and the compensation
for the services are intended to constitute expenses of the administration under
any applicable Federal or state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.8 Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof, or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least U.S.$50,000,000, subject to supervision or examination by federal or
state authority, in good standing and having an established place of business in
the City of New York, and the City of London, England. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation 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, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article and a successor shall be appointed pursuant to Section 6.9.
SECTION 6.9 Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10.
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(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.10 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to the
Trustee and the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.10 shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal, the removed Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 6.8 and
shall fail to resign after written request therefor by the Company or by
any Holder of a Security who has been a bona fide Holder of a Security for
at least six months, or
(2) 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 (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six 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.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee and
shall comply with the applicable requirements of this Section and Section 6.10.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 6.10, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner required by this Section and Section
6.10, any Holder of a Security who has been a
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bona fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders of Securities in the manner provided in Section 1.6. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 6.10 Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be eligible under this Article.
SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
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, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
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SECTION 6.12 Authenticating Agents.
---------------------
The Paying Agent in London may authenticate the Temporary Global
Bearer Security and Bearer Securities as the Trustee's Authenticating Agent.
The Trustee may, with the consent of the Company, appoint an additional
Authenticating Agent or Agents acceptable to the Company with respect to the
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon exchange or substitution pursuant to this
Indenture.
Securities authenticated by an Authenticating Agent shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder, and every reference in
this Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be subject to acceptance
by the Company and shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State thereof, the
District of Columbia, England and Wales or Luxembourg, authorized under such
laws to act as Authenticating Agent and subject to supervision or examination by
government or other fiscal authority. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
6.12, such Authenticating Agent shall resign immediately in the manner and with
the effect specified in this Section 6.12.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.12, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
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 such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
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Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section 6.12.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.12.
The Authenticating Agent, Transfer Agent, Registrar and Paying Agent
shall be entitled to the same rights and protections as the Trustee, as
specified in this Article.
If an Authenticating Agent is appointed with respect to the
Securities pursuant to this Section 6.12, the Securities may have endorsed
thereon, in addition to or in lieu of the Trustee's certification of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: BANKERS TRUST COMPANY,
as Trustee
By: [Authenticating Agent,]
as Authenticating Agent
By ___________________________
Authorized Signatory
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1 Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease all its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease all or
substantially all of its properties and assets to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases the properties
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and assets of the Company substantially as an entirety shall be a
corporation, limited liability company, partnership or trust, shall be
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of, premium, if any, and interest (including Additional
Amounts and Bearer Additional Amounts, if any, payable pursuant to
Section 10.4) on all of the Securities and coupons, as applicable, and the
performance or observance of every covenant of this Indenture on the part
of the Company to be performed or observed and shall have provided for
conversion rights in accordance with Article Twelve;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered (except in the case of the merger of
any Person into the Company where the Common Stock is not converted into or
exchanged for the right to receive cash, property or securities, or the
conveyance, transfer or lease by any Person of its properties and assets
substantially as an entirety to the Company) to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with, together with any documents required under Section 8.3.
SECTION 7.2 Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company in accordance with
Section 7.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture, the Securities and the coupons, if any.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Holders of Securities
----------------------------------------------------------------
or Coupons.
----------
Without the consent of any Holders of Securities or coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants and obligations of
the Company herein and in the Securities and coupons as permitted by this
Indenture; or
(2) to add to the covenants of the Company for the benefit of the
Holders of Securities or coupons, or to surrender any right or power herein
conferred upon the Company; or
(3) to secure the Securities; or
(4) to permit Bearer Securities to be issued in exchange for
Registered Securities or to remove or relax the restrictions on payment of
principal, premium, if any, or interest in respect of Bearer Securities in
the United States to the extent then permitted under the Code and
applicable regulations of the United States Treasury Department; provided,
however, that no adverse consequences would result to any Holder; or
(5) to make provision with respect to the conversion rights of
Holders of Securities pursuant to Section 12.11; or
(6) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or which
is otherwise defective, or to make any other provisions with respect to
matters or questions arising under this Indenture as the Company and the
Trustee may deem necessary or desirable, provided, such action pursuant to
this clause (6) shall not materially adversely affect the interests of the
Holders of Securities or coupons.
(7) in connection with the registration of Securities pursuant to
the Registration Rights Agreement, to make any changes required to comply
with the Trust Indenture Act, or any Successor thereto, and the rules,
regulations and laws promulgated thereunder, all as the same shall be
amended from time to time.
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Upon Company Request, accompanied by a Board Resolution authorizing
the execution of any such supplemental indenture, and subject to and upon
receipt by the Trustee of the documents described in Section 8.3 hereof, the
Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations which may be therein contained.
SECTION 8.2 Supplemental Indentures with Consent of Holders of Securities.
-------------------------------------------------------------
With either (a) the written consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities, by the Act of said
Holders delivered to the Company and the Trustee, or (b) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of 66-2/3% in principal amount of the
Outstanding Securities represented at such meeting, the Company, when authorized
by a Board Resolution, and the Trustee may 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 of
modifying in any manner the rights of the Holders of Securities or coupons under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent or affirmative vote of the Holder of each Outstanding
Security or coupon affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount or
the rate of interest payable thereon or any premium payable upon redemption
or repurchase thereof, or change the obligation of the Company to pay
Additional Amounts and any Bearer Additional Amounts pursuant to
Section 10.4, or change the coin or currency in which any Security or the
interest or any premium thereon or any other amount in respect thereof is
payable, or impair the right to institute suit for the enforcement of any
payment in respect of any Security or coupon on or after the Stated
Maturity thereof (or, in the case of redemption or any repurchase, on or
after the Redemption Date or Repurchase Date, as the case may be) or,
except as permitted by Section 12.11, adversely affect the right to convert
any Security as provided in Article Twelve, or
(2) reduce the requirements of Section 9.4 for quorum or voting, or
reduce the percentage in principal amount of the Outstanding Securities the
consent of whose Holders is required for any such supplemental indenture or
the consent of whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences) provided for in this Indenture, or
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(3) modify the obligation of the Company to maintain an office or
agency in the City of New York, and in a city in a Western European country
(or Luxembourg in particular if so required) pursuant to Section 10.2, or
(4) modify any of the provisions of this Section or Section 5.13 or
10.12, except to increase any percentage contained herein or therein or to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding Security
affected thereby; or
(5) modify any of the provisions of Section 10.10 or 10.11.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 8.3 Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in conclusively relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture, that such supplemental indenture has been duly
authorized, executed and delivered by the Company and constitutes a valid and
legally binding obligation of the Company enforceable against the Company in
accordance with its terms. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 8.4 Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupons appertaining thereto shall be bound thereby.
SECTION 8.5 Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of
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the Company and the Trustee, to any such supplemental indenture may be prepared
and executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
SECTION 8.6 Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the Company
shall give notice to all Holders of Securities of such fact, setting forth in
general terms the substance of such supplemental indenture, in the manner
provided in Section 1.6. Any failure of the Company to give such notice, or any
defect therein, shall not in any way impair or affect the validity of any such
supplemental indenture.
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 9.1 Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Holders of Securities may be called at any time and from
time to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities.
SECTION 9.2 Call, Notice and Place of Meetings.
----------------------------------
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 9.1, to be held at such time and
at such place in the City of New York, or in the City of London, England, as the
Trustee shall determine. Notice of every meeting of Holders of Securities,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 1.6, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 10% in principal amount of the Outstanding Securities
shall have requested the Trustee to call a meeting of the Holders of Securities
for any purpose specified in Section 9.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the Holders
of Securities in the amount
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specified, as the case may be, may determine the time and the place in the City
of New York, or in the City of London, England, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in paragraph
(a) of this Section.
SECTION 9.3 Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities, a
Person shall be (a) a Holder of one or more Outstanding Securities, or (b) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities by such Holder or Holders. 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, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 9.4 Quorum; Action.
--------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be dissolved. In any other
case, the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting (subject to repeated applications of this sentence). Notice
of the reconvening of any adjourned meeting shall be given as provided in
Section 9.2(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage of the principal amount of the Outstanding Securities which shall
constitute a quorum.
Subject to the foregoing, and Section 5.13 herein, at the reconvening
of any meeting adjourned for a lack of a quorum, the Persons entitled to vote
25% in principal amount of the Outstanding Securities at the time shall
constitute a quorum for the taking of any action set forth in the notice of the
original meeting.
Except as otherwise specifically provided in this Indenture at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid, any resolution and all matters (except as limited by the proviso
to Section 8.2) shall be effectively passed and decided if passed or decided by
the Persons entitled to vote not less than 66-2/3% in principal amount of
Outstanding Securities represented and entitled to vote at such meeting.
92.
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Any resolution passed or decisions taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities and coupons, whether or not present or represented at the
meeting. The Trustee shall, in the name and at the expense of the Company,
notify all the Holders of Securities of any such resolutions or decisions
pursuant to
Section 1.6.
SECTION 9.5 Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.
--------
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities in regard to proof of the holding of Securities
and of the appointment of proxies and in regard to the appointment and duties of
inspectors of votes, 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 deem appropriate. Except as otherwise
permitted or required by any such regulations, the holding of Securities shall
be proved in the manner specified in Section 1.4 and the appointment of any
proxy shall be proved in the manner specified in Section 1.4 or by having the
signature of the Person executing the proxy witnessed or certified by any
officer authorized by Section 1.4(c) to certify to the holding of Bearer
Securities.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in
Section 9.2(b), in which case the Company or the Holders of Securities 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 Persons entitled to vote a majority in principal
amount of the Outstanding Securities represented at the meeting.
(c) At any meeting, each Holder of a Security or proxy shall be
entitled to one vote for each U.S.$1,000 principal amount of Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security 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, except as a Holder of a Security or proxy.
(d) Any meeting of Holders of Securities duly called pursuant to
Section 9.2 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Outstanding
Securities represented at the meeting, and the meeting may be held as so
adjourned without further notice.
93.
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SECTION 9.6 Counting Votes and Recording Action of Meetings.
-----------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts at Stated Maturity and serial numbers of the Outstanding
Securities 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, at least in duplicate, of the proceedings
of each meeting of Holders of Securities 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 given as provided in
Section 9.2 and, if applicable, Section 9.4. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company and another 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.
ARTICLE TEN
COVENANTS
SECTION 10.1 Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees that it will duly and punctually pay
the principal of and premium, if any, and interest on the Securities in
accordance with the terms of the Securities, the coupons appertaining thereto
and this Indenture. The interest due on the Bearer Securities on or before
Maturity, other than Additional Amounts and Bearer Additional Amounts payable as
provided in Section 10.4 in respect of principal of such a Security, shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature. The
Company will deposit or cause to be deposited with the Trustee, one Business Day
prior to the Stated Maturity of any Security or one Business Day prior to the
due date for any installment of interest, all payments so due, which payments
shall be in immediately available funds on the date of such Stated Maturity or
due date, as the case may be.
94.
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SECTION 10.2 Maintenance of Offices or Agencies.
----------------------------------
The Company hereby appoints (a) the Corporate Trust Office of the
Trustee as its agent in the City of New York, where Registered Securities may be
presented or surrendered for payment, where Bearer Securities and coupons may be
presented or surrendered for payment in the circumstances described below (and
not otherwise), where Registered Securities may be surrendered for registration
of transfer or exchange, where Registered Securities may be surrendered for
conversion, where Bearer Securities may be surrendered for conversion in the
circumstances described below (and not otherwise) and where notices and demands
to or upon the Company in respect of the Securities and coupons and this
Indenture may be served, and (b) the office of Bankers Trust Company, 1 Appold
Street, Broadgate, London EC2A 2HE, England, as its agents outside of the United
States where, subject to any applicable laws or regulations, Bearer Securities
and coupons may be presented and surrendered for payment, where, subject to any
applicable laws and regulations, Registered Securities may be surrendered for
payment, where Registered Securities may be surrendered for registration of
transfer or exchange, where Bearer Securities may be presented for exchange, and
where Securities may be surrendered for conversion. As provided in the form of
Bearer Securities set forth in Section 2.2(a), payment of principal of, premium,
if any, or interest on Bearer Securities, including any Additional Amounts and
any Bearer Additional Amounts payable on Bearer Securities pursuant to Section
10.4, may be made, and Bearer Securities may be surrendered for conversion, at
the Corporate Trust Office of the Trustee in the City of New York, if (but only
if) payment of the full amount of such principal, interest, Additional Amounts
or Bearer Additional Amounts, or surrender of Bearer Securities for conversion,
as the case may be, at all offices outside the United States maintained for such
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions on the
full payment or receipt of such amounts in United States Dollars, as determined
by the Company, or on the surrender of any Bearer Securities for conversion.
The Company may at any time and from time to time vary or terminate
the appointment of any such agent or appoint any additional agents for any or
all of such purposes; provided, however, that until all of the Securities have
been delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of, premium, if any, and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the
provisions of Section 10.3, the Company will maintain (1) in the City of New
York, an office or agency where Registered Securities may be presented or
surrendered for payment and conversion, where Bearer Securities and coupons may
be presented or surrendered for payment and conversion in the circumstances
described in the last sentence of the first paragraph of this Section (and not
otherwise), where Registered Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and coupons and this Indenture may be served, and (2)
subject to any laws or regulations applicable thereto, in any city in a Western
European
95.
<PAGE>
country, an office or agency where Securities and coupons may be presented and
surrendered for payment and where Securities may be presented for registration
of transfer or exchange or conversion; and provided, further, that so long as
the Securities are listed on the Luxembourg Stock Exchange and such stock
exchange shall so require, the Company will maintain a Paying Agent and
Conversion Agent in Luxembourg. The Company will give prompt written notice to
the Trustee, and notice to the Holders in accordance with Section 1.6, of the
appointment or termination of any such agents and of the location and any change
in the location of any such office or agency.
If at any time the Company shall fail to maintain any such required
office or agency, or shall fail to furnish the Trustee with the address thereof,
presentations and surrenders may be made and notices and demands may be served
on the Corporate Trust Office of the Trustee, except that Bearer Securities and
coupons may be presented and surrendered for payment and conversion to the
Paying Agent in London at its office in the City of London, England or other
Paying Agent or conversion agent outside the United States, and the Company
hereby appoints the Paying Agent in London as its agent to receive such
respective presentations, surrenders, notices and demands.
SECTION 10.3 Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company shall act as its own Paying Agent, it will, on or
before each due date of the principal of, premium, if any, or interest on any of
the Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and the Company will promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
one Business Day prior to each due date of the principal of, premium, if any, or
interest on any Securities, deposit with the Trustee a sum sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum to be held for
the benefit of the Persons entitled to such principal, premium, if any, or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
96.
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(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security or any coupon
appertaining thereto shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in an Authorized
Newspaper in each Place of Payment, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 10.4 Additional Amounts and Bearer Additional Amounts.
------------------------------------------------
The Company will pay to the Holder of any Bearer Security or any
coupon appertaining thereto Additional Amounts and Bearer Additional Amounts as
provided in the form of Bearer Security and to a Holder of any Registered
Security Additional Amounts as provided in the form of Registered Security, in
each case set forth in Section 2.2. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of, premium, if any, or
interest on, or in respect of, any Security or any coupon, such mention shall be
deemed to include mention of the payment of Additional Amounts and Bearer
Additional Amounts provided for in this Section to the extent that, in such
context, Additional Amounts and Bearer Additional Amounts are, were or would be
payable in respect thereof pursuant to
97.
<PAGE>
the provisions of this Section and express mention of the payment of Additional
Amounts and Bearer Additional Amounts (if applicable) in any provisions hereof
shall not be construed as excluding Additional Amounts and Bearer Additional
Amounts in those provisions hereof where such express mention is not made.
At least 10 days prior to January 1, 1997 or an earlier Redemption
Date or Repurchase Date (and at least 10 days prior to each date of payment of
principal, premium, if any, or interest after January 1, 1997 or such earlier
Redemption Date or Repurchase Date, if there has been any change with respect to
the matters set forth in the below- mentioned Officers' Certificate), the
Company will furnish the Trustee and the Company's Paying Agents in London,
England, and in the City of New York, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agents whether
such payment of principal of, premium, if any, or interest on the Securities
shall be made to Holders of Securities or coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the second paragraph of the face of the forms
of Definitive Securities set forth in Section 2.2. If any such withholding shall
be required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders of
Securities or coupons and the Company will pay to the Trustee or the Paying
Agent in London the Additional Amounts required by this Section to be paid in
the event of any such withholding. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section, except to the extent such loss, liability or expense
is attributable to the Trustee's negligence or bad faith.
SECTION 10.5 Existence.
---------
Subject to Article Seven, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
rights (charter and statutory); provided, however, that the Company shall not be
required to preserve any such right if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and that the loss thereof is not disadvantageous in any
material respect to the Holders.
SECTION 10.6 Maintenance of Properties.
-------------------------
The Company will cause all properties used or useful in the conduct of
its business or the business of any Material Subsidiary 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, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
98.
<PAGE>
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Material Subsidiary and not disadvantageous
in any material respect to the Holders.
SECTION 10.7 Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge, or cause to be paid or discharged,
before the same may become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Material
Subsidiary or upon the income, profits or property of the Company or any
Material Subsidiary, (2) all claims for labor, materials and supplies which, if
unpaid, might by law become a lien or charge upon the property of the Company or
any Material Subsidiary, and (3) all stamps and other duties, if any, which may
be imposed by the United States or the United Kingdom or any political
subdivision thereof or therein in connection with the issuance, transfer,
exchange or conversion of any Securities or coupons or with respect to this
Indenture; provided, however, that, in the case of clauses (1) and (2), 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.
SECTION 10.8 Registration and Listing.
------------------------
Within a reasonable time after the issuance of the Temporary Global
Bearer Security, the Company (i) will effect all registrations with, and obtain
all approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) before the shares of Common Stock
issuable upon conversion of Securities may be lawfully issued and delivered, and
thereafter publicly traded (if permissible under the Securities Act), and
qualified or listed as contemplated by clause (ii) (it being understood that the
Company shall not be required to register the Securities under the Securities
Act); and (ii) will qualify the shares of Common Stock required to be issued and
delivered upon conversion of Securities prior to such issuance or delivery for
quotation on the Nasdaq National Market or, if the Common Stock is not then
quoted on the Nasdaq National Market, list the Common Stock on each national
securities exchange on which outstanding Common Stock is listed at the time of
such delivery.
SECTION 10.9 Statement by Officers as to Default.
-----------------------------------
The Company, within 10 Business Days, shall notify the Trustee in
writing of any Event of Default hereunder, and shall deliver to the Trustee
within 120 days after the end of each fiscal year of the Company an Officers'
Certificate stating whether or not to the best knowledge of the signers thereof
any default exists in the performance and observance of any
99.
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of the terms, provisions and conditions of this Article Ten and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
SECTION 10.10 Delivery of Certain Information.
-------------------------------
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a Holder of a Restricted Security or the
holder of shares of Common Stock issued upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder of Restricted Securities or such holder of shares of
Common Stock issued upon conversion of Restricted Securities, or to a
prospective purchaser of any such security designated by any such Holder or
holder, as the case may be, to the extent required to permit compliance by such
Holder or holder with Rule 144A under the Securities Act (or any successor
provision thereto) in connection with the resale of any such security; provided,
however, that the Company shall not be required to furnish such information in
connection with any request made on or after the date which is three years from
the later of (i) the date such a security (or any such predecessor security) was
last acquired from the Company or (ii) the date such a security (or any such
predecessor security) was last acquired from an "affiliate" of the Company
within the meaning of Rule 144 under the Securities Act (or any successor
provision thereto). "Rule 144A Information" shall be such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto).
SECTION 10.11 Resale of Certain Securities; Reporting Issuer.
----------------------------------------------
During the period beginning on June 24, 1996 and ending on the date
that is three years from such date, the Company will not, and will not permit
any of its "affiliates" (as defined under Rule 144 under the Securities Act or
any successor provision thereto) to, resell (x) any Securities which constitute
"restricted securities" under Rule 144 or (y) any securities into which the
Securities have been converted under this Indenture which constitute "restricted
securities" under Rule 144, that in either case have been reacquired by any of
them. The Trustee shall have no responsibility in respect of the Company's
performance of its agreement in the preceding sentence. The Company will
continue to be a "reporting issuer" for purposes of Rule 903 under the
Securities Act until the full principal amount of the Temporary Global Bearer
Security has been exchanged for Bearer Securities in accordance with this
Indenture.
SECTION 10.12 Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or conditions set forth in Sections 10.5 to 10.7, inclusive (other than
a covenant or condition which under Article Eight cannot be modified or amended
without the consent of the Holder of
100.
<PAGE>
each Outstanding Security affected), if before the time for such compliance the
Holders shall, through the written consent of, or the adoption of a resolution
at a meeting of Holders of the Outstanding Securities at which a quorum is
present by, not less than a majority in principal amount of the Outstanding
Securities, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee or any Paying or Conversion Agent in respect of
any such covenant or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1 Right of Redemption.
-------------------
The Securities may be redeemed in accordance with the provisions of
the forms of Securities set forth in Section 2.2.
SECTION 11.2 Applicability of Article.
------------------------
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of the Securities or this Indenture,
shall be made in accordance with such provision and this Article Eleven.
SECTION 11.3 Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of any of the Securities, the Company shall, at least 60 days (or 75
days in the case of a redemption pursuant to the fourth paragraph of the reverse
of the form of Bearer Security set forth in Section 2.2(a)) prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date. If the Securities are to be redeemed pursuant to an election of the
Company which is subject to a condition specified in the forms of Securities set
forth in Section 2.2, the Company shall furnish the Trustee with an Officers'
Certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right of the Company so to redeem have occurred.
101.
<PAGE>
SECTION 11.4 Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed (other than
pursuant to the third or fourth paragraph on the reverse of the form of Bearer
Security in Section 2.2(a) or the third paragraph on the reverse of the form of
Registered Security in Section 2.2(b)), the particular Securities to be redeemed
shall be selected not more than 30 days prior to the Redemption Date (unless the
Trustee shall agree in writing to a shorter notice) by the Trustee, from the
Outstanding Securities not previously called for redemption, individually by lot
in the case of Bearer Securities, and by such method as the Trustee may deem
substantially equivalent thereto in the case of Registered Securities and under
circumstances intended not to discriminate between Registered and Bearer
Securities to be redeemed pursuant to the terms thereof and hereof in the
selection of Securities (or portion thereof) selected for redemption. Partial
redemption must be in an amount not less than U.S.$1,000,000 principal amount of
Securities.
If any Registered Security selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed may be treated by the Trustee as Outstanding for the purpose of such
selection.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the securities selected for redemption and, in the case
of any Registered Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 11.5 Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in Section
1.6 not less than 20 nor more than 60 days prior to the Redemption Date, and
(except, in the case of a redemption pursuant to the fourth paragraph of the
form of reverse of the Bearer Security set forth in Section 2.2(a), to the
extent otherwise expressly provided in such form) such notice shall be
irrevocable.
All notices of redemption shall state:
(1) the Redemption Date,
102.
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(2) the Redemption Price, and accrued interest, if any,
(3) if less than all Outstanding Securities are to be redeemed, the
aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities which will be outstanding
after such partial redemption,
(4) that on the Redemption Date the Redemption Price, and accrued
interest, if any, will become due and payable upon each such Security
to be redeemed, and that interest thereon shall cease to accrue on and
after said date,
(5) the Conversion Price, the date on which the right to convert the
Securities to be redeemed will terminate and the places where such
Securities, together with all unmatured coupons and any matured
coupons in default appertaining thereto, may be surrendered for
conversion, and
(6) the place or places where such Securities, together with all
coupons appertaining thereto, if any, maturing after the Redemption
Date, are to be surrendered for payment of the Redemption Price and
accrued interest, if any.
In case of a partial redemption, the first notice given shall specify
the last date on which exchanges or transfers of Securities may be made pursuant
to Section 3.5, and the second notice shall specify the serial and ISIN (if any)
numbers of the Bearer Securities (either individually or in group, from one
number to another, or by last digit or digits) called for redemption and, in the
case of Registered Securities, the serial and CUSIP numbers (if any) and the
portions thereof called for redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name of and at the expense of the Company. Notice of redemption
of Securities to be redeemed at the election of the Company received by the
Trustee shall be given by the Trustee to each Paying Agent in the name of and at
the expense of the Company.
SECTION 11.6 Deposit of Redemption Price.
---------------------------
Not less than one Business Day prior to any Redemption Date, the
Company shall deposit with the Trustee or with the Paying Agent in London (or,
if the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3) an amount of money (which shall be in immediately
available funds on such Redemption Date) sufficient to pay the Redemption Price
of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date
other than any Securities called for redemption on that date which have been
converted prior to the date of such deposit.
103.
<PAGE>
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security, if a Registered Security, or any Predecessor Security
to receive interest as provided in the last paragraph of Section 3.7) be paid to
the Company on Company Request or, if then held by the Company, shall be
discharged from such trust.
SECTION 11.7 Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price, including accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to Bearer Securities shall, except to the extent provided
below, be void. Upon surrender of any Security for redemption in accordance with
said notice, together with all coupons, if any, appertaining thereto maturing
after the Redemption Date, such Security shall be paid by the Company at the
Redemption Price together with accrued and unpaid interest to the Redemption
Date; provided, however, that installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only upon presentation and surrender of coupons for such interest (at an office
or agency outside the United States, except as otherwise provided in the form of
Bearer Security set forth in Section 2.2(a)); and provided, further, that
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such on the relevant Record
Date according to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of, premium, if any, and,
to the extent permitted by applicable law, accrued interest on such Security
shall, until paid, bear interest from the Redemption Date at a rate of 4 1/2%
per annum and each Security shall remain convertible into Common Stock until the
principal of such Security (or portion thereof, as the case may be) shall have
been paid or duly provided for.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons or the surrender of such missing
coupons or coupon may be waived by the Company and the Trustee or the Paying
Agent in London or its agent, if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made from the
104.
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Redemption Price, such Holder shall be entitled to receive the amount so
deducted; provided, however, that interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency located outside of the United States (except as otherwise provided in the
form of Bearer Security set forth in Section 2.2(a)).
SECTION 11.8 Registered Securities Redeemed in Part.
--------------------------------------
Any Registered Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 10.2 (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 make available for delivery to the Holder of such
Registered Security without service charge, a new Registered Security or
Securities, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Registered Security so surrendered.
ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1 Conversion Privilege and Conversion Price.
-----------------------------------------
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security may be converted into fully paid
and nonassessable shares (calculated as to each conversion to the nearest
1/100th of a share) of Common Stock of the Company at the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. Such
conversion right shall commence (a) in the case of all Securities, the 90th day
following the latter of the Settlement Date or the latest issuance of Securities
upon exercise of the Underwriters' over-allotment option and prior to maturity,
subject to prior redemption or repurchase, and (b) in the case of Securities
represented by a Temporary Global Bearer Security, the receipt of definitive
Bearer Securities, and in each case prior to maturity, subject to prior
redemption or repurchase. In case a Security or portion thereof is called for
redemption, such conversion right in respect of the Security shall expire at the
close of business on the fifth Business Day immediately preceding the Redemption
Date (as defined in Article Fourteen), unless the Company defaults in making the
payment due upon redemption or repurchase, as the case may be.
105.
<PAGE>
The price at which shares of Common Stock shall be delivered upon
conversion (the "Conversion Price") shall be initially U.S.$50.00 per share of
Common Stock. The Conversion Price shall be adjusted in certain instances as
provided in this Article Twelve.
SECTION 12.2 Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
Definitive Security to be converted shall surrender such Security, duly endorsed
or assigned to the Company or in blank (in the case of any Registered Security),
at any office or agency of the Company maintained for that purpose pursuant to
Section 10.2, accompanied by a duly signed conversion notice substantially in
the form set forth in Section 2.5 stating that the Holder elects to convert such
Security or, if less than the entire principal amount thereof is to be converted
(in the case of any Registered Security), the portion thereof to be converted.
Each Bearer Security surrendered for conversion must be surrendered together
with all coupons appertaining thereto that mature after the date of conversion,
except in the case of Bearer Securities called for redemption during the period
from the Record Date to and including five days after the next succeeding
Interest Payment Date, the single coupon maturing on such succeeding Interest
Payment Date. If any Bearer Security surrendered for conversion shall not be
accompanied by all such appurtenant coupons, the surrender of any or all of such
missing coupons may be waived by the Company and the Trustee, if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. Matured coupons not in default (including
coupons maturing on the date of conversion) will be payable against surrender
thereof, and matured coupons previously surrendered and in default will continue
to be payable, notwithstanding the exercise of the right of conversion by the
Holder of the Security to which the coupon appertains. Each Registered Security
surrendered for conversion (in whole or in part) during the Interest Period
(other than Registered Securities called for redemption during the period from
the Record Date to and including the fifth day after the next succeeding
Interest Payment Date) shall be accompanied by payment in same day 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 of such Registered
Security (or part thereof, as the case may be) being surrendered for conversion
(or, if such Registered Security was issued in exchange for a Bearer Security
after the close of business on such Record Date, by surrender of one or more
coupons relating to such Interest Payment Date or by both payment in such funds
and surrender of such coupon or coupons, in either case in an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
such Registered Security (or portion thereof) then being converted). The
interest so payable on such Interest Payment Date in respect of such Registered
Security (or portion thereof, as the case may be) surrendered for conversion
shall be paid to the Holder of such Security as of such Record Date. Except as
provided in this paragraph and subject to the last paragraph of Section 3.7, no
cash payment or adjustment shall be made upon any conversion on account of, if
the date of conversion is not an Interest Payment Date, any interest accrued
from the Interest Payment Date next preceding the
106.
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conversion date, in respect of any Definitive Security (or part thereof, as the
case may be) surrendered for conversion, or on account of any dividends on the
Common Stock issued upon conversion. The Company's delivery to the Holder of the
fixed number of shares of Common Stock (or a cash adjustment, as provided in
this Indenture) into which a Definitive Security is convertible will be deemed
to satisfy the Company's obligation to pay the principal amount of the Security.
Definitive Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Securities for conversion in accordance with the foregoing provisions, and at
such time the rights of the Holders of such Securities as Holders shall cease,
and the Person or Persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock at such time. As promptly as practicable on or after the
conversion date, the Company shall issue and deliver to the Trustee, for
delivery to the Holder, a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, together with payment in lieu
of any fraction of a share, as provided in Section 12.3.
All shares of Common Stock delivered upon such conversion of
Restricted Securities shall bear restrictive legends substantially in the form
of the legends required to be set forth on the Restricted Securities pursuant to
Section 2.6 and shall be subject to the restrictions on transfer provided in
such legends. Neither the Trustee nor any agent maintained for the purpose of
such conversion shall have any responsibility for the inclusion or content of
any such restrictive legends on such Common Stock; provided, however, that the
Trustee or any agent maintained for the purpose of such conversion shall have
provided, to the Company or to the Company's transfer agent for such Common
Stock, prior to or concurrently with a request to the Company to deliver such
Common Stock, written notice that the Securities delivered for conversion are
Restricted Securities.
In the case of any Registered Security which is converted in part
only, upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Registered Security or Securities of authorized denominations in an
aggregate principal amount equal to the unconverted portion of the principal
amount of such Security. A Registered Security may be converted in part, but
only if the principal amount of such Security to be converted is any integral
multiple of U.S.$1,000 and the principal amount of such security to remain
Outstanding after such conversion is equal to U.S.$5,000 or any integral
multiple of $1,000 in excess thereof.
SECTION 12.3 Fractions of Shares.
-------------------
No fractional shares of Common Stock shall be issued upon conversion
of any Definitive Security or Securities. If more than one Definitive Security
shall be surrendered for conversion at one time by the same Holder, the number
of full shares which shall be issuable
107.
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upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Definitive Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Definitive Security or Securities
(or specified portions thereof), the Company shall calculate and pay a cash
adjustment in respect of such fraction (calculated to the nearest 1/100th of a
share) in an amount equal to the same fraction of the current market price per
share of Common Stock (calculated in accordance with Section 12.4(8) below) at
the close of business on the day of conversion. Such cash payments shall, in the
case of a conversion of Bearer Securities, be made to an address outside of the
United States.
SECTION 12.4 Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be subject to adjustments from time to time
as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock, the
Conversion Price in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on 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. For the purposes of
this paragraph (1), 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.
(2) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the current market price
per share (determined as provided in paragraph (8) of this Section) of the
Common Stock on the date fixed for the determination of shareholders entitled to
receive such rights or warrants, the Conversion Price in effect at the opening
of business on the day following the date fixed for such determination 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 plus the number of shares
of Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
108.
<PAGE>
such determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), 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 issue any rights or warrants in respect of shares of Common Stock held
in the treasury of the Company.
(3) 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 each 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 sub division or combination becomes
effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness, shares of any
class of capital stock, cash or assets (including securities, but excluding any
(i) rights or warrants referred to in para graph (2) of this Section, (ii) any
dividend or distribution paid exclusively in cash, (iii) any dividend or
distribution referred to in paragraph (1) of this Section and (iv) any merger or
consolidation to which Section 12.11 applies), 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 fixed for the determination of shareholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (8) of this Section) of the
Common Stock on the date fixed for such determination less the then fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
distribution. Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants (other than those referred to in paragraph (2) of
this Section) ("Rights") pro rata to holders of Common Stock, the Company shall
make proper provision so that each Holder of a Security who converts such
Security (or any portion thereof) after the record date for such distribution
and prior to the expiration or redemption of the Rights shall be entitled to
receive upon such conversion, in addition to the shares of Common Stock issuable
upon such conversion (the "Conversion Shares"), a number of Rights to be
determined as follows: (i) if such conversion occurs on or
109.
<PAGE>
prior to the date for the distribution to the holders of Rights of separate
certificates evidencing such Rights (the "Distribution Date"), the same number
of Rights to which a holder of a number of shares of Common Stock equal to the
number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
principal amount of the Security so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights;
provided, however, that if after the Distribution Date with respect to such
Rights converting Holders of Securities are not entitled to receive the Rights
that would otherwise be attributable (but for the date of conversion) to their
respective Conversion Shares or such Rights are not issued to them upon
conversion for any reason, then adjustment of the Conversion Price shall be made
under this paragraph, except the Distribution Date with respect to such Rights
shall be substituted as "the date fixed for the determination of shareholders
entitled to receive such distribution" and "the date fixed for such
determination"; provided, further, that if such an adjustment is made and such
Rights are later redeemed, invalidated or terminated, then a corresponding
reversing adjustment of the Conversion Price shall be made to the Conversion
Price, on an equitable basis, to take account of such event.
(5) 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 12.11 applies or as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (I) the aggregate amount of any other
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 paragraph (5) has been made and (II) 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 Board
Resolution) of consideration payable in respect of any tender offer by the
Company or any of its subsidiaries 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 paragraph (6) of
this Section has been made, exceeds 20% of the product of the current market
price per share of the Common Stock on the date for the determination of holders
of shares of Common Stock entitled to receive 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 for determination, 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 fixed for determination of the shareholders
entitled to receive such distribution by a fraction (i) the numerator of which
shall be equal to the current market price per share (determined as provided in
paragraph (8) of this Section) of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the excess of
110.
<PAGE>
such combined amount over such 20% and (y) the number of shares of Common Stock
outstanding on such date for determination and (ii) the denominator of which
shall be equal to the current market price per share (determined as provided in
paragraph (8) of this Section) of the Common Stock on such date for
determination.
(6) In case a tender offer made by the Company or any Material
Subsidiary for all or any portion of the Common Stock shall expire and such
tender offer (as amended upon the expiration thereof) shall require the payment
to shareholders (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 Board
Resolution) that combined together with (I) 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 Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any other tender
offer by the Company or any Material Subsidiary 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 paragraph
(6) has been made and (II) the aggregate amount of any distributions to all
holders of the Company's 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 paragraph (5) of this Section has been made, exceeds 20%
of the product of the current market price per share of the Common Stock
(determined as provided in paragraph (8) of this Section) 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) as of 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
immediately prior to close of business on the date of the Expiration Time by a
fraction (i) the numerator of which shall be equal to (A) the product of (I) the
current market price per share of the Common Stock (determined as provided in
paragraph (8) of this Section) on the date of the Expiration Time and (II) the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time less (B) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to shareholders
based on the acceptance (up to any maximum specified in the terms of the tender
offer) of Purchased Shares, and (ii) the denominator of which shall be equal to
the product of (A) the current market price per share of the Common Stock
(determined as provided in paragraph (8) of this Section) as of the Expiration
Time and (B) the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less the number 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").
111.
<PAGE>
(7) The reclassification of Common Stock into securities including
other than Common Stock (other than any reclassification upon a consolidation or
merger to which Section 12.11 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be deemed to be
"the date fixed for the determination of shareholders entitled to receive such
distribution" and "the date fixed for such determination" within the meaning of
paragraph (4) of this Section), and (b) a subdivision or combination, as the
case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (3) of this Section).
(8) For the purpose of any computation under paragraphs (2), (4),
(5) or (6) of this Section 12.4, the current market price per share of Common
Stock on any date shall be calculated by the Company and be deemed to be the
average of the daily Closing Prices Per Share for the five consecutive Trading
Days selected by the Company commencing not more than 10 Trading Days before,
and ending not later than, the earlier of the day in question and the day before
the "ex" date with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "'ex' date," when used
with respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way in the applicable securities market or on the
applicable securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Price shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent in
such price; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
shall be made to the nearest cent or to the nearest one- hundredth of a share,
as the case may be.
(10) The Company may make such reductions in the Conversion Price,
for the remaining term of the Securities or any shorter term, in addition to
those required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section
12.4, as it considers to be advisable in order to avoid or diminish any income
tax to any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or subscribe
for stock or from any event treated as such for income tax purposes.
112.
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SECTION 12.5 Notice of Adjustments of Conversion Price.
-----------------------------------------
Whenever the Conversion Price is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Price in
accordance with Section 12.4 and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall promptly be filed with the Trustee and with each
Conversion Agent; and
(2) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be required,
and as soon as practicable after it is required, such notice shall be
provided by the Company to all Holders in accordance with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.
SECTION 12.6 Notice of Certain Corporate Action.
----------------------------------
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require any adjustment pursuant to
Section 12.4; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common Stock), or
of any consolidation or merger to which the Company is a party and for which
approval of any shareholders 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; or
113.
<PAGE>
(e) the Company or any Material Subsidiary shall commence a tender
offer for all or a portion of the Company's outstanding shares of Common Stock
(or shall amend any such tender offer); then the Company shall cause to be filed
at each office or agency maintained for the purpose of conversion of Securities
pursuant to Section 10.2, and shall cause to be provided to all Holders in
accordance with Section 1.6, at least 20 days (or 10 days in any case specified
in clause (a) or (b) above) prior to the applicable record, expiration or
effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, rights,
options 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, rights, options or warrants are to be determined, (y) the date on
which the right to make tenders under such tender offer expires or (z) the date
on which such reclassification, consolidation, merger, share exchange,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, conveyance, transfer,
sale, lease, dissolution, liquidation or winding up. If at the time the Trustee
shall not be conversion agent, a copy of such notice and any notice referred to
in the following paragraph shall also forthwith be filed by the Company with the
Trustee.
SECTION 12.7 Company to Reserve Common Stock.
-------------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all Outstanding Securities.
SECTION 12.8 Taxes on Conversions.
--------------------
The Company will pay any and all taxes and duties that may be payable
in respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. 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 shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
SECTION 12.9 Covenant as to Common Stock.
---------------------------
The Company agrees that all shares of Common Stock which may be
delivered upon conversion of Securities, upon such delivery, will have been duly
authorized and validly
114.
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issued and will be fully paid and nonassessable and, except as provided in
Section 12.8, the Company will pay all taxes, liens and charges with respect to
the issue thereof.
SECTION 12.10 Cancellation of Converted Securities.
------------------------------------
All Securities delivered for conversion shall be delivered to the
Trustee or the Paying Agent in London or its agent to be cancelled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
3.9.
SECTION 12.11 Provision in Case of Consolidation, Merger or Sale of Assets.
------------------------------------------------------------
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any sale or transfer of all or substantially all of the assets of the
Company, the Person formed by such consolidation or resulting from such merger
or which acquires such assets, as the case may be, shall execute and deliver to
the Trustee a supplemental indenture providing that the Holder of each Security
then Outstanding shall have the right thereafter, during the period such
Security shall be convertible as specified in Section 12.1, to convert such
Security only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock of the Company into which such Security might
have been converted immediately prior to such consolidation, merger, sale or
transfer, assuming such holder of Common Stock of the Company (i) is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be ("Constituent Person"), or an Affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer (provided that if the kind or amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer is not the same for each share of Common Stock of the Company held
immediately prior to such consolidation, merger, sale or transfer by others than
a Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 12.11 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by the
holders of 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), and further
assuming, if such consolidation, merger, conveyance, transfer, sale or lease
occurs prior to the later of the Exchange Date and the receipt of Securities in
definitive form (in the case of Securities initially represented by a Temporary
Global Bearer Security), that the Security was convertible at the time of such
occurrence at the Conversion Price specified in Section 12.1 as adjusted from
the issue date of such Security to such time as provided in this Article Twelve.
Such
115.
<PAGE>
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The above provisions of this Section 12.11 shall similarly apply to
successive consolidations, mergers, sales or transfers. Notice of the execution
of such a supplemental indenture shall be given by the Company to the Holder of
each Security as provided in Section 1.6 promptly upon such execution.
ARTICLE THIRTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 13.1 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 Securities, or any portion of the principal
amount thereof that is equal to U.S.$1,000 or any integral multiple of
U.S.$1,000 in excess thereof (provided that no single Bearer Security may be
repurchased in part, and no single Registered Security may be repurchased in
part unless the portion of the principal amount of such Registered Security to
be Outstanding after such repurchase is equal to U.S.$1,000 or integral
multiples of U.S.$1,000 in excess thereof), on the date (the "Repurchase Date")
that is 30 days after the giving of notice to Holders of such change in control
at a purchase price equal to 100% of the principal amount of the Securities to
be repurchased in cash (the "Purchase Price") plus interest accrued to the
Repurchase Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Repurchase Date shall be
payable only upon presentation and surrender of coupons for such interest (at an
office or agency outside the United States, except as otherwise provided in the
form of Bearer Security set forth in Section 2.2(a)); and provided, further,
that installments of interest on Registered Securities whose Stated Maturity is
on or prior to the Repurchase Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Record Date according to their terms and the provisions of Section 3.7.
Such right to require the repurchase of the Securities shall not continue after
a discharge of the Company from its obligations with respect to the Securities
in accordance with Article Four, unless a Change in Control shall have occurred
prior to such discharge. Whenever in this Indenture (including Sections 2.2,
3.1, 5.1(2) and 5.8) there is a reference, in any context, to the principal of
any Security as of any time, such reference shall be deemed to include reference
to the Purchase Price payable in respect of such Security to the extent that
such Purchase Price is, was or would be so payable at such time, and express
mention of the Purchase Price in any provision of this Indenture
116.
<PAGE>
shall not be construed as excluding the Purchase Price in those provisions of
this Indenture when such express mention is not made.
SECTION 13.2 Notices; Method of Exercising Repurchase Right, Etc.
---------------------------------------------------
(a) Unless the Company shall have theretofore called for redemption
all of the Outstanding Securities, on or before the 30th day after the
occurrence of a Change of Control, the Company or, at the request and expense of
the Company, the Trustee, shall give to all Holders of Securities, in the manner
provided in Section 1.6, notice (the "Company Notice") of the occurrence of the
Change of 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 notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Purchase Price, and accrued interest, if any,
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where such Securities,
together with all coupons appertaining thereto, if any, maturing after the
Repurchase Date, are to be surrendered for payment of the Purchase Price and
accrued interest, if any,
(5) that on the Repurchase Date the Purchase Price, and accrued
interest, if any, will become due and payable upon each such Security designated
by the Holder to be repurchased, and that interest thereon shall cease to accrue
on and after said date,
(6) the Conversion Price then in effect, the date on which the right
to convert the principal amount of the Securities to be repurchased will
terminate and the place or places where such Securities, together with all
unmatured coupons and any matured coupons in default appertaining thereto, may
be surrendered for conversion, and
(7) the place or places that the certificate required by Section 2.2
shall be delivered, and the form of such certificate.
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 Securities.
117.
<PAGE>
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
Securities to be repurchased (and, if any Registered Security is to 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, in
the event that the Purchase Price shall be paid in shares of Common Stock, the
name or names (with addresses) in which the certificate or certificates for
shares of Common Stock shall be issued, and (ii) the Securities with respect to
which the repurchase right is being exercised, together with all coupons, if
any, appertaining thereto maturing after the Repurchase Date; provided, however,
that Bearer Securities shall be delivered only to an office of a Paying Agent
located outside the United States except in the limited circumstances described
in Section 10.2. Such written notice shall be irrevocable, except that the
right of the Holder to convert the Securities with respect to which the
repurchase right is being exercised shall continue until the close of business
on the second Trading Day preceding the Repurchase Date.
(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 in London the Purchase Price in cash for payment to the
Holder on the Repurchase Date together with accrued and unpaid interest to the
Repurchase Date payable with respect to the Securities as to which the purchase
right has been exercised; provided, however, that installments of interest that
mature on or prior to the Repurchase Date shall be payable in cash, in the case
of Registered Securities, to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Date and, in the case of Bearer Securities, to the holder of the
coupon with respect thereto, in each case according to the terms and provisions
of Article Three; and provided, further, that Bearer Securities and coupons
shall be so payable only at an office or agency outside the United States
(except as otherwise provided in the form of Bearer Security set forth in
Section 2.2(a)).
(d) If any Bearer Security surrendered for repurchase shall not be
accompanied by all appurtenant coupons maturing after the Repurchase Date, such
Security may be paid after deducting from the Purchase Price an amount equal to
the face amount of all such missing coupons or the surrender of such missing
coupons or coupon may be waived by the Company and the Trustee, if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Purchase Price, if any, such
Holder shall
118.
<PAGE>
be entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside of the United States
(except as otherwise provided in the form of Bearer Security set forth in
Section 2.2(a)).
(e) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate of 4 1/2% per annum, and each Security shall remain convertible into
Common Stock until the principal of such Security (or portion thereof, as the
case may be) shall have been paid or duly provided for.
(f) Any Registered Security 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 make available for delivery to the Holder of
such Registered Security without service charge, a new Registered Security or
Registered Securities, containing identical terms and conditions, each in an
authorized denomination in aggregate principal amount equal to and in exchange
for the unrepurchased portion of the principal of the Registered Security so
surrendered.
(g) Any issuance of shares of Common Stock in respect of the Purchase
Price shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the Person or Persons in
whose name or names the certificate or certificates for such shares are to be
issued as the recordholder or holders thereof for all purposes at the opening of
business on the next succeeding day on which such stock transfer books are open.
No payment or adjustment shall be made for dividends or distributions on any
Common Stock issued upon repurchase of any Security declared prior to the
Repurchase Date.
(h) No fractions of shares or scrip representing fractions of shares
shall be issued upon repurchase of Securities. If more than one Security shall
be repurchased from the same Holder and the Purchase Price shall be pay able in
shares of Common Stock, the number of full shares which shall be issuable upon
such repurchase shall be computed on the basis of the aggregate principal amount
of the Securities so repurchased. Instead of any fractional share of Common
Stock which would otherwise be issuable on the repurchase of any Security or
Securities, the Company will deliver to the applicable Holder its check for the
current
119.
<PAGE>
market value of such fractional share. The current market value of a fraction of
a share is determined by multiplying the current market price of a full share by
the fraction, and rounding the result to the nearest cent. For purposes of this
Section, the current market price of a share of Common Stock is the Closing
Price Per Share of the Common Stock on the last Trading Day prior to the
Repurchase Date.
(i) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Securities being repurchased, and no such issuance or delivery shall be made
unless and until the Person requesting such issuance or delivery has paid to the
Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(j) The Company covenants that all shares of Common Stock which may
be issued upon repurchase of Securities will upon issue be duly and validly
issued and fully paid and non-assessable.
SECTION 13.3 Certain Definitions.
-------------------
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3, as in effect on the date of the original execution of this
Indenture, promulgated by the Commission pursuant to the Exchange Act;
(b) the term "Capital Stock" shall mean capital stock of the Company
that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, to shares of capital stock of any
other class of the Company;
(c) a "Change in Control" shall be deemed to have occurred at the
time, after the original issuance of the Securities, of:
(i) the acquisition by any Person of beneficial ownership,
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of capital stock of the
Company entitling such Person to exercise 50% or more of the total voting
power of all shares of capital stock of the Company entitled to vote
generally in the elections of directors (any shares of voting stock of
120.
<PAGE>
which such person or group is the beneficial owner that are not then
outstanding being deemed outstanding for purposes of calculating such
percentage); or
(ii) 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 sales or transfer of all or substantially all of the assets
of the Company to another Person (other than a merger (x) which does not
result in a material reclassification, conversion, exchange or cancellation
of outstanding shares of Capital Stock, (y) 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 into solely shares of common stock, or (z) does not result in a
substantial (i.e., over 50%) change in the beneficial ownership of the
Company);
provided, however, that a Change in Control shall not be deemed to have occurred
if either (x) the Closing Price Per Share on any five Trading Days within the
period of ten consecutive Trading Days ending immediately after the later of the
date of the Change in Control or the date of the public announcement of the
Change in Control (in the case of a Change in Control under Clause (i) above) or
the period of ten consecutive Trading Days ending immediately prior to the
effective date of the Change in Control (in the case of a Change in Control
under Clause (ii) above) shall equal or exceed 105% of the Conversion Price in
effect on such trading day or (y) at least 90% of the consideration (excluding
cash payments for fractional shares) to be paid for the Common Stock in the
transaction or transactions constituting the Change in Control consists of
shares of common stock traded on a national securities exchange or quoted on the
Nasdaq National Market and as a result of such transaction or transactions the
Securities become convertible solely into such common stock; and
(d) 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, as
in effect on the date of the original execution of this Indenture.
ARTICLE FOURTEEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 14.1 Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after the Record Date, a list, in
such form as the Trustee may reasonably require, of the names and addresses
of the Holders of Registered Securities as of such Record Date, and
121.
<PAGE>
(b) at such other times as the Trustee may reasonably request in writing,
within 30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 14.2 Preservation of Information.
---------------------------
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 14.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it pursuant to Section
14.1 upon receipt of a new list so furnished.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
122.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CORPORATE EXPRESS, INC.
By__________________________________________
Name:
Title:
Attest:
_______________________
Name:
Title:
BANKERS TRUST COMPANY, as Trustee
By__________________________________________
Name:
Title:
Attest:
_______________________
Name:
Title:
123.
<PAGE>
EXHIBIT A
---------
Transfer Certificate Pursuant to Section 3.4 of the Indenture
In connection with the proposed transfer of an interest in the
Temporary Global Bearer Security, please be advised of the following:
1. The sale has been made in compliance with the provisions of Rule
144A.
2. The transferee is purchasing the Security for its own account or
an account with respect to which it exercises sole investment discretion.
3. The transferee or the account with respect to which it exercises
sole investment discretion is a Qualified Institutional Buyer within the meaning
of Rule 144A.
4. The transferee is aware that the sale to it is being made in
reliance on Rule 144A.
5. The transferee acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule 144A or has
determined not to request such information.
6. The transferee is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
Dated: _____________ By:___________________________
Name:
Title:
______________________________
Signature Medallion Guaranteed
A-1.
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 24, 1996 by and among Corporate Express, Inc., a Colorado
corporation (the "Company"), and Alex. Brown & Sons Incorporated, Donaldson
Lufkin & Jenrette Securities Corporation, Montgomery Securities and J.P. Morgan
& Co. (Collectively, the "Underwriters").
This Agreement is made pursuant to the Underwriting Agreement, dated June
19, 1996 (the "Underwriting Agreement"), between the Company and the
Underwriters. In connection with the transactions contemplated by the
Underwriting 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 Underwriting Agreement.
The parties hereby agree as follows:
1. Definitions. Capitalized terms used herein without definition shall
-----------
have their respective meanings set forth in the Underwriting Agreement. As used
in this Agreement, the following terms shall have the following meanings:
Advice: See the last paragraph of Section 4 hereof.
------
Affiliate: "Affiliate" means, 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" (including the terms "controlling," "controlled by" and
"under common control with") 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 a Person, whether through the
ownership of voting securities, by contract, or otherwise.
Authorized Newspapers: "Authorized Newspapers" shall have the
---------------------
meaning set forth in the Indenture.
Bearer Security: "Bearer Security" shall have the meaning set forth
---------------
in the Indenture.
Common Stock: The shares of common stock, par value $0.0002 per
------------
share, of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, in each case, issuable or issued
upon conversion of the Notes.
1.
<PAGE>
Effectiveness Date: The date that is as soon as practicable, but in
------------------
no event more than 120 days after the date the Registration Statement relating
to the Shelf Registration is first filed with the SEC.
Effectiveness Period: See Section 2(a) hereof.
--------------------
Exchange Act: The Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations of the SEC promulgated thereunder.
Filing Date: The date that is 90 days after the latter of the
-----------
Settlement Date or the latest issuance of the Notes upon exercise of the
Underwriters' overallotment option.
Indenture: The Indenture, dated as of June 24, 1996, between the
---------
Company and Bankers Trust Company, 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 Shelf Registration Statement: See Section 2(a) hereof.
------------------------------------
Losses: See Section 6(a) hereof.
------
Notes: The 4 1/2% Convertible Notes due July 1, 2000 of the Company
-----
being issued and sold pursuant to the Underwriting Agreement and the Indenture
on the date hereof; provided, that if the Notes are converted pursuant to
--------
Article 12 of the Indenture, such term shall mean the Common Stock issued upon
conversion thereof.
Person: The term "person" shall mean a corporation, an association,
------
a partnership, an individual, a joint venture, a joint stock company, a trust,
an unincorporated organization or a government or an agency or a political
subdivision thereof.
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 prospectus supplement, including, without
limitation, with respect to the terms of the offering of any portion of the
Registrable Securities covered by such Registration Statement and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Registered Security: "Registered Security" shall have the meaning
-------------------
set forth in the Indenture.
2.
<PAGE>
Registrable Securities: The Notes and the Common Stock issuable upon
----------------------
conversion of the Notes upon original issuance thereof, and at all times
subsequent thereto, 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 saleable
by the holder thereof pursuant to Rule 144(k) or (iii) it is distributed to the
public pursuant to Rule 144, and, as a result of the event or circumstance
described in any of the foregoing clauses (i) through (iii), the restrictive
legends required under the Indenture 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 promulgated by the SEC thereunder.
Settlement Date: June 24, 1996, or such later date as the Company and
---------------
the Underwriters shall mutually agree to in writing.
Shelf Registration: See Section 2 hereof.
------------------
Special Counsel: Any special counsel to the Underwriters or the
---------------
holders of the 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.
-----------------------------
TIA: The Trust Indenture Act of 1939, as amended.
---
Trustee: The "Trustee" under the Indenture.
-------
3.
<PAGE>
Underwriters: Alex. Brown & Sons Incorporated, Donaldson, Lufkin &
------------
Jenrette Securities Corporation, Montgomery Securities and J.P. Morgan & Co.
Underwriting Agreement: As such term is defined in the second
----------------------
paragraph of this Agreement.
2. Shelf Registration
------------------
(a) Shelf Registration. The Company shall prepare and file with the
------------------
SEC prior to the Filing Date a Registration Statement for an offering to be made
on a continuous basis pursuant to Rule 415 covering all of the Registrable
Securities (the "Initial Shelf Registration Statement"). The Initial Shelf
Registration Statement shall be on Form S-3 or other appropriate form permitting
registration of such Registrable Securities for resale by such holders. The
Company shall use all reasonable efforts to cause the Initial Shelf Registration
Statement to be declared effective under the Securities Act as soon as
practicable, but in no event more than 120 days after the date the Registration
Statement is first filed with the SEC (the "Effectiveness Date") and to keep the
Initial Shelf Registration continuously effective under the Securities Act until
the earliest of (i) the expiration of three years from the time the Initial
Shelf Registration Statement is declared effective (the "Effectiveness Period"),
(ii) such time as all Registrable Securities have been sold pursuant to the
Shelf Registration Statement, transferred pursuant to Rule 144 under the
Securities Act or otherwise transferred in a manner that results in a new
security not subject to transfer restrictions under the Securities Act being
delivered pursuant to the Indenture and (iii) such time as, in the opinion of
counsel, all of the Registrable Securities held by non-affiliates of the Company
are eligible for resale pursuant to Rule 144(k) under the Securities Act and the
restrictive legends have been removed from such Registrable Securities.
(b) If the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement (as defined below) ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Company shall use all
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Registration Statement pursuant to Rule 415
covering all of the Registrable Securities (a "Subsequent Shelf Registration")
(the Initial Shelf Registration and the Subsequent Shelf Registrations are
hereinafter collectively referred to as the "Shelf Registration"). If a
Subsequent Shelf Registration is filed, the Company shall use all reasonable
efforts to cause the Subsequent Shelf Registration to be declared effective as
soon as practicable after such filing and to keep such Subsequent Shelf
Registration Statement continuously effective until the end of the Effectiveness
Period.
(c) The Company shall supplement and amend the Initial Shelf
Registration Statement or a Subsequent Shelf Registration Statement, as the case
may be, if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration, if required
by the Securities Act, or if reasonably requested by the
4.
<PAGE>
Underwriters or by the Trustee on behalf of the holders of the Registrable
Securities covered by such Registration Statement.
(d) Notwithstanding the provisions contained in Section 2(b) above,
in the event that, in the judgment of the Company's Board of Directors, Chief
Executive Officer or Chief Financial Officer, it is advisable to suspend use of
the Prospectus due to pending corporate developments, public filings with the
SEC or similar events, the Company shall deliver a written certificate to
each selling holder of Registrable Securities, the Underwriters and the Special
Counsel to the effect that the use of the Prospectus is to be suspended until
the Company shall deliver a written notice that the use of the Prospectus may be
resumed. Thereafter, the use of the Prospectus shall be suspended, and the
Company shall not be required to maintain the effectiveness of, or amend or
update the Shelf Registration, or amend or supplement the Prospectus; provided,
--------
however, that the Company shall only be permitted to suspend the use of the
- -------
Prospectus for a period not to exceed 30 days in any three-month period or two
periods not to exceed an aggregate of 60 days in any 12-month period.
The Company will use its best efforts to ensure that the use of the
Prospectus may be resumed as soon as, in the judgment of the Company's Board of
Directors, Chief Executive Officer or Chief Financial Officer, disclosure of the
material relating to such pending development, filing or event would not have a
materially adverse effect on the Company.
3. Liquidated Damages
------------------
(a) The parties hereto agree that the holders of Registrable
Securities will suffer damages and that it would not be feasible to attempt to
ascertain the extent of such damages with precision, if (i) the Initial Shelf
Registration Statement has not been filed with the SEC on or prior to the Filing
Date, (ii) the Initial Shelf Registration Statement has not become effective on
or prior to the Effectiveness Date, (iii) prior to the end of the Effectiveness
Period, the SEC shall have issued a stop order suspending the effectiveness of
the Registration Statement or proceedings have been initiated against the
Company under Section 8(d) or 8(e) of the Securities Act or (iv) a notice under
Section 4(c) (v) hereof is delivered and either (x) such notice is delivered
during the period from the effective date of the Initial Shelf Registration
Statement until 90 days thereafter (the "Initial Resale Period") or (y) the
aggregate number of days since the Initial Resale Period for which notices
delivered pursuant to Section 4(c) (v) hereof have been in effect exceeds 90
days (each of the events described in clauses (i) through (iv) is individually
referred to herein as an "Event," and each of the Filing Date in the case of
clause (i), the Effectiveness Date in the case of clause (ii), the date on which
the Registration Statement ceases to be effective or proceedings referred to
therein have been commenced in the case of clause (iii), and the date on which
such notice is delivered or the 90-day limit is exceeded, as the case may be, in
the case of clause (iv), are referred to herein as the "Event Date"). For
purposes hereof, a notice under Section 4(c) (v) hereof shall be deemed to be
effective from the date of such
5.
<PAGE>
notice through the date that the use of the applicable Prospectus may be resumed
pursuant to the last paragraph of Section 4(m) hereof.
Accordingly, upon the occurrence of an Event, commencing on the
Event Date, the Company agrees to pay, as liquidated damages, and not as a
penalty, to each holder of Registrable Securities, an additional amount (the
"Liquidated Damages Amount") equal to one-half of one percent per annum (50
basis points) per U.S.$1,000 principal amount of Registrable Securities held by
such holder; provided, however, that such liquidated damages will be only
-------- -------
an additional amount equal to one-quarter of one percent per annum (25 basis
points) per $1,000 principal amount of Registrable Securities held by such
holder for the first 60 days following the Event Date resulting from a failure
to file the Initial Shelf Registration on or prior to the Filing Date (and,
following such 60 day period, the applicable additional amount shall be equal to
one-half of one percent per annum (50 basis points) per U.S.$1,000 principal
amount of Registrable Securities held by such holder); provided, further,
-------- -------
however, that such liquidated damages will, in each case, cease to accrue on and
- -------
after the date the Shelf Registration is filed or effective, the stop order or
proceeding has terminated, or the notice under clause (iv) is no longer in
effect, as the case may be.
(b) The Company shall pay the Liquidated Damages Amount due on the
Registrable Securities by depositing with the Trustee under the Indenture, in
trust, for the benefit of the holders thereof, at least one business day prior
to the applicable interest payment date, sums sufficient to pay the Liquidated
Damages Amount then due. The Liquidated Damages Amount due shall be payable on
each interest payment date to the record holder entitled to receive the interest
payment to be made on such date. The Trustee shall be entitled, on behalf of the
holders of Registrable Securities, to seek any available remedy for the
enforcement of this Agreement, including for the payment of such liquidated
damages.
(c) The parties hereto agree that the liquidated damages provided for
in this Section 3 constitute a reasonable estimate of the damages that may be
incurred by holders of Registrable Securities (other than the Underwriters) by
reason of the failure of the Shelf Registration to be filed, declared effective
or consummated, as the case may be, in accordance with the provisions hereof.
4. 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
cause each such Registration Statement to become effective and remain effective
as provided herein; provided, however, that before filing any
-------- -------
6.
<PAGE>
such Registration Statement or Prospectus or any amendments or supplements
thereto (other than documents that would be incorporated or deemed to be
incorporated therein by reference and that the Company is required by applicable
securities laws or stock exchange requirements to file), the Company shall
furnish to the Underwriters through the Special Counsel, copies of all such
documents proposed to be filed, which documents will be subject to the review of
the Underwriters and the Special Counsel, and the Company shall not file any
such Registration Statement or amendment thereto or any Prospectus or any
supplement thereto (other than such documents which, upon filing, would be
incorporated or deemed to be incorporated by reference therein and that the
Company is required by applicable securities laws or stock exchange requirements
to file) to which the Underwriters or the Special Counsel shall reasonably
object on a timely basis.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement 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 of disposition by the sellers
thereof set forth in such Registration Statement as so amended or to such
Prospectus as so supplemented.
(c) Notify the selling holders of Registrable Securities and the
Underwriters through the Special Counsel promptly, and (if requested by any such
Person) confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, 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 during the period of effectiveness of the Registration
Statement 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 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 proceeding for such
purpose, (v) of the happening of any event or the existence of any circumstance
which makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in such Registration Statement, Prospectus or documents so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and that in the case
of the Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
7.
<PAGE>
were made, not misleading, and (vi) of the Company's reasonable determination
that a post-effective amendment to a Registration Statement would be
appropriate.
(d) Use every reasonable effort 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) Subject to the last paragraph of this Section 4, if reasonably
requested by the Underwriters, the Special Counsel or the holders of a majority
in principal amount of the Registrable Securities being sold, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the Company, the Underwriters and such holders agree should be
included therein as required by applicable law, (ii) make all required filings
of such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment, and
(iii) supplement or make amendments to any Registration Statement consistent
with clause (i) or (ii) above; provided, that the Company shall not be required
--------
to take any actions under this Section 4(e) that are not, in the reasonable
opinion of counsel for the Company, in compliance with applicable law.
(f) Furnish to each selling holder of Registrable Securities (at its
request) and to the Underwriters through the Special Counsel, without charge, at
least one conformed copy of the Registration Statement or Registration
Statements and any post-effective amendment thereto, including financial
statements, if any (but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits, unless
requested in writing by the Underwriters or the Special Counsel).
(g) Deliver to each selling holder of Registrable Securities, the
Underwriters and the Special Counsel, 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 the 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 of Registrable
Securities, and their respective 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 Seller 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
8.
<PAGE>
disposition in such jurisdictions of the Registrable Securities covered by the
applicable Registration Statement; provided, however, that the Company will not
-------- -------
be required to (i) qualify generally to do business in any jurisdiction where it
is not then so qualified or (ii) take any action that would subject it to
general service of process 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 or authorities within the United States, except as may be
required solely as a consequence of the nature of such selling holder, in which
case the Company will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals, as may be
necessary to enable the seller or sellers thereof to consummate the disposition
of such Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section 4(c) (v)
or 4(c) (vi) above, prepare a supplement or 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 so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, provided that the foregoing
obligation shall be suspended in the case of the giving of a notice pursuant to
Section 4(c) (v) hereof until the use of the applicable Prospectus may be
resumed pursuant to the last paragraph of Section 4(m) hereof.
(k) If necessary in connection with a disposition of Registrable
Securities, make available for inspection by a representative of the holders of
Registrable Securities being sold and any attorney or accountant retained by
such selling holders, financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries, and cause the officers,
directors and employees of the Company and its subsidiaries to supply all
information reasonably requested by any such representative, attorney or
accountant in connection with such disposition; provided, that any records,
information or documents that are designated by the Company in writing as
confidential at the time of delivery of such records, information or documents
shall be kept confidential by such Persons unless (i) such records, information
or documents are in the public domain or otherwise publicly available, (ii)
disclosure of such records, information or documents is required by court or
administrative order or is necessary to respond to inquiries of regulatory
authorities or (iii) disclosure of such records, information or documents is
otherwise required by law (including, without limitation, pursuant to the
requirements of the Securities Act).
(l) Cause the Indenture to be qualified under the TIA not later than
the effectiveness of the first Registration Statement relating to the
Registrable Securities; and, in connection therewith, cooperate with the Trustee
and the holders of the Registrable Securities, to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
9.
<PAGE>
accordance with the terms of the TIA; and execute, and use all reasonable
efforts to cause such 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 the Indenture to be so qualified in a timely manner.
(m) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders financial statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) commencing on the first day of the first
fiscal quarter of the Company, after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
The Company may require each selling holder of Registrable Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Securities as the
Company may, from time to time, reasonably request in writing and the Company
may exclude from such registration the Registrable Securities of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4 (c) (ii), 4 (c) (iii),
4 (c) (iv), 4 (c) (v) or 4(c) (vi) hereof, such holder will forthwith
discontinue disposition of such Registrable Securities covered by the applicable
Registration Statement or Prospectus until such holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 4(j) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the applicable Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus.
5. Registration Expenses. All fees and expenses incident to the
---------------------
performance of or compliance with this Agreement by the Company 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
(x) fees and expenses relating to filings required to be made with the National
Association of Securities Dealers, Inc. and (y) fees and expenses relating
to compliance with securities or Blue Sky laws (including, without limitation,
fees and disbursements of counsel for the selling holders of Registrable
Securities in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as holders of a majority in
aggregate principal amount of the Registrable Securities being sold may
designate), (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 or the holders of a majority
in aggregate principal amount
10.
<PAGE>
of the Registrable Securities included in any Registration Statement), (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company and the Special Counsel for the selling Holders of the
Registrable Securities or the Underwriters in connection with the Shelf
Registration (provided that the Company shall not be liable for the reasonable
fees and expenses of more than one separate firm for all of the selling Holders
and the Underwriters), (v) fees and disbursements of all independent certified
public accountants, (vi) fees and expenses of any qualified independent
underwriter or other independent appraiser participating in an offering pursuant
to Section 3 of Schedule E to the Bylaws of the National Association of
Securities Dealers, Inc., (vii) rating agency fees in connection with obtaining
ratings of the Notes at the time of their original issuance, (viii) Securities
Act liability insurance if the Company so desires such insurance, and (ix) fees
and expenses of all other Persons retained by the Company. In addition, the
expense of any annual audit, the fees and expenses incurred in connection with
the listing of the securities to be registered on any securities exchange on
which similar securities issued by the Company are then listed and rating agency
fees and the fees and expenses of any Person, including special experts,
retained by the Company.
6. Indemnification
---------------
(a) Indemnification by the Company. The Company shall, without
------------------------------
limitation as to time, indemnify and hold harmless, to the fullest extent
permitted by law, each holder of Registrable Securities, the officers, directors
and agents and employees of each of them, each Person who controls such holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of any such
controlling person, from and against all losses, claims, damages, liabilities,
costs (including, without limitation, the costs of preparation and attorneys'
fees) and expenses (collectively, "Losses"), as incurred, arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, Prospectus or form of Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or 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, except insofar as the same are based solely upon information
furnished in writing to the Company by such holder expressly for use therein;
provided, however, that the Company shall not be liable to any holder of
- -------- -------
Registrable Securities to the extent that any such Losses arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if either (A) (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 by such holder of a Registrable
Security to the person asserting the claim from which such Losses arise and (ii)
the Prospectus would have completely corrected such untrue statement or such
omission or alleged omission, or (B) (x) such untrue statement or alleged untrue
statement, omission or alleged omission is completely corrected in an amendment
or supplement to the Prospectus and (y) having
11.
<PAGE>
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 the claim from
which such Losses arise. The Company shall also indemnify each selling broker,
dealer manager and similar securities industry professional participating in the
distribution, and each of their officers, directors, agents and employees and
each Person who controls such Persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as provided
above with respect to the indemnification of the holders of Registrable
Securities.
(b) Indemnification by Holder of Registrable Securities. In
---------------------------------------------------
connection with any Registration Statement in which a holder of Registrable
Securities is participating, such holder of Registrable Securities shall furnish
to the Company in writing such information as the Company reasonably requests
for use in connection with any Registration Statement or Prospectus and each
such holder by its sale of a Registrable Securities pursuant to any Registration
Statement shall, without limitation as to time, be deemed to have agreed to
indemnify, to the fullest extent permitted by law, the Company, its directors
and officers, agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling
persons, 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 preliminary 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, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
such holder to the Company expressly for use in such Registration Statement or
Prospectus and that such information was solely relied upon by the Company in
preparation of such Registration Statement, Prospectus or preliminary
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
(net of payment of all expenses) received by such holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation. The
Company shall be entitled to receive indemnities from selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution to the same extent as provided above with respect to information so
furnished in writing by such Persons expressly for use in any Prospectus or
Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Person shall be
--------------------------------------
entitled to indemnity hereunder (an "indemnified party"), such indemnified party
shall give prompt notice to the party from which such indemnity is sought (the
"indemnifying party") of any claim or of the commencement of a proceeding with
respect to which such indemnified party seeks indemnification or contribution
pursuant hereto; provided, however, that the failure to so notify the
-------- -------
indemnifying party shall not relieve the indemnifying party from any obligation
or liability. All such fees and expenses (including any fees and expenses
incurred in connection with investigating or preparing to defend such action or
proceeding) shall be paid to the indemnified party, as incurred, within five
days of written notice thereof to the indemnifying
12.
<PAGE>
party (regardless of whether it is ultimately determined that an indemnified
party is not entitled to indemnification hereunder). The indemnifying party
shall not consent to entry of any judgment or enter into any settlement or
otherwise seek to terminate any proceeding in which any indemnified party is or
could be a party and as to which indemnification or contribution could be sought
by such indemnified party under this Section 6, unless such judgment, settlement
or other termination includes as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release, in form and
substance satisfactory to the indemnified party, from all liability in respect
of such claim or litigation for which such indemnified party would be entitled
to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this Section
------------
6 is unavailable to an indemnified party under Section 6(a) or 6(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, jointly and severally, contribute to the amount paid
or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or indemnifying parties, on the one hand, and such indemnified party, on
the other hand, in connection with the actions, statements or omissions that
results in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party or indemnifying parties, on the
one hand, and such indemnified party, on the other hand, shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include any
legal or other fees or expenses incurred by such party in connection with any
proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(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.
Notwithstanding the provision of this Section 6(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 Underwriting Agreement or otherwise. The
provisions of this Section 6 shall
13.
<PAGE>
survive so long as Registrable Securities remain outstanding, notwithstanding
any transfer of the Registrable Securities by any holder or any termination of
this Agreement.
7. Rule 144 and Rule 144A.
----------------------
(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 action as any holder of
Registrable Securities may reasonably request (including, without limitation
making such representations as any such holder may reasonably request), all to
the extent required from time to 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 7 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 Form S-3 in order to allow the Company to be eligible to
file registration statements on Form S-3.
8. Miscellaneous.
-------------
(a) Remedies. In the event of a breach by the Company of its
--------
obligations under this Agreement, each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(b) No Conflicting Agreements. The Company has not, 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.
(c) Amendments and Waivers. The provision of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers
14.
<PAGE>
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 the
then outstanding aggregate principal amount 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, however, that the provisions of this sentence may not be amended,
- -------- -------
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(d) Notices. All notices and other communications to holders of
-------
Registered Securities, or to holders of Common Stock issuable upon conversion of
a Registered Security or a Bearer Security, 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 this Section 8 (d); and
(y) if to the Company, to Corporate Express, Inc., 325
Interlocken Parkway, Broomfield, Colorado 80021, Attention: Secretary.
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
All notices and other communications to holders of Bearer Securities
provided for or permitted hereunder shall be deemed given when made in
Authorized Newspapers in London, England, and so long as the Bearer Securities
are listed on the Luxembourg Stock Exchange and the rules of the Luxembourg
Stock Exchange shall so require, in Luxembourg or, if publication in either
London or Luxembourg is not practical, elsewhere in Western Europe.
(e) Owner of Registered Security. The Company will maintain, or
------------------------------
will cause its registrar and transfer agent to maintain, a register with respect
to the Registered Securities in which all transfers of a Registered Security of
which the Company has received notice will be recorded. The Company may deem
and treat the person in whose name the Registered Security is 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
15.
<PAGE>
held by the Company or its affiliates (as such term is defined in Rule 405 under
the Securities Act) (other than the Underwriters 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. For purposes of calculating the
consent or approval of holders of a majority of the then outstanding aggregate
principal amount of Registrable Securities, Registrable Securities which have
been converted into shares of Common Stock shall be deemed to bear the principal
amount at which such securities were converted.
(g) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each holder of any Registrable
Securities. The Company may not assign its rights or obligations hereunder
without the prior written consent of each holder of any Registrable Securities.
In the event another Person becomes an obligor on the Notes pursuant to the
requirements of Article 7 of the Indenture or the Notes become convertible into
shares of common stock of a Person other than the Company pursuant to the
provision of Section 11 of Article 12 of the Indenture, the Company shall, at or
prior to the consummation of the transaction which resulted or will result in
such Person becoming an obligor on the Notes or the Notes becoming convertible
into such common stock, cause such Person to execute and deliver to the
Trustee a written agreement under which it shall agree to discharge the
obligations of the Company hereunder as if it were the Company for all purposes
hereunder to the extent necessary or appropriate to give effect to the intent of
the provisions hereof.
(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 New York, as applied to contracts
made and performed within the State of New York, without regard to principles of
conflict of laws.
(k) Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their 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
16.
<PAGE>
that they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such which may be hereafter declared
invalid, 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 and the registration rights
granted by the Company with respect to the Notes sold pursuant to the
Underwriting Agreement and the Common Stock issuable upon conversion of the
Notes. Except as provided in the Underwriting Agreement, 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 Registrable Securities. This Agreement supersedes
all prior agreements and understandings among the parties with respect to such
registration rights.
(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 and make effective the transactions
contemplated hereby.
(o) Termination. This Agreement and the obligations of the parties
-----------
hereunder shall terminate at the end of the Effectiveness Period, except for any
liabilities or obligations under Sections 5 or 6 or the proviso of Section 4(k)
above, which shall remain in effect in accordance with their terms.
17.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CORPORATE EXPRESS, INC.
By:/s/Gary M. Jacobs
--------------------------
Gary M. Jacobs
Executive Vice President and
Secretary
Accepted as of the date first
above written:
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MONTGOMERY SECURITIES
J.P. MORGAN & CO.
By: Alex. Brown & Sons Incorporated
By: /s/Alexander Daignault
-----------------------------------------
Alexander Daignault
Principal
18.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Corporate Express, Inc. on Form S-3 (the "Registration Statement") of our report
dated June 11, 1996 on our audits of the consolidated financial statements and
financial statement schedule of Corporate Express, Inc. as of March 2, 1996 and
February 25, 1995, and for the years ended March 2, 1996, February 25, 1995, and
February 28, 1994 and to the incorporation by reference in this Registration
Statement of our report dated August 30, 1996 on our audit of the balance sheet
of Check Office Equipment Company as of February 29, 1996, and the related
statements of operations, stockholders' equity (parent company investment), and
cash flows for the year then ended. We also consent to the reference to our firm
under the caption "Experts."
Coopers & Lybrand L.L.P.
Denver, Colorado
September 19, 1996
<PAGE>
[LETTERHEAD OF HORNE CPA GROUP APPEARS HERE]
Exhibit 23.2
September 20, 1996
Corporate Express
325 Interlocken
Broomfield, Colorado 80021
We consent to the incorporation by reference in this Form S-3 registration
statement of Corporate Express, Inc. of our report dated February 21, 1996 on
our audit of the financial statements of Forms and Supplies, Inc. as of December
31, 1995 and for the year ended December 31, 1995.
With best regards,
HORNE CPA GROUP
/s/ Arvil R. Stanford
Arvil R. Stanford
Shareholder
<PAGE>
EXHIBIT 23.3
[LETTERHEAD OF SCHUTRUMPF & KOREN, P.C. APPEARS HERE]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form S-3 registration
statement of Corporate Express, Inc. of our report dated March 4, 1996 on our
audit of the financial statements of Virginia Impression Products Co.,Inc. as of
December 31, 1995 and for the year then ended.
/s/ Schutrumpf & Koren
Schutrumpf & Koren, P.C.
Certified Public Accountants
September 20, 1996
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 registration statement of our reports on the audited
financial statements of Dock Truck Express Inc., dated August 29, 1996, Pronto
Delivery Service, Inc., dated August 15, 1996, and RUSHTRUCKING, Inc., dated
August 22, 1996 included in the Form 8-K as filed by Corporate Express, Inc. on
September 19, 1996, and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
September 19, 1996
Houston, Texas
<PAGE>
Exhibit 23.5
[INSERT KPMG LETTERHEAD HERE]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement in
this Form S-3 of Corporate Express, Inc. of our report dated April 4, 1996
relating to the consolidated balance sheet of Miller Stationers Ltd. as of
January 31, 1996 and the related statements of earnings and retained earnings
and changes in financial position for the year then ended.
/s/KPMG
Chartered Accountants
Edmonton, Canada
September 20, 1996
<PAGE>
Exhibit 23.6
[LETTERHEAD OF MCGEE, WHEELER & CO., P.C. APPEARS HERE]
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this Form S-3 registration
statement of Corporate Express, Inc. of our report dated February 26, 1996,
except for Note 13 as to which the date is March 4, 1996, on our audit of the
financial statements of Enbee Company as of December 31, 1995 and for the year
then ended.
McGee, Wheeler & Co., P.C.
/s/ McGee, Wheeler & Co., P.C.
Certified Public Accountants
Houston, Texas
September 20, 1996
<PAGE>
Exhibit 23.7
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-3) and related Prospectus of Corporate Express, Inc. for the registration of
$325,000,000 of 4-1/2% Convertible Notes due 2000 and 6,500,000 shares of its
common stock of our report dated February 19, 1996, except Note 9 for which the
date is May 13, 1996, with respect to the consolidated financial statements of
ASAP Software Express, Inc. included in Corporate Express, Inc.'s Current Report
on Form 3-K/A dated June 19, 1996 filed with the Securities and Exchange
Commission.
Chicago, Illinois
September 20, 1996
<PAGE>
EXHIBIT 23.8
[LETTERHEAD FOR SAMSON BELAIR DELOITTE & TOUCHE APPEARS HERE]
We consent to the incorporation by reference in this Form S-3 registration
statement of Corporate Express Inc. of our report dated December 5th, 1995 on
our audit of the financial statements of Boulevard Office Products Inc. as of
October 31, 1995 and for the year ended 1995.
Samson Belair Deloitte & Touche
September 20, 1996
<PAGE>
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
TO SECTION 305(b)(2)
-----------
===============================
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
Bankers Trust Company
Legal Department
130 Liberty Street, 31st Floor
New York, New York 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
===============================
CORPORATE EXPRESS, INC.
(Exact name of obligor as specified in its charter)
Colorado 84-0978360
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
325 INTERLOCKEN PARKWAY
BROOMFIELD, CO 80021
(Address of principal executive offices) (Zip Code)
4 1/2% CONVERTIBLE NOTES DUE JULY 1, 2000
(Title of the indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
Item 3.-15. Not Applicable
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of Amendment
of the Organization Certificate of Bankers Trust
Company dated June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1 Statement,
Registration No. 33-65171, and Certificate of
Admendment of the Organization Certificate of Bankers
Trust Company dated March 21, 1996, copy attached.
Exhibit 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration No. 33-21047.
Exhibit 3 - Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement, Registration
No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust Company, dated as
amended on October 19, 1995. - Incorporated herein by
reference to Exhibit 4 filed with Form T-1 Statement,
Registration No. 33-65171.
-2-
<PAGE>
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference
to Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
Exhibit 7 - A copy of the latest report of condition of Bankers
Trust Company dated as of July 31, 1996.
Exhibit 8 - Not Applicable.
Exhibit 9 - Not Applicable.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 18th day
of September, 1996.
BANKERS TRUST COMPANY
By: /s/ Terence Rawlins
-------------------------------
Terence Rawlins
Assistant Treasurer
-4-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 18th day
of September, 1996.
BANKERS TRUST COMPANY
By: /s/ Terence Rawlins
-------------------
Terence Rawlins
Assistant Treasurer
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: 0 0 6 2 3
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks June 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
-----------------
C400
-----------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS / / / / / / / / / / / / / /
1. Cash and balances due from depository institutions (from Schedule RC-A): / / / / / / / / / / / / / / / /
a. Noninterest-bearing balances and currency and coin(1)..................... 0081 1,631,000 1.a.
b. Interest-bearing balances(2).............................................. 0071 2,066,000 1.b.
2. Securities: / / / / / / / / / / / / / /
a. Held-to-maturity securities (from Schedule RC-B, column A)................ 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).............. 1773 3,761,000 2.b.
3. Federal funds sold and securities purchased under agreements to resell in / / / / / / / / / / / / / /
domestic offices of the bank and of its Edge and Agreement subsidiaries, and / / / / / / / / / / / / / /
in IBFs:
a. Federal funds sold........................................................ 0276 5,162,000 3.a.
b. Securities purchased under agreements to resell........................... 0277 4,192,000 3.b.
4. Loans and lease financing receivables: / / / / / / / / / / / / / /
a. Loans and leases, net of unearned income (from
Schedule RC-C) RCFD 2122 24,849,000 / / / / / / / / / / / / / / 4.a.
b. LESS: Allowance for loan and lease losses.......... RCFD 3123 923,000 / / / / / / / / / / / / / / 4.b.
c. LESS: Allocated transfer risk reserve.............. RCFD 3128 0 / / / / / / / / / / / / / / 4.c.
d. Loans and leases, net of unearned income, / / / / / / / / / / / / / /
allowance, and reserve (item 4.a minus 4.b and 4.c)....................... 2125 23,926,000 4.d.
5. Assets held in trading accounts............................................... 3545 33,052,000 5.
6. Premises and fixed assets (including capitalized leases)...................... 2145 858,000 6.
7. Other real estate owned (from Schedule RC-M).................................. 2150 216,000 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M).......................................................... 2130 271,000 8.
9. Customers' liability to this bank on acceptances outstanding.................. 2155 572,000 9.
10. Intangible assets (from Schedule RC-M)........................................ 2143 18,000 10.
11. Other assets (from Schedule RC-F)............................................. 2160 7,612,000 11.
12. Total assets (sum of items 1 through 11)...................................... 2170 83,337,000 12.
-----------------------------------
</TABLE>
__________________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: 0 0 6 2 3
</TABLE>
Schedule RC--Continued
<TABLE>
<CAPTION>
-----------------------------------------
Dollar Amounts in Thousands / / / / / / / / Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES / / / / / / / / / / / / / / / /
13. Deposits: / / / / / / / / / / / / / / / /
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part I) RCON 2200 9,040,000 13.a.
(1) Noninterest-bearing(1)......................RCON 6631 3,569,000 / / / / / / / / / / / / / / 13.a.(1)
(2) Interest-bearing............................RCON 6636 5,471,000 / / / / / / / / / / / / / / 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from / / / / / / / / / / / / / / / /
Schedule RC-E part II) RCFN 2200 19,648,000 13.b.
(1) Noninterest-bearing.........................RCFN 6631 494,000 / / / / / / / / / / / / / / 13.b.(1)
(2) Interest-bearing............................RCFN 6636 19,154,000 / / / / / / / / / / / / / / / / 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBFs: / / / / / / / / / / / / / / / /
a. Federal funds purchased........................................... RCFD 0278 2,564,000 14.a.
b. Securities sold under agreements to repurchase.................... RCFD 0279 790,000 14.b.
15. a. Demand notes issued to the U.S. Treasury.......................... RCON 2840 0 15.a.
b. Trading liabilities............................................... RCFD 3548 18,177,000 15.b.
16. Other borrowed money: / / / / / / / / / / / / / / / /
a. With original maturity of one year or less........................ RCFD 2332 16,421,000 16.a.
b. With original maturity of more than one year...................... RCFD 2333 3,388,000 16.b.
17. Mortgage indebtedness and obligations under capitalized leases....... RCFD 2910 31,000 17.
18. Bank's liability on acceptances executed and outstanding............. RCFD 2920 572,000 18.
19. Subordinated notes and debentures.................................... RCFD 3200 1,227,000 19.
20. Other liabilities (from Schedule RC-G)............................... RCFD 2930 6,911,000 20.
21. Total liabilities (sum of items 13 through 20)....................... RCFD 2948 78,769,000 21.
/ / / / / / / / / / / / / / / /
22. Limited-life preferred stock and related surplus..................... RCFD 3282 0 22.
EQUITY CAPITAL / / / / / / / / / / / / / / / /
23. Perpetual preferred stock and related surplus........................ RCFD 3838 500,000 23.
24. Common stock......................................................... RCFD 3230 1,002,000 24.
25. Surplus (exclude all surplus related to preferred stock)............. RCFD 3839 528,000 25.
26. a. Undivided profits and capital reserves............................ RCFD 3632 2,915,000 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities........................................................ RCFD 8434 ( 5,000) 26.b.
27. Cumulative foreign currency translation adjustments.................. RCFD 3284 ( 372,000) 27.
28. Total equity capital (sum of items 23 through 27).................... RCFD 3210 4,568,000 28.
29. Total liabilities, limited-life preferred stock, and equity capital / / / / / / / / / / / / / / / /
(sum of items 21, 22, and 28)........................................ RCFD 3300 83,337,000 29.
-----------------------------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that Number
best describes the most comprehensive level of auditing work -----------
performed the bank by independent external auditors as
of any date during 1995............................................... RCFD 6724 2 M.1
-------------------------------------------
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by
other external auditors (may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
State of New York,
Banking Department
I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY Under Section
8005 of the Banking Law," dated March 20, 1996, providing for an increase in
authorized capital stock from $1,351,666,670 consisting of 85,166,667 shares
with a par value of $10 each designated as Common Stock and 500 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$1,501,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
Witness, my hand and official seal of the Banking Department at the City of New
York,
this 21st day of March in the Year of our Lord
--------- --------
one thousand nine hundred and ninety-six.
Peter M. Philbin
------------------------------
Deputy Superintendent of Banks
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
_____________________________
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Three Hundred Fifty One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,351,666,670), divided into
Eighty-Five Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-
Seven (85,166,667) shares with a par value of $10 each designated as Common
Stock and 500 shares with a par value of One Million Dollars ($1,000,000)
each designated as Series Preferred Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Five Hundred One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,501,666,670), divided into One
Hundred Million, One Hundred Sixty Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 500 shares with a par value of One Million Dollars ($1,000,000)
each designated as Series Preferred Stock."
<PAGE>
6. The foregoing amendment of the organization certificate was authorized
by unanimous written consent signed by the holder of all outstanding shares
entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this 20th
day of March, 1996.
James T. Byrne, Jr.
----------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
----------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant
Secretary of Bankers Trust Company, the corporation described in the foregoing
certificate; that she has read the foregoing certificate and knows the contents
thereof, and that the statements herein contained are true.
Lea Lahtinen
----------------------
Lea Lahtinen
Sworn to before me this 20th day
of March, 1996.
Sandra L. West
- --------------------------
Notary Public
SANDRA L. WEST Counterpart filed in the
Notary Public State of New York Office of the Superintendent of
No. 31-4942101 Banks, State of New York,
Qualified in New York County This 21st day of March, 1996
Commission Expires September 19, 1996
