<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 25, 1997
PREMIERE TECHNOLOGIES, INC.
(Exact name of registrant
as specified in its charter)
Georgia 33-80547 59-3074176
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3399 Peachtree Road, N.E.
The Lenox Building
Suite 400, Atlanta, Georgia 30326
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (404) 262-8400
N/A
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(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS.
Exhibit
No. Description
------- -----------
4.1 Indenture, dated as of June 15, 1997, between Premiere
Technologies, Inc. and IBJ Schroder Bank & Trust Company,
as Trustee.
4.2 Form of Global Convertible Subordinated Note due 2004.
4.3 Registration Rights Agreement, dated as of June 15, 1997, by and
among Premiere Technologies, Inc. and Robertson, Stephens &
Company LLC, Alex. Brown & Sons Incorporated and Donaldson,
Lufkin & Jenrette Securities Corporation.
10.1 Purchase Agreement, dated June 25, 1997, by and among Premiere
Technologies, Inc., Robertson, Stephens & Company LLC, Alex.
Brown & Sons Incorporated and Donaldson, Lufkin and Jenrette
Securities Corporation.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
On June 26, 1997, Premiere Technologies, Inc. (the "Company") issued a
press release announcing that it would sell $150 million in 5 3/4 percent
convertible notes due July 1, 2004 in a Rule 144A offering. The transaction
closed on June 30, 1997, and on July 1, 1997, the Company filed a Current Report
on Form 8-K in connection therewith. On July 25, 1997, the initial purchasers
exercised an option to purchase an additional $22.5 million of notes to cover
over-allotments. The closing of this transaction took place on July 30, 1997.
(a) On June 25, 1997, the Company sold $150,000,000 of 5-3/4% convertible
subordinated notes due 2004 (the "Notes"). On July 25, 1997, the
Company sold an additional $22,500,000 of 5-3/4% convertible
subordinated notes due 2004 (the "Option Notes") pursuant to the
exercise of an over-allotment option.
(b) The initial purchasers of the Notes and the Option Notes were
Robertson, Stephens & Company LLC, Alex. Brown & Sons Incorporated and
Donaldson, Lufkin & Jenrette Securities Corporation (the "Initial
Purchasers").
(c) The total offering price of the Notes was $150,000,000 with a discount
to the Initial Purchasers of 3.0%, and the total offering price of the
Option Notes was $22,500,000 with a discount to the Initial Purchasers
of 3.0%.
(d) The Company relied upon the exemption set forth in Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"), for the sale
of the Notes and the Option Notes to the Initial Purchasers. The
Initial Purchasers intend to resell the Notes and the Option Notes in
the United States to qualified institutional buyers under Rule 144A
under the Securities Act and to a limited number of other institutional
"accredited investors" as defined in Rule 501 of the Securities Act and
outside the United States to non-U.S. persons in reliance upon
Regulation S under the Securities Act.
(e) The Notes and the Option Notes, unless previously redeemed or
repurchased, are convertible at the option of the holder at any time
through the close of business on the final maturity date into shares of
Common Stock at a conversion price of $33.00 per share, subject to
adjustment in certain events.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
--------------------
Patrick G. Jones
Senior Vice President of Finance and Legal
Dated: August 5, 1997
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Indenture, dated as of June 15, 1997, between Premiere
Technologies, Inc. and IBJ Schroder Bank & Trust Company,
as Trustee.
4.2 Form of Global Convertible Subordinated Note due 2004.
4.3 Registration Rights Agreement, dated as of June 15, 1997, by and
among Premiere Technologies, Inc. and Robertson, Stephens &
Company LLC, Alex. Brown & Sons Incorporated and Donaldson,
Lufkin & Jenrette Securities Corporation.
10.1 Purchase Agreement, dated June 25, 1997, by and among Premiere
Technologies, Inc., Robertson, Stephens & Company LLC, Alex.
Brown & Sons Incorporated and Donaldson, Lufkin and Jenrette
Securities Corporation.
<PAGE>
EXHIBIT 4.1
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PREMIERE TECHNOLOGIES, INC.
IBJ SCHRODER BANK & TRUST COMPANY
as Trustee
INDENTURE
Dated as of June 15, 1997
5 3/4% Convertible Subordinated Notes due 2004
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................... 1
Section 1.1 Definitions............................................. 1
ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF NOTES.................................................... 8
Section 2.1 Designation, Amount and Issue of Notes.................. 8
Section 2.2 Form of Notes........................................... 8
Section 2.3 Date and Denomination of Notes; Payments of Interest.... 9
Section 2.4 Execution of Notes...................................... 10
Section 2.5 Exchange and Registration of Transfer of Notes;
Restrictions on Transfer; Depositary.................... 11
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes.............. 20
Section 2.7 Temporary Notes......................................... 21
Section 2.8 Cancellation of Notes Paid, Etc......................... 22
ARTICLE III REDEMPTION OF NOTES.......................................... 22
Section 3.1 Redemption Prices....................................... 22
Section 3.2 Notice of Redemption; Selection of Notes................ 22
Section 3.3 Payment of Notes Called for Redemption.................. 24
Section 3.4 Conversion Arrangement on Call for Redemption........... 24
ARTICLE IV SUBORDINATION OF NOTES........................................ 25
Section 4.1 Agreement of Subordination.............................. 25
Section 4.2 Payments to Noteholders................................. 26
Section 4.3 Bankruptcy and Dissolution, Etc......................... 27
Section 4.4 Subrogation of Notes.................................... 28
Section 4.5 Authorization by Noteholders............................ 30
Section 4.6 Notice to Trustee....................................... 30
Section 4.7 Trustee's Relation to Senior Indebtedness............... 31
Section 4.8 No Impairment of Subordination.......................... 31
Section 4.9 Certain Conversions Deemed Payment...................... 31
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY............................ 32
Section 5.1 Payment of Principal, Premium and Interest.............. 32
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TABLE OF CONTENTS
(CONTINUED)
Page
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Section 5.2 Maintenance of Office or Agency......................... 32
Section 5.3 Appointments to Fill Vacancies in Trustee's Office...... 33
Section 5.4 Provisions as to Paying Agent........................... 33
Section 5.5 Existence............................................... 34
Section 5.6 Rule 144A Information Requirement....................... 34
Section 5.7 Stay, Extension and Usury Laws.......................... 34
Section 5.8 Compliance Certificate.................................. 35
Section 5.9 Further Instruments and Acts............................ 35
ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE...................................................... 35
Section 6.1 Noteholders' Lists...................................... 35
Section 6.2 Preservation and Disclosure of Lists.................... 35
Section 6.3 Reports by Trustee...................................... 36
Section 6.4 Reports by Company...................................... 36
ARTICLE VII DEFAULTS AND REMEDIES........................................ 37
Section 7.1 Events of Default...................................... 37
Section 7.2 Payments of Notes on Default; Suit Therefor............ 39
Section 7.3 Application of Monies Collected by Trustee............. 41
Section 7.4 Proceedings by Noteholder.............................. 42
Section 7.5 Proceedings by Trustee................................. 43
Section 7.6 Remedies Cumulative and Continuing..................... 43
Section 7.7 Direction of Proceedings and Waiver of Defaults
by Majority of Noteholders............................. 43
Section 7.8 Notice of Defaults..................................... 44
Section 7.9 Undertaking to Pay Costs............................... 44
Section 7.10 Delay or Omission Not Waiver........................... 44
ARTICLE VIII CONCERNING THE TRUSTEE...................................... 45
Section 8.1 Duties and Responsibilities of Trustee................. 45
Section 8.2 Reliance on Documents, Opinions, Etc................... 46
Section 8.3 No Responsibility for Recitals, Etc.................... 47
Section 8.4 Trustee, Paying Agents, Conversion Agents
or Registrar May Own Notes............................. 47
Section 8.5 Monies to Be Held in Trust............................. 47
Section 8.6 Compensation and Expenses of Trustee................... 47
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TABLE OF CONTENTS
(CONTINUED)
Page
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Section 8.7 Officers' Certificate as Evidence...................... 48
Section 8.8 Conflicting Interests of Trustee....................... 48
Section 8.9 Eligibility of Trustee................................. 49
Section 8.10 Resignation or Removal of Trustee...................... 49
Section 8.11 Acceptance by Successor Trustee........................ 50
Section 8.12 Succession by Merger, Etc.............................. 51
Section 8.13 Limitation on Rights of Trustee as Creditor............ 51
ARTICLE IX CONCERNING THE NOTEHOLDERS.................................... 51
Section 9.1 Action by Noteholders.................................. 51
Section 9.2 Proof of Execution by Noteholders...................... 52
Section 9.3 Who Are Deemed Absolute Owners......................... 52
Section 9.4 Company-Owned Notes Disregarded........................ 52
Section 9.5 Revocation of Consents; Future Holders Bound........... 53
ARTICLE X NOTEHOLDERS' MEETINGS.......................................... 53
Section 10.1 Purpose of Meetings.................................... 53
Section 10.2 Call of Meetings by Trustee............................ 54
Section 10.3 Call of Meetings by Company or Noteholders............. 54
Section 10.4 Qualifications for Voting.............................. 54
Section 10.5 Regulations............................................ 54
Section 10.6 Voting................................................. 55
Section 10.7 No Delay of Rights by Meeting.......................... 55
ARTICLE XI SUPPLEMENTAL INDENTURES....................................... 56
Section 11.1 Supplemental Indentures Without Consent
of Noteholders......................................... 56
Section 11.2 Supplemental Indentures with Consent of Noteholders.... 57
Section 11.3 Effect of Supplemental Indentures...................... 58
Section 11.4 Notation on Notes...................................... 58
Section 11.5 Evidence of Compliance of Supplemental Indenture
to Be Furnished Trustee................................ 58
ARTICLE XII CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE............ 59
Section 12.1 Company May Consolidate, Etc. on Certain Terms......... 59
Section 12.2 Successor Corporation to Be Substituted................ 59
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TABLE OF CONTENTS
(CONTINUED)
Page
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Section 12.3 Opinion of Counsel to Be Given Trustee................. 60
ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE..................... 60
Section 13.1 Discharge of Indenture................................. 60
Section 13.2 Deposited Monies to Be Held in Trust by Trustee........ 61
Section 13.3 Paying Agent to Repay Monies Held...................... 61
Section 13.4 Return of Unclaimed Monies............................. 61
Section 13.5 Reinstatement.......................................... 61
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS....................................... 62
Section 14.1 Indenture and Notes Solely Corporate Obligations....... 62
ARTICLE XV CONVERSION OF NOTES........................................... 62
Section 15.1 Right to Convert....................................... 62
Section 15.2 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for
Interest or Dividends.................................. 63
Section 15.3 Cash Payments in Lieu of Fractional Shares............. 64
Section 15.4 Conversion Price....................................... 65
Section 15.5 Adjustment of Conversion Price......................... 65
Section 15.6 Effect of Reclassification, Consolidation,
Merger or Sale......................................... 75
Section 15.7 Taxes on Shares Issued................................. 76
Section 15.8 Reservation of Shares; Shares to Be Fully Paid;
Listing of Common Stock................................ 76
Section 15.9 Responsibility of Trustee.............................. 77
Section 15.10 Notice to Holders Prior to Certain Actions............. 78
ARTICLE XVI REPURCHASE UPON A DESIGNATED EVENT........................... 79
Section 16.1 Repurchase Right....................................... 79
Section 16.2 Notices; Method of Exercising Repurchase Right, Etc.... 79
Section 16.3 Conditions to the Company's Election to Pay
the Repurchase Price in Common Stock................... 81
Section 16.4 Certain Definitions.................................... 82
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TABLE OF CONTENTS
(CONTINUED)
Page
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ARTICLE XVII MISCELLANEOUS PROVISIONS.................................... 84
Section 17.1 Provisions Binding on Company's Successors............. 84
Section 17.2 Official Acts by Successor Corporation................. 84
Section 17.3 Addresses for Notices, Etc............................. 84
Section 17.4 Governing Law.......................................... 84
Section 17.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee................................ 85
Section 17.6 Legal Holidays......................................... 85
Section 17.7 No Security Interest Created........................... 85
Section 17.8 Trust Indenture Act.................................... 85
Section 17.9 Benefits of Indenture.................................. 86
Section 17.10 Table of Contents, Headings, Etc....................... 86
Section 17.11 Authenticating Agent................................... 86
Section 17.12 Execution in Counterparts.............................. 87
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<PAGE>
INDENTURE dated as of June 15, 1997 between Premiere Technologies, Inc., a
Georgia corporation (hereinafter sometimes called the "Company", as more fully
set forth in Section 1.1), and IBJ Schroder Bank & Trust Company, a New York
banking corporation (hereinafter sometimes called the "Trustee", as more fully
set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 5 3/4% Convertible Subordinated Notes due 2004 (hereinafter
sometimes called the "Notes"), in an aggregate principal amount not to exceed
$172,500,000 and, to provide the terms and conditions upon which the Notes are
to be authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes,
a form of assignment, a form of option to elect repayment upon a Designated
Event, a form of conversion notice and a certificate of transfer to be borne by
the Notes are to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders thereof,
the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The terms defined in this Section 1.1 (except
-----------
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture, which are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder," and words of
<PAGE>
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other Subdivision. The terms defined in this Article include
the plural as well as the singular.
Affiliate: The term "Affiliate" of any specified person shall mean 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 or cause the direction of 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.
Board of Directors: The term "Board of Directors" shall mean the Board of
-------------------
Directors of the Company or a committee of such Board duly authorized to act for
it hereunder.
Board Resolution: The term "Board Resolution" means a copy of a resolution
----------------
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors, or duly authorized committee thereof (to
the extent permitted by applicable law), and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
Business Day: The term "Business Day" means each Monday, Tuesday,
-------------
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York, San Francisco, California, or the city in
which the Corporate Trust Office is located are authorized or obligated by law
or executive order to close or be closed.
close of business: The term "close of business" means 5 p.m. (New York
------------------
City time).
Commission: The term "Commission" shall mean the Securities and Exchange
-----------
Commission.
Common Stock: The term "Common Stock" shall mean any stock of any class of
-------------
the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the Company.
Subject to the provisions of Section 15.6, however, shares issuable on
conversion of Notes shall include only shares of the class designated as common
stock of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company; provided
--------
that if at any time there shall be more than one such resulting class, 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.
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Company: The term "Company" shall mean Premiere Technologies, Inc., a
-------
Georgia corporation, and subject to the provisions of Article XII, shall include
its successors and assigns.
Conversion Price: The term "Conversion Price" shall have the meaning
-----------------
specified in Section 15.4.
Corporate Trust Office: The term "Corporate Trust Office," or other
----------------------
similar term, shall mean the office of the Trustee at which at any particular
time its corporate trust business shall be principally administered, which
office is, at the date as of which this Indenture is dated, located at 1 State
Street, New York, New York 10004, Attention: Corporate Finance Trust Services .
Custodian: The term "Custodian" means IBJ Schroder Bank & Trust Company,
----------
as custodian with respect to the Notes in global form, or any successor entity
thereto.
default: The term "default" shall mean any event that is, or after notice
-------
or passage of time, or both, would be, an Event of Default.
Depositary: The term "Depositary" means, with respect to the Notes
----------
issuable or issued in whole or in part in global form, the person specified in
Section 2.5(d) as the Depositary with respect to such Notes, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
Designated Event: The term "Designated Event" shall have the meaning
----------------
specified in Section 16.3.
Designated Senior Indebtedness: The term "Designated Senior Indebtedness"
-------------------------------
means all Senior Indebtedness with respect to which the instrument creating or
evidencing the same or the assumption or guarantee thereof (or related
agreements or documents to which the Company is a party) expressly provides that
such Senior Indebtedness shall be "Designated Senior Indebtedness" for purposes
of this Indenture (provided that such instrument, agreement or other document
may place limitations and conditions on the right of such Senior Indebtedness to
exercise the rights of Designated Senior Indebtedness).
Event of Default: The term "Event of Default" shall mean any event
----------------
specified in Section 7.1, continued for the period of time, if any, and after
the giving of notice, if any, therein designated.
Exchange Act: The term "Exchange Act" means the Securities Exchange Act of
-------------
1934, as amended, and the rules and regulations promulgated thereunder.
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Indebtedness: The term "Indebtedness" shall mean any obligations (other
------------
than non-recourse obligations) of, guaranteed or assumed by, the Company or any
Significant Subsidiary for borrowed money.
Indenture: The term "Indenture" shall mean this instrument as originally
----------
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
Initial Purchasers: The term "Initial Purchasers" means Robertson,
------------------
Stephens & Company LLC, Alex. Brown & Sons Incorporated and Donaldson, Lufkin &
Jenrette Securities Corporation.
Liquidated Damages: The term "Liquidated Damages" means all liquidated
------------------
damages then owing pursuant to Section 3 of the Registration Rights Agreement.
Note or Notes: The terms "Note" or "Notes" shall mean any Note or Notes,
--------------
as the case may be, authenticated and delivered under this Indenture.
Noteholder; holder: The terms "Noteholder" or "holder" as applied to any
------------------
Note, or other similar terms (but excluding the term "beneficial holder"), shall
mean any person in whose name at the time a particular Note is registered on the
Note register.
Note register: The term "Note register" shall have the meaning specified
--------------
in Section 2.5.
Officers' Certificate: The term "Officers' Certificate", when used with
---------------------
respect to the Company, shall mean a certificate signed by (a) one of the
President, the Chief Executive Officer, Executive or Senior Vice President or
any Vice President (whether or not designated by a number or numbers or word
added before or after the title "Vice President", but excluding any Assistant
Vice President), and (b) by one of the Treasurer or any Assistant Treasurer,
Secretary or any Assistant Secretary or Controller of the Company, which is
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 17.5 if and to the extent required by the provisions of
such Section.
Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in
------------------
writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee, which is delivered to the
Trustee. Each such opinion shall include the statements provided for in Section
17.5 if and to the extent required by the provisions of such Section.
Outstanding: The term "outstanding," when used with reference to Notes,
------------
shall, subject to the provisions of Section 9.4, mean, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except
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(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for the payment, or redemption of
which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the
Company shall act as its own paying agent); provided that if such Notes
--------
are to be redeemed, as the case may be, prior to the maturity thereof,
notice of such redemption shall have been given as provided in Section
3.2, or provision satisfactory to the Trustee shall have been made for
giving such notice;
(c) Notes in lieu of which, or in substitution for which, other
Notes shall have been authenticated and delivered pursuant to the terms
of Section 2.6 unless proof satisfactory to the Trustee is presented
that any such Notes are held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article XV and
Notes deemed not outstanding pursuant to Section 3.2.
person: The term "person" shall mean an individual, a corporation, a
------
limited liability company, 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.
PORTAL Market: The term "PORTAL Market" shall mean the Private Offerings,
--------------
Resales and Trading through Automated Linkages Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
Predecessor Note: The term "Predecessor Note" of any particular Note shall
----------------
mean every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this definition, any
Note authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
QIB: The term "QIB" shall mean a "qualified institutional buyer" as
---
defined in Rule 144A.
Registration Rights Agreement: The term "Registration Rights Agreement"
-----------------------------
means that certain Registration Rights Agreement, dated as of June 15, 1997,
between the Company and the Initial Purchasers.
Regulation S: The term "Regulation S" shall mean Regulation S as
------------
promulgated under the Securities Act.
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Repurchase Price: The term "Repurchase Price" has the meaning specified in
----------------
Section 16.1.
Responsible Officer: The term "Responsible Officer", when used with
--------------------
respect to the Trustee, shall mean an officer of the Trustee in the Corporate
Trust Office assigned and duly authorized by the Trustee to administer its
obligations under this Indenture.
Restricted Securities: The term "Restricted Securities" has the meaning
---------------------
specified in Section 2.5(d).
Rule 144A: The term "Rule 144A" shall mean Rule 144A as promulgated under
----------
the Securities Act.
Securities Act: The term "Securities Act" means the Securities Act of
---------------
1933, as amended, and the rules and regulations promulgated thereunder.
Senior Indebtedness: The term "Senior Indebtedness" means the principal
-------------------
of, premium, if any, interest on (including any interest accruing after the
filing of a petition by or against the Company under any bankruptcy law, whether
or not allowed as a claim after such filing in any proceeding under such
bankruptcy law) and any other payment (including all fees, indemnities and
expense reimbursements) due pursuant to, any of the following, whether
outstanding on the date of this Indenture or thereafter incurred or created:
(a) All indebtedness of the Company for money borrowed or evidenced by
notes, debentures, bonds or other securities (including, but not limited
to, those which are convertible or exchangeable for securities of the
Company) and all obligations of the Company constituting the deferred
purchase price of property or assets;
(b) All indebtedness and other obligations of the Company due and owing
with respect to letters of credit (including, but not limited to,
reimbursement obligations with respect thereto);
(c) All indebtedness or other obligations of the Company due and owing
with respect to interest rate and currency swap agreements, cap, floor and
collar agreements, currency spot and forward contracts and other similar
agreements and arrangements;
(d) All obligations consisting of commitment or standby fees due and
payable to lending institutions with respect to credit facilities or
letters of credit available to the Company;
(e) All obligations of the Company under leases required or permitted
to be capitalized under generally accepted accounting principles;
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<PAGE>
(f) All indebtedness or obligations of others of the kinds described in
any of the preceding clauses (a), (b), (c), (d) or (e) assumed by or
guaranteed in any manner by the Company or in effect guaranteed (directly
or indirectly) by the Company through an agreement to purchase, contingent
or otherwise, and all obligations of the Company under any such guarantee
or other arrangements; and
(g) All renewals, extensions, refundings, deferrals, amendments or
modifications of indebtedness or obligations of the kinds described in any
of the preceding clauses (a), (b), (c), (d), (e) or (f);
unless in the case of any particular indebtedness, obligation, renewal,
extension, refunding, amendment, modification or supplement, the instrument or
other document creating or evidencing the same or the assumption or guarantee of
the same expressly provides that such indebtedness, obligation, renewal,
extension, refunding, amendment, modification or supplement is subordinate to,
or is not superior to, or pari passu with, the Notes; provided that Senior
---------- --------
Indebtedness shall not include (i) any indebtedness of any kind of the Company
to any subsidiary of the Company, a majority of the voting stock of which is
owned, directly or indirectly, by the Company, (ii) indebtedness for trade
payables or constituting the deferred purchase price of assets, property or
services incurred in the ordinary course of business, or (iii) the Notes.
Significant Subsidiary: The term "Significant Subsidiary" means, with
----------------------
respect to any person, a Subsidiary of such person that would constitute a
"significant subsidiary" as such term is defined under Rule 1-02 of Regulation
S-X of the Securities and Exchange Commission; provided that clause (3) of such
definition shall not apply during any fiscal period prior to the fiscal period
ending December 31, 1997.
Subsidiary: The term "Subsidiary" means a corporation more than 50% of the
----------
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
Trading Day: The term "Trading Day" has the meaning specified in Section
------------
15.5(h)(5).
Trust Indenture Act: The term "Trust Indenture Act" shall mean the Trust
-------------------
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture, except as provided in Sections 11.3 and 15.6; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the extent required
by such amendment, the Trust Indenture Act of 1939 as so amended.
Trustee: The term "Trustee" shall mean IBJ Schroder Bank & Trust Company,
--------
and its successors and any corporation resulting from or surviving any
consolidation or merger to which
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it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.
The definitions of certain other terms are as specified in Article XV and
Article XVI.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 Designation, Amount and Issue of Notes. The Notes shall be
--------------------------------------
designated as "5 3/4% Convertible Subordinated Notes due 2004". Notes not to
exceed the aggregate principal amount of $150,000,000 (or $172,500,000 if the
over-allotment option set forth in Section 7 of the Purchase Agreement dated
June 25, 1997 (as amended from time to time by the parties thereto) by and
between the Company and the Initial Purchasers is exercised in full) (except
pursuant to Sections 2.5, 2.6, 3.3, 15.2 and 16.2) upon the execution of this
Indenture, or from time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes upon the written order of the Company,
signed by the Company's (a) President, Executive or Senior Vice President or any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and (b) Treasurer or
Assistant Treasurer or its Secretary or any Assistant Secretary, without any
further action by the Company hereunder.
Section 2.2 Form of Notes. The Notes and the Trustee's certificate of
-------------
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed or designated for issuance, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon
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instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any (including
any redemption price), on any Note in global form shall be made to the holder of
such Note.
The terms and provisions contained in the form of Note attached as Exhibit
A hereto shall constitute, and is hereby expressly made, a part of this
Indenture and to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.3 Date and Denomination of Notes; Payments of Interest. The
----------------------------------------------------
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication, shall bear interest from the applicable
date and accrued interest shall be payable semiannually on each January 1 and
July 1, commencing January 1, 1998 as specified on the face of the form of Note,
attached as Exhibit A hereto.
The person in whose name any Note (or its Predecessor Note) is registered
at the close of business on any record date with respect to any interest payment
date (including any Note that is converted after the record date and on or
before the interest payment date) shall be entitled to receive the interest
payable on such interest payment date notwithstanding the cancellation of such
Note upon any transfer, exchange or conversion subsequent to the record date and
on or prior to such interest payment date. Interest may, at the option of the
Company, be paid by check mailed to the address of such person on the registry
kept for such purposes; provided that, with respect to any holder of Notes with
an aggregate principal amount equal to or in excess of $5,000,000, at the
request of such holder in writing to the Company, interest on such holder's
Notes shall be paid by wire transfer in immediately available funds in
accordance with the wire transfer instruction supplied by such holder from time
to time to the Trustee and paying agent (if different from Trustee) at least two
days prior to the applicable record date. The term "record date" with respect
to any interest payment date shall mean the December 15 or June 15 preceding
said January 1 or July 1.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months compounded semi-annually.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any said January 1 or July 1 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder; and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a special record date for the
payment of such Defaulted
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<PAGE>
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest to be paid
on each Note and the date of the payment (which shall be not less than
twenty-five (25) days after the receipt by the Trustee of such notice, unless
the Trustee shall consent to an earlier date), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest which shall be not more than fifteen
(15) days and not less than ten (10) days prior to the date of the proposed
payment and not less than ten (10) days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first-class
postage prepaid, to each Noteholder as of such special record date at his
address as it appears in the Note register, not less than ten (10) days prior
to such special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been so mailed, such
Defaulted Interest shall be paid to the persons in whose names the Notes (or
their respective Predecessor Notes) were registered at the close of business
on such special record date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, 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.
Section 2.4 Execution of Notes. The Notes shall be signed in the name
------------------
and on behalf of the Company by the facsimile signature of its President, its
Chief Executive Officer any of its Executive or Senior Vice Presidents, or any
of its Vice Presidents (whether or not designated by a number or numbers or word
or words added before or after the title "Vice President") and attested by the
facsimile signature of its Secretary or any of its Assistant Secretaries (which
may be printed, engraved or otherwise reproduced thereon, by facsimile or
otherwise). Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 17.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be
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<PAGE>
conclusive evidence that the Note so authenticated has been duly authenticated
and delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.5 Exchange and Registration of Transfer of Notes; Restrictions
on Transfer; Depositary.
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(a) The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency of the Company designated pursuant to Section 5.2 being herein
sometimes collectively referred to as the "Note register") in which,
subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. Such
register shall be in written form or in any form capable of being converted
into written form within a reasonable period of time. The Trustee is hereby
appointed "Note registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. The Company may appoint one or more
co-registrars in accordance with Section 5.2.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for
such transfer set forth in this Section 2.5, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency. Whenever any Notes are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Noteholder making the
exchange is entitled to receive, bearing registration numbers not
contemporaneously outstanding.
All Notes presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee, the Note
registrar or any co-registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in
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<PAGE>
form satisfactory to the Company and duly executed, by the Noteholder
thereof or his attorney-in-fact duly authorized in writing.
No service charge shall be charged to the Noteholder for any exchange
or registration of transfer of Notes, but the Company may require payment
of a sum sufficient to cover any tax, assessments or other governmental
charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Note registrar or any co-
registrar shall be required to exchange or register a transfer of (a) any
Notes for a period of fifteen (15) days next preceding any selection of
Notes to be redeemed or (b) any Notes called for redemption or, if a
portion of any Note is selected or called for redemption, such portion
thereof selected or called for redemption or (c) any Notes surrendered for
conversion or, if a portion of any Note is surrendered for conversion, such
portion thereof surrendered for conversion.
All Notes issued upon any transfer or exchange of Notes in accordance
with this Indenture shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture as the Notes surrendered upon such registration of transfer or
exchange.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary, unless otherwise required by law, all Notes to be traded on
the PORTAL Market or to a person who is not a U.S. Person (as defined in
Regulation S) who is acquiring the Note in an offshore transaction (a "Non-
U.S. Person") in accordance with Regulation S shall be represented by a
Note in global form registered in the name of the Depositary or the nominee
of the Depositary. The transfer and exchange of beneficial interests in
such Note in global form, which does not involve the issuance of a
definitive Note, shall be effected through the Depositary (but not the
Trustee or the Custodian) in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the
Depositary therefor.
At any time at the request of the beneficial holder of an interest in a
Note in global form, such beneficial holder shall be entitled to obtain a
definitive Note upon written request to the Trustee and the Custodian in
accordance with the standing instructions and procedures existing between
the Depositary and the Custodian for the issuance thereof. Upon receipt of
any such request, the Trustee or the Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Custodian, the aggregate
principal amount of the Note in global form to be reduced by the principal
amount of the definitive Note issued upon such request to such beneficial
holder and, following such reduction, the Company will execute and the
Trustee will authenticate and deliver to such beneficial holder (or its
nominee) a definitive Note or Notes in the appropriate aggregate principal
amount in the
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name of such beneficial holder (or its nominee) and bearing such
restrictive legends as may be required by this Indenture.
Any transfer of a beneficial interest in a Note in global form which
cannot be effected through book-entry settlement must be effected by the
delivery to the transferee (or its nominee) of a definitive Note or Notes
registered in the name of the transferee (or its nominee) on the books
maintained by the Trustee in accordance with the transfer restrictions set
forth herein. With respect to any such transfer, the Trustee or the
Custodian, at the direction of the Trustee, will cause, in accordance with
the standing instructions and procedures existing between the Depositary
and the Custodian, the aggregate principal amount of the Note in global
form to be reduced by the principal amount of the beneficial interest in
the Note in global form being transferred and, following such reduction,
the Company will execute and the Trustee will authenticate and deliver to
the transferee (or such transferee's nominee, as the case may be), a Note
or Notes in the appropriate aggregate principal amount in the name of such
transferee (or its nominee) and bearing such restrictive legends as may be
required by this Indenture.
(c) So long as the Notes are eligible for book-entry settlement, unless
otherwise required by law, upon any transfer of a definitive Note to a QIB
in accordance with Rule 144A or a Non-U.S. Person in accordance with
Regulation S, unless otherwise requested by the transferor, and upon
receipt of the definitive Note or Notes being so transferred, together with
a certification from the transferor that the transferee is a QIB or a Non-
U.S. Person (or other evidence satisfactory to the Trustee), the Trustee
shall make or direct the Custodian to make, an endorsement on the Note in
global form to reflect an increase in the aggregate principal amount of the
Notes represented by the Note in global form by the principal amount of the
Note being transferred to the QIB or the Non-U.S. Person, the Trustee shall
cancel such definitive Note or Notes and cause, or direct the Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Custodian, the aggregate principal amount of
Notes represented by the Note in global form to be increased accordingly;
provided that no definitive Note, or portion thereof, in respect of which
--------
the Company or an Affiliate of the Company held any beneficial interest
shall be included in such Note in global form until such definitive Note is
freely tradable in accordance with Rule 144(k); provided further that the
-------- -------
Trustee shall issue Notes in definitive form upon any transfer of a
beneficial interest in the Note in global form to the Company or any
Affiliate of the Company.
Any Note in global form may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the Custodian, the
Depositary or by the National Association of Securities Dealers, Inc. in
order for the Notes to be tradeable on the PORTAL Market or as may be
required for the Notes to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or required to comply with any
applicable law or any
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<PAGE>
regulation thereunder or with the rules and regulations of any securities
exchange or automated quotation system upon which the Notes may be listed
or traded or designated for issuance or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to
which any particular Notes are subject.
(d) Every Note that bears or is required under this Section 2.5(d) to
bear the legend set forth in this Section 2.5(d) (together with any Common
Stock issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.5(e), collectively, the "Restricted Securities")
shall be subject to the restrictions on transfer set forth in this Section
2.5(d) (including the legend set forth below), unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder
of each such Restricted Security, by such holder's acceptance thereof,
agrees to be bound by all such restrictions on transfer. As used in
Sections 2.5(d) and 2.5(e), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted
Security.
Until two (2) years after the original issuance date of any Note, any
certificate evidencing such Note (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued
upon conversion thereof which shall bear the legend set forth in Section
2.5(e), if applicable) shall bear a legend in substantially the following
form (unless such Notes have been transferred pursuant to a registration
statement that has been declared effective under the Securities Act (and
which continues to be effective at the time of such transfer) or unless
otherwise agreed by the Company in writing, with notice thereof to the
Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY
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<PAGE>
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO IBJ SCHRODER BANK & TRUST
COMPANY, AS TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(F)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(F) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO IBJ SCHRODER BANK & TRUST
COMPANY, AS TRUSTEE. IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE
2(C) OR 2(E) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO IBJ SCHRODER BANK & TRUST COMPANY, AS TRUSTEE, SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON
THE EARLIER OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY PURSUANT TO
CLAUSE 2(F) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL
ISSUANCE OF THE NOTE EVIDENCED HEREBY. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
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<PAGE>
Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance
with their terms may, upon surrender of such Note for exchange to the Note
registrar in accordance with the provisions of this Section 2.5, be
exchanged for a new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by this
Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.5(d)), a Note in global form may not
be transferred as a whole or in part except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Notes in global form. Initially, the global
Note shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Trustee as
custodian for Cede & Co.
If at any time the Depositary for the Note in global form notifies the
Company that it is unwilling or unable to continue as Depositary for such
Note, the Company may appoint a successor Depositary with respect to such
Note. If a successor Depositary for the Note is not appointed by the
Company within ninety (90) days after the Company receives such notice, the
Company will execute, and the Trustee, upon receipt of an Officers'
Certificate for the authentication and delivery of Notes, will authenticate
and deliver, Notes in definitive form, in an aggregate principal amount
equal to the principal amount of the Note in global form, in exchange for
such Note in global form and upon delivery of such Note in global form to
the Trustee such Note in global form shall be canceled.
Definitive Notes issued in exchange for all or a part of a Note in
global form pursuant to this Section 2.5(d) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such definitive Notes to the persons in whose names such definitive
Notes are so registered.
At such time as all interests in a Note in global form have been
redeemed, converted, canceled, repurchased or transferred, such Note in
global form shall be, upon
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<PAGE>
receipt thereof, canceled by the Trustee in accordance with standing
procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a
global Note is exchanged for definitive Notes, redeemed, converted,
canceled, repurchased or transferred to a transferee who receives
definitive Notes therefor or any definitive Note is exchanged or
transferred for part of a Note in global form, the principal amount of such
Note in global form shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Custodian, be
appropriately reduced or increased, as the case may be, and an endorsement
shall be made on such Note in global form, by the Trustee or the Custodian,
at the direction of the Trustee, to reflect such reduction or increase.
(e) Until two (2) years after the original issuance date of any Note,
any stock certificate representing Common Stock issued upon conversion of
such Note shall bear a legend in substantially the following form (unless
such Common Stock has been sold pursuant to a registration statement that
has been declared effective under the Securities Act (and which continues
to be effective at the time of such transfer) or such Common Stock has been
issued upon conversion of Notes that have been transferred pursuant to a
registration statement that has been declared effective under the
Securities Act or unless otherwise agreed by the Company with written
notice thereof to the Trustee and any transfer agent for the Common Stock):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF
AGREES THAT UNTIL THE EXPIRATION OF TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE COMMON STOCK
EVIDENCED HEREBY WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT PRIOR TO
SUCH TRANSFER, FURNISHES TO SUNTRUST BANK, ATLANTA, AS TRANSFER AGENT,
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
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COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRANSFER AGENT), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO
ANY SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F)
ABOVE), IT WILL FURNISH TO SUNTRUST BANK, ATLANTA, AS TRANSFER AGENT,
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT
WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY
IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY PURSUANT TO CLAUSE 1(F) ABOVE OR THE EXPIRATION OF TWO YEARS
FROM THE ORIGINAL ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH
THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED OR UPON THE EARLIER
SATISFACTION OF SUNTRUST BANK, ATLANTA, AS TRANSFER AGENT, THAT THE
COMMON STOCK HAS BEEN OR IS BEING OFFERED AND SOLD IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon surrender of the
certificates representing such shares of Common Stock for exchange in
accordance with the procedures of the transfer agent for the Common Stock,
be exchanged for a new certificate or certificates for a like aggregate
number of shares of Common Stock, which shall not bear the restrictive
legend required by this Section 2.5(e).
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(f) Any certificate evidencing a Note that has been transferred to an
Affiliate of the Company within two years after the original issuance date
of the Note, as evidenced by a notation on the Assignment Form for such
transfer or in the representation letter delivered in respect thereof, for
so long as such Note is held by such Affiliate, shall, until three years
after the last date on which the Company or any Affiliate of the Company
was an owner of such Note, in each case, bear a legend in substantially the
following form, unless otherwise agreed by the Company (with written notice
thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
AGREES (1) THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE NOTE
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
NOTE EXCEPT (A) TO SUNTRUST BANK, ATLANTA OR ANY SUBSIDIARY THEREOF,
(B) IN A TRANSACTION REGISTERED UNDER THE SECURITIES ACT OR (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (2) THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND SHALL BE
REMOVED UPON THE TRANSFER OF THE NOTE EVIDENCED HEREBY OR THE COMMON
STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE PURSUANT TO THE
IMMEDIATELY PRECEDING SENTENCE. IF THE PROPOSED TRANSFER IS PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH IBJ
SCHRODER BANK & TRUST COMPANY, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
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Any stock certificate representing Common Stock issued upon conversion of
such Note shall also bear a legend in substantially the form indicated
above, unless otherwise agreed by the Company (with written notice thereof
to the Trustee).
(g) Notwithstanding any provision of Section 2.5 to the contrary, in
the event Rule 144(k) as promulgated under the Securities Act (or any
successor rule) is amended to shorten the two-year period under Rule 144(k)
(or the corresponding period under any successor rule), from and after
receipt by the Trustee of the Officers' Certificate and Opinion of Counsel
provided for in this Section 2.5(g), (i) the references in the first
sentence of the second paragraph of Section 2.5(d) to "two (2) years" and
in the restrictive legend set forth in such paragraph to "TWO YEARS" shall
be deemed for all purposes hereof to be references to such shorter period,
(ii) the references in the first paragraph of Section 2.5(e) to "two (2)
years" and in the restrictive legend set forth in such paragraph to "TWO
YEARS" shall be deemed for all purposes hereof to be references to such
shorter period and (iii) all corresponding references in the Notes and the
restrictive legends thereon shall be deemed for all purposes hereof to be
references to such shorter period, provided that such changes shall not
become effective if they are otherwise prohibited by, or would otherwise
cause a violation of, the then-applicable federal securities laws. As soon
as practicable after the Company has knowledge of the effectiveness of any
such amendment to shorten the two-year period under Rule 144(k) (or the
corresponding period under any successor rule), unless such changes would
otherwise be prohibited by, or would otherwise cause a violation of, the
then-applicable securities law, the Company shall provide to the Trustee an
Officers' Certificate and Opinion of Counsel informing the Trustee of the
effectiveness of such amendment and the effectiveness of the foregoing
changes to Sections 2.5(d) and 2.5(e) and the Notes. The provisions of this
Section 2.5(g) will not be effective until such time as the Opinion of
Counsel and Officers' Certificate have been received by the Trustee
hereunder. This Section 2.5(g) shall apply to successive amendments to Rule
144(k) (or any successor rule) shortening the holding period thereunder.
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes. In case any Note
------------------------------------------
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its request the Trustee or an authenticating
agent appointed by the Trustee shall authenticate and deliver, a new Note,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Note, or in lieu of and in substitution for the Note so
destroyed, lost or stolen. In every case the applicant for a substituted Note
shall furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be required by them to
save each of them harmless for any loss, liability, cost or expense caused by or
connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.
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The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or is about to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in case of destruction, loss or theft,
evidence satisfactory to the Company, the Trustee and, if applicable, any paying
agent or conversion agent of the destruction, loss or theft of such Note and of
the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.6
by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.7 Temporary Notes. Pending the preparation of definitive
---------------
Notes, the Company may execute and the Trustee or an authenticating agent
appointed by the Trustee shall, upon written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the definitive Notes but with such omissions, insertions and variations
as may be appropriate for temporary Notes, all as may be determined by the
Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Notes. Without unreasonable delay the Company will execute and
deliver to the Trustee or such authenticating agent definitive Notes (other than
in the case of Notes in global form) and thereupon any or all temporary Notes
(other than any such Note in global form) may be surrendered in exchange
therefor, at each office or agency maintained by the Company pursuant to Section
5.2 and the Trustee or such authenticating agent shall authenticate and deliver
in exchange for such temporary Notes an equal aggregate principal amount of
definitive Notes. Such exchange shall be made by the Company at its own expense
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and without any charge therefor. Until so exchanged, the temporary Notes shall
in all respects be entitled to the same benefits and subject to the same
limitations under this Indenture as definitive Notes authenticated and delivered
hereunder.
Section 2.8 Cancellation of Notes Paid, Etc. All Notes surrendered for
-------------------------------
the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent or any Note registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Notes shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. Upon written
instructions of the Company, the Trustee shall destroy canceled Notes and, after
such destruction, shall deliver a certificate of such destruction to the
Company. If the Company shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Notes unless and until the same are delivered to the Trustee for
cancellation.
ARTICLE III
REDEMPTION OF NOTES
Section 3.1 Redemption Prices. The Company may, at its option, redeem
-----------------
all or from time to time any part of the Notes on any date prior to maturity,
upon notice as set forth in Section 3.2, and at the optional redemption prices
set forth in the form of Note attached as Exhibit A hereto, together with
accrued interest, if any, to, but excluding, the date fixed for redemption,
provided, however, that no such redemption shall be effected before July 6,
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2000.
Section 3.2 Notice of Redemption; Selection of Notes. In case the
----------------------------------------
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption, and it, or at its request (which must be received by the Trustee at
least ten (10) Business Days prior to the date the Trustee is requested to give
notice as described below unless a shorter period is agreed to by the Trustee),
the Trustee in the name of and at the expense of the Company, shall mail or
cause to be mailed a notice of such redemption at least twenty (20) and not more
than (60) days prior to the date fixed for redemption to the holders of Notes
so to be redeemed as a whole or in part at their last addresses as the same
appear on the Note register (provided that if the Company shall give such
--------
notice, it shall also give such notice, and notice of the Notes to be redeemed,
to the Trustee). Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder receives such notice. In any case,
failure to give such notice by mail or any defect in the notice to the holder of
any Note designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Note.
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<PAGE>
Each such notice of redemption shall specify the aggregate principal amount
of Notes to be redeemed, the date fixed for redemption, the redemption price at
which Notes are to be redeemed, the place or places of payment, that payment
will be made upon presentation and surrender of such Notes, that interest
accrued to, but excluding, the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or on
the portion thereof to be redeemed will cease to accrue. Such notice shall also
state the current Conversion Price and the date on which the right to convert
such Notes or portions thereof into Common Stock will expire. If fewer than all
the Notes are to be redeemed, the notice of redemption shall identify the Notes
to be redeemed. In case any Note is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of redemption
given as provided in this Section, the Company will deposit with the Trustee or
with one or more paying agents (or, if the Company is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 5.4) an
amount of money sufficient to redeem on the redemption date all the Notes (or
portions thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Stock) at the appropriate redemption
price, together with accrued interest to, but excluding, the date fixed for
redemption; provided that if such payment is made on the redemption date it must
--------
be received by the Trustee or paying agent, as the case may be, by 10:00 a.m.
New York City time, on such date. If any Note called for redemption is
converted pursuant hereto, any money deposited with the Trustee or any paying
agent or so segregated and held in trust for the redemption of such Note shall
be paid to the Company upon its request, or, if then held by the Company shall
be discharged from such trust.
If fewer than all the Notes are to be redeemed, the Company will give the
Trustee written notice in the form of an Officers' Certificate not fewer than
thirty-five (35) days (or such shorter period of time as may be acceptable to
the Trustee) prior to the redemption date as to the aggregate principal amount
of Notes to be redeemed. If fewer than all the Notes are to be redeemed, the
Trustee shall select the Notes or portions thereof to be redeemed (in principal
amounts of $1,000 or integral multiples thereof), by lot, on a pro rata basis,
or in any other manner the Trustee may select. If any Note selected for partial
redemption is converted in part after such selection, the converted portion of
such Note shall be deemed (so far as may be) to be the portion to be selected
for redemption. The Notes (or portions thereof) so selected shall be deemed
duly selected for redemption for all purposes hereof, notwithstanding that any
such Note is converted as a whole or in part before the mailing of the notice of
redemption.
Upon any redemption of less than all Notes, the Company and the Trustee may
(but need not) treat as outstanding any Notes surrendered for conversion during
the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as not
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<PAGE>
outstanding any Note authenticated and delivered during such period in exchange
for the unconverted portion of any Note converted in part during such period.
Section 3.3 Payment of Notes Called for Redemption. If notice of
---------------------------------------
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date and at
the place or places stated in such notice at the applicable redemption price,
together with interest accrued to, but excluding, the date fixed for redemption,
and on and after said date (unless the Company shall default in the payment of
such Notes at the redemption price, together with interest accrued to, but
excluding, said date) interest on the Notes or portion of Notes so called for
redemption shall cease to accrue and such Notes shall cease after the close of
business on the Business Day next preceding the date fixed for redemption to be
convertible into Common Stock and, except as provided in Sections 8.5 and 13.4,
to be entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Notes except the right to receive
the redemption price thereof and unpaid interest to, but excluding, the date
fixed for redemption. On presentation and surrender of such Notes at a place of
payment in said notice specified, the said Notes or the specified portions
thereof to be redeemed shall be paid and redeemed by the Company at the
applicable redemption price, together with interest accrued thereon to, but
excluding, the date fixed for redemption; provided that, if the applicable
--------
redemption date is an interest payment date, the semi-annual payment of interest
becoming due on such date shall be payable to the holders of such Notes
registered as such on the relevant record date subject to the terms and
provisions of Section 2.3 hereof.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of optional redemption during the continuance of a default in
payment of interest or premium on the Notes or of any Event of Default of which,
in the case of any Event of Default other than under Section 7.1(a), (b) or (c),
a Responsible Officer of the Trustee has actual knowledge. If any Note called
for redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid or duly provided for, bear
interest from the date fixed for redemption at the rate borne by the Note and
such Note shall remain convertible into Common Stock until the principal and
premium, if any, shall have been paid or duly provided for.
Section 3.4 Conversion Arrangement on Call for Redemption. In connection
---------------------------------------------
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes by an agreement with one or more investment bankers or
other purchasers to purchase such Notes by paying to the Trustee in trust for
the Noteholders, on or before the date fixed for redemption, an amount not less
than the applicable redemption price, together with interest accrued to the
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<PAGE>
date fixed for redemption, of such Notes. Notwithstanding anything to the
contrary contained in this Article III, the obligation of the Company to pay the
redemption price of such Notes, together with interest accrued to, but
excluding, the date fixed for redemption, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into, a copy of which, certified as true and correct by the
Secretary or Assistant Secretary of the Company will be filed with the Trustee
prior to the date fixed for redemption, any Notes not duly surrendered for
conversion by the holders thereof may, at the option of the Company, be deemed,
to the fullest extent permitted by law, acquired by such purchasers from such
holders and (notwithstanding anything to the contrary contained in Article XV)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the date fixed for redemption (and the right to convert
any such Notes shall be deemed to have been extended through such time), subject
to payment of the above amount as aforesaid. At the direction of the Company,
the Trustee shall hold and dispose of any such amount paid to it in the same
manner as it would monies deposited with it by the Company for the redemption of
Notes. Without the Trustee's prior written consent, no arrangement between the
Company and such purchasers for the purchase and conversion of any Notes shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Notes between the Company and such
purchasers to which the Trustee has not consented in writing, including the
costs and expenses incurred by the Trustee in the defense of any claim or
liability arising out of or in connection with the exercise or performance of
any of its powers, duties, responsibilities or obligations under this Indenture.
ARTICLE IV
SUBORDINATION OF NOTES
Section 4.1 Agreement of Subordination. The Company covenants and
--------------------------
agrees, and each holder of Notes issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article IV; and each person holding any Note, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all Notes
(including, but not limited to, the redemption price or repurchase price with
respect to the Notes to be redeemed or repurchased, as provided in this
Indenture) issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated to the prior payment in full in cash or in such other
form of payment as may be acceptable to the holders of Senior Indebtedness of
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred or created.
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No provision of this Article IV shall prevent the occurrence of any default
or Event of Default hereunder.
Section 4.2 Payments to Noteholders. No payment (including pursuant to
-----------------------
any redemption or repurchase of Notes) shall be made with respect to the
principal of, or premium, if any, or interest (including Liquidated Damages, if
any) on the Notes, except payments and distributions made by the Trustee as
permitted by Section 4.6, if:
(1) a default in the payment of principal, premium, if any, or interest
or other payment due on Senior Indebtedness occurs and is continuing beyond
any applicable period of grace; or
(2) any other default occurs and is continuing with respect to
Designated Senior Indebtedness that then permits holders of the Designated
Senior Indebtedness as to which such default related to accelerate its
maturity and the Trustee and the Company receive a notice of such default (a
"Payment Blockage Notice") from a Representative of Designated Senior
Indebtedness.
The Company may and shall resume payments on the Notes (1) in the case of a
payment default, on the date upon which such default is cured or waived or
ceases to exist, and (2) in the case of a nonpayment default with respect to
Designated Senior Indebtedness, on the earlier of the date on which the
nonpayment default is cured or waived or ceases to exist or 179 days pass after
the date on which the applicable Payment Blockage Notice is received.
No new period of payment blockage may be commenced pursuant to a Payment
Blockage Notice unless (A) at least 365 days shall have elapsed since the first
day of effectiveness of the immediately prior Payment Blockage Notice and (B)
all scheduled payments of principal, premium, if any, and interest on the Notes
that have come due have been paid in full in cash, or in such other form of
payment as may be acceptable to the holders of the Notes or the Trustee or the
holder of the Notes shall have instituted proceedings to enforce such holders'
rights to receive such payments. No default (whether or not such event of
default is on the same issue of Designated Senior Indebtedness) that existed or
was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
In addition, in the event of any acceleration of the Notes because of an
Event of Default, no payment or distribution (including with respect to any
redemption or repurchase of the Notes) shall be made to the Trustee or any
holder of Notes with respect to the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes, except payments and
distributions made by the Trustee as permitted by Section 4.6, until all Senior
Indebtedness has been paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Indenture. If payment of the
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Notes is accelerated because of an Event of Default, the Company shall promptly
notify holders of Senior Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing, the Trustee or any holder
of Notes receives any payment or distribution of assets of the Company of any
kind in contravention of any term of this Indenture, whether in cash, property
or securities, including, without limitation, by way of setoff or otherwise,
before all Senior Indebtedness is paid in full, in cash or such other form of
payment as may be acceptable to the holders of Senior Indebtedness, then such
payment or distribution shall be held by the recipient or recipients in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
make payment in full, in cash or such other form of payment as may be acceptable
to the holders of Senior Indebtedness, of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to or for the holders of such Senior Indebtedness.
Nothing in this Section 4.2 shall apply to claims of, or payments to, the
Trustee pursuant to Section 8.6. This Section 4.2 shall be subject to the
further provisions of Section 4.6.
Section 4.3 Bankruptcy and Dissolution, Etc.. Upon any payment by the
---------------------------------
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution,
winding-up, liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due upon all Senior Indebtedness shall first be paid in
full, in cash or in such other form of payment as may be acceptable to the
holders of Senior Indebtedness, before any payment is made on account of the
principal or premium, if any, and interest on the Notes (except payments made
pursuant to Article XIII from monies deposited with the Trustee pursuant thereto
prior to the happening of such dissolution, winding-up, liquidation or
reorganization or bankruptcy, insolvency, receivership or other such
proceedings); and upon any such dissolution, winding-up, liquidation or
reorganization or bankruptcy, insolvency, receivership or other such
proceedings, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Notes or the Trustee under this Indenture would be
entitled, except for the provision of this Article IV, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
or by the holders of the Notes or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, or as otherwise required by law or a court order) or their
respective representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective
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interests may appear, to the extent necessary to pay all Senior Indebtedness in
full in cash or in such other form of payment as may be acceptable to the
holders of Senior Indebtedness after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the holders of the Notes or to the Trustee under this
Indenture.
In the event that, notwithstanding the foregoing, the Trustee or any holder
of Notes receives any payment or distribution of assets of the Company of any
kind in contravention of any term of this Indenture, whether in cash, property
or securities, including, without limitation, by way of setoff or otherwise,
before all Senior Indebtedness is paid in full, in cash or such other form of
payment as may be acceptable to the holders of Senior Indebtedness, then such
payment or distribution shall be held by the recipient or recipients in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
make payment in full, in cash or such other form of payment as may be acceptable
to the holders of Senior Indebtedness, of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to or for the holders of such Senior Indebtedness.
For purposes of this Section 4.3, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated (at least to the extent provided in this Article IV with respect to
the Notes) to the payment of all Senior Indebtedness which may at the time be
outstanding; provided that (i) the Senior Indebtedness is assumed by the new
--------
corporation, if any, resulting from such reorganization or adjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases which are
not assumed by the Company or by the new corporation, as the case may be) are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article XII shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 4.3
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article XII.
Nothing in this Section 4.3 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6. This Section 4.3 shall be subject to
the further provisions of Section 4.6.
Section 4.4 Subrogation of Notes. Subject to the payment in full in cash
--------------------
or in such other form of payment as may be acceptable to the holders of Senior
Indebtedness of all Senior Indebtedness, the rights of the holders of the Notes
shall be subrogated to the extent of the
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payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article IV (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is
subordinated to other indebtedness of the Company to substantially the same
extent as the Notes are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of (and premium, if
any) and interest on the Notes shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Notes or the Trustee would be entitled except for the provisions of this Article
IV, and no payment over pursuant to the provisions of this Article IV, to or for
the benefit of the holders of Senior Indebtedness by holders of the Notes or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Indebtedness, and the holders of the Notes, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness; and no payments or
distributions of cash, property or securities to or for the benefit of the
holders of the Notes pursuant to the subrogation provisions of this Article IV,
which would otherwise have been paid to the holders of Senior Indebtedness shall
be deemed to be a payment by the Company to or for the account of the Notes. It
is understood that the provisions of this Article IV are and are intended solely
for the purposes of defining the relative rights of the holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of (and premium, if any) and interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article IV of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article IV, the Trustee, subject to the provisions of Section 8.1, and the
holders of the Notes shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article IV.
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Section 4.5 Authorization by Noteholders. Each holder of a Note by his
----------------------------
acceptance thereof authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article IV and appoints the Trustee his attorney-in-fact for
any and all such purposes.
Section 4.6 Notice to Trustee. The Company shall give written notice to
-----------------
the Trustee of the issuance of any Designated Senior Indebtedness. In addition,
the Company shall give prompt written notice in the form of an Officers'
Certificate to a Responsible Officer of the Trustee and to any paying agent of
any fact known to the Company which would prohibit the making of any payment of
monies to or by the Trustee or any paying agent in respect of the Notes pursuant
to the provisions of this Article IV. Notwithstanding the provisions of this
Article IV or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any Senior Indebtedness or of any
default or event of default with respect to any Senior Indebtedness or of any
other facts which would prohibit the making of any payment of monies to or by
the Trustee in respect of the Notes pursuant to the provisions of this Article
IV, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a holder or holders of Senior Indebtedness
or from any trustee thereof who shall have been certified by the Company or
otherwise established to the reasonable satisfaction of the Trustee to be such
holder or trustee; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 8.1, shall be entitled in all
respects to assume that no such facts exist; provided that if on a date at least
--------
two (2) Business Days prior to the date upon which by the terms hereof any such
monies may become payable for any purpose (including, without limitation, the
payment of the principal of, or premium, if any, or interest on any Note), the
Trustee shall not have received with respect to such monies the notice provided
for in this Section 4.6, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such prior date.
Notwithstanding anything to the contrary hereinbefore set forth, nothing
shall prevent (a) any payment by the Company or the Trustee to the Noteholders
of amounts in connection with a redemption of Notes if (i) notice of such
redemption has been given pursuant to Article III prior to the receipt by the
Trustee of written notice as aforesaid, and (ii) such notice of redemption is
given not earlier than (60) days before the redemption date, (b) any payment by
the Company or the Trustee to the Noteholders of amounts in connection with a
repurchase of Notes if (i) notice of such repurchase has been given pursuant to
Article XVI prior to the receipt by the Trustee of written notice as aforesaid,
and (ii) such notice of repurchase is given not earlier than forty (40) days
before the repurchase date, or (c) any payment by the Trustee to the Noteholders
of monies deposited with it pursuant to Section 13.1.
The Trustee, subject to the provisions of Section 8.1, shall be entitled to
rely on the delivery to it of a written notice by a person representing himself
to be a holder of Senior
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Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee on behalf
of any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article IV, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article IV, and if such
evidence is not furnished the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
Section 4.7 Trustee's Relation to Senior Indebtedness. The Trustee and
-----------------------------------------
any agent of the Company or the Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article IV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in Section 8.13 or elsewhere in this Indenture
shall deprive the Trustee or any such agent of any of its rights as such holder.
Nothing in this Article IV shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 8.6.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article IV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 4.2 and Section 8.1, the Trustee shall not be liable to
any holder of Senior Indebtedness if it shall pay over or deliver to holders of
Notes, the Company or any other person money or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article IV or otherwise.
Section 4.8 No Impairment of Subordination. No right of any present or
------------------------------
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Section 4.9 Certain Conversions Deemed Payment. For the purposes of this
----------------------------------
Article only, (1) the issuance and delivery of junior securities upon conversion
of Notes in accordance with Article XV shall not be deemed to constitute a
payment or distribution on account of the principal of (or premium, if any) or
interest on Notes or on account of the purchase or other acquisition of Notes,
and (2) the payment, issuance or delivery of cash, property or securities (other
than junior securities) upon conversion of a Note shall be deemed to constitute
payment on account of the principal of such Note. For the purposes of this
Section, the term "junior securities" means (a) shares of any stock of any class
of the Company and (b) securities of the
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Company which are subordinated in right of payment to all Senior Indebtedness
which may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Notes are
so subordinated as provided in this Article. Nothing contained in this Article
or elsewhere in this Indenture or in the Notes is intended to or shall impair,
as among the Company, its creditors other than holders of Senior Indebtedness
and the holders of the Notes, the right, which is absolute and unconditional, of
the holder of any Note to convert such Note in accordance with Article XV.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest. The Company
------------------------------------------
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes. Each installment of interest on the Notes due on any semi-annual
interest payment date may be paid by mailing checks for the interest payable to
or upon the written order of the holders of Notes entitled thereto as they shall
appear on the registry books of the Company, provided that, with respect to any
--------
holder of Notes with an aggregate principal amount equal to or in excess of
$5,000,000, at the request of such holder in writing to the Company, interest on
such holder's Notes shall be paid by wire transfer in immediately available
funds in accordance with the wire transfer instructions supplied by such holder
from time to time to the Trustee and paying agent (if different from Trustee) at
least two days prior to the applicable record date.
Section 5.2 Maintenance of Office or Agency. The Company will maintain
-------------------------------
in the Borough of Manhattan, The City of New York, an office or agency where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion, redemption or repurchase and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office or the
office or agency of the Trustee in the Borough of Manhattan, The City of New
York.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
--------
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes. The Company will give prompt written
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notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent, Note
registrar, Custodian and conversion agent and the Corporate Trust Office and the
office or agency of the Trustee in the Borough of Manhattan, The City of New
York at 1 State Street, New York, New York 10004 as one such office or agency of
the Company for each of the aforesaid purposes.
So long as the Trustee is the Note registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 8.10(a) and the third
paragraph of Section 8.11.
Section 5.3 Appointments to Fill Vacancies in Trustee's Office. The
--------------------------------------------------
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.4 Provisions as to Paying Agent.
-----------------------------
(a) If the Company shall appoint a paying agent other than the
Trustee or if the Trustee shall appoint such a paying agent, it will cause
such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of
this Section 5.4:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Notes (whether such sums have been paid to it by the Company or by
any other obligor on the Notes) in trust for the benefit of the
holders of the Notes;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of
the principal of and premium, if any, or interest on the Notes when
the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a
sum sufficient to pay 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 to take such action, provided that if such
deposit is made on the due date, such deposit must be received by the
paying agent by 10:00 a.m., New York City time, on such date.
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(b) 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
the Notes, set aside, segregate and hold in trust for the benefit of the
holders of the Notes a sum sufficient to pay such principal, premium, if
any, or interest so becoming due and will notify the Trustee of any failure
to take such action and of any failure by the Company (or any other obligor
under the Notes) to make any payment of the principal of, premium, if any,
or interest on the Notes when the same shall become due and payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust by the Company or any paying
agent hereunder as required by this Section 5.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying
agent shall be released from all further liability with respect to such
sums.
(d) Anything in this Section 5.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.4 is subject
to Sections 13.3 and 13.4.
Section 5.5 Existence. Subject to Article XII, the Company will do or
---------
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
Section 5.6 Rule 144A Information Requirement. During the period beginning
---------------------------------
on the latest date of the original issuance of any of the Notes and ending on
the date that is three years from such date, the Company covenants and agrees
that it shall, during any period in which it is not subject to Section 13 or
15(d) under the Exchange Act, make available to any holder or beneficial holder
of Notes or any Common Stock issued upon conversion thereof, in each case which
continue to be Restricted Securities, in connection with any sale thereof and
any prospective purchaser of Notes or such Common Stock from such holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any holder or beneficial holder of the
Notes or such Common Stock and it will take such further action as any holder or
beneficial holder of such Notes or such Common Stock may reasonably request, all
to the extent required from time to time to enable such holder or beneficial
holder to sell its Notes or Common Stock without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A, as
such rule may be amended from time to time. Upon the request of any holder or
any beneficial holder of the Notes or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.
Section 5.7 Stay, Extension and Usury Laws. The Company covenants (to the
------------------------------
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other
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law which would prohibit or forgive the Company from paying all or any portion
of the principal of or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
has been enacted.
Section 5.8 Compliance Certificate. The Company shall deliver to the
----------------------
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 1997) an Officers'
Certificate stating whether or not to the best of their knowledge the signers
know of any default or Event of Default that occurred during such period. If
they do, such Officers' Certificate shall describe the default or Event of
Default and its status.
Section 5.9 Further Instruments and Acts. Upon request of the Trustee, the
----------------------------
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.1 Noteholders' Lists. The Company covenants and agrees that it
------------------
will furnish or cause to be furnished to the Trustee, semi-annually, not more
than fifteen (15) days after each June 15 and December 15 in each year beginning
with December 15, 1997, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished so long as the Trustee is acting as Note registrar.
Section 6.2 Preservation and Disclosure of Lists.
------------------------------------
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Notes contained in the most recent list furnished to it as provided
in Section 6.1 or maintained by the Trustee in its capacity as Note registrar,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
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(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Notes made
pursuant to the Trust Indenture Act.
Section 6.3 Reports by Trustee.
------------------
(a) After this Indenture has been qualified under the Trust
Indenture Act, the Trustee shall transmit to holders of Notes such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(b) A copy of such report shall, at the time of such transmission
to holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed and with the Company.
The Company will notify the Trustee when the Notes are listed on any stock
exchange or automated quotation system and when any such listing is
discontinued.
Section 6.4 Reports by Company.
------------------
(a) After this Indenture has been qualified under the Trust
Indenture Act, the Company shall file with the Trustee and the Commission, and
transmit to holders of Notes, such information, documents and other reports and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided that any
--------
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
(b) The Company will deliver to the Trustee (a) as soon as available
and in any event within ninety (90) days after the end of each fiscal year of
the Company (i) a consolidated balance sheet of the Company and its subsidiaries
as of the end of such fiscal year and the related consolidated statements of
operations, stockholders' equity and cash flows for such fiscal year, all
reported on by an independent public accountant of nationally recognized
standing and (ii) a report containing a management's discussion and analysis of
the financial condition and results of operations and a description of the
business and properties of the Company and (b) as soon as available and in any
event within forty five (45) days after the end of each of the first three
quarters of each fiscal year of the Company (i) an unaudited consolidated
management's discussion and analysis of the financial condition and results of
operations of the Company for such quarter; provided that the foregoing
statements and reports shall not be
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required for any fiscal year or quarter, as the case may be, with respect to
which the Company files or expects to file with the Trustee an annual report or
quarterly report, as the case may be, pursuant to the preceding paragraph of
this Section 6.4. The Trustee shall have no liability as regards the substance
of the information provided by the Company or its agents pursuant to this
Section 6.4.
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.1 Events of Default. In case one or more of the following
------------------
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of the principal of and premium, if any,
on any of the Notes as and when the same shall become due and payable
either at maturity or in connection with any redemption, by declaration or
otherwise, whether or not such payment is prohibited by the provisions of
Article IV; or
(b) default for thirty (30) days in the payment of any installment
of interest or Liquidated Damages, if any, upon any of the Notes as and
when the same shall become due and payable, whether or not such payment is
prohibited by the provisions of Article IV; or
(c) failure on the part of the Company duly to observe or perform
any other of the covenants on the part of the Company in the Notes or in
this Indenture (other than a covenant a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with) (a
"Covenant Default") and the continuance of such failure for a period of
forty-five (45) days after the date on which written notice of such
failure, requiring the Company to remedy the same, shall have been given to
the Company by the Trustee, or to the Company and a Responsible Officer of
the Trustee by the holders of at least 25% in aggregate principal amount of
the outstanding Notes at the time outstanding determined in accordance with
Section 9.4, provided that such forty-five (45) day period may be extended
for an additional forty-five (45) days if the Company is disputing the
existence of such Covenant Default in good faith and has provided to the
Trustee prior to the expiration of the initial forty-five (45) day period
an Officers' Certificate to such effect setting forth in reasonable detail
the basis on which the Company is disputing the existence of such Covenant
Default; or
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(d) a default in the payment of the Repurchase Price in respect of
any Note on the repurchase date therefor in accordance with the provisions
of Article XVI, whether or not such payment is prohibited by the provisions
of Article IV; or
(e) failure on the part of the Company to provide a written notice
of a Designated Event in accordance with Section 16.2; or
(f) failure on the part of the Company or any Significant Subsidiary
to make any payment at maturity, including any applicable grace period, in
respect of Indebtedness of, or guaranteed or assumed by, the Company or any
Significant Subsidiary, in a principal amount then outstanding in excess of
U.S. $10,000,000, and the continuance of such failure for a period of
thirty (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 not less than 25% in aggregate principal amount
of the Notes then outstanding, a written notice specifying such default and
requiring the Company to cause such default to be cured or waived and
stating that such notice is a "Notice of Default" hereunder; or
(g) default on the part of the Company or any Significant Subsidiary
with respect to any Indebtedness of, or guaranteed or assumed by, the
Company or any Significant Subsidiary, which default results in the
acceleration of Indebtedness in a principal amount then outstanding in
excess of U.S. $10,000,000, and such Indebtedness shall not have been
discharged or such acceleration shall not have been cured, waived,
rescinded or annulled for a period of thirty (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 not less than
25% in aggregate principal amount of the Notes then outstanding, 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
(h) the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due; or
(i) an involuntary case or other proceeding shall be commenced
against the Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
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custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of ninety (90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1(h) or (i)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then outstanding hereunder
determined in accordance with Section 9.4, by notice in writing to the Company
(and to the Trustee if given by Noteholders), may declare the principal of and
premium, if any, on all the Notes and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.1(h) or (i) occurs and is continuing, the principal of all the Notes
and the interest accrued thereon shall be immediately due and payable. This
provision, however, is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all Notes and the principal of and premium, if any, on any and all
Notes which shall have become due otherwise than by acceleration (with interest
on overdue installments of interest (to the extent that payment of such interest
is enforceable under applicable law) and on such principal and premium, if any,
at the rate borne by the Notes, to the date of such payment or deposit) and
amounts due to the Trustee pursuant to Section 8.6, and if any and all defaults
under this Indenture, other than the nonpayment of principal of and premium, if
any, and accrued interest on Notes which shall have become due by acceleration,
shall have been cured or waived pursuant to Section 7.7, then and in every such
case the holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or Event of Default, or shall impair any
right consequent thereon. The Company shall notify the Responsible Officer of
the Trustee, promptly upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been instituted.
Section 7.2 Payments of Notes on Default; Suit Therefor. The Company
-------------------------------------------
covenants that (a) in case default shall be made in the payment by the Company
of any installment of
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interest upon any of the Notes as and when the same shall become due and
payable, and such default shall have continued for a period of thirty (30) days,
or (b) in case default shall be made in the payment of the principal of or
premium, if any, on any of the Notes as and when the same shall have become due
and payable, whether at maturity of the Notes or in connection with any
redemption or repurchase, by declaration under this Indenture or otherwise,
then, upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Notes, the whole amount that then shall have
become due and payable on all such Notes for principal and premium, if any, or
interest, or both, as the case may be, with interest upon the overdue principal
and premium, if any, and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest at
the rate borne by the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Notes to the
registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.6; and any receiver, assignee
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or trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders 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 Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including agents and counsel fees incurred by it up to the date of such
distribution. To the extent that such payment of reasonable compensation,
expenses, advances and disbursements out of the estate in any such proceedings
shall be denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends, monies,
securities and other property which the holders of the Notes may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Trustee without the possession of any
of the Notes, or the production thereof on any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
Section 7.3 Application of Monies Collected by Trustee. Any monies
------------------------------------------
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under
Section 8.6;
Second: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall not have become due and be unpaid, to the
payment of interest on the Notes in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue installments
of interest at the rate borne by the Notes, such payments to be made
ratably to the persons entitled thereto;
Third: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid, to the payment of the whole amount then owing and
unpaid upon the Notes for principal and
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premium, if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest at the rate borne by
the Notes; and in case such monies shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Notes, then to the payment of such
principal and premium, if any, and interest without preference or priority
of principal and premium, if any, over interest, or of interest over
principal and premium, if any, or of any installment of interest over any
other installment of interest, or of any Note over any other Note, ratably
to the aggregate of such principal and premium, if any, and accrued and
unpaid interest; and
Fourth: Subject to the provisions of Article IV, to the payment of the
remainder, if any, to the Company or any other person lawfully entitled
thereto.
Section 7.4 Proceedings by Noteholder. No holder of any Note shall have
-------------------------
any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such indemnity as may be
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for (60) days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes 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 holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 7.4, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.
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Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in his own behalf and for his own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, his rights of
conversion as provided herein.
Section 7.5 Proceedings by Trustee. In case of an Event of Default the
----------------------
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Section 7.6 Remedies Cumulative and Continuing. Except as provided in
----------------------------------
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or any acquiescence therein; and, subject to the provisions of Section
7.4, every power and remedy given by this Article VII or by law to the Trustee
or to the Noteholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Noteholders.
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority
-----------------------------------------------------------
of Noteholders. The holders of a majority in aggregate principal amount of the
- - ---------------
Notes at the time outstanding determined in accordance with Section 9.4 shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided, however, that (a) such direction shall
-----------------
not be in conflict with any rule of law or with this Indenture, and (b) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4 may on behalf of the holders of all of the Notes waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest or premium, if any, on, or the principal of, the
Notes when due, (ii) a failure by the Company to convert any Notes into Common
Stock or (iii) a default in respect of a covenant or provisions hereof which
under Article XI cannot be modified or amended without the consent of the
holders of all Notes then outstanding. Upon any such waiver the Company, the
Trustee and the holders of the Notes shall be restored to their former positions
and rights hereunder; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder
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shall have been waived as permitted by this Section 7.7, said default or Event
of Default shall for all purposes of the Notes and this Indenture be deemed to
have been cured and to be not continuing; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 7.8 Notice of Defaults. The Trustee shall, within ninety (90) days
------------------
after the occurrence of a default, mail to all Noteholders, as the names and
addresses of such holders appear upon the Note register, notice of all defaults
known to a Responsible Officer, unless such defaults shall have been cured or
waived before the giving of such notice; and provided that, except in the case
--------
of default in the payment of the principal of, or premium, if any, or interest
on any of the Notes, the Trustee shall be protected in withholding such notice
if and so long as a trust committee of directors and/or Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interests of the Noteholders.
Section 7.9 Undertaking to Pay Costs. All parties to this Indenture agree,
------------------------
and each holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; provided that the provisions of this Section 7.9 shall not apply to
--------
any suit instituted by the Trustee, to any suit instituted by any Noteholder, or
group of Noteholders, holding in the aggregate more than 10% in principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Note (including, but
not limited to, the redemption price or repurchase price with respect to the
Notes being redeemed or repurchased as provided in this Indenture) on or after
the due date expressed in such Note or to any suit for the enforcement of the
right to convert any Note in accordance with the provisions of Article XV.
Section 7.10 Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any holder of any Note 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 or by law to the Trustee or to the holders of Notes
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the holders of Notes, as the case may be.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee. The Trustee, prior
--------------------------------------
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and
the Trust Indenture Act, and the Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture and the Trust
Indenture Act against the Trustee; and
(2) in the absence of bad faith and willful misconduct on the
part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture;
but, in the case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless
it shall be provided that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable to any Noteholder with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a majority
in principal amount of the Notes at the time outstanding determined as
provided in Section 9.4 relating to the time, method and place
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of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or
affording protection to, the Trustee shall be subject to the provisions of
this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 8.2 Reliance on Documents, Opinions, Etc. Except as otherwise
------------------------------------
provided in Section 8.1:
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, note, coupon or other paper or document
believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel and any advice or Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry
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or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; provided,
--------
however, that if the payment within a reasonable time to the Trustee of the
-------
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require indemnity reasonably satisfactory to the
Trustee from the Noteholders against such expenses or liability as a
condition to so proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Company upon demand; and
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder.
In no event shall the Trustee be liable for any consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action other than through the Trustee's willful misconduct or
gross negligence.
Section 8.3 No Responsibility for Recitals, Etc. The recitals contained
------------------------------------
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar May Own
--------------------------------------------------------------
Notes. The Trustee, any paying agent, any conversion agent or Note registrar, in
- - -----
its individual or any other capacity, may become the owner or pledgee of Notes
with the same rights it would have if it were not Trustee, paying agent,
conversion agent or Note registrar.
Section 8.5 Monies to Be Held in Trust. Subject to the provisions of
--------------------------
Section 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust 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 may be
agreed from time to time by the Company and the Trustee.
Section 8.6 Compensation and Expenses of Trustee. The Company covenants and
------------------------------------
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable
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compensation for all services rendered by it hereunder in any capacity (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Company will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
reasonably incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or willful misconduct. The Company also covenants to
indemnify the Trustee in any capacity under this Indenture and its agents and
any authenticating agent for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or willful misconduct on the
part of the Trustee or such agent or authenticating agent, as the case may be,
and arising out of or in connection with the acceptance or administration of
this trust or in any other capacity hereunder, including the costs and expenses
of defending themselves against any claim of liability in the premises. The
obligations of the Company under this Section 8.6 to compensate or indemnify the
Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall be secured by a lien prior to that of the Notes upon all property
and funds held or collected by the Trustee as such, except, subject to the
effect of Sections 4.3 and 7.6, funds held in trust herewith for the benefit of
the holders of particular Notes prior to the date of the accrual of such unpaid
compensation or indemnifiable claim. The obligation of the Company under this
Section shall survive the satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur expenses
or render services after an Event of Default specified in Section 7.1(h) or (i)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy, insolvency or
similar laws.
Section 8.7 Officers' Certificate as Evidence. Except as otherwise provided
---------------------------------
in Section 8.1, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness
and bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee, and such
Officers' Certificate, in the absence of negligence, willful misconduct,
recklessness and bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken or omitted by it under the provisions of this
Indenture upon the faith thereof.
Section 8.8 Conflicting Interests of Trustee. If the Trustee has or shall
--------------------------------
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and in
the manner provided by, and subject to the provisions of, the Trust Indenture
Act and this Indenture.
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Section 8.9 Eligibility of Trustee. There shall at all times be a Trustee
-----------------------
hereunder which shall be a person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus (together
with its corporate parent) of at least $50,000,000. If such person publishes
reports of condition at least annually, pursuant to law or to the requirements
of any supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
Section 8.10 Resignation or Removal of Trustee.
---------------------------------
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and by mailing notice thereof to the
holders of Notes at their addresses as they shall appear on the Note
register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have
accepted appointment (60) days after the mailing of such notice of
resignation to the Noteholders, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee,
or any Noteholder who has been a bona fide holder of a Note or Notes for at
least six months may, subject to the provisions of Section 7.9, on behalf
of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section 8.8 within
a reasonable time after written request therefor by the Company or
by any Noteholder who has been a bona fide holder of a Note or Notes
for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.9 and shall fail to resign after written
request therefor by the Company or by any such Noteholder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
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then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or, subject
to the provisions of Section 7.9, any Noteholder who has been a bona fide
holder of a Note or Notes for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so
removed or any Noteholder, upon the terms and conditions and otherwise as
in Section 8.10(a) provided, may petition any court of competent
jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10
shall becomeeffective upon acceptance of appointment by the successor
trustee as provided in Section 8.11.
Section 8.11 Acceptance by Successor Trustee. Any successor trustee
-------------------------------
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this Section
8.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
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Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, each of the Company and the former trustee shall mail or cause to
be mailed notice of the succession of such trustee hereunder to the holders of
Notes at their addresses as they shall appear on the Note register. If the
Company fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
Section 8.12 Succession by Merger, Etc. Any corporation or other entity
--------------------------
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 or other
entity succeeding to all or substantially all of the trust business of the
Trustee, shall be the successor to the Trustee hereunder without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that in the case of any corporation succeeding to all or
substantially all of the trust business of the Trustee such corporation shall be
qualified under the provisions of Section 8.8 and eligible under the provisions
of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by such successor
trustee may authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
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any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 8.13 Limitation on Rights of Trustee as Creditor. If and when the
-------------------------------------------
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1 Action by Noteholders. Whenever in this Indenture it is
---------------------
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or
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the taking of any other action), the fact that at the time of taking any such
action, the holders of such specified percentage have joined therein may be
evidenced (a) by any instrument or any number of instruments of similar tenor
executed by Noteholders in person or by agent or proxy appointed in writing, or
(b) by the record of the holders of Notes voting in favor thereof at any meeting
of Noteholders duly called and held in accordance with the provisions of Article
X, or (c) by a combination of such instrument or instruments and any such record
of such a meeting of Noteholders. Whenever the Company or the Trustee solicits
the taking of any action by the holders of the Notes, the Company or the Trustee
may fix in advance of such solicitation, a date as the record date for
determining holders entitled to take such action. The record date shall be not
more than fifteen (15) days prior to the date of commencement of solicitation of
such action.
Section 9.2 Proof of Execution by Noteholders. Subject to the provisions of
---------------------------------
Sections 8.1, 8.2 and 10.5, proof of the execution of any instrument by a
Noteholder or his agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the Note register or by a certificate of the Note registrar. The
record of any Noteholders' meeting shall be proved in the manner provided in
Section 10.6.
Section 9.3 Who Are Deemed Absolute Owners. The Company, the Trustee, any
------------------------------
paying agent, any conversion agent and any Note registrar may deem the person in
whose name such Note shall be registered upon the Note register to be, and may
treat him as, the absolute owner of such Note (whether or not such Note shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal of,
premium, if any, and interest on such Note, for conversion of such Note and for
all other purposes; and neither the Company nor the Trustee nor any paying agent
nor any conversion agent nor any Note registrar shall be affected by any notice
to the contrary. All such payments so made to any holder for the time being, or
upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note.
Section 9.4 Company-Owned Notes Disregarded. In determining whether the
-------------------------------
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Notes shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; provided that for the purposes of determining whether the Trustee
--------
shall be protected in relying on any such direction, consent, waiver or other
action only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or a person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any
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such other obligor. In the case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full protection to the
Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers' Certificate listing and identifying all Notes, if any,
known by the Company to be owned or held by or for the account of any of the
above described persons; and, subject to Section 8.1, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Notes not listed therein are
outstanding for the purpose of any such determination.
Section 9.5 Revocation of Consents; Future Holders Bound. At any time prior
--------------------------------------------
to (but not after) the evidencing to the Trustee, as provided in Section 9.1, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action,
any holder of a Note which is shown by the evidence to be included in the Notes
the holders of which have consented to such action may, by filing written notice
with the Trustee at its Corporate Trust Office and upon proof of holding as
provided in Section 9.2, revoke such action so far as concerns such Note. Except
as aforesaid, any such action taken by the holder of any Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Note and of any Notes issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1 Purpose of Meetings. A meeting of Noteholders may be called
--------------------
at any time and from time to time pursuant to the provisions of this Article X
for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to consent
to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article VII;
(2) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VIII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2;
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(4) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable law; or
(5) to take any other action authorized by this Indenture or under
applicable law.
Section 10.2 Call of Meetings by Trustee. The Trustee may at any time
----------------------------
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place in the Borough of Manhattan, The City of
New York, as the Trustee shall determine. Notice of every meeting of the
Noteholders, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting and the establishment of
any record date pursuant to Section 9.1, shall be mailed to holders of Notes at
their addresses as they shall appear on the Note register. Such notice shall
also be mailed to the Company. Such notices shall be mailed not less than
twenty (20) nor more than ninety (90) days prior to the date fixed for the
meeting.
Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.3 Call of Meetings by Company or Noteholders. In case at any
------------------------------------------
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least 10% in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place for such meeting and
may call such meeting to take any action authorized in Section 10.1, by mailing
notice thereof as provided in Section 10.2.
Section 10.4 Qualifications for Voting. To be entitled to vote at any
--------------------------
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes. The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 10.5 Regulations. Notwithstanding any other provisions of this
-----------
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
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proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each Noteholder or
proxyholder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; provided, however, that no vote shall be cast
-----------------
or counted at any meeting in respect of any Note challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.2 or 10.3 may be adjourned from time to
time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 10.6 Voting. The vote upon any resolution submitted to any
------
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 10.2. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7 No Delay of Rights by Meeting. Nothing in this Article X
-----------------------------
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders
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or any rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Noteholders under any of the provisions of
this Indenture or of the Notes.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without Consent of Noteholders. The
-------------------------------------------------------
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.6;
(b) subject to Article IV, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article XII;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions for the benefit of the holders of Notes, and to
make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions or conditions a default or an Event
of Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
-----------------
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of such Notes with the Notes issued hereunder
in fully registered form and to make all appropriate changes for such
purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other
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provisions in regard to matters or questions arising under this Indenture
which shall not materially adversely affect the interests of the holders of
the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualifications of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
Section 11.2 Supplemental Indentures with Consent of Noteholders. With
---------------------------------------------------
the consent (evidenced as provided in Article IX) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding (determined in accordance with Section 9.4), the Company, when
authorized by the resolutions of the Board of Directors, and the Trustee may
from time to time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or any
supplemental indenture or of modifying in any manner the rights of the holders
of the Notes; provided, however, that no such supplemental indenture shall (i)
-----------------
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount thereof or premium,
if any, thereon, or reduce any amount payable on redemption or repurchase
thereof, impair, or change in any respect adverse to the holder of Notes, the
obligation of the Company to repurchase any Note at the option of the holder
upon the happening of a Designated Event, or impair or adversely affect the
right of any Noteholder to institute suit for the payment thereof, or change the
currency in which the Notes are payable, or impair or change in any respect
adverse to the Noteholders the right to convert the Notes into Common Stock
subject to the terms set forth herein, including Section 15.6, or modify the
provisions of this Indenture with respect to the subordination of the Notes in a
manner adverse to the Noteholders, without the consent of the holder of each
Note so affected, or (ii) reduce the aforesaid percentage of Notes, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of all Notes then outstanding.
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Upon the request of the Company, accompanied by a copy of the resolutions
of the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Noteholders as aforesaid,
the Trustee shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in is discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.3 Effect of Supplemental Indentures. Any supplemental indenture
----------------------------------
executed pursuant to the provisions of this Article XI shall comply with the
Trust Indenture Act, as then in effect. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 11.4 Notation on Notes. Notes authenticated and delivered after the
-----------------
execution of any supplemental indenture pursuant to the provisions of this
Article XI may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company's expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 17.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.
Section 11.5 Evidence of Compliance of Supplemental Indenture to Be
------------------------------------------------------
Furnished Trustee. The Trustee, subject to the provisions of Trustee Sections
- - -----------------
8.1 and 8.2, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
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ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate, Etc. 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
unless:
(a) the Company is the surviving entity or 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 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 Liquidated Damages, if any) on all of the Notes 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 the applicable conversion rights set forth in Section 15.6 and the
repurchase rights set forth in Article XVI;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event that after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered 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
Article IX.
Section 12.2 Successor Corporation to Be Substituted. In case of any such
---------------------------------------
consolidation, merger, sale, conveyance or lease in accordance with Section
12.1, and, where required in accordance with Section 12.1(a) upon the assumption
by the successor corporation, by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of Premiere Technologies, Inc. any or all of the
Notes
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issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver,
or cause to be authenticated and delivered, any Notes which previously shall
have been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Notes which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the Notes
so issued shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof. In the event of any such consolidation, merger, sale,
conveyance or lease, the person named as the "Company" in the first paragraph of
this Indenture or any successor which shall thereafter have become such in the
manner prescribed in this Article XII may be dissolved, wound up and liquidated
at any time thereafter and such person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
Section 12.3 Opinion of Counsel to Be Given Trustee. The Trustee, subject
--------------------------------------
to Sections 8.1 and 8.2, shall receive an Officers' Certificate and an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance or lease and any such assumption complies with the provisions of this
Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture. When (a) the Company shall deliver to
----------------------
the Trustee for cancellation all Notes theretofore authenticated (other than any
Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all
of the Notes (other than any Notes which shall have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) not theretofore canceled or delivered to
the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to such date of maturity or redemption date, as
the case may be, and if in either case the Company
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shall also pay or cause to be paid all other sums payable hereunder by the
Company, then this Indenture shall cease to be of further effect (except as to
(i) remaining rights of registration of transfer, substitution and exchange and
conversion of Notes, (ii) rights hereunder of Noteholders to receive payments of
principal of and premium, if any, and interest on, the Notes and the other
rights, duties and obligations of Noteholders, as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee and (iii) the
rights, obligations and immunities of the Trustee hereunder), and the Trustee,
on demand of the Company accompanied by an Officers' Certificate and an Opinion
of Counsel as required by Section 17.5 and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agreeing to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection
with this Indenture or the Notes.
Section 13.2 Deposited Monies to Be Held in Trust by Truste. Subject to
----------------------------------------------
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1
shall be held in trust and applied by it to the payment, notwithstanding the
provisions of Article IV, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
interest and premium, if any.
Section 13.3 Paying Agent to Repay Monies Held. Upon the satisfaction and
----------------------------------
discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon demand of the Company, be repaid to
it or paid to the Trustee, and thereupon such paying agent shall be released
from all further liability with respect to such monies.
Section 13.4 Return of Unclaimed Monies. Subject to the requirements of
---------------------------
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
unless an applicable abandoned property law designates another person.
Section 13.5 Reinstatement. If (i) the Trustee or the paying agent is
--------------
unable to apply any money in accordance with Section 13.2 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application and (ii) the holders of at least a
majority in principal amount of the then outstanding Notes so request by written
notice to the Trustee, the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 13.1 until such
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time as the Trustee or the paying agent is permitted to apply all such money in
accordance with Section 13.2; provided, however, that if the Company makes any
-----------------
payment of interest on or principal of any Note following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the money held by the Trustee or paying
agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 Indenture and Notes Solely Corporate Obligations. No
-------------------------------------------------
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1 Right to Convert. Subject to and upon compliance with the
----------------
provisions of this Indenture, the holder of any Note shall have the right, at
his option, at any time following the date of original issuance of the Notes and
prior to the close of business on July 1, 2004 (except that, with respect to any
Note or portion of a Note which shall be called for redemption, such right shall
terminate, except as provided in the fifth paragraph of Section 15.2, at the
close of business on the last Business Day prior to the date fixed for
redemption of such Note or portion of a Note unless the Company shall default in
payment due upon redemption thereof) to convert the principal amount of any such
Note, or any portion of such principal amount which is $1,000 or an integral
multiple thereof, into that number of fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided in Section 15.2. A holder
of Notes is not entitled to any rights of a holder of Common Stock until such
holder has converted his Notes to
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Common Stock, and only to the extent such Notes are deemed to have been
converted to Common Stock under this Article XV. A Note with respect to which a
holder has delivered a notice in accordance with Section 16.2 regarding such
holder's election to require the Company to repurchase such holder's Notes
following the occurrence of a Designated Event may be converted in accordance
with this Article XV only if such holder withdraws such notice by delivering a
written notice of withdrawal to the Company prior to the close of business on
last Business Day prior to the day fixed for repurchase.
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on
-------------------------------------------------------------
Conversion; No Adjustment for Interest or Dividends. In order to exercise
- - ---------------------------------------------------
the conversion privilege with respect to any Note in definitive form, the holder
of any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 5.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 15.2, and shall give written notice of conversion in
the form provided on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to convert such Note or
such portion thereof specified in said notice. Such notice shall also state the
name or names (with address) in which the certificate or certificates for shares
of Common Stock which shall be issuable on such conversion shall be issued, and
shall be accompanied by transfer taxes, if required pursuant to Section 15.7.
Each such Note surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the registration of such Note,
be duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or his duly authorized
attorney.
In order to exercise the conversion privilege with respect to any interest
in a Note in global form, the beneficial holder must complete the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program, deliver by book-entry delivery an interest in such Note in
global form, furnish appropriate endorsements and transfer documents if required
by the Company or the Trustee or conversion agent, and pay the funds, if any,
required by the penultimate paragraph of this Section 15.2 and any transfer
taxes, if required pursuant to Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such holder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.2, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof in accordance with the provisions of this Article and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 15.3 and, if applicable, any cash
payment required pursuant to the proviso to the first sentence of Section 15.1
(which payment, if any, shall be paid no later than five Business Days after
satisfaction of the requirements for
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conversion set forth above). In case any Note of a denomination greater than
$1,000 shall be surrendered for partial conversion, and subject to Section 2.3,
the Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Note so surrendered, without charge to him, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.2 have been satisfied as to such Note (or portion thereof), and
the person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares represented thereby; provided,
--------
however, that any such surrender on any date when the stock transfer books of
- - -------
the Company shall be closed shall constitute the person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date
through the close of business on the Business Day next preceding such interest
payment date shall (unless such Note or portion thereof being converted shall
have been called for redemption pursuant to a redemption notice mailed to the
Noteholders in accordance with Section 3.2) be accompanied by payment, in New
York Clearing House funds or other funds acceptable to the Company, of an amount
equal to the interest otherwise payable on such interest payment date on the
principal amount being converted; provided, however, that no such payment need
-----------------
be made if there shall exist at the time of conversion a default in the payment
of interest on the Notes. Except as provided above in this Section 15.2, no
adjustment shall be made for interest accrued on any Note converted or for
dividends on any shares issued upon the conversion of such Note as provided in
this Article.
Upon the conversion of an interest in a Note in global form, the Trustee,
or the Custodian at the direction of the Trustee, shall make a notation on such
Note in global form as to the reduction in the principal amount represented
thereby.
Section 15.3 Cash Payments in Lieu of Fractional Shares. No fractional
------------------------------------------
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares which shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered for conversion. If any fractional share of
stock otherwise would be issuable upon the conversion of any Note or Notes, the
Company shall make an adjustment therefor in cash at the current market value
thereof to the holder of Notes. The current market value of a share of Common
Stock shall be the Closing Price on the first Trading Day
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immediately preceding the day on which the Notes (or specified portions thereof)
are deemed to have been converted and such Closing Price shall be determined as
provided in Section 15.5(h).
Section 15.4 Conversion Price. The conversion price shall be as specified
-----------------
in the form of Note (herein called the "Conversion Price") attached as Exhibit A
hereto, subject to adjustment as provided in this Article XV.
Section 15.5 Adjustment of Conversion Price. The Conversion Price shall be
-------------------------------
adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the Record Date (as defined in Section 15.5(h)) 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 Record Date. If any dividend
or distribution of the type described in this Section 15.5(a) is declared
but not so paid or made, the Conversion Price shall again be adjusted to
the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a
period expiring within forty-five (45) days after the date fixed for the
determination of stockholders entitled to receive such rights or warrants)
to subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price (as defined in Section 15.5(h)) on the
Record Date fixed for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price
in effect at the opening of business on the date after such Record Date by
a fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the Record Date plus the
number of shares which the aggregate offering price of the total number of
shares so offered for subscription or purchase would purchase at such
Current Market Price, and of which the denominator shall be the number of
shares of Common Stock outstanding on the close of business on the Record
Date plus the total number of additional shares of Common Stock so offered
for subscription or purchase. Such adjustment shall become effective
immediately after the opening of business on the day following the Record
Date fixed for determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not
delivered pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants the Conversion Price shall
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be readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on
the basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed. In determining whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than such Current
Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, the value of such consideration, if
other than cash, to be determined by the Board of Directors.
(c) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such subdivision becomes effective shall be proportionately
reduced, and conversely, in case outstanding shares of Common Stock shall
be combined into a smaller number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become
effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of
the Company (other than any dividends or distributions to which Section
15.5(a) applies) or evidences of its indebtedness, cash or other assets
(including securities, but excluding (1) any rights or warrants referred to
in Section 15.5(b) and, (2) dividends and distributions (A) in connection
with the liquidation, dissolution or winding up of the Company or paid (B)
exclusively in cash and (3) excluding any capital stock, evidences of
indebtedness, cash or assets distributed upon a merger or consolidation to
which Section 15.6 applies) (the foregoing hereinafter in this Section
15.5(d) called the "Securities")), (unless the Company elects to reserve
such Securities for distribution to the Noteholders upon conversion of the
Notes so that any such holder converting Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such holder
is entitled, the amount and kind of such Securities which such holder would
have received if such holder had converted its Notes into Common Stock
immediately prior to the Record Date (as defined in Section 15.5(h) for
such distribution of the Securities) then, in each such case, the
Conversion Price shall be reduced so that the same shall be equal to the
price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on the Record Date (as defined in Section
15.5(h)) with respect to such distribution by a fraction of which the
numerator shall be the Current Market Price (determined as provided in
Section 15.5(h)) on such date less the fair market value (as
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determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) on such date of the portion
of the Securities so distributed applicable to one share of Common Stock
and the denominator shall be such Current Market Price, such reduction to
become effective immediately prior to the opening of business on the day
following the Record Date; provided, however, that in the event the then
-------- -------
fair market value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall
have the right to receive upon conversion of a Note (or any portion
thereof) the amount of Securities such holder would have received had such
holder converted such Note (or portion thereof) immediately prior to such
Record Date. In the event that such dividend or distribution is not so paid
or made, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or distribution had
not been declared. If the Board of Directors determines the fair market
value of any distribution for purposes of this Section 15.5(d) by reference
to the actual or when issued trading market for any securities comprising
all or part of such distribution, it must in doing so consider the prices
in such market over the same period (the "Reference Period') used in
computing the Current Market Price pursuant to Section 15.5(h) to the
extent possible, unless the Board of Directors in a board resolution
determines in good faith that determining the fair market value during the
Reference Period would not be in the best interest of the Noteholder.
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable; and
(iii) are also issued in respect of future issuances of Common Stock, shall
be deemed not to have been distributed for purposes of this Section 15.5(d)
(and no adjustment to the Conversion Price under this Section 15.5(d) will
be required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of
which such right or warrant shall become exercisable to purchase different
securities, evidences of indebtedness or other assets or entitle the holder
to purchase a different number or amount of the foregoing or to purchase
any of the foregoing at a different purchase price, then the occurrence of
each such event shall be deemed to be the date of issuance and record date
with respect to a new right or warrant (and a termination or expiration of
the existing right or warrant without exercise by the holder thereof). In
addition, in the event of any distribution (or deemed distribution) of
rights or warrants, or any Trigger Event or other event (of the type
described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Conversion Price under this Section 15.5(d), (1) in
the case of any such rights or warrants which shall all have been redeemed
or repurchased without exercise by any holders thereof, the Conversion
Price
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shall be readjusted upon such final redemption or repurchase to give effect
to such distribution or Trigger Event, as the case may be, as though it
were a cash distribution, equal to the per share redemption or repurchase
price received by a holder of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made
to all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants all of which
shall have expired or been terminated without exercise, the Conversion
Price shall be readjusted as if such rights and warrants had never been
issued.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (b),
any dividend or distribution to which this Section 15.5(d) is applicable
that also includes shares of Common Stock, or rights or warrants to
subscribe for or purchase shares of Common Stock to which Section 15.5(b)
applies (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, assets, shares of capital
stock, rights or warrants other than such shares of Common Stock or rights
or warrants to which Section 15.5(b) applies (and any Conversion Price
reduction required by this Section 15.5(d) with respect to such dividend or
distribution shall then be made) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants (and
any further Conversion Price reduction required by Sections 15.5(a) and (b)
with respect to such dividend or distribution shall then be made, except
(A) the Record Date of such dividend or distribution shall be substituted
as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "Record Date fixed for such
determination" and "Record Date" within the meaning of Section 15.5(a) and
as "the date fixed for the determination of stockholders entitled to
receive such rights or warrants", "the Record Date fixed for the
determination of the stockholders entitled to receive such rights or
warrants" and "such Record Date" within the meaning of Section 15.5(b) and
(B) any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed
for such determination" within the meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 15.6 applies or
as part of a distribution referred to in Section 15.5(d)), in an aggregate
amount that, combined together with (1) the aggregate amount of any other
such distributions to all holders of its Common Stock made exclusively in
cash within the twelve (12) months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to this
Section 15.5(e) has been made, and (2) the aggregate of any cash plus the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a 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 twelve (12) months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section
15.5(f) has been made, exceeds 10.0% of the
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product of the Current Market Price (determined as provided in Section
15.5(h)) on the Record Date with respect to such distribution times the
number of shares of Common Stock outstanding on such date, then, and in
each such case, immediately after the close of business on such date, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the close of business on such Record Date by a fraction (i) the
numerator of which shall be equal to the Current Market Price on the Record
Date less an amount equal to the quotient of (x) the excess of such
combined amount over such 10.0% and (y) the number of shares of Common
Stock outstanding on the Record Date and (ii) the denominator of which
shall be equal to the Current Market Price on such date, provided, however,
that in the event the portion of the cash so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price
of the Common Stock on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall
have the right to receive upon conversion of a Note (or any portion
thereof) the amount of cash such holder would have received had such holder
converted such Note (or portion thereof) immediately prior to such Record
Date. In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or distribution had
not been declared. Any cash distribution to all holders of Common Stock as
to which the Company makes the election permitted by Section 15.5(n) and as
to which the Company has complied with the requirements of such Section
shall be treated as not having been made for all purposes of this Section
15.5(e).
(f) In case a tender offer made by the Company or any of its
subsidiaries 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 stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as defined
below)) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) that combined together with
(1) the aggregate of the cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), as of the expiration of such tender
offer, of consideration payable in respect of any other tender offers, by
the Company or any of its subsidiaries for all or any portion of the Common
Stock expiring within the twelve (12) months preceding the expiration of
such tender offer and in respect of which no adjustment pursuant to this
Section 15.5(f) has been made and (2) the aggregate amount of any
distributions to all holders of the Company's Common Stock made exclusively
in cash within twelve (12) months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to Section 15.5(e) has
been made, exceeds 10.0% of the product of the Current Market Price
(determined as provided in Section 15.5(h)) as of the last time (the
"Expiration Time") tenders could have been made pursuant to such tender
offer (as it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares) on
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the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to close of business on the date of the Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time and the denominator shall be the
sum of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any
maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time and the
Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction (if any) to become effective
immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender offer, but the Company is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such tender offer had
not been made. If the application of this Section 15.5(f) to any tender
offer would result in an increase in the Conversion Price, no adjustment
shall be made for such tender offer under this Section 15.5(f). Any cash
distribution to all holders of Common Stock as to which the Company has
made the election permitted by Section 15.5(n) and as to which the Company
has complied with the requirements of such Section shall be treated as not
having been made for all purposes of this Section 15.5(f).
(g) In case of a tender or exchange offer made by a person other
than the Company or any Subsidiary for an amount which increases the
offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding and shall involve the payment by such person of consideration
per share of Common Stock having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive, and described
in a resolution of the Board of Directors at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time,
and in which, as of the Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum
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of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred
to as the "Purchased Shares") and (y) the product of the number of shares
of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the
Expiration Time. In the event that such person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such person is
permanently prevented by applicable law from effecting any such purchases
or all such purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing,
the adjustment described in this Section 15.5(g) shall not be made if, as
of the Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any
transaction described in Article XII.
(h) For purposes of this Section 15.5, the following terms shall
have the meaning indicated:
(1) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in
case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in each case on
the Nasdaq National Market or New York Stock Exchange, as
applicable, or, if such security is not listed or admitted to
trading on such National Market or Exchange, on the principal
national security exchange or quotation system on which such
security is quoted or listed or admitted to trading, or, if not
quoted or listed or admitted to trading on any national securities
exchange or quotation system, the average of the closing bid and
asked prices of such security on the over-the-counter market on the
day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or
if not so available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time by the Board
of Directors for that purpose, or a price determined in good faith
by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution.
(2) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten (10)
consecutive Trading Days immediately prior to the date in question;
provided, however, that (1) if the "ex" date (as hereinafter
-------- -------
defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the
Conversion Price
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pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs
during such ten (10) consecutive Trading Days, the Closing Price for
each Trading Day prior to the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the same fraction
by which the Conversion Price is so required to be adjusted as a
result of such other event, (2) if the "ex" date for any event
(other than the issuance or distribution requiring such computation)
that requires an adjustment to the Conversion Price pursuant to
Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after
the "ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing Price for
each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event, and (3) if
the "ex" date for the issuance, distribution requiring such
computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or (2) of
this proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any
cash and the fair market value (as determined by the Board of
Directors in a manner consistent with any determination of such
value for purposes of Section 15.5(d), (f) or (g), whose
determination shall be conclusive and described in a Board
Resolution) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common
Stock as of the close of business on the day before such "ex" date.
For purposes of any computation under Sections 15.5(f) or (g), the
Current Market Price of the Common Stock on any date shall be deemed
to be the average of the daily Closing Prices per share of Common
Stock for such day and the next two succeeding Trading Days;
provided, however, that if the "ex" date for any event (other than
-------- -------
the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 15.5(a), (b),
(c), (d), (e), (f) and (g) occurs on or after the Expiration Time
for the tender or exchange offer requiring such computation and
prior to the day in question, the Closing Price for each Trading Day
on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by
which the Conversion Price is so required to be adjusted as a result
of such other event. For purposes of this paragraph, the term "ex"
date, (1) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular way on
the relevant exchange or in the relevant market from which the
Closing Price was obtained without the right to receive such
issuance or distribution, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision
or combination becomes effective, and (3) when used with respect to
any tender or exchange offer means the first date on which the
Common Stock trades regular way on such exchange or in such market
after the Expiration Time of such offer. Notwithstanding the
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foregoing, whenever successive adjustments to the Conversion Price
are called for pursuant to this Section 15.5, such adjustments shall
be made to the Current Market Price as may be necessary or
appropriate to effectuate the intent of this Section 15.5 and to
avoid unjust or inequitable results as determined in good faith by
the Board of Directors.
(3) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New York
Stock Exchange or another national security exchange is open for
business or (y) if the applicable security is quoted on the Nasdaq
National Market, a day on which trades may be made thereon or (z) if
the applicable security is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5(a), (b), (c), (d), (e), (f) and
(g), as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase
Common stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time
if the period is at least twenty (20) days, the reduction is irrevocable
during the period and the Board of Directors shall have made a
determination that such reduction would be in the best interests of the
Company, which determination shall be conclusive and described in a Board
Resolution. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to the holder of each Note at
his last address appearing on the Note register provided for in Section 2.5
a notice of the reduction at least fifteen
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(15) days prior to the date the reduced Conversion Price takes effect, and
such notice shall state the reduced Conversion Price and the period during
which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
-------- -------
Section 15.5(j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article XV shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may
be. No adjustment need be made for a change in the par value or no par
value of the Common Stock.
(k) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent
other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date
on which each adjustment becomes effective and shall mail such notice of
such adjustment of the Conversion Price to the holder of each Note at his
last address appearing on the Note register provided for in Section 2.5,
within twenty (20) days of the effective date of such adjustment. Failure
to deliver such notice shall not effect the legality or validity of any
such adjustment.
(l) In any case in which this Section 15.5 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the holder of any Note converted after such Record Date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash
in lieu of any fraction pursuant to Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(n) In lieu of making any adjustment to the Conversion Price
pursuant to Section 15.5(e), the Company may elect to reserve an amount of
cash for distribution to the holders of the Notes upon the conversion of
the Notes so that any such holder converting Notes will receive upon such
conversion, in addition to the shares of Common
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Stock and other items to which such holder is entitled, the full amount of
cash which such holder would have received if such holder had, immediately
prior to the Record Date for such distribution of cash, converted its Notes
into Common Stock, together with any interest accrued with respect to such
amount, in accordance with this Section 15.5(n). The Company may make such
election by providing an Officers' Certificate to the Trustee to such
effect on or prior to the payment date for any such distribution and
depositing with the Trustee on or prior to such date an amount of cash
equal to the aggregate amount the holders of the Notes would have received
if such holders had, immediately prior to the Record Date for such
distribution, converted all of the Notes into Common Stock. Any such funds
so deposited by the Company with the Trustee shall be invested by the
Trustee in marketable obligations issued or fully guaranteed by the United
States government with a maturity not more than three (3) months from the
date of issuance. Upon conversion of Notes by a holder, the holder will be
entitled to receive, in addition to the Common Stock issuable upon
conversion, an amount of cash equal to the amount such holder would have
received if such holder had, immediately prior to the Record Date for such
distribution, converted its Note into Common Stock, along with such
holder's pro rata share of any accrued interest earned as a consequence of
the investment of such funds. Promptly after making an election pursuant to
this Section 15.5(n), the Company shall give or shall cause to be given
notice to all Noteholders of such election, which notice shall state the
amount of cash per $1,000 principal amount of Notes such holders shall be
entitled to receive (excluding interest) upon conversion of the Notes as a
consequence of the Company having made such election.
Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale.
---------------------------------------------------------
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture if such supplemental indenture is then required
to so comply) providing that such Note shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to convert all
such Notes) immediately prior to such
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reclassification, change, consolidation, merger, combination, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section 15.6 the kind and amount of securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance for each non-electing share shall be deemed to be
the kind and amount so receivable per share by a plurality of the non-electing
shares). Such supplemental indenture shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Article. If, in the case of any such reclassification, change,
consolidation, merger, combination, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of shares of Common Stock
includes shares of stock or other securities and assets of a corporation other
than the successor or purchasing corporation, as the case may be, in such
reclassification, change, consolidation, merger, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the holders of the Notes as the Board of Directors shall reasonably
consider necessary by reason of the foregoing, including to the extent
practicable the provisions providing for the repurchase rights set forth in
Article XVI herein.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 15.6 applies to any event or occurrence, Section 15.5 shall
not apply.
Section 15.7 Taxes on Shares Issued. The issue of stock certificates on
----------------------
conversions of Notes shall be made without charge to the converting Noteholder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
Section 15.8 Reservation of Shares; Shares to Be Fully Paid; Listing of
----------------------------------------------------------
Common Stock. The Company shall provide, free from preemptive rights, out of
- - ------------
its authorized but unissued
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shares or shares held in treasury, sufficient shares to provide for the
conversion of the Notes from time to time as such Notes are presented for
conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock issued upon
conversion of Notes will be fully paid and non-assessable by the Company and
free from all taxes, liens and charges with respect to the issue thereof.
The Company further covenants that if at any time the Common Stock shall be
listed on the Nasdaq National Market or any other national securities exchange
or automated quotation system the Company will, if permitted by the rules of
such exchange or automated quotation system, list and keep listed, so long as
the Common Stock shall be so listed on such exchange or automated quotation
system, all Common Stock issuable upon conversion of the Notes.
Section 15.9 Responsibility of Trustee. The Trustee and any other
-------------------------
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Subject to
the provisions of Section 8.1, neither the Trustee nor any conversion agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any note for the purpose of conversion or
to comply with any of the duties, responsibilities or covenants of the Company
contained in this Article. Without limiting the generality of the foregoing,
neither the Trustee nor any conversion agent shall be under any responsibility
to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 15.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
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Section 15.10 Notice to Holders Prior to Certain Actions. In case:
------------------------------------------
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (that would require an adjustment in the Conversion
Price pursuant to Section 15.5); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share
of any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock,
or a change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any 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;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register, provided for in
Section 2.5 of this Indenture, as promptly as possible but in any event at least
fifteen days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
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ARTICLE XVI
REPURCHASE UPON A DESIGNATED EVENT
Section 16.1 Repurchase Right.
----------------
(a) If, at any time prior to July 1, 2004 there shall occur a
Designated Event, then each Noteholder shall have the right, at such
holder's option, to require the Company to repurchase all of such holder's
Notes, or any portion thereof (in principal amounts of $1,000 or integral
multiples thereof), on the repurchase date that is forty (40) days after
the date of the Company Notice (as defined in Section 16.2 below) of such
Designated Event (or, if such 40th day is not a Business Day, the next
succeeding Business Day). Such repayment shall be made in cash at a price
equal to 100% of the principal amount of Notes such holder elects to
Company to repurchase (the "Repurchase Price"); provided that if such
--------
repurchase date is January 1 or July 1, then the interest payable on such
date shall be paid to the holder of record of the Note on the next
preceding December 15 or June 15, respectively. In each case, the Company
shall also pay to such holders accrued interest to the repurchase date on
the redeemed Notes. No Notes may be redeemed at the option of holders upon
a Designated Event if there has occurred and is continuing an Event of
Default, other than a default in the payment of the Repurchase Price with
respect to such Notes on the repurchase date.
Section 16.2 Notices; Method of Exercising Repurchase Right, Etc.
----------------------------------------------------
(a) Unless the Company shall have theretofore called for redemption
all of the outstanding Notes, on or before the fifteenth (15th) calendar
day after the occurrence of a Designated Event, the Company or, at the
request of the Company, the Trustee, shall mail to all holders a notice
(the "Company Notice") of the occurrence of the Designated Event 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 and cause a copy of such notice of a repurchase right, or a summary
of the information contained therein, to be published in a newspaper of
general circulation in The City of New York. The Company Notice shall
contain the following information:
(1) the repurchase date,
(2) the date by which the repurchase right must be exercised,
(3) the last date by which the election to require
repurchase, if submitted, must be revoked;
(4) the Repurchase Price,
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(5) a description of the procedure which a holder must follow
to exercise a repurchase right, and
(6) the Conversion Price then in effect, the date on which the
right to convert the principal amount of the Notes to be repurchased
will terminate and the place or places where Notes may be
surrendered for conversion.
No failure of the Company to give the foregoing notices or defect
therein shall limit any holder's right to exercise a repurchase right or
affect the validity of the proceedings for the repurchase of Notes.
If any of the foregoing provisions are inconsistent with applicable
law, such law shall govern.
(b) To exercise a repurchase right, a holder shall deliver to the
Trustee on or before the thirty-fifth (35th) day after the Company Notice
(i) written notice to the Company (or agent designated by the Company for
such purpose) of the holder's exercise of such right, which notice shall
set forth the name of the holder, the principal amount of the Notes to be
repurchased, a statement that an election to exercise the repurchase right
is being made thereby, and (ii) the Notes with respect to which the
repurchase right is being exercised, duly endorsed for transfer to the
Company. Election of repurchase by a holder shall be revocable at any time
prior to, but excluding, the repurchase date, by delivering written notice
to that effect to the Trustee prior to the close of business on the
Business Day prior to the repurchase date.
(c) If the Company fails to repurchase on the repurchase date any
Notes (or portions thereof) as to which the repurchase right has been
properly exercised, then the principal of such Notes shall, until paid,
bear interest to the extent permitted by applicable law from the repurchase
date at the rate borne by the Note and each such Note shall be convertible
into Common Stock in accordance with this Indenture (without giving effect
to Section 16.2(b)) until the principal of such Note shall have been paid
or duly provided for.
(d) Any Note which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the holder of
such Note without service charge, a new Note or Notes, containing identical
terms and conditions, of any authorized denomination as requested by such
holder in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Note so surrendered.
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(e) On or prior to the repurchase date, the Company shall deposit
with the Trustee or with a paying agent (or, if the Company is acting as
its own paying agent, segregate and hold in trust as provided in Section
5.4) an amount of money sufficient to pay the Repurchase Price of the Notes
that are to be repaid on the repurchase date, provided that if such payment
is made on the repurchase date it must be received by the Trustee or paying
agent, as the case may be, by 10:00 a.m., New York City time, on such date.
Section 16.3 Conditions to the Company's Election to Pay the Repurchase
----------------------------------------------------------
Price in Common Stock.
- - ---------------------
The Company may elect to pay the Repurchase Price by delivery of shares of
Common Stock pursuant to Section 16.1 if and only if the following conditions
shall have been satisfied:
(a) The shares of Common Stock deliverable in payment of the Repurchase
Price shall have a fair market value as of the repurchase date of not less than
the Repurchase Price. For purposes of Section 16.1 and this Section 16.3, the
fair market value of shares of Common Stock shall be determined by the Company
and shall be equal to 95% of the average of the Closing Prices of the Common
Stock for the five consecutive Trading Days immediately preceding the second
Trading Day prior to the repurchase date;
(b) The Repurchase Price shall be paid only in cash in the event any shares
of Common Stock to be issued upon repurchase of Notes hereunder (i) require
registration under any federal securities law before such shares may be freely
transferrable without being subject to any transfer restrictions under the
Securities Act upon repurchase and if such registration is not completed or does
not become effective prior to the repurchase date, and/or (ii) require
registration with or approval of any governmental authority under any state law
or any other federal law before such shares may be validly issued or delivered
upon repurchase and if such registration is not completed or does not become
effective or such approval is not obtained prior to the repurchase date;
(c) Payment of the Repurchase Price may not be made in Common Stock unless
such stock is, or shall have been, approved for quotation on the Nasdaq National
Market or listed on a national securities exchange, in either case, prior to the
repurchase date; and
(d) All shares of Common Stock which may be issued upon repurchase of the
Notes will be issued out of the Company's authorized but unissued Common Stock
and, will upon issue, be duly and validly issued and fully paid and non-
assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 16.3 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.
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Section 16.4 Certain Definitions. For purposes of this Article XVI:
-------------------
(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3 and 13d-5, as in effect on the date of the original
execution of this Indenture, promulgated by the Securities and Exchange
Commission pursuant to the Exchange Act;
(b) the term "person" or "group" shall include any syndicate or
group which would be deemed to be a "person" under Section 13(d)(3) and
14(d) of the Exchange Act as in effect on the date of the original
execution of this Indenture; and
(c) the term "Continuing Director" means at any date a member of the
Company's Board of Directors (i) who was a member of such board on June 30,
1997 or (ii) who was nominated or elected by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Company's Board of Directors was
recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or such
lesser number comprising a majority of a nominating committee whose
authority and composition have been approved by at least a majority of the
directors who were continuing directors at the time such committee was
formed. (Under this definition, if the current Board of Directors of the
Company were to approve a new director or directors and then resign, no
Change in Control would occur even though the current Board of Directors
would thereafter cease to be in office).
(d) the term "Designated Event" means a Change in Control or a
Termination of Trading.
(e) a "Change in Control" shall be deemed to have occurred when (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rules 13-d3 and 13-d5 under the Exchange Act) of shares representing more
than 50% of the combined voting power of the then outstanding securities
entitled to vote generally in elections of directors of the Company (the
"Voting Stock"); (ii) stockholders of the Company approve any plan or
proposal for the liquidation, dissolution or winding up of the Company;
(iii) the Company (A) consolidates with or merges into any other
corporation or any other corporation merges into the Company, and in the
case of any such transaction, the outstanding Common Stock of the Company
is changed or exchanged into other assets or securities as a result, unless
the stockholders of the Company immediately before such transaction own,
directly or indirectly immediately following such transaction, at least 51%
of the combined voting power of the outstanding voting securities of the
corporation resulting from such transaction in substantially the same
proportion as their ownership of the Voting Stock immediately before such
transaction, or (B) conveys, transfers or leases all or substantially all
of its assets to any person; or (iv) any time Continuing Directors do not
constitute a majority of the Board of Directors of the Company (or, if
applicable, a
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<PAGE>
successor corporation to the Company); provided that a Change in Control
--------
shall not be deemed to have occurred if either (x) the Closing Price of the
Common Stock for any five (5) Trading Days during the ten (10) Trading Days
immediately preceding the Change in Control is at least equal to 105% of
the Conversion Price in effect on the date on which the Change in Control
occurs or (y) in the case of a merger or consolidation, at least 90% of the
consideration (excluding cash payments for fractional shares) in the
transaction or transactions constituting the Change in Control consists of
common stock or securities convertible into common stock that are, or upon
issuance will be, traded on a United States national securities exchange or
quoted on the Nasdaq National Market (or which will be so traded or quoted
when issued or exchanged in connection with such Change in Control) and as
a result of such transaction or transactions such Notes become convertible
solely into such common stock. A Change of Control also shall not be deemed
to have occurred if Boland T. Jones or a group that includes Boland T.
Jones (a "Permitted Investor") becomes the beneficial owner of more than
50% of the Voting Stock, provided that, if as a consequence of any
--------
transaction involving a Permitted Investor, or in which a Permitted
Investor has an interest, less than 30% of the number of shares of Common
Stock outstanding upon the issuance of the Notes are neither listed for
trading upon a national securities exchange nor approved for trading or
quoted for trading on the Nasdaq National Market, then a Change of Control
shall be deemed to have occurred upon the consummation of such transaction.
(f) a "Termination of Trading" shall have occurred if the Common
Stock (or other common stock into which the Notes are then convertible) is
neither listed for trading on a United States national securities exchange
nor approved for trading on an established automated over-the-counter
trading market in the United States.
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<PAGE>
ARTICLE XVII
MISCELLANEOUS PROVISIONS
Section 17.1 Provisions Binding on Company's Successors. All the covenants,
------------------------------------------
stipulations, promises and agreements of the Company in this Indenture contained
shall bind its successors and assigns whether so expressed or not.
Section 17.2 Official Acts by Successor Corporation. Any act or proceeding
--------------------------------------
by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
Section 17.3 Addresses for Notices, Etc. Any notice or demand which by any
--------------------------
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Premiere Technologies, Inc., 3399 Peachtree Road N.E., The Lenox
Building, Suite 400, Atlanta, Georgia 30326, Attention: Patrick Jones, with a
copy to Alston & Bird LLP, One Atlantic Center, 1201 West Peachtree Street,
Atlanta Georgia 30309, Attention: Jeffrey A. Allred. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as of which this Indenture is dated, located at 1 State Street, New York, New
York 10004, Attention: Corporate Finance Trust Services.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 17.4 Governing Law. This Indenture and each Note shall be deemed
-------------
to be a contract made under the laws of New York, and for all purposes shall be
construed in accordance with the laws of New York (without regard to the
conflict of laws provisions thereof).
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<PAGE>
Section 17.5 Evidence of Compliance with Conditions Precedent; Certificates
--------------------------------------------------------------
to Trustee. Upon any application or demand by the Company to the Trustee to
- - ----------
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with.
Each certificate or opinion provided for by or on behalf of the Company in
this Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained in
such certificate or opinion is based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
Section 17.6 Legal Holidays. In any case where the date of maturity of
---------------
interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
Section 17.7 No Security Interest Created. Nothing in this Indenture or in
----------------------------
the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction.
Section 17.8 Trust Indenture Act. This Indenture is hereby made subject to,
-------------------
and shall be governed by, the provisions of the Trust Indenture Act required to
be part of and to govern indentures qualified under the Trust Indenture Act;
provided, however, that, unless otherwise required by law, notwithstanding the
- - -----------------
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect as hereafter amended or modified; provided
--------
further that this Section 17.8 shall not require that this Indenture or the
- - -------
Trustee be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party hereto that
any such qualification is required prior to the time such qualification is in
fact required under the terms of the Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in an indenture qualified under the Trust Indenture Act,
such required provision shall control.
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<PAGE>
Section 17.9 Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Notes, expressed or implied, shall give to any person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 17.10 Table of Contents, Headings, Etc. The table of contents and
--------------------------------
the titles and headings of the and sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof, and
shall in no way modify or restrict any of the terms or provisions hereof.
Section 17.11 Authenticating Agent. The Trustee may appoint an
--------------------
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all intents and
purposes as though the authenticating agent had been expressly authorized by
this Indenture and those Sections to authenticate and deliver Notes. For all
purposes of this Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and delivery of such
Notes "by the Trustee" and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee's certificate of
authentication. Such authenticating agent shall at all times be a person
eligible to serve as trustee hereunder pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall promptly appoint a successor authenticating agent (which may be
the Trustee), shall give written notice of such appointment to the Company and
shall mail notice of such appointment to all holders of Notes as the names and
addresses of such holders appear on the Note register.
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<PAGE>
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 17.11 shall
be applicable to any authenticating agent.
Section 17.12 Execution in Counterparts. This Indenture may be executed in
-------------------------
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
IBJ Schroder Bank & Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Boland T. Jones
-------------------------
Name: Boland T. Jones
Title: Chairman of the Board
of Directors and President
Attest:
/s/ Patrick G. Jones
- - ----------------------
Name: Patrick G. Jones
Title: Secretary
[seal]
IBJ SCHRODER BANK & TRUST
COMPANY, as Trustee
By: /s/ Barbara McCluskey
------------------------
Barbara McCluskey,
Vice President
Attest:
/s/ Max Volmar
- - ---------------------
Max Volmar,
Assistant Secretary
[seal]
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<PAGE>
EXHIBIT 4.2
FORM OF GLOBAL CONVERTIBLE SUBORDINATED NOTE DUE 2004
PREMIERE TECHNOLOGIES, INC.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE
NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO IBJ SCHRODER BANK & TRUST
COMPANY, AS TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D) OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(F) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO IBJ SCHRODER BANK & TRUST COMPANY, AS TRUSTEE. IF THE PROPOSED
TRANSFER IS PURSUANT TO CLAUSE 2(C) OR 2(E) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO IBJ SCHRODER BANK & TRUST COMPANY, AS TRUSTEE, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(F)
ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
<PAGE>
NO. 1 $150,000,000
CUSIP: 74058 FAAO
PREMIERE TECHNOLOGIES, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
Premiere Technologies, Inc., a corporation duly organized and validly
existing under the laws of the State of Georgia (herein called the "Company",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of One Hundred Fifty Million Dollars
($150,000,000) on July 1, 2004, and to pay interest on said principal sum semi-
annually on January 1 and July 1 of each year, commencing January 1, 1998, at
the rate per annum specified in the title of this Note, accrued from the January
1 or July 1, as the case may be, next preceding the date of this Note to which
interest has been paid or duly provided for, unless the date of this Note is a
date to which interest has been paid or duly provided for, in which case
interest shall accrue from the date of this Note, or unless no interest has been
paid or duly provided for, in which case interest shall accrue from June 30,
1997, until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after any December 15 or
June 15, as the case may be, and before the following January 1 or July 1, this
Note shall bear interest from such January 1 or July 1, respectively; provided,
---------
however, that if the Company shall default in the payment of interest due on
- - -------
such January 1 or July 1, then this Note shall bear interest from the next
preceding January 1 or July 1 to which interest has been paid or duly provided
for; provided further, however, that in any event, if no interest has been paid
---------------- -------
or duly provided for, from June 30, 1997. The interest so payable on any
January 1 or July 1 will be paid to the person in whose name this Note (or one
or more Predecessor Notes) is registered at the close of business on the record
date, which shall be the December 15 or June 15 (whether or not a Business Day)
next preceding such January 1 or July 1, respectively; provided that any such
-------- ----
interest not punctually paid or duly provided for shall be payable as provided
in the Indenture. Payment of the principal of and interest accrued on this Note
shall be made at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York, or, at the option of the
holder of this Note, at the Corporate Trust Office, in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts; provided, however, that at the option
-------- -------
of the Company, payment of interest may be made by check mailed to the
registered address of the person entitled thereto; provided, further, that, with
-------- -------
respect to any holder of Notes with an aggregate principal amount equal to or in
excess of $5,000,000, at the request of such holder in writing to the Company,
interest on such holder's Notes shall be paid by wire transfer in immediately
available funds in accordance with the wire transfer instruction supplied by
such holder from time to time to the Trustee and paying agent (if different from
Trustee) at least two days prior to the applicable record date.
-2-
<PAGE>
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on, this Note to the
prior payment in full of all Senior Indebtedness as defined in the Indenture and
provisions giving the holder of this Note the right to convert this Note into
Common Stock of the Company on the terms and subject to the limitations referred
to on the reverse hereof and as more fully specified in the Indenture. Such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State (without regard to the conflict of laws
provisions thereof).
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
[SIGNATURES AND AUTHENTICATION ON NEXT PAGE]
-3-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
PREMIERE TECHNOLOGIES, INC.
Dated: June 30, 1997 By:
-----------------------------
Name:
Title:
Attest:
By:
-----------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
IBJ SCHRODER BANK & TRUST COMPANY,
AS TRUSTEE
Dated: June 30, 1997 By:
-----------------------------
Name:
Title:
-4-
<PAGE>
REVERSE OF NOTE
_______________
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 5 3/4% Convertible Subordinated Notes due 2004 (herein called
the "Notes"), limited to the aggregate principal amount of $172,500,000 all
issued or to be issued under and pursuant to an Indenture dated as of June 15,
1997 (herein called the "Indenture"), between the Company and IBJ Schroder Bank
& Trust Company (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all Notes
may be declared, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee in certain limited circumstances, without the consent of the holders of
the Notes, and in other circumstances, with the consent of the holders of not
less than a majority of the aggregate principal amount of the Notes at the time
outstanding, evidenced as in the Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the holders of the Notes; provided, however, that no
-----------------
such supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable on redemption or repurchase thereof, impair, or change in any respect
adverse to the holder of Notes, the obligation of the Company to repurchase any
Note at the option of the holder upon the happening of a Designated Event, or
impair or adversely affect the right of any Noteholder to institute suit for the
payment thereof, or make the principal thereof or interest or premium, if any,
thereon payable in any coin or currency other than that provided in the Notes,
or modify the provisions of the Indenture with respect to the subordination of
the Notes in a manner adverse to the Noteholders, or impair, or change in any
respect adverse to the holders of the Notes, the right to convert the Notes into
Common Stock subject to the terms set forth in the Indenture, including Section
15.6 thereof, without the consent of the holder of each Note so affected or (ii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Notes then outstanding. It is also provided in the Indenture that, prior
to any declaration accelerating the maturity of the Notes, the holders of a
majority in aggregate principal amount of the Notes at the
-5-
<PAGE>
time outstanding may on behalf of the holders of all of the Notes waive any past
default or Event of Default under the Indenture and its consequences except a
default in the payment of interest or any premium on or the principal of or any
redemption price or repurchase price of any of the Notes or a failure by the
Company to convert any Notes into Common Stock of the Company. Any such consent
or waiver by the holder of this Note (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Note or such other Notes.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
as defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney in fact for such purpose.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the place, at the respective times, at the rate and in the coin
or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months compounded semi-annually.
The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
The Notes will not be redeemable at the option of the Company prior to
July 6, 2000. On or after such date and prior to maturity the Notes may be
redeemed at the option of the Company as a whole, or from time to time in part,
upon mailing a notice of such redemption not less than 20 nor more than 60 days
before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the following
redemption prices (expressed as percentages of the principal amount), together
in each case with accrued interest to, but excluding, the date fixed for
redemption; provided that if a redemption date is an interest payment date, the
-6-
<PAGE>
semi-annual interest payment becoming due on such date shall be payable to the
holder of record of this Note as of the relevant date.
If redeemed during the 12-month period beginning July 1:
Year Percentage Year Percentage
------------ ---------- ----------- ----------
2000 103.286% 2002 101.643%
2001 102.464 2003 100.821
and 100% at July 1, 2004; provided that if the date fixed for redemption is a
-------- ----
January 1 or July 1, then the interest payable on such date shall be paid to the
holder of record on the next preceding December 15 or June 15, respectively.
The Notes are not subject to redemption through the operation of any
sinking fund.
Upon the occurrence of a "Designated Event", the Noteholder has the
right, at such holder's option, to require the Company to repurchase all or any
portion of such holder's Notes on the 40th day after notice of such Designated
Event at a price equal to 100% of the principal amount of the Notes, together in
each case with accrued interest to the date fixed for redemption; provided that
--------
if such repurchase date is January 1 or July 1, then the interest payable on
such date shall be paid to the holder of record of the Note on the next
preceding December 15 or June 15, respectively. The Company shall mail to all
holders of record of the Notes a notice of the occurrence of a Designated Event
and of the repurchase right arising as a result thereof on or before 15 calendar
days after the occurrence of such Designated Event. Payment of the repurchase
price may be made in shares of the Company's Common Stock under certain
circumstances, as provided in Section 16.3 of the Indenture.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time following the date of original issuance of the
Notes and prior to the close of business on July 1, 2004, or, as to all or any
portion hereof called for redemption, prior to the close of business on the
Business Day next preceding the date fixed for redemption (unless the Company
shall default in payment due upon redemption), to convert the principal hereof
or any portion of such principal which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable shares of Company's
Common Stock, as said shares shall be constituted at the date of conversion,
obtained by dividing the principal amount of this Note or portion thereof to be
converted by the conversion price of $33.00 or such conversion price as adjusted
from time to time as provided in the Indenture, upon surrender of this Note,
together with a conversion notice as provided in the Indenture and this Note, to
the Company at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York, or at the option of such
holder, the Corporate Trust Office, and, unless the
-7-
<PAGE>
shares issuable on conversion are to be issued in the same name as this Note,
duly endorsed by, or accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or by his duly authorized attorney.
No adjustment in respect of interest or dividends will be made upon any
conversion; provided, however, that if this Note shall be surrendered for
-----------------
conversion during the period from the close of business on any record date for
the payment of interest through the close of business on the Business Day next
preceding the following interest payment date, this Note (unless it or the
portion being converted shall have been called for redemption during the period
from the close of business on any record date through the close of business on
the Business Day next preceding the following interest payment date) must be
accompanied by an amount, in funds acceptable to the Company, equal to the
interest otherwise payable on such interest payment date on the principal amount
being converted. No fractional shares of Common Stock will be issued upon any
conversion, but an adjustment in cash will be paid to the holder, as provided in
the Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion.
Any Notes called for redemption, unless surrendered for conversion on
or before the close of business on the date fixed for redemption, may be deemed
to be purchased from the holder of such Notes at an amount equal to the
applicable redemption price, together with accrued interest to the date fixed
for redemption, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Notes from the holders thereof and
convert them into Common Stock of the Company and to make payment for such Notes
as aforesaid to the Trustee in trust for such holders.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, or at the option of the holder of this Note, at the Corporate Trust
Office, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange thereof, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
-8-
<PAGE>
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, employee, agent, officer, director
or subsidiary, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
Terms used in this Note and defined in the Indenture are used herein
as therein defined.
-9-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
----- -------
TEN ENT - as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with Act
right of survivorship --------------------------------------
and not as tenants in (State)
common
Additional abbreviations may also be used
though not in the above list.
-10-
<PAGE>
CONVERSION NOTICE
To: IBJ Schroder Bank & Trust Company
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Note, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto. Any amount required to be
paid to the undersigned on account of interest accompanies this Note.
Dated:
-----------------------------
---------------------------------
---------------------------------
Signature(s)
Signature(s) must be guaranteed by
an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved signature
guarantee medallion program pursuant to
Securities and Exchange Commission
Rule 17Ad-15 if shares of Common Stock
are to be issued, or Notes to be
delivered, other than to and in the name
of the registered holder.
- - ---------------------------------
Signature Guarantee
-11-
<PAGE>
Fill in for registration of
shares if to be issued, and
Notes if to be delivered,
other than to and in the name
of the registered holder:
- - -----------------------------
(Name)
- - -----------------------------
(Street Address)
- - -----------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if less
than all): $______,000
-----------------------------------------
Social Security or Other Taxpayer
Identification Number
-12-
<PAGE>
OPTION TO ELECT REPAYMENT
UPON A DESIGNATED EVENT
To: IBJ Schroder Bank & Trust Company
The undersigned registered owner of this Note hereby acknowledges
receipt of a notice from Premiere Technologies, Inc. (the "Company") as to the
occurrence of a Designated Event with respect to the Company and requests and
instructs the Company to repay the entire principal amount of this Note, or the
portion thereof (which is $1,000 principal amount or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture
referred to in this Note, together with accrued interest to such date, to the
registered holder hereof.
Dated:
-------------------------------
------------------------------------
------------------------------------
Signature(s)
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (if
less than all): $______,000
NOTICE: The above signatures of the
holder(s) hereof must correspond with
the name as written upon the face of
the Note in every particular without
alteration or enlargement or any
change whatever.
-13-
<PAGE>
ASSIGNMENT
For value received ______________________________ hereby sell(s),
assign(s) and transfer(s) unto ______________________________ (Please insert
social security or Taxpayer Identification Number of assignee) the within Note,
and hereby irrevocably constitutes and appoints ______________________________
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
In connection with any transfer of the within Note occurring within
two years of the original issuance of such Note (unless such Note is being
transferred pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such Note is
being transferred:
[ ] To __________________ or a subsidiary thereof; or
[ ] Pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended; or
[ ] To an Institutional Accredited Investor pursuant to
and in compliance with the Securities Act of 1933,
as amended; or
[ ] Pursuant to and in compliance with Regulation S under
the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under
the Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company.
-14-
<PAGE>
Dated:
--------------------------
- - --------------------------------
- - --------------------------------
Signature(s)
Signature(s) must be guaranteed
by an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit
unions) with membership in an
approved signature guarantee
medallion program pursuant to
Securities and Exchange
Commission Rule 17Ad-15 if shares
of Common Stock are to be issued,
or Notes to be delivered, other
than to and in the name of the
required holder.
- - --------------------------------
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect repurchase
upon a Designated Event or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.
-15-
<PAGE>
EXHIBIT 4.3
5-3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
REGISTRATION RIGHTS AGREEMENT
Dated as of June 15, 1997
by and among
PREMIERE TECHNOLOGIES, INC.,
as the Company,
and
ROBERTSON, STEPHENS & COMPANY LLC,
ALEX. BROWN & SONS INCORPORATED
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION,
as Purchasers
<PAGE>
This Registration Rights Agreement is made and entered into as of June 15,
1997, by and among Premiere Technologies, Inc., a Georgia (the "Company"), and
Robertson, Stephens & Company LLC, Alex. Brown & Sons Incorporated and
Donaldson, Lufkin & Jenrette Securities Corporation (the "Purchasers") who have
purchased or have the right to purchase up to $150,000,000 in aggregate
principal amount of 5-3/4% Convertible Subordinated Notes due 2004 (the "Notes")
of the Company pursuant to the Purchase Agreement (as such term is defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated June 25,
1997, among the Company and the Purchasers (the "Purchase Agreement"). In order
to induce the Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights provided for in this Agreement to the
Purchasers and their respective direct and indirect transferees (i) for the
benefit of the Purchasers, (ii) for the benefit of the holders from time to time
of the Notes (including the Purchasers) and the holders from time to time of the
Common Stock issuable or issued upon conversion of the Notes and (iii) for the
benefit of the securities constituting the Transfer Restricted Securities. The
execution of this Agreement is a condition to the closing of the transactions
contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
-----------
have the following meanings:
Accredited Investor Notes: Notes initially resold by the Purchasers
--------------------------
pursuant to the Purchase Agreement to institutional "accredited investors"
(within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated by the SEC
under the Securities Act) (it being understood and agreed that such Notes shall
not include any Notes initially resold outside the United States to certain
persons in offshore transactions in reliance on Registration S under the
Securities Act) and all Notes issued upon registration of transfer of or in
exchange for such Notes.
Act: As defined in this Section 1.
----
Advice: As defined in the last paragraph of Section 2(d) hereof.
-------
Affiliate: An affiliate of any specified person shall mean 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 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 "affiliated," "controlling" and "controlled" have meanings correlative
to the foregoing.
Agreement: This Registration Rights Agreement, as the same may be amended,
----------
supplemented or modified from time to time in accordance with the terms hereof.
<PAGE>
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is
-------------
not a day on which banking institutions in New York, New York are authorized or
obligated by law or executive order to close.
Closing Date: June 30, 1997.
-------------
Common Stock: Common Stock, $.01 par value 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, as issuable or issued upon conversion of the
Notes.
Company: Premiere Technologies, Inc., a Georgia corporation, and any
--------
successor corporation thereto.
controlling person: As defined in Section 6(a) hereof.
-------------------
Damages Payment Date: Each of the semi-annual interest payment dates
---------------------
provided in the Indenture.
Effectiveness Period: As defined in Section 2(a) hereof.
---------------------
Effectiveness Target Date: The 180th day following the Closing Date.
--------------------------
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
-------------
rules and regulations promulgated by the SEC thereunder.
Filing Date: The 90th day after the Closing Date.
------------
Holder: Each owner of any Transfer Restricted Securities.
-------
Indemnified Person: As defined in Section 6(a) hereof.
-------------------
Indenture: The Indenture, dated as of the date hereof, between the Company
----------
and the Trustee, pursuant to which the Notes are being issued, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.
Liquidated Damages: As defined in Section 3(a) hereof.
-------------------
Purchasers: As defined in the first paragraph hereof.
-----------
Notes: The $150,000,000 aggregate principal amount of 5-3/4% Convertible
------
Subordinated Notes due 2004 of the Company being issued pursuant to the
Indenture (together with up to $22,500,000 aggregate principal amount of such
Notes, if, and to the extent, the Purchasers' over-allotment option is
exercised).
-2-
<PAGE>
Proceeding: An action, claim, suit or proceeding (including, without
-----------
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
Prospectus: The prospectus included in any Registration Statement
-----------
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed in reliance upon Rule 430A), as
amended or supplemented by any prospectus supplement, with respect to the resale
of any of the Transfer Restricted Securities covered by such Registration
Statement, and all other amendments and supplements to any such prospectus,
including post-effective amendments, and all materials incorporated by reference
or deemed to be incorporated by reference, if any, in such prospectus.
Purchase Agreement: As defined in the second paragraph hereof.
-------------------
Record Holder: (i) with respect to any Damages Payment Date relating
--------------
to any Note as to which any such Liquidated Damages have accrued, the registered
Holder of such Note on the record date with respect to the interest payment date
under the Indenture on which such Damages Payment Date shall occur and (ii) with
respect to any Damages Payment Date relating to any shares of Common Stock as to
which any such Liquidated Damages have accrued, the registered Holder of such
shares 15 days prior to the next succeeding Damages Payment Date.
Registration Default: As defined in Section 3(a) hereof.
---------------------
Registration Statement: Any registration statement of the Company filed
-----------------------
with the SEC pursuant to the Securities Act that covers the resale of any of the
Transfer Restricted Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement.
Regulation S Notes: Notes initially resold by the Purchasers pursuant to
-------------------
the Purchase Agreement outside the United States to certain persons in offshore
transactions in reliance on Registration S under the Securities Act and all
Notes issued upon registration of transfer of or in exchange for such Notes.
Requisite Information: As defined in Section 2(c) hereof.
----------------------
Rule 144: Rule 144 promulgated by the SEC pursuant to the Securities Act,
---------
as such Rule may be amended from time to time, or any successor rule or
regulation.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the Securities
----------
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
-3-
<PAGE>
Rule 144A Notes: Notes initially resold by the Purchasers pursuant to the
----------------
Purchase Agreement to "qualified institutional buyers" (as such term is defined
in Rule 144A) (it being understood and agreed that such Notes shall not include
any Notes initially resold outside the United States to certain persons in
offshore transactions in reliance on Registration S under the Securities Act)
and all Notes issued upon registration of transfer of or in exchange for such
Notes.
Rule 158: Rule 158 promulgated by the SEC pursuant to the Securities Act,
---------
as such Rule may be amended from time to time, or any successor rule or
regulation.
Rule 415: Rule 415 promulgated by the SEC pursuant to the Securities Act,
---------
as such Rule may be amended from time to time, or any successor rule or
regulation.
Rule 424: Rule 424 promulgated by the SEC pursuant to the Securities Act,
---------
as such Rule may be amended from time to time, or any successor rule or
regulation.
Rule 430A: Rule 430A promulgated by the SEC pursuant to the Securities
----------
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
SEC: The Securities and Exchange Commission.
----
Securities Act: The Securities Act of 1933, as amended, and the rules and
---------------
regulations promulgated by the SEC thereunder.
Shelf Registration Statement: As defined in Section 2 hereof.
-----------------------------
Special Counsel: The special counsel to the Holders.
----------------
TIA: The Trust Indenture Act of 1939, as amended, and the rules and
----
regulations promulgated by the SEC thereunder.
Transfer Restricted Securities: The Accredited Investor Notes, the Rule
-------------------------------
144A Notes and the Regulation S Notes, and the shares of Common Stock into which
such Notes are converted or convertible (including any shares of Common Stock
issued or issuable thereon upon any stock split, stock combination, stock
dividend or the like), upon original issuance thereof, and at all times
subsequent thereto, and associated related rights, if any, until, in the case of
any such Note or share (and associated rights) (i) the date on which the resale
thereof has been effectively registered under the Securities Act and disposed of
in accordance with the Registration Statement relating thereto, (ii) the date on
which such security has been distributed to the public pursuant to Rule 144 or
is saleable pursuant to paragraph (k) of Rule 144 or (iii) the date on which it
ceases to be outstanding, whichever date is earliest.
Trustee: The trustee under the Indenture.
--------
-4-
<PAGE>
underwritten registration or underwritten offering: A registration in
---------------------------------------------------
connection with which securities of the Company are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
References herein to the term "Holders of a majority in aggregate principal
amount of Transfer Restricted Securities" or words to a similar effect shall
mean, with respect to any request, notice, demand, objection or other action by
the Holders hereunder or pursuant hereto (each, an "Act"), registered Holders of
a number of shares of then-outstanding Common Stock constituting Transfer
Restricted Securities and an aggregate principal amount of then outstanding
Notes constituting Transfer Restricted Securities, such that the sum of such
shares of Common Stock and the shares of Common Stock issuable upon conversion
of such Notes constitutes in excess of 50% of the sum of all of the then-
outstanding shares of Common Stock constituting Transfer Restricted Securities
and the number of shares of Common Stock issuable upon conversion of then-
outstanding Notes constituting Transfer Restricted Securities. For purposes of
the preceding sentence, Transfer Restricted Securities owned, directly or
indirectly, by the Company or its Affiliates shall be deemed not to be
outstanding.
2. Shelf Registration Statement
----------------------------
(a) The Company agrees to file with the SEC as soon as reasonably
practicable after the Closing Date, but in no event later than the Filing Date,
a Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Transfer Restricted Securities or
separate Registration Statements for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Notes constituting Transfer
Restricted Securities and all of the Common Stock constituting Transfer
Restricted Securities, respectively (such Registration Statement or Statements,
collectively, the "Shelf Registration Statement"). Each Shelf Registration
Statement shall be on Form S-3 under the Securities Act or another appropriate
form selected by the Company permitting registration of such Transfer Restricted
Securities for resale by the Holders in the manner or manners reasonably
designated by Holders of a majority in aggregate principal amount of Transfer
Restricted Securities being sold (including, without limitation, up to two
underwritten offerings). The Company shall use all commercially reasonable
efforts to not permit any securities other than the Transfer Restricted
Securities to be included in any Shelf Registration Statement. The Company
shall use all commercially reasonable efforts to cause each Shelf Registration
Statement to be declared effective pursuant to the Securities Act as soon as
reasonably practicable following the filing thereof and to keep each Shelf
Registration Statement continuously effective under the Securities Act for two
years after the date on which all the Notes are sold (including those sold
pursuant to the over-allotment option granted to the Purchasers in the Purchase
Agreement) to the Purchasers (subject to extension pursuant to Sections 2(d)
hereof) (the "Effectiveness Period"), or such shorter period ending when there
cease to be any Transfer Restricted Securities outstanding.
(b) Supplements and Amendments. The Company shall use all commercially
---------------------------
reasonable efforts to keep each Shelf Registration Statement continuously
effective by supplementing and amending the Shelf Registration Statement if
required by the rules, regulations or instructions
-5-
<PAGE>
applicable to the registration form used for such Shelf Registration Statement,
if required by the Securities Act or if reasonably requested by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities or
by any underwriter of such Transfer Restricted Securities; provided, however,
that the Effectiveness Period shall be extended as provided in Section 2(d)
hereof.
(c) Selling Securityholder Information. Each Holder shall furnish to the
-----------------------------------
Company such information regarding the distribution of its Transfer Restricted
Securities as is required by law to be disclosed in the applicable Registration
Statement (the "Requisite Information") prior to effecting any sale pursuant to
such Registration Statement.
The Company shall file, within two Business Days after the receipt of
notice from any Holder which includes the Requisite Information with respect to
such Holder, a Prospectus supplement pursuant to Rule 424 or otherwise amend or
supplement such Registration Statement to include in the Prospectus the
Requisite Information as to such Holder (and the Transfer Restricted Securities
held by such Holder), and the Company shall provide such Holder and the Special
Counsel within two Business Days after receipt of such notice with a copy of
such Prospectus as so amended or supplemented containing the Requisite
Information in order to permit such Holder to comply with the Prospectus
delivery requirements of the Securities Act in a timely manner with respect to
any proposed disposition of such Holder's Transfer Restricted Securities.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require, in the event that such reference to such Holder by
name or otherwise is not required by the Securities Act or any similar Federal
statute then in force, the deletion of the reference to such Holder in such
Registration Statement at any time subsequent to the time that such reference
ceases to be required.
(d) Certain Notices; Suspension of Sales. Each Holder agrees by
-------------------------------------
acquisition of such Transfer Restricted 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)(v) or 4(c)(vi) hereof, such Holder will
forthwith discontinue disposition of such Transfer Restricted Securities covered
by such Registration Statement and Prospectus (other than in transactions exempt
from the registration requirements under the Securities Act) until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Sections 4(c)(i) and 4(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus. If the Company shall give any such notice, the
Effectiveness Period shall be extended by the number of days during such period
from and including the date of the giving of such notice to and including the
date when each Holder shall have received (x) the copies of the supplemented or
amended Prospectus contemplated by Sections 4(i) and 4(k) hereof or (y) the
Advice, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus.
-6-
<PAGE>
3. Liquidated Damages
------------------
(a) The Company and the Purchasers agree that the Holders will suffer
damages if the Company fails to fulfill its obligations pursuant to Section 2
hereof and that it would not be possible to ascertain the extent of such
damages. Accordingly, the Company hereby agrees to pay liquidated damages
("Liquidated Damages") to each Holder under the circumstances and to the extent
set forth below:
(i) if the Shelf Registration Statement has not been filed with the SEC
on or prior to the Filing Date; or
(ii) if each Shelf Registration Statement is not declared effective by
the SEC on or prior to the applicable Effectiveness Target Date; or
(iii) any Shelf Registration Statement ceases to be effective or usable
at any time during the Effectiveness Period (without being succeeded on the
same day immediately by a post-effective amendment or supplement to such
Registration Statement that cures such failure and that is itself, in the
case of post-effective amendment, immediately declared effective) for a
period of time which shall exceed 90 days in the aggregate in any period of
365 consecutive days;
(any of the foregoing, a "Registration Default"). In the event of any such
Registration Default, the Company shall accrue Liquidated Damages to each Holder
during the first 90-day period immediately in an amount equal to $.05 per week
per $1,000 principal amount of Notes and, if applicable, on an equivalent basis
per share (i.e., $.00165 per week per share) (subject to appropriate adjustment
in the event of any stock split, stock combination, stock dividends and the
like) of Common Stock constituting Transfer Restricted Securities held by such
Holder for each week or portion thereof that the Registration Default continues.
The weekly rate at which such Liquidated Damages accrue shall increase by an
additional $.05 per $1,000 principal amount of Notes and, if applicable, an
equivalent amount per week per share (subject to adjustment as set forth above)
of Common Stock constituting Transfer Restricted Securities for each subsequent
continuing 90-day period following the occurrence of such Registration Default
until all Registration Defaults have been cured; provided, however, that
------------------
Liquidated Damages shall not at any time exceed $.25 per week per $1,000
principal amount of Notes or, as applicable, an equivalent amount per week per
share (i.e., $.00825 per week per share) (subject to adjustment as set forth
above) of Common Stock constituting Transfer Restricted Securities. Following
the cure of all Registration Defaults, the accrual of Liquidated Damages shall
cease (without in any way limiting the effect of any subsequent Registration
Default). A Registration Default under clause (i) above shall be cured on the
date that the applicable Shelf Registration Statement is filed with the SEC; a
Registration Default under clause (ii) above shall be cured on the date that the
applicable Shelf Registration Statement is declared effective by the SEC; and a
Registration Default under clause (iii) above shall be cured on the date the
applicable Shelf Registration Statement is declared effective or otherwise
usable.
-7-
<PAGE>
(b) The Company shall notify the Trustee within one Business Day after
each and every date on which a Registration Default occurs. Liquidated Damages
shall be paid by the Company to the Record Holders on each Damages Payment Date
by wire transfer of immediately available funds to the accounts specified by
them or by mailing checks to their registered addresses as they appear in the
Note register (as defined in the Indenture), in the case of the Notes, and in
the register of the Company for the Common Stock, in the case of shares of
Common Stock, if no such accounts have been specified on or before the Damages
Payment Date; provided, however, that any Liquidated Damages accrued with
------------------
respect to any Note or portion thereof called for redemption on a redemption
date, repurchased in connection with a Repurchase Event (as defined in the
Indenture) on a repurchase date, or converted into shares of Common Stock on a
conversion date prior to the Damages Payment Date, shall, in any such event, be
paid instead to the Holder who submitted such Note or portion thereof for
redemption, repurchase or conversion on the applicable redemption date,
repurchase date or conversion date, as the case may be, on such date (promptly
following the conversion date, in the case of conversion of a Note). In no
event shall the Company be required to pay Liquidated Damages in excess of the
applicable maximum weekly amount set forth above, regardless of whether one or
multiple Registration Defaults shall exist.
(c) All of the Company's obligations set forth in this Section 3 which are
unsatisfied to any extent with respect to any Transfer Restricted Securities at
the time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such security have been
satisfied in full (notwithstanding the earlier termination of this Agreement).
(d) Any payments due and payable pursuant to this Section 3 with respect
to any Notes shall be subject to the provisions of Article IV of the Indenture
as if such payments were additional interest on the Notes.
4. Registration Procedures. In connection with the Company's
-----------------------
registration obligations hereunder, the Company shall effect such registrations
on the appropriate form selected by the Company to permit the resale of Transfer
Restricted Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall:
(a) No fewer than five Business Days prior to the initial filing of a
Registration Statement or Prospectus and no fewer than two Business Days prior
to the filing of any amendment or supplement thereto (excluding, unless
requested, any document that would be incorporated or deemed to be incorporated
therein by reference), furnish to the registered (as of the most recent
reasonably practicable date which shall not be more than two Business Days prior
to the date such document is personally delivered, delivered to a next-day
courier, deposited in the mail or telecopied, as the case may be) Holders,
Special Counsel and the managing underwriters, if any, copies of all such
documents proposed to be filed (excluding, unless requested, those incorporated
or deemed to be incorporated by reference) and cause the officers and directors
of the Company, counsel to the Company and independent certified public
accountants to the Company to respond to such inquiries as shall be necessary in
connection with such Registration Statement, in the opinion of Special
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<PAGE>
Counsel and counsel to such underwriters, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file any such
Registration Statement or related Prospectus or any amendments or supplements
thereto to which the Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities, Special Counsel, or the managing underwriters,
if any, shall reasonably object on a timely basis, provided, that the Company
may assume, for the purposes of this subparagraph (a), that objections to the
inclusion of information specifically requested to be included in the
Registration Statement by the staff of the SEC, or in a written opinion of
counsel to the Company required to be in the Registration Statement, or
specifically required by the Securities Act or other applicable law, shall not
be deemed to be reasonable.
(b) As expeditiously as reasonably possible, prepare and file with the SEC
such amendments, including post-effective amendments, to each Registration
Statement as may be necessary to keep such Registration Statement continuously
effective for the applicable time period set forth in Section 2(a) hereof; cause
the related Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Securities Act
and the Exchange Act with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the
intended method or methods of disposition by the Holder set forth in such
Registration Statement as so amended or in such Prospectus as so supplemented
(including, without limitation, the filing of any Prospectus supplement pursuant
to Rule 424 in order to add or change any selling security holder information
(including any such supplements or amendments pursuant to Section 2(c) hereof,
provided such Holder to which such change applies complies with the Requisite
- - --------
Information requirements of Section 2(c) hereof));
(c) As expeditiously as reasonably possible, notify the registered (as of
the most recent reasonably practicable date which shall not be more than two
Business Days prior to the date such notice is personally delivered, delivered
to a next-day courier, deposited in the mail or telecopied, as the case may be)
Holders, Special Counsel and the managing underwriters, if any, promptly (and in
the case of an event specified by clause (i)(A) of this paragraph in no event
fewer than two Business Days prior to such filing), and (if requested by any
such person), confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment is proposed to be filed, and,
(B) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request of the SEC or any other
Federal or state governmental authority for amendments or supplements to such
Registration Statement or related Prospectus or for additional information
related thereto, (iii) of the issuance by the SEC, any state securities
commission, any other governmental agency or any court of any stop order, order
or injunction suspending or enjoining the use or the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if at any time any of the representations and warranties of the Company
contained in any agreement (including any underwriting agreement) contemplated
by Section 4(m) hereof are not true and correct in all material respects, (v) of
the receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Transfer
Restricted Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, and (vi) of the
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<PAGE>
existence of any fact and the happening of any event that makes any statement
made in such Registration Statement or related Prospectus untrue in any material
respect, or that requires the making of any changes in such Registration
Statement or Prospectus 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, such Prospectus
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(d) Use all commercially reasonable efforts to avoid the issuance of, or,
if issued, obtain the withdrawal of any stop order or order enjoining or
suspending the use or effectiveness of a Registration Statement or the lifting
of any suspension of the qualification (or exemption from qualification) of any
of the Transfer Restricted Securities for sale in any jurisdiction, at the
earliest practicable moment;
(e) If requested by the Special Counsel, the managing underwriters, if
any, or the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities being sold in connection with such offering, (i) promptly
include in a Prospectus supplement or post-effective amendment such information
as the Special Counsel, the managing underwriters, if any, and such Holders
reasonably request to be included therein, and (ii) make all required filings of
such Prospectus supplement or such post-effective amendment as soon as
reasonably practicable after the Company has received notification of the
matters to be included in such Prospectus supplement or post-effective
amendment; provided, however, that the Company shall not be required to take any
------------------
action pursuant to this Section 4(e) that would, in the opinion of counsel for
the Company, violate applicable law;
(f) As expeditiously as reasonably possible, furnish to each Holder who so
requests, Special Counsel and each managing underwriter, if any, without charge,
at least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements (but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits,
unless requested in writing by such Holder, Special Counsel or managing
underwriter);
(g) As expeditiously as reasonably possible, deliver to each Holder, the
Special Counsel, and the underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses (including each form of Prospectus) and each
amendment or supplement thereto as such persons may reasonably request; and,
unless the Company shall have given notice to such Holder pursuant to Section
2(d), the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders of Transfer
Restricted Securities and the underwriters, if any, in connection with the
offering and sale of the Transfer Restricted Securities covered by such
Prospectus and any amendment or supplement thereto, provided, however, that no
------------------
Holder shall be entitled to use the Prospectus unless and until such Holder
shall have furnished to the Company any and all Requisite Information pursuant
to Section 2(c) hereof;
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<PAGE>
(h) Use all commercially reasonable efforts to register or qualify, or
cooperate with the Holders of Transfer Restricted Securities to be sold, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of, such Transfer Restricted Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions within the United States
as any Holder or underwriter reasonably requests in writing, 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 legally to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the applicable
Registration Statement; provided, however, that the Company shall not be
------------------
required to qualify generally to do business in any jurisdiction where it is not
then so qualified, take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or subject the
Company to any tax in any such jurisdiction where it is not then so subject;
(i) In connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders and the managing underwriters,
if any, to (A) facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold, which certificates shall
not bear any restrictive legends, shall bear a CUSIP number different from the
CUSIP number for the Transfer Restricted Securities and shall be in a form
eligible for deposit with The Depository Trust Company and (B) enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the managing underwriters, if any, or Holders may reasonably
request at least two Business Days prior to any sale of Transfer Restricted
Securities;
(j) Use all commercially reasonable efforts to cause the offering of the
Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
within the United States, except as may be required as a consequence of the
nature of a Holder's business, in which case the Company will cooperate in all
reasonable respects with the filing of such Registration Statement and the
granting of such approvals as may be reasonably necessary to enable the seller
or sellers thereof or the underwriters, if any, to consummate the disposition of
such Transfer Restricted Securities; provided, however, that the Company shall
------------------
not be required to register the Transfer Restricted Securities in any
jurisdiction that would require the Company to qualify to do business in any
jurisdiction where it is not then so qualified, subject it to general service of
process in any such jurisdiction where it is not then so subject or subject the
Company to any tax in any such jurisdiction where it is not then so subject or
to;
(k) Upon the occurrence of any event contemplated by Section 4(c)(vi)
hereof, as promptly as reasonably practicable, prepare a supplement or
amendment, including, if appropriate, a post-effective amendment, to each
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, such Prospectus will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
-11-
<PAGE>
misleading, provided that, the Company may delay the filing and delivery of such
supplement or amendment if, and only for so long as, (i) such supplement or
amendment would require the Company to disclose material non-public information,
(ii) the Board of Directors of the Company determines in good faith that such
disclosure is adverse to the reasonable interests of the Company and its
shareholders, and (iii) the Company complies with its obligations, if any, to
pay Liquidated Damages;
(l) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, to provide a CUSIP number for
the Transfer Restricted Securities to be sold pursuant to the Registration
Statement;
(m) Enter into such agreements (including an underwriting agreements in
form, scope and substance as are customary in underwritten offerings) reasonably
satisfactory to the Company and take all such other reasonable actions in
connection therewith (including those reasonably requested by the managing
underwriters, if any, or the Holders of a majority in aggregate principal amount
of the Transfer Restricted Securities being sold) in order to expedite or
facilitate the sale of such Transfer Restricted Securities; provided, however,
------------------
that the Company is not required to facilitate an underwritten public offering
unless a request therefor shall have been made by the holders of a majority in
aggregate principal amount of the Transfer Restricted Securities being sold and,
in any event, the Company is not required to effect more than two underwritten
offerings. In such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration, the Company shall (i) make such representations and warranties to
the Holders of such Transfer Restricted Securities and the underwriters, if any,
with respect to the business of the Company and its subsidiaries (including with
respect to businesses or assets acquired or to be acquired by any of them), and
the Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, in form, substance
and scope as are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when requested; (ii) seek to obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, and Special Counsel to the Holders of the
Transfer Restricted Securities being sold), addressed to each selling Holder of
Transfer Restricted Securities and each of the underwriters, if any, covering
the matters customarily covered in opinions requested in underwritten offerings
(including any such matters as may be reasonably requested by such Special
Counsel and underwriters); (iii) use all reasonable efforts to obtain customary
"cold comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data is, or is
required to be, included in the Registration Statement), addressed (where
reasonably possible) to each selling Holder of Transfer Restricted Securities
and each of the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; (iv) if an underwriting agreement is
entered into, provide that the underwriting agreement shall contain
indemnification provisions and procedures no less favorable to the selling
Holders of Transfer Restricted Securities and the underwriters, if any, than
those set forth in Section 6 hereof (or such other provisions and procedures
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<PAGE>
acceptable to Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities covered by such Registration Statement and the
managing underwriters); and (v) deliver such documents and certificates as may
be reasonably requested by the Holders of majority in aggregate principal amount
of the Transfer Restricted Securities being sold, their Special Counsel or the
managing underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) of this Section 4(m)
and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company;
(n) As expeditiously as reasonably possible, make available for inspection
by a representative of the Holders of Transfer Restricted Securities being sold,
any underwriter participating in any such disposition of Transfer Restricted
Securities, if any, and any attorney, consultant or accountant retained by such
selling Holders or underwriter, at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries as they may
reasonably request, and cause the officers, directors, agents and employees of
the Company and its subsidiaries to supply all information in each case
reasonably requested by any such representative, underwriter, attorney,
consultant or accountant in connection with such Registration Statement,
provided, however, that such persons shall first agree in writing with the
- - ------------------
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery or inspection (as
the case may be) of such information shall be kept confidential by such persons,
unless (i) disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any disclosure
requirements pursuant to Federal securities laws in connection with the filing
of any Registration Statement or the use of any Prospectus), (iii) such
information becomes generally available to the public other than as a result of
a disclosure or failure to safeguard by any such person or (iv) such information
becomes available to any such person from a source other than the Company and
such source is not bound by a confidentiality agreement.
(o) Cause the Indenture to be qualified under the TIA not later than the
effective date of the first Registration Statement relating to the Transfer
Restricted Securities; and in connection therewith, cooperate with the Trustee
and the Holders of Notes constituting Transfer Restricted Securities to effect
such changes to the Indenture, if any, as may be required for such Indenture to
be so qualified in accordance with the terms of the TIA; and execute, and use
its best efforts to cause the Trustee to execute, all customary documents as may
be required to effect such changes, and all other forms and documents (including
Form T-1) required to be filed with the SEC to enable the Indenture to be so
qualified under the TIA in a timely manner.
(p) Comply with applicable rules and regulations of the SEC and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act or Rule 158 (or any similar
rule promulgated under the Securities Act), no later than 45 days after the end
of any 12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Transfer Restricted
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<PAGE>
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter after the effective date
of a Registration Statement, which statement shall cover said period, consistent
with the requirements of Rule 158; and
(q) (i) list all shares of Common Stock covered by such Registration
Statement on any securities exchange on which the Common Stock is then listed or
(ii) authorize for quotation on the National Association of Securities Dealers
Automated Quotation System ("Nasdaq") or the National Market of Nasdaq all
Common Stock covered by such Registration Statement if the Common Stock is then
so authorized for quotation.
5. Registration Expenses
---------------------
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by it whether or not any
Registration Statement is filed or becomes effective and whether or not any
securities are offered or sold pursuant to any Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filings fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made
with the National Association of Securities Dealers, Inc. and (B) in compliance
with securities or Blue Sky laws (including, without limitation and in addition
to that provided for in (b) below, fees and disbursements of counsel for the
underwriters or the Special Counsel in connection with Blue Sky qualifications
of the Transfer Restricted Securities and determination of the eligibility of
the Transfer Restricted Securities for investment under the laws of such
jurisdictions as the managing underwriters, if any, or Holders of a majority in
aggregate principal amount of Transfer Restricted Securities, may designate)),
(ii) printing expenses (including, without limitation, expenses of printing
certificates for Transfer Restricted Securities in a form eligible for deposit
with The Depository Trust Company and of printing Prospectuses if the printing
of Prospectuses is required by the managing underwriters, if any, or by the
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities included), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and the Special Counsel (plus
any local counsel deemed appropriate by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Securities) in accordance with the
provisions of Section 5(b) hereof, (v) fees and disbursements of all independent
certified public accountants referred to in Section 4(m)(iii) (including,
without limitation, the expenses of any special audit and "comfort" letters
required by or incident to such performance), (vi) Securities Act liability
insurance, if the Company so desires such insurance, and (vii) fees and expenses
of all other persons retained by the Company. In addition, the Company shall
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of an annual audit and the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange
or the Nasdaq or the Nasdaq National Market. Notwithstanding anything in this
Agreement to the contrary, each Holder shall pay all underwriting discounts and
brokerage commissions with respect to any Transfer Restricted Securities sold by
it.
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<PAGE>
(b) In connection with any registration hereunder, the Company shall
reimburse the Holders of the Transfer Restricted Securities being registered or
tendered for in such registration for the reasonable fees and disbursements of
not more than one firm of attorneys representing the selling Holders (in
addition to any local counsel), which firm shall be chosen by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities.
Wilson Sonsini Goodrich & Rosati shall be Special Counsel for all purposes
hereof unless and until another Special Counsel shall have been selected by a
majority in aggregate principal amount of the Transfer Restricted Securities and
notice hereof shall have been given to the Company.
6. Indemnification
---------------
(a) The Company agrees to indemnify and hold harmless (i) each of the
Purchasers, (ii) each Holder, (iii) each person, if any, who controls (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) any of the foregoing (any of the persons referred to in this clause (iii)
being hereinafter referred to as a "controlling person"), and (iv) the
respective officers, directors, partners, employees, representatives and agents
of the Purchasers, the Holders (including predecessor Holders), or any
controlling person (any person referred to in clause (i), (ii), (iii) or (iv)
may hereinafter be referred to as an "Indemnified Person"), from and against any
and all losses, claims, damages, liabilities, expenses and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
supplement thereto or any preliminary Prospectus, in light of the circumstances
under which they were made) not misleading, except insofar as such losses,
claims, damages, liabilities, expenses or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Indemnified Person furnished to the Company by or on
behalf of such Indemnified Person expressly for use therein; provided, however,
------------------
that the foregoing indemnity with respect to any preliminary Prospectus shall
not inure to the benefit of any Indemnified Person from whom the person
asserting such losses, claims, damages, liabilities, expenses and judgments
purchased securities if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary Prospectus is eliminated or
remedied in the Prospectus and a copy of the Prospectus shall not have been
furnished to such person in a timely manner due to the wrongful action or
wrongful inaction of such Indemnified Person, whether as a result of negligence
or otherwise.
(b) In case any action shall be brought against any Indemnified Person,
based upon any Registration Statement or any such Prospectus or any amendment or
supplement thereto and with respect to which indemnity may be sought against the
Company, such Indemnified Person shall promptly notify the Company in writing
and the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Person and payment of all
reasonable fees and expenses. Any Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless (i) the employment of such counsel
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<PAGE>
shall have been specifically authorized in writing by the Company, (ii) the
Company shall have failed to assume the defense and employ counsel or (iii) such
Indemnified Person or Persons shall have been advised by counsel that there may
be a conflict between the positions of the indemnifying party or parties and of
the indemnified party or parties in conducting the defense of such action or
proceeding or that there may be legal defenses available to such Indemnified
Person or Persons different from or in addition to those available to the
indemnifying party or parties (in which case the Company shall not have the
right to assume the defense of such action on behalf of such Indemnified Person,
it being understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all such Indemnified Persons, which firm
shall be designated in writing by such Indemnified Persons, and that all such
fees and expenses shall be reimbursed as they are incurred). The Company shall
not be liable for any settlement of any such action effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Indemnified Person from and against
any loss or liability by reason of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(c) In connection with any Registration Statement pursuant to which any
Holder (or predecessor Holder) sold or offered for resale Transfer Restricted
Securities, such Holder (or predecessor Holder) agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its officers
and any person controlling the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Indemnified Person but only with
reference to information relating to such Indemnified Person furnished by or on
behalf of such Indemnified Person expressly for use in such Registration
Statement. In case any action shall be brought against the Company, any of its
directors, any such officer or any person controlling the Company based on such
Registration Statement and in respect of which indemnity may be sought against
any Indemnified Person, the Indemnified Person shall have the rights and duties
given to the Company (except that if the Company shall have assumed the defense
thereof, such Indemnified Person shall not be required to do so, but may employ
separate counsel therein and participate in defense thereof but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person),
and the Company, its directors, any such officers and any person controlling the
Company shall have the rights and duties given to the Indemnified Person by
Section 6(b) hereof.
(d) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party in respect of any losses, claims, damages, liabilities,
expenses or judgments referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities, expenses and judgments (i) in such proportion as is appropriate to
reflect the
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<PAGE>
relative benefits received by the Company on the one hand and each Indemnified
Person on the other hand pursuant to the Purchase Agreement or from the offering
for resale of the Transfer Restricted Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and each such
Indemnified Person in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities, expenses or judgments, as well as
any other relevant equitable considerations. The relative fault of the Company
and each such Indemnified Person shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Company or such Indemnified Person and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Holders and the Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 6(d) were determined
by pro rata allocation (even if the Indemnified Person were treated as one
--------
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities, expenses or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no Indemnified Person shall be required to contribute any amount in
excess of the amount by which the total net profit received by it in connection
with the sale of the Transfer Restricted Securities pursuant to this Agreement
exceeds the amount of any damages which such Indemnified Person has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Indemnified Persons' obligations to contribute pursuant
to this Section 6(d) are several in proportion to the respective amount of
Transfer Restricted Securities included in and sold pursuant to any such
Registration Statement by each Indemnified Person and not joint.
7. Rules 144 and 144A
------------------
The Company shall file the reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner and, if at any time it is
not required to file such reports but in the past had been required to or did
file such reports, it will, upon the request of any Holder, make available other
information as required by, and so long as necessary to permit sales of its
Transfer Restricted Securities pursuant to, Rule 144 and Rule 144A.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
-17-
<PAGE>
8. Underwritten Registrations
--------------------------
If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be investment bankers of recognized national
standing selected by the Holders of a majority in aggregate principal amount of
such Transfer Restricted Securities included in such offering, subject to the
consent of the Company (which will not be unreasonably withheld or delayed).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities
underwriting agreements, lock-up agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. Miscellaneous
-------------
(a) Remedies. In the event of a breach by the Company or by a Holder of
---------
any of their respective obligations under this Agreement, each Holder or the
Company, in addition to being entitled to exercise all rights granted by law,
including, without limitation, recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each Holder
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agree that, in the event of any action for specific
performance in respect of such breach, they shall waive the defense that a
remedy at law would be adequate. This Section 9(a) shall not apply to any
breach for which Liquidated Damages have been specifically provided hereunder.
(b) No Inconsistent Agreements.
---------------------------
(i) The Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights specifically granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Without limiting the generality of the foregoing, without the written consent of
the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities, the Company shall not hereafter grant to any person the
right to include any securities held by such person in any Registration
Statement filed pursuant to this Agreement.
(ii) The Company is not currently a party to any agreement granting
any registration rights with respect to any of its securities to any person
which conflicts with the Company's obligations hereunder, except for such rights
and conflicts (A) as have been irrevocably waived, (B) that subject the Transfer
Restricted Securities to be sold in an underwritten offering to be cutback prior
to the securities included in such offering by security holders exercising
piggyback registration rights with respect to such offering as specifically
described in the Offering Circular dated
-18-
<PAGE>
June 25, 1997 with respect to the Notes (the "Offering Circular") and (C) that
could delay the time period with respect to amendments or supplements as
contemplated in this Agreement as specifically described in the Offering
Circular.
(iii) Notwithstanding any term of this Agreement to the contrary, the
Company shall use all commercially reasonable efforts to obtain waivers from
holders of registration rights with respect to the Company's securities
("Existing Registration Rights Holders") of any rights to include any of their
shares of Common Stock ("Piggyback Shares") in any Registration Statement filed
pursuant to this Agreement and any other rights they otherwise would have with
respect to actions required to be taken by the Company under this Agreement.
Without limiting the foregoing, the Company shall, to the extent required to
obtain such waivers, offer to file, prior to or contemporaneously with the Shelf
Registration Statement required pursuant to Section 2(a) of this Agreement, a
shelf registration statement with respect to the Existing Registration Rights
Holders' Piggyback Shares with substantially the same terms that such Existing
Registration Rights Holders would otherwise have with respect to any Shelf
Registration Statement. In addition, the Company shall use all commercially
reasonable efforts to eliminate or minimize any adverse effects on the rights of
the Holders under this Agreement as a result of the Company's registration
rights agreements with the Existing Registration Rights Holders.
(iv) The Purchasers agree that the second paragraph of Section 2(c)
of this Agreement shall not require the Company to breach the third-party
obligation referenced in Section 9(b)(ii)(C) above if such third-party
obligation is not waived. The Company acknowledges that neither the agreement
set forth in the preceding sentence, the disclosure set forth in Section
9(b)(ii) above nor the covenants of the Company set forth in Section 9(b)(iii)
above shall relieve the Company of its obligation to pay Liquidated Damages
pursuant to and in accordance with Section 3 of this Agreement. Without
limiting the foregoing, with respect to amendments or supplements to a Shelf
Registration Statement, such Shelf Registration Statement shall "cease to be
usable" within the meaning of Section 3(a)(iii) of this Agreement for such
period which exceeds the applicable time period for filing and delivering
amendments or supplements, as the case may be, as required under this Agreement.
(c) No Adverse Action Affecting the Transfer Restricted Securities. The
---------------------------------------------------------------
Company will not take any action with respect to the Transfer Restricted
Securities which would adversely affect the ability of any of the Holders to
include such Transfer Restricted Securities in a registration undertaken
pursuant to this Agreement.
(d) No Piggyback on Registrations. After the date hereof, the Company
------------------------------
shall not grant to any of its security holders (other than the Holders in such
capacity) the right to include any of its securities in any Shelf Registration
Statement.
(e) Amendments and Waivers. The provisions of this
-----------------------
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof, may not be given, without the written consent of the
-19-
<PAGE>
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities; provided, however, that, for the purposes of this Agreement,
------------------
Transfer Restricted Securities that are owned, directly or indirectly, by either
the Company or an Affiliate of the Company are not deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders whose Transfer Restricted Securities are being sold pursuant to an
underwritten offering and that does not directly or indirectly affect the rights
of other Holders may be given by Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities being sold by such Holders pursuant
to such an underwritten offering; 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.
(f) Notices. All notices and other communications provided for herein
--------
shall be made in writing by hand-delivery, next day air courier, certified
first-class mail, return receipt requested or telecopy:
(i) if to a Holder, to the address of such Holder as it appears
in the Note or Common Stock register of the Company, as applicable;
(ii) if to the Company, to:
Premiere Technologies, Inc.
3399 Peachtree Road N.E.
The Lenox Building, Suite 400
Atlanta, Georgia 30326
Attn.: Senior Vice President of Finance and Legal
Telecopy No.: (404) 262-8540
with a copy to:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Attn: Jeffrey A. Allred
Telecopy No: (404) 881-7777
(iii) if to the Special Counsel, to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94301
Attn: John A. Fore
Telecopy No.: (415) 493-6811
-20-
<PAGE>
or such other Special Counsel at such other address and
telecopy number as a majority in aggregate principal amount
of the Transfer Restricted Securities shall have given
notice to the Company as contemplated by Section 5(b)
hereof.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given, when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a
next-day air courier, five Business Days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(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 existing and future Holder.
The Company may not assign its rights or obligations hereunder without the prior
written consent of the Holders of a majority in aggregate principal amount of
the Transfer Restricted Securities, other than by operation of law pursuant to a
merger or consolidation to which the Company is a party. In the event the Notes
constituting Transfer Restricted Securities become convertible into common stock
of another person pursuant to Section 15.6 of the Indenture, the Company shall
cause such person to assume the Company's obligations hereunder.
(h) Counterparts. This Agreement may be executed in any number
-------------
of counterparts by the parties hereto, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.
(i) 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 CONFLICTS OF LAW.
(j) Severability. The remedies provided herein are cumulative
-------------
and not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
-21-
<PAGE>
(k) Headings. The headings in this Agreement are for
---------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. All references made in this Agreement to "Section" and
"paragraph" refer to such Section or paragraph of this Agreement, unless
expressly stated otherwise.
(l) Attorneys' Fees. In any action or proceeding brought to
----------------
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover its reasonable attorneys' fees in addition to any
other available remedy.
-22-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
---------------------------
Name: Patrick G. Jones
Title: Senior Vice President of
Finance and Legal
The foregoing Registration Rights
Agreement is hereby confirmed and
agreed to as of the date first
written above:
ROBERTSON, STEPHENS & COMPANY LLC
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: ROBERTSON, STEPHENS & COMPANY LLC
By: ROBERTSON, STEPHENS & COMPANY GROUP, L.L.C.
By: /s/ Brendan Dyson
--------------------------------
Authorized Signatory
Acting on behalf of itself and the other
Purchasers
<PAGE>
EXHIBIT 10.1
$150,000,000*
Premiere Technologies, Inc.
5-3/4% Convertible Subordinated Notes due 2004
PURCHASE AGREEMENT
------------------
June 25, 1997
ROBERTSON, STEPHENS & COMPANY LLC
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
c/o Robertson, Stephens & Company LLC
555 California Street
Suite 2600
San Francisco, California 94104
Ladies/Gentlemen:
Premiere Technologies, Inc., a Georgia corporation (the "Company"),
addresses you in your capacity as initial purchasers (the "Initial Purchasers")
of the proposed offering described below and hereby confirms its agreement with
the Initial Purchasers (the "Agreement") as follows:
1. Description of Securities. The Company proposes to issue and sell to the
-------------------------
Initial Purchasers an aggregate of $150,000,000 principal amount of its 5-3/4%
Convertible Subordinated Notes due 2004 (the "Firm Notes"). The Company also
proposes to grant to the Initial Purchasers an option to purchase an aggregate
of up to $22,500,000 additional principal amount of its 5-3/4% Convertible
Subordinated Notes due 2004 (the "Option Notes") as provided in Section 7
hereof. The Firm Notes and Option Notes will be convertible into shares (the
"Underlying Securities") of Common Stock, $0.01 par value, of the Company (the
"Common Stock"). The Firm Notes and the Option Notes are referred to herein
collectively as the "Notes." The Notes and the Underlying Securities are
referred to herein collectively as the "Securities." The Notes will be issued
pursuant to the provisions of an Indenture to be dated as of June 30, 1997 in
the form attached hereto as Schedule D (the "Indenture") to be between the
----------
Company and IBJ Schroder Bank & Trust Company, as trustee (the "Trustee").
The Notes will be offered without being registered under the Securities Act
of 1933, as amended (the "Act"), in reliance on exemptions therefrom provided by
the Act and the rules and regulations (the "Rules and Regulations") thereunder.
In connection with the offer and sale of the Notes, the Company has
prepared a preliminary offering circular dated June 16, 1997 (the "Preliminary
Memorandum") and a final offering circular dated June 26, 1997 (the "Final
Memorandum") for delivery to prospective purchasers of the Notes. Each of the
Preliminary
- - ---------------
* Plus an option to purchase an aggregate of up to $22,500,000 additional
principal amount of the Company's 5-3/4% Convertible Subordinated Notes due
2004 from the Company to cover over-allotments.
<PAGE>
Memorandum and the Final Memorandum includes or incorporates certain
information concerning, among other things, the Company, the Notes and the
Underlying Securities. The Final Memorandum incorporates by reference each
document or report filed by the Company with the Securities and Exchange
Commission (the "Commission") pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") after the
date thereof and prior to the termination of the distribution of the Notes and
as set forth in the Final Memorandum. As used herein, the terms "Preliminary
Memorandum" and "Final Memorandum" shall include in each case the documents
incorporated by reference therein, and any and all supplements and amendments to
such documents incorporated by reference therein and any and all amendments and
supplements to the Preliminary Memorandum or the Final Memorandum, as the case
may be, and the term "Memorandum" shall include the Preliminary Memorandum and
the Final Memorandum. The terms "supplement", "amendment" and "amend" as used
herein shall include all documents deemed to be incorporated by reference in the
Preliminary Memorandum or Final Memorandum that are filed subsequent to the date
of such Memorandum with the Commission pursuant to the Exchange Act.
2. Representations, Warranties and Agreements of the Company. The Company
---------------------------------------------------------
represents and warrants to and agrees with each Initial Purchaser that:
(a) The Preliminary Memorandum does not, and the Final Memorandum in the
form used by the Initial Purchasers to confirm sales does not, and on the
Closing Date (as hereinafter defined) will not, contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this sentence do not apply to statements or omissions in either Memorandum
based upon information relating to the Initial Purchasers furnished to the
Company in writing by you expressly for use therein as specified in Section 3
hereof. The Company is subject to Section 13 or 15(d) of the Exchange Act. The
Company has timely filed with the Commission all the documents that the Company
was required to file with the Commission under Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act (collectively, the "SEC Documents"). The SEC Documents, when
they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules, regulations and instructions of
the Commission thereunder, and any documents so filed and incorporated by
reference in any Memorandum subsequent to the date hereof will, when they are
filed with the Commission, conform in all material respects to the requirements
of the Exchange Act and the rules, regulations and instructions of the
Commission thereunder. The Company's registration statement on Form S-1
(Registration No. 33-80547), when it was filed with the Commission, conformed in
all material respects to the requirements of the Act and the Rules and
Regulations. No stop order or other similar order or decree preventing the use
of any Memorandum, or any order or decree asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act has been issued and remains in effect and, to the best knowledge of the
Company, no proceedings for that purpose have been commenced or are
contemplated.
(b) The Company has not taken and will not take, directly or indirectly,
any action prohibited by Regulation M under the Exchange Act in connection with
the sale and offering of the Notes.
(c) Each of the Company and its subsidiaries listed on Schedule C hereto
----------
(the "Significant Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation with full power and authority (corporate and other) to own, lease
and operate its properties and conduct its business as described in each
Memorandum; the Company, except for director's qualifying shares, if any, owns
either directly or through a wholly-owned subsidiary all of the outstanding
capital stock of its subsidiaries free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest; each of the Company and its
subsidiaries is duly qualified to do business as a foreign corporation and is
-2-
<PAGE>
in good standing in each jurisdiction in which the ownership or leasing of
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse effect on
the condition (financial or otherwise), earnings, operations or business of the
Company and its subsidiaries considered as one enterprise; no proceeding has
been instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification;
each of the Company and its subsidiaries is in possession of and is operating in
compliance with all authorizations, licenses, certificates, consents, orders and
permits from state, federal and other regulatory authorities necessary to the
conduct of its business, all of which are valid and in full force and effect,
except for such authorizations, licenses, certificates, consents, orders and
permits for which the failure to possess or comply with would not, individually
or in the aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, operations or business of the Company and its
subsidiaries considered as one enterprise; neither the Company nor any of its
subsidiaries is in violation of its respective charter or bylaws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, or in any
lease, contract, indenture, mortgage, loan agreement, joint venture or other
agreement or instrument to which the Company or its subsidiaries is a party or
by which it or any of its subsidiaries or their respective properties may be
bound and neither the Company nor any of its subsidiaries is in violation of any
law, order, rule, regulation, writ, injunction judgment or decree of any court
or governmental agency or body of which it has knowledge, except for such
violations or defaults which would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), earnings,
operations or business of the Company and its subsidiaries considered as one
enterprise or on the Company's ability or right to perform its obligations under
this Agreement, the Registration Rights Agreement, the Indenture and the Notes.
The Company does not have any subsidiaries, nor does it control, directly or
indirectly, or own, directly or indirectly, any shares of stock or any other
equity interest of any corporation association or other entity other than those
entities identified on Schedule B hereto. Except for the Significant
----------
Subsidiaries, the Company does not have any subsidiary which is individually a
"significant subsidiary" (as defined in Item 1-02 of Regulation S-X). For the
purposes of this Agreement, the term "subsidiary" includes any corporation or
partnership or other entity in which the Company or any subsidiary, directly or
indirectly, has a controlling ownership interest.
(d) The Company has full legal right, power and authority to enter into
this Agreement, the Registration Rights Agreement (as such term is hereinafter
defined), the Indenture and the Notes and to perform the transactions
contemplated hereby and thereby. This Agreement, the Registration Rights
Agreement and the Indenture have been duly and validly authorized. This
Agreement has been, and at or prior to the Closing, the Registration Rights
Agreement and the Indenture will have been, duly and validly executed and
delivered by the Company and are, or at or prior to the Closing will be, as the
case may be, valid and legally binding obligations of the Company, enforceable
in accordance with their respective terms, except, in the case of this Agreement
and the Registration Rights Agreement, insofar as indemnification, contribution
and waiver provisions may be limited by applicable law, equitable principles or
public policy and except, with respect to all such agreements, as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally or by
equitable principles of general applicability. The execution and delivery by the
Company of, and performance of its obligations under, this Agreement, the
Registration Rights Agreement, the Indenture and the Notes, and the consummation
of the transactions herein and therein contemplated does not and will not result
in a breach or violation of any of the terms and provisions of, or constitute a
default under: (i) any indenture, mortgage, deed of trust, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, or any lease,
contract, joint venture or other agreement or instrument to which the Company or
its subsidiaries is a party or by which the property of the Company or any of
its subsidiaries is bound, except for such breaches, violations and defaults
which would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, operations or
business of the Company and its subsidiaries
-3-
<PAGE>
considered as one enterprise or on the Company's ability or right to perform its
obligations under this Agreement, the Registration Rights Agreement, the
Indenture and the Notes; or (ii) the charter or bylaws of the Company or any of
its Significant Subsidiaries; or (iii) any law, order, rule, regulation, writ,
injunction, judgment or decree of any court or governmental agency or body
having jurisdiction over the Company or any of this subsidiaries or over the
properties of the Company or any of its subsidiaries, the violation of which
would have a material adverse effect on the condition (financial or otherwise),
earnings, operations or business of the Company and its subsidiaries considered
as one enterprise or on the Company's ability or right to perform its
obligations under this Agreement, the Registration Rights Agreement, the
Indenture and the Notes. No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution and delivery
of this Agreement, the Registration Rights Agreement, the Indenture and the
Notes and the consummation by the Company or any of its Significant Subsidiaries
of the transactions herein or therein contemplated except such as may be
required under state or other securities or Blue Sky laws.
(e) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with the terms of this
Agreement, will (x) constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally or by
equitable principles of general applicability, (y) be entitled to the benefits
of the Indenture and (z) be validly issued, fully paid and nonassessable and
will not be subject to any preemptive rights, co-sale rights, rights of first
refusal or other rights to subscribe for or purchase securities.
(f) The Notes, the Registration Rights Agreement and the Indenture conform
in all material respects to all statements in relation thereto contained in each
Memorandum. The Underlying Securities have been duly authorized and duly
reserved for issuance and, upon issuance thereof upon conversion of the Notes in
accordance with the terms of the Notes and the Indenture, will be validly
issued, fully paid and nonassessable shares of Common Stock of the Company and
will be issued free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest and will not be subject to any
preemptive rights, co-sale rights, rights of first refusal or other rights to
subscribe for or purchase securities.
(g) There is not any pending or, to the best of the Company's knowledge,
any threatened action, suit, claim or proceeding against the Company, any of its
subsidiaries or any of their respective officers or any of their respective
properties, assets or rights before any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective officers or properties or otherwise which
might (i) result in any material adverse change in the condition (financial or
otherwise), earnings, operations or business of the Company and its subsidiaries
considered as one enterprise, (ii) materially and adversely affect their
properties, assets or rights, (iii) adversely affect the power or ability of the
Company to perform its obligations under this Agreement, the Indenture, the
Registration Rights Agreement or the Notes, or (iv) prevent or delay
consummation of the transactions contemplated hereby or thereby, in each case,
which has not been accurately described in all material respects in the Final
Memorandum.
(h) All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, have been
issued in compliance with all applicable federal and state securities laws, were
not issued in violation of any preemptive right, co-sale right, registration
right, right of first refusal, other rights to subscribe for or purchase
securities, and the actual, pro forma, and pro forma as adjusted capitalization
of the Company as of March 31, 1997 is as set forth in the Final Memorandum
under the caption "Capitalization" and conforms in all material respects to the
statements relating thereto contained in the Final Memorandum (and such
statements correctly state the substance of the instruments defining the
capitalization
-4-
<PAGE>
of the Company). No preemptive right, co-sale right, right of first refusal or
other rights to subscribe for or purchase securities exists with respect to any
of the Securities or the issuance or sale thereof other than those that have
been expressly waived prior to the date hereof and described in the Final
Memorandum. Except as described in the Final Memorandum under the caption
"Description of Capital Stock," no registration right exists with respect to any
of the Securities or the issuance or sale thereof other than those that have
been expressly waived prior to the date hereof or those that will not conflict
with or adversely affect the Company's ability or right to perform its
obligations under this Agreement, the Registration Rights Agreement, the
Indenture and the Notes. All registration rights have been described in the
Final Memorandum. No further approval or authorization of any shareholder, the
Board of Directors or others is required for the issuance and sale or transfer
of the Notes, or the issuance and transfer of the Underlying Securities, except,
with respect to the transfer of the Notes and the Underlying Securities, as may
be required under the Act and which will be satisfied upon the completion by the
Company of its obligations under the Registration Rights Agreement. All issued
and outstanding shares of capital stock of each subsidiary of the Company have
been duly authorized and validly issued and are fully paid and nonassessable,
and were not issued in violation of or subject to any preemptive right, co-sale
right, registration right, right of first refusal, other rights to subscribe for
or purchase securities and are owned by the Company free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest.
Except as disclosed in the Final Memorandum, neither the Company nor any
subsidiary has outstanding any options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option, stock purchase and
other stock plans or arrangements, and, as of the date stated in the document in
which such information appears, the options or other rights granted and
exercised thereunder, included or incorporated by reference in the Final
Memorandum, accurately and fairly describe in all material respects such plans,
arrangements, options and rights.
(i) Arthur Anderson LLP, which has examined (i) the consolidated financial
statements, together with the related schedules and notes, of the Company, as of
December 31, 1996 and 1995 and for the nine months ended December 31, 1994 and
each of the years in the two years ended December 31, 1996 and (ii) the
financial statements, together with the related schedules and notes, of each of
the Significant Franchisees (as such term is defined in the Final Memorandum)
acquired in connection with the Voice-Tel Acquisitions (as such term is defined
in the Final Memorandum), in each case as previously filed with the Commission
and which are incorporated by reference or included in the Final Memorandum, are
independent accountants within the meaning of the Act and the Rules and
Regulations. The audited consolidated financial statements of the Company and
the audited financial statements of the Significant Franchisees, together with
the related schedules and notes, and the unaudited consolidated financial
information of the Company, included in or incorporated by reference into the
Final Memorandum fairly present the financial position and the results of
operations of the Company and its consolidated subsidiaries or the Significant
Franchisees, as the case may be, at the respective dates and for the respective
periods to which they apply. The supplemental financial information for the
Company and the Voice-Tel Entities (as such term is defined in the Final
Memorandum) on a combined basis included in the Final Memorandum (the
"Supplemental Financial Information") fairly presents, for the respective
periods to which they apply, (i) the total combined revenue of all of the Voice-
Tel Entities and (ii) the total combined revenue of the Company and all of the
Voice-Tel Entities. All audited and unaudited consolidated financial statements
of the Company and the Significant Franchisees, together with the related
schedules and notes, and all pro forma financial information, included in or
incorporated by reference into the Final Memorandum, have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved except as may be otherwise stated in the Final
Memorandum. The selected and summary financial and statistical data included or
incorporated by reference in the Final Memorandum present fairly the information
shown therein and have been compiled on a basis consistent with the audited and
unaudited financial statements presented therein. All pro forma adjustments made
by the Company with respect to the Pro Forma Combined Financial Information
-5-
<PAGE>
included in or incorporated by reference into the Final Memorandum have been
based upon assumptions believed by the Company to be reasonable, have been
properly applied to the historical amounts in the compilation of the Pro Forma
Combined Financial Information and comply with the applicable accounting
requirements of Rule 11-02 of Regulation S-X.
(j) Subsequent to the respective dates as of which information is given in
the Final Memorandum, there has not been (i) any material adverse change in the
business, properties or assets described or referred to in the Final Memorandum
or in the condition (financial or otherwise) earnings, operations or business of
the Company and its subsidiaries considered as one enterprise or any change
which would adversely affect the power or ability of the Company to perform its
obligations under this Agreement, the Indenture, the Registration Rights
Agreement or the Notes, (ii) any transaction which is material to the Company
and its subsidiaries considered as one enterprise, except transactions in the
ordinary course of business, (iii) any obligation, direct or contingent,
incurred by the Company or any of its subsidiaries which is material to the
Company and its subsidiaries considered as one enterprise, except obligations
incurred in the ordinary course of business, (iv) any change in the capital
stock or outstanding indebtedness of the Company or any of its subsidiaries,
which is material to the Company and its subsidiaries considered as one
enterprise, except for the issuance of the Notes pursuant hereto and except as
set forth in the Final Memorandum, (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its
subsidiaries or (vi) any loss or damage (whether or not insured) to the property
of the Company or any of its subsidiaries which has been sustained or will have
been sustained which has a material adverse effect on the condition (financial
or otherwise), earnings, operations or business of the Company and its
subsidiaries considered as one enterprise.
(k) Except as set forth in the Final Memorandum, (i) each of the Company
and its subsidiaries has good and marketable title to all properties and assets
described in the Final Memorandum as owned by it, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest other than
such as are not material to the business of the Company and its subsidiaries
considered as one enterprise, (ii) the agreements to which the Company or any of
its subsidiaries is a party or by which their properties are bound described in
the Final Memorandum (or included as exhibits to filings made with the
Commission or which would be required to be filed as an exhibit to an Annual
Report on Form 10-K if such Annual Report was now required to be filed
(collectively, "Material Contracts"), are valid agreements, enforceable by the
Company and its subsidiaries (as applicable) in accordance with their respective
terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles and, to the best knowledge of the Company, the other contracting
party or parties thereto are not in material breach or material default under
any such agreements, and (iii) the Company and its subsidiaries have valid and
enforceable leases for the properties described in the Final Memorandum as
leased by them, other than such as are not material to the business of the
Company and its subsidiaries considered as one enterprise and except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles. Except as set forth in the Final
Memorandum, the Company owns or leases all such properties as are necessary to
its operations as now conducted or as proposed to be conducted.
(l) Each of the Company and its subsidiaries has timely filed all necessary
federal, state and foreign income and franchise tax returns and has paid all
taxes shown thereon as due, and there is no tax deficiency that has been or, to
the Company's knowledge, might be asserted against the Company or any of its
subsidiaries other than in each instance such as would not have a material
adverse effect on the condition (financial or otherwise), earnings, operations
or business of the Company and its subsidiaries considered as one enterprise.
All tax liabilities are adequately provided for on the books of the Company and
its subsidiaries, except for such liabilities which would not, individually or
in the aggregate, have a material adverse effect on the condition
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<PAGE>
(financial or otherwise), earnings, operations or business of the Company and
its subsidiaries considered as one enterprise.
(m) The Company and its Significant Subsidiaries maintain insurance with
insurers of recognized financial responsibility of the types and in the amounts
generally deemed adequate for their respective businesses including, but not
limited to, insurance covering real and personal property owned or leased by the
Company or its Significant Subsidiaries against theft, damage, destruction, acts
of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company nor any such subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), earnings, operations or
business of the Company and its subsidiaries considered as one enterprise.
(n) To the best of the Company's knowledge, no labor disturbance by the
employees of the Company or any of its subsidiaries exists or is imminent; and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal customers or suppliers that might be expected
to result in any material adverse change in the condition (financial or
otherwise), earnings, operations or business of the Company and its subsidiaries
considered as one enterprise. No collective bargaining agreement exists with any
of the Company's employees and, to the Company's knowledge, no such agreement is
imminent.
(o) Each of the Company and its subsidiaries owns or possesses adequate
rights to use all material patents, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names and copyrights ("Intellectual
Property") described or referred to in the Final Memorandum as owned or used by
it or which are necessary for the conduct of its businesses as described in the
Final Memorandum; the expiration of any Intellectual Property would not have a
material adverse effect on the condition (financial or otherwise), earnings,
operations or business of the Company and its subsidiaries considered as one
enterprise; except as set forth in the Final Memorandum, the Company has not
received any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of the Company by others with respect to any Intellectual
Property; except as set forth in the Final Memorandum, the Company has not
received any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, might have a material adverse effect on the condition (financial or
otherwise), earnings, operations or business of the Company and its subsidiaries
considered as one enterprise. The Company has taken reasonable security measures
to protect the secrecy, confidentiality and value of its Intellectual Property.
(p) Except as set forth in the proxy statement for the Company's 1997
Annual Meeting, there are no material outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company or its subsidiaries by the Company to or for the
benefit of any of the executive officers or directors of the Company or its
subsidiaries or any of the members of the families of any of them.
(q) Neither the Company nor any of its subsidiaries has been advised, or
has reason to believe, that it is not conducting its business in conformity with
all applicable laws, rules and regulations of each jurisdiction in which it is
conducting business, except where the failure to be so in compliance would not
have a material adverse effect on the condition (financial or otherwise),
earnings, operations or business of the Company and its subsidiaries considered
as one enterprise. The Company and its subsidiaries have all licenses,
certificates, authorizations, approvals, permits, franchises or consents from
governmental authorities which are necessary to
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<PAGE>
the conduct of their businesses as described in the Final Memorandum, except
where the failure to so have would not have a material adverse effect on the
condition (financial or otherwise), earnings, operations or business of the
Company and its subsidiaries considered as one enterprise. The Company and its
subsidiaries have fulfilled and performed, all of their obligations with respect
to any such licenses, certificates, authorizations, approvals, permits, and
franchises and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or result in any impairment
of the rights of the holder thereof, except to the extent that any such
revocation, termination or impairment would not have a material adverse effect
on the condition (financial or otherwise), results of operations or business of
the Company and the subsidiaries considered as one enterprise, and except as set
forth in the Final Memorandum, no such licenses, certificates, authorizations,
approvals, permits or franchises contain any restrictions that have or may have
a material adverse effect on the condition (financial or otherwise), results of
operations or business of the Company and its subsidiaries considered as one
enterprise. The Company and its subsidiaries are not aware of any existing or
imminent matter which may materially and adversely impact their operations or
business other than as disclosed in the Final Memorandum.
(r) The Company and its subsidiaries have complied and will comply in all
material respects with wage and hour determinations issued by the U.S.
Department of Labor under the Service Contract Act of 1965 and the Fair Labor
Standards Act in paying its employees' salaries, fringe benefits, and other
compensation for the performance of work of other duties in connection with
contracts with the U.S. government, and have complied and will comply in all
material respects with the requirements of the Americans with Disabilities Act
of 1990, the Family and Medical Leave Act of 1993, the Employee Retirement
Income Security Act, the Civil Rights Act of 1964 (Title VII), as amended, the
Age Discrimination in Employment Act and state labor laws, except where the
failure to comply with any such requirements has not, and will not, have a
material adverse effect on the condition (financial or otherwise), earnings,
operations or business of the Company and its subsidiaries considered as one
enterprise. The Company and its subsidiaries have complied with the terms of all
certifications and representations made to the U.S. government in connection
with the submission of any bid or proposal or any contract and with their
obligations under their agreements and contracts with the U.S. government and
agencies thereof, except for such noncompliance which would not, individually or
in the aggregate, have a material adverse effect on the condition (financial or
otherwise), earnings, operations or business of the Company and its subsidiaries
considered as one enterprise.
(s) The Company and its subsidiaries have obtained all required permits,
licenses, and other authorizations, if any, which are required under federal,
state, regional, county, local and foreign statutes, codes, ordinances and other
laws relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases, spilling, injecting, leaching, or
disposing into the environment or threatened releases of pollutants,
contaminants, chemicals, or industrial, hazardous, or toxic materials or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface, or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
discharge into the environment, transport, or handling of pollutants,
contaminants, chemicals, or industrial, hazardous, toxic materials or wastes, or
infectious materials or wastes, or any regulation, rule, code, plan, order,
decree, judgment, injunction, notice, or demand letter issued, entered,
promulgated, or approved thereunder ("Environmental Laws") except for such
permits, licenses, and other authorizations, which if not obtained by the
Company or the subsidiaries will not have a material adverse effect on the
condition (financial or otherwise), earnings, operations or business of the
Company and its subsidiaries considered as one enterprise. The Company and its
subsidiaries are in compliance with all terms and conditions of all required
permits, licenses, and authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in the Environmental Laws
except for such noncompliance which does not and will not have a material
adverse effect on the condition (financial or otherwise), earnings, operations
or business of the Company and its subsidiaries considered as one enterprise.
There is no pending or, to the best
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<PAGE>
knowledge of the Company, threatened civil or criminal litigation, notice of
violation, warning letter, or administrative proceeding relating in any way to
the Environmental Laws (including, without limitation, notices, demand letters,
or claims under the Medical Waste Tracking Act of 1988, the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), as amended by the Superfund Amendments Reauthorization Act of 1986
("SARA"), the Toxic Substances Control Act of 1976, the Emergency Planning and
Community Right-to-Know Act of 1986, the Clean Water Act of 1972, and the Clear
Air Act of 1966, all as amended, and similar foreign, state, or local laws)
involving the Company or any of its subsidiaries. There have not been and there
are not any past or present events, conditions, circumstances, activities,
practices, incidents, actions, or plans which could reasonably be expected to
interfere with or prevent continued compliance, or which could reasonably be
expected to give rise to any common law or legal liability, or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, arrangement for disposal, transport,
environment, of any pollutant, contaminant, chemical, or industrial, hazardous,
or toxic material or waste, including, without limitation, any liability
arising, or any claim, action, demand, suit, proceeding, hearing, study, or
investigation which could reasonably be expected to be brought, under RCRA,
CERCLA, SARA, or similar foreign, state, regional, county, or local laws which
could have a material adverse effect on the condition (financial or otherwise),
earnings, operations or business of the Company and its subsidiaries considered
as one enterprise; provided that no representation is made as to the effect, if
any, of amendments to the statutes and regulations referenced in this sentence
which are adopted after the date as of which this representation is made.
(t) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and is listed on the Nasdaq National Market, and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the National Association of Securities
Dealers, Inc. ("NASD") is contemplating terminating such registration or
listing.
(u) The Firm Notes and Option Notes satisfy the requirements set forth in
Rule 144A(d)(3) under the Act for securities to be eligible for trading pursuant
to Rule 144A.
(v) None of the Company, its affiliates (as defined in Rule 501(b) of
Regulation D under the Act, an "Affiliate") or any person acting on its or their
behalf has engaged or will engage in any directed selling efforts (as that term
is defined in Regulation S under the Act ("Regulation S")) with respect to any
of the Notes, and the Company and its Affiliates and any person acting on its or
their behalf have complied and will comply with the offering restriction
requirements of Regulation S.
(w) Neither the Company nor any Affiliate of the Company, directly or
through any agent or any person acting on its or their behalf, (i) has sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
or will sell, offer for sale, solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Act) which is or will be integrated
with the sale of the Notes under Rule 502(a) of Regulation D under the Act in a
manner that would require the registration under the Act of the Notes, or (ii)
has engaged or will engage in any form of general solicitation or general
advertising (as those terms are used in Rule 502(c) of Regulation D under the
Act) in connection with the offering of the Notes, or (iii) has engaged or will
engage in any manner in a public offering in connection with the sale of the
Notes within the meaning of Section 4(2) of the Act (assuming, with respect to
(ii) and (iii), the accuracy and completeness of the Initial Purchasers'
representations, warranties and agreements in Sections 3(d) and 3(e) hereof).
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<PAGE>
(x) It is not necessary in connection with the offer, sale and delivery of
any of the Notes to the Initial Purchasers in the manner contemplated by this
Agreement to register any of the Notes or the Underlying Securities under the
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended.
(y) The Company is not an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act").
(z) The Company has not paid or agreed to pay to any person any
compensation in connection with the solicitation of any person to purchase any
Notes except as contemplated by this Agreement.
(aa) Neither the Company nor any of its Affiliates has taken or will take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Notes or of the Common Stock of the Company to facilitate the sale or resale of
any of the Notes.
(bb) Neither the Company nor any of its subsidiaries has at any time during
the last five (5) years (i) made any unlawful contribution to any candidate for
foreign office or failed to disclose fully any contribution in violation of law,
or (ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
(cc) None of the Company or its subsidiaries or any agent thereof acting on
their behalf has taken, and none of them will take, any action that might cause
this Agreement or the issuance or sale of the Notes to violate Regulation G (12
C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System.
(dd) To the best knowledge of the Company, the present fair saleable value
of the assets of the Company exceeds the amount that will be required to be paid
on or in respect of the existing debts and other liabilities (including
contingent liabilities) of the Company as they become absolute and matured; the
assets of the Company do not constitute unreasonably small capital to carry out
its businesses as conducted or as proposed to be conducted, including the
capital needs of the Company, taking into account the projected capital
requirements and capital availability of the Company; the Company does not
intend to, nor does it believe that it will, incur debts beyond its ability to
pay such debts as they mature; upon the issuance of the Notes and the
application of the proceeds thereof as contemplated by the Final Memorandum, the
present fair saleable value of the assets of the Company will exceed the amount
that will be required to be paid on or in respect of the existing debts and
other liabilities (including contingent liabilities) of the Company as they
become absolute and matured; the assets of the Company, upon the issuance of the
Notes and the application of the proceeds thereof as contemplated by the Final
Memorandum, will not constitute unreasonably small capital to carry out its
businesses as conducted or as proposed to be conducted, including the capital
needs of the Company, taking into account the projected capital requirements and
capital availability of the Company.
(ee) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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<PAGE>
(ff) The Company has complied and will comply with all provisions of
Florida Statutes Section 517.075 and the regulations thereunder, relating to
issuers doing business with Cuba.
(gg) Each executive officer and director of the Company has agreed in
writing that such person will not, for a period from the date hereof through and
including August 14, 1997 (the "Lock-up Period"), offer to sell, contract to
sell, or otherwise sell, dispose of, loan, pledge or grant any rights with
respect to (collectively, a "Disposition") any shares of Common Stock, any
options or warrants to purchase any shares of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock (collectively,
"Company Securities") now owned or hereafter acquired directly by such person or
with respect to which such person has or hereafter acquires the power of
disposition, otherwise than (i) as a bona fide gift or gifts, provided the donee
or donees thereof agree in writing to be bound by this restriction, (ii) as a
distribution to limited partners or shareholders of such person, provided that
the distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) with the prior written consent of Robertson, Stephens &
Company LLC. The foregoing restrictions have been expressly agreed to preclude
the holder of the Company Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of Company Securities during the Lock-up Period, even if such
Company Securities would be disposed of by someone other than such holder. Such
prohibited hedging or other transactions would include, without limitation, any
short sale (whether or not against the box) or any purchase, sale or grant of
any right (including, without limitation, any put or call option) with respect
to any Company Securities or with respect to any security (other than a broad-
based market basket or index) that includes, relates to or derives any
significant part of its value from Company Securities. Furthermore, such person
has also agreed and consented to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of the Company Securities held
by such person except in compliance with this restriction. The Company has
provided to counsel for the Initial Purchasers a complete and accurate list of
its "affiliates" (as defined under Rule 144 of the Rule and Regulations) and the
number and type of securities held by each such affiliate. The Company has
provided to counsel for the Initial Purchasers true, accurate and complete
copies of all of the agreements pursuant to which its executive officers,
directors and shareholders have agreed to such or similar restrictions (the
"Lock-up Agreements") presently in effect or effected hereby. The Company hereby
represents and warrants that it will not release any of its officers or
directors from any Lock-up Agreements currently existing or hereafter effected
without the prior written consent of Robertson, Stephens & Company LLC. In
addition each officer and director of the Company, each other "affiliate" (as
defined under Rule 144 of the Rules and Regulations) of the Company and each
"affiliate" (as defined under Rule 144 of the Rules and Regulations) of each of
the foregoing has agreed in writing not to purchase any of the Securities, other
than Securities that have been or are being sold in a transaction registered
under the Act or in any other transaction as a result of which such person
receives Securities without any restrictive legends, directly or indirectly,
until after two years following the later to occur of the Closing Date or the
latest Option Closing Date, if any. In connection with the foregoing, the
Company will use its best efforts to secure the agreement of any person who
becomes an "affiliate" (as defined under Rule 144 of the Rules and Regulations)
of the Company after the effective date of this Agreement that they will not
purchase any of the Securities, other than Securities that have been or are
being sold in a transaction registered under the Act or in any other transaction
as a result of which such person receives Securities without any restrictive
legends, until after two years following the later to occur of the Closing Date
or the latest Option Closing Date, if any, which steps shall include securing a
written agreement that they will not purchase any of the Securities other than
Securities that have been or are being registered under the Act or in any other
transaction as a result of which such person receives Securities without any
restrictive legends until after two years following the later to occur of the
Closing Date or the latest Option Closing Date, the imposition of appropriate
restrictive legends and the removal of any such Securities from DTC and trading
in PORTAL.
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3. Offering, Purchase, Sale and Delivery of Firm Notes and Option Notes.
--------------------------------------------------------------------
(a) You have advised the Company that you have made and will make an
offering of the Firm Notes and Option Notes purchased by you hereunder on the
terms to be set forth in the Final Memorandum and in this Agreement, as soon
after this Agreement is entered into as in your judgment is advisable.
(b) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, the principal amount of
Firm Notes set forth opposite the name of such Initial Purchaser on Schedule A
----------
hereto at a purchase price of 97% of the principal amount thereof (the "Purchase
Price") plus accrued interest, if any, from June 30, 1997 to the date of payment
and delivery.
Delivery of definitive certificates for the Firm Notes to be purchased by
the Initial Purchasers pursuant to this Section 3 shall be made against payment
of the Purchase Price therefor by the Initial Purchasers by wire transfer,
payable to the order of the Company in Federal (same day) funds at the offices
of Alston & Bird LLP, One Atlantic Center, 1201 West Peachtree Street, Atlanta,
Georgia 30309 (or at such other place as may be agreed upon among the Initial
Purchasers and the Company), at 10:00 A.M., Atlanta time (a) if this Agreement
is executed and delivered before 4:30 p.m. Atlanta time, on the third (3rd) full
business day following the first day that Notes are traded, (b) if this
Agreement is executed and delivered after 4:30 p.m., Atlanta time, the fourth
(4th) full business day following the day that this Agreement is executed and
delivered or (c) at such other time and date not later than seven (7) full
business days following the first day that Notes are traded as the Initial
Purchasers and the Company may determine (or at such time and date to which
payment and delivery shall have been postponed pursuant to Section 10 hereof),
such time and date of payment and delivery being herein called the "Closing
Date." The certificates (including one or more global certificates), if any,
for the Firm Notes to be so delivered will be made available to you at such
office or at such other location including, without limitation, in New York
City, as you may reasonably request for checking at least one full business day
prior to the Closing Date and will be in such names and denominations as you may
request, such request to be made at least two full business days prior to the
Closing Date. To the extent that the Initial Purchasers so elect, delivery of
the Firm Notes held in global certificates may be made by credit through full
fast transfer to the accounts at the Depository Trust Company ("DTC") designated
by the Initial Purchasers.
(c) The information set forth in the last paragraph on the cover page of
the Final Memorandum, in the paragraph immediately following the Table of
Contents on page 3 of Final Memorandum and in the table of Initial Purchasers
and the sixth, eighth, eleventh, twelfth and thirteenth paragraphs under the
caption "Plan of Distribution" in the Final Memorandum (in each case, insofar as
such information relates to the Initial Purchasers) constitutes the only
information furnished by the Initial Purchasers to the Company for inclusion in
the Final Memorandum, and you represent and warrant to the Company that the
statements made therein are true and correct and do not fail to state any
material fact necessary in order to make such statements, in light of the
circumstances in which made, not misleading.
(d) Each Initial Purchaser severally represents and warrants that such
Initial Purchaser is an accredited investor as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Act (an "Institutional Accredited
Investor"). Each Initial Purchaser severally agrees with the Company that (a) it
has not solicited and will not solicit offers for, or offer or sell, any Notes
by any form of general solicitation or general advertising (as those terms are
used in Rule 502(c) of Regulation D under the Act) or engage in any manner in a
public offering in connection with the sale of the Notes within the meaning of
Section 4(2) of the Act (assuming the accuracy and completeness of the Company's
representations, warranties and compliance with its agreements in Sections 2(v),
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2(w), 4(e), 4(f) and 4(i) hereof), and (b) it has solicited and will solicit
offers for the Notes only from, and has offered and will offer and sell the
Notes only to, persons that it reasonably believes to be (A) in the case of
offers or sales inside the United States, either (i) qualified institutional
buyers, as defined in Rule 144A(a)(1) under the Act ("QIBs"), or (ii) other
Institutional Accredited Investors (provided that each such other Institutional
Accredited Investor, prior to its purchase of the Firm Notes and the Option
Notes, shall have delivered to the Initial Purchasers a letter containing the
representations and agreements set forth in Annex A to the Final Memorandum) and
(B) in the case of offers or sales outside the United States, either (i) persons
described in clause (A) above, (ii) persons other than U.S. persons (as such
term is defined in Rule 902(o) of Regulation S under the Act), or (iii) a
distributor (as such term is defined in Rule 902(c) of Regulation S under the
Act) that has represented and agreed as set forth in Section 3(d), 3(e) and 3(f)
hereof as if the provisions of such sections applied to such distributor rather
than to each Initial Purchaser.
(e) Each Initial Purchaser severally agrees that neither it, its Affiliates
nor any persons acting on its or their behalf have engaged or will engage in any
directed selling efforts (within the meaning of Regulation S under the Act) with
respect to any Notes, and such Initial Purchaser, its Affiliates and any such
persons have complied and will comply with the offering restrictions requirement
of Regulation S under the Act.
(f) Each Initial Purchaser severally represents, warrants, and agrees with
respect to offers and sales outside the United States that such Initial
Purchaser has (A) not offered or sold, and will not offer or sell in the United
Kingdom by means of any document any Notes other than to persons whose ordinary
business it is to buy and sell shares or notes, whether as a principal or agent,
or in circumstances which do not constitute an offer to the public within the
meaning of the Public Offers of Securities Regulations 1995 ("Regulations"),
(B) complied and will comply with all applicable provisions of the Financial
Services Act 1986 of Great Britain and the Regulations with respect to the Notes
in, from or otherwise involving the United Kingdom, and (C) only issued or
passed on and will only issue and pass on to any persons in the United Kingdom
any document received by it in connection with the issue of the Notes if that
person is of a kind described in Article 11(d) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1996 of Great Britain.
4. Further Agreements of the Company. The Company agrees with the Initial
---------------------------------
Purchasers that:
(a) If, during such period after the date hereof and prior to the date on
which all of the Notes shall have been sold by the Initial Purchasers, any event
shall occur or condition exist as a result of which it is necessary in your
judgment to amend or supplement the Final Memorandum in order to make the
statements therein, in the light of the circumstances when such Final Memorandum
is delivered to a purchaser, not misleading, or if, in the opinion of your
counsel, it is necessary to amend or supplement such Final Memorandum to comply
with applicable law, forthwith to prepare and furnish, at its own expense, to
you either amendments or supplements to such Final Memorandum so that the
statements in such Final Memorandum as so amended or supplemented will not, in
the light of the circumstances when such Final Memorandum is delivered to a
purchaser, be misleading or so that such Final Memorandum, as so amended or
supplemented, will comply with applicable law.
(b) Before amending or supplementing the Final Memorandum, to furnish to
you a copy of each such proposed amendment or supplement and not to use any such
proposed amendment or supplement to which you reasonably object.
(c) The Company will use its best efforts to qualify the Securities for
sale under the securities or Blue Sky laws of such jurisdictions in the United
States as you may designate and to continue such qualifications in effect for so
long as may be required for purposes of the distribution of the Securities,
except that the Company shall not be required in connection therewith or as a
condition thereof to qualify as a foreign corporation or to
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execute a general consent to service of process in any jurisdiction in which it
is not otherwise required to be so qualified or to so execute a general consent
to service of process. In each jurisdiction in which the Securities shall have
been qualified as above provided, the Company will make and file such statements
and reports in each year as are or may be reasonably required by the laws of
such jurisdiction.
(d) The Company will furnish to you, (i) as soon as available, copies of
the Preliminary Memorandum and (ii) as soon as available, and in no event later
than the first (1st) full business day following the first day that the Notes
are traded, copies of the Final Memorandum, any documents incorporated by
reference therein and any amendments or supplements to such documents, all in
such quantities as you may from time to time reasonably request until all of the
Notes shall have been sold by the Initial Purchasers.
(e) Neither the Company nor any Affiliate has sold, offered for sale or
solicited offers to buy or otherwise negotiated in respect of any security (as
defined in the Act) or will do any of the foregoing which could be integrated
with the sale of any of the Notes under Rule 502(a) of Regulation D under the
Act in a manner which would require the registration under the Act of such
Notes.
(f) Neither the Company nor any Affiliate has solicited or will solicit any
offer to buy or offer or sell any of the Notes by means of any form of general
solicitation or general advertising (as those terms are used in Rule 502(c) of
Regulation D under the Act) or has engaged or will engage in any manner in a
public offering in connection with the sale of the Notes within the meaning of
Section 4(2) of the Act.
(g) To the extent that any Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144 under the Act, during the
two year period following the Closing Date (or, if later, the Option Closing
Date) and during the two-year period following the sale of any such Security by
an Affiliate of the Company (for purposes of this Section 4(g) only, as such
term is defined in Rule 144(a)(1) under the Act), the Company will make
available, upon request, to any seller of such Securities the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then subject
to and in compliance with Section 13 or 15(d) of the Exchange Act.
(h) The Company will use its best efforts to permit the Notes to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL Market and to permit the Notes to be eligible for
clearance and settlement through DTC.
(i) None of the Company, its Affiliates or any person acting on its or
their behalf (other than the Initial Purchasers) have engaged or will engage in
any directed selling efforts (as that term is defined in Regulation S under the
Act) with respect to any of the Notes, and the Company and its Affiliates and
each person acting on its or their behalf (other than the Initial Purchasers)
will comply with the offering requirements of Regulation S under the Act.
(j) If the transactions contemplated hereby are not consummated by reason
of any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed hereunder or to fulfill any condition of
the Initial Purchasers' obligations hereunder, or if the Company shall terminate
the Agreement under Section 11(a) or if the Initial Purchasers shall terminate
this Agreement under Section 11(b)(i), the Company will reimburse the Initial
Purchasers for all out-of-pocket expenses (including fees and disbursements of
counsel for the Initial Purchasers) incurred by the Initial Purchasers in
investigating, preparing to market or marketing the Notes.
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(k) During the Lock-up Period, the Company will not, without the prior
written consent of Robertson, Stephens & Company LLC effect a Disposition of,
directly or indirectly, any Company Securities other than: (i) the sale of the
Notes and Underlying Securities hereunder or (ii) the Company's grant of options
to purchase Common Stock or issuance of Common Stock under the Company's stock
option plan described in the Final Memorandum.
(l) The Company will at all times reserve and keep available, free of any
preemptive rights, co-sale rights, registration rights, rights of first refusal
or other rights to subscribe for or purchase securities out of its authorized
but unissued Common Stock, for the purpose of effecting the conversion of the
Notes into Common Stock, the full number of shares of Common Stock issuable upon
the conversion of all outstanding Notes.
(m) The Company will apply the proceeds from the sale of the Notes as set
forth under "Use of Proceeds" in the Final Memorandum.
(n) The Company will ensure that each certificate representing any Notes
bears the legend required by the Indentures, if any.
(o) The Company will ensure that each stock certificate representing
Underlying Securities bears the legend required by the Indenture, if any.
(p) Until such time as all of the restrictive legends required to be placed
on the Securities pursuant to the Indenture have been removed or are removable,
neither the Company nor any of its Affiliates will purchase any of the
Securities, other than, in the case of the Company, Securities which upon such
purchase are canceled and not reissued. For purposes of this Section 4(p), the
term "Affiliate" shall mean the definition of such term in Rule 144(a) (1) under
the Securities Act.
(q) In connection with any disposition of Securities pursuant to a
transaction made in compliance with applicable state securities laws and (i)
satisfying the requirements of Rule 144(k) under the Act, (ii) satisfying the
requirements of Rule 904 of Regulation S under the Act in the case of the
Underlying Securities, (iii) made pursuant to an effective registration
statement under the Act or (iv) disposed of in any other transaction that does
not require registration under the Act, the Company will reissue certificates
evidencing such Securities without the legends referred to in Section 4(n) or
4(o) hereof (provided, in the case of a transaction specified in clause (iv)
above, that the legal opinion referred to therein supports the removal of such
legends).
(r) The Company agrees to comply with all agreements set forth in the
representation letters of the Company to DTC relating to the approval of the
Notes by DTC for "book entry" transfer.
5. Expenses.
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(a) The Company agrees with each Initial Purchaser that:
(i) The Company will pay and bear all costs and expenses in connection
with the preparation and printing of the Preliminary Memorandum and Final
Memorandum (including financial statements, schedules and exhibits) and any
amendments or supplements thereto; the issuance and delivery of the Firm
Notes and the Option Notes hereunder to the Initial Purchasers, including
transfer taxes, if any, the cost of all certificates (including one or more
global certificates) representing the Notes and Transfer Agents' and
Registrars' fees; the fees and disbursements of counsel for the Company;
all fees and other charges of the Company's independent public auditors;
the cost of furnishing to the Initial Purchasers copies of the Memorandum
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(including appropriate exhibits, if any), and any amendments or supplements to
any of the foregoing; and the cost of qualifying the Notes under the laws of
such jurisdictions as you may designate (including filing fees and fees and
disbursements of Initial Purchasers' counsel in connection with such Blue Sky
qualifications); the fees and expenses of the Trustee and Trustee's counsel in
connection with the Indenture and the Notes; the fees and expenses, if any,
incurred in connection with the admission of such Notes for trading in the
PORTAL Market and for clearance and settlement through DTC, and all other
expenses directly incurred by the Company in connection with the performance of
its obligations hereunder.
(ii) In addition to its other obligations under Section 8(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding described in Section 8(a), it
will reimburse the Initial Purchasers on a monthly basis for all reasonable
legal or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse the Initial Purchasers
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the Initial
Purchasers shall promptly refund it to the Company together with interest,
compounded daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) listed from time to
time in the Wall Street Journal which represents the base rate on corporate
loans posted by the substantial majority of the nation's 30 largest banks (the
"Prime Rate"). Any such interim reimbursement payments which are not made to the
Initial Purchasers within 30 days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request.
(b) In addition to its other obligations under Section 8(b), each Initial
Purchaser severally agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding described in
Section 8(b), it will reimburse the Company on a monthly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Initial Purchasers' obligation to reimburse the Company
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the Company
shall promptly refund it to the Initial Purchasers together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Initial Purchasers within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request.
(c) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in Sections 5(a)(ii) and 5(b)
hereof, including the amounts of any requested reimbursement payments, the
method of determining such amounts and the basis on which such amounts shall be
apportioned among the indemnifying parties, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the National Association of Securities Dealers, Inc.
Any such arbitration must be commenced by service of a written demand for
arbitration or a written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding arbitration does not make
such designation of an arbitration tribunal in such demand or notice, then the
party responding to said demand or notice is authorized to do so. Any such
arbitration will be limited to the operation of the interim reimbursement
provisions contained in Sections 5(a)(ii) and 5(b) hereof and will not resolve
the ultimate propriety or enforceability of the obligation to indemnify for
expenses which is created by the provisions of Sections 8(a) and 8(b) hereof or
the obligation to contribute expenses which is created by the provisions of
Section 8(d).
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6. Conditions of Initial Purchasers' Obligations. The obligations of the
---------------------------------------------
Initial Purchasers to purchase and pay for the Firm Notes and Option Notes as
provided herein, shall be subject to the accuracy, as of the date hereof and the
Closing Date or the applicable Option Closing Date, as the case may be, of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) Prior to the Closing Date or the applicable Option Closing Date, as the
case may be, there shall not have occurred any change, or any development
involving a prospective change, in the properties or assets of the Company
described in the Final Memorandum or, in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise, from that set forth in the
Preliminary Memorandum that, in your sole judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the Firm Notes or
Option Notes on the terms and in the manner contemplated in the Final
Memorandum.
(b) All corporate proceedings and other legal matters in connection with
this Agreement, the Registration Rights Agreement, the Indenture, the form of
Preliminary Memorandum and Final Memorandum, and the authorization, issue, sale
and delivery of the Firm Notes and the Option Notes shall have been satisfactory
to Initial Purchasers' counsel, and such counsel shall have been furnished with
such papers and information as they may reasonably have requested to enable them
to pass upon the matters referred to in this Section 6.
(c) You shall have received on the Closing Date or on the applicable Option
Closing Date, as the case may be, of Alston & Bird LLP, counsel for the Company
and the subsidiaries, dated the Closing Date or the applicable Option Closing
Date, as the case may be, addressed to the Initial Purchasers to the effect
that:
(A) The Company and each of the Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;
(B) The Company and each Significant Subsidiary has the corporate power
to own, lease and operate its properties and to conduct its business as
described in the Final Memorandum;
(C) The Company and each Significant Subsidiary is duly qualified to do
business as a foreign corporation and is in good standing in each of the
jurisdictions to be listed on a schedule attached to the opinion of such counsel
which shall be reasonably acceptable to counsel to the Initial Purchasers. To
such counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entities other than the
subsidiaries listed on Schedule B;
----------
(D) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Final Memorandum under the title "Capitalization" as
of the dates stated therein; the issued and outstanding shares of capital
stock of the Company have been duly and validly authorized and issued, are
fully paid and nonassessable, and have not been issued in violation of any
preemptive right under the Company's articles of incorporation or bylaws,
co-sale right, registration right, right of first refusal or any other
right to subscribe for or purchase securities;
(E) The certificates for the Notes as delivered to the Initial
Purchasers and the certificates representing the Underlying Securities to
be delivered upon the conversion of the Notes are in due and proper form;
the Notes have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered and paid for
in accordance with the terms of this Agreement, will
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(x) constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally or by equitable
principles of general applicability; and (y) be entitled to the benefits of
the Indenture; all of the shares of Underlying Securities initially
issuable upon conversion of the Notes have been duly authorized and
reserved for issuance upon conversion of the Notes and, when issued in
accordance with the terms of the Indenture, will be validly issued, fully
paid and non-assessable and will not have been issued in violation of any
preemptive right under the Company's articles of incorporation or bylaws,
co-sale right, registration right, right of first refusal or any other
right to subscribe for or purchase securities; the shareholders of the
Company have no preemptive rights, co-sale rights, registration rights,
rights of first refusal or any other rights to subscribe for or purchase
securities which are applicable to the issue, sale or resale of any of the
Securities, other than such rights as have been waived prior to the date of
this opinion and other than "piggy-back" registration rights as described
under the caption "Description of Capital Stock" in the Final Memorandum;
(F) The Company has corporate power and authority to enter into this
Agreement, the Indenture, the Registration Rights Agreement and the Notes,
to issue, sell and deliver to the Initial Purchasers the Notes to be issued
and sold by it hereunder and to perform its obligations under this
Agreement, the Indenture, the Registration Rights Agreement and the Notes;
(G) This Agreement, the Indenture, and the Registration Rights
Agreement have been duly authorized by all necessary corporate action on
the part of the Company and have been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery by you and
the Trustee, as applicable, each is a valid and binding agreement of the
Company enforceable in accordance with its respective terms, except, in the
case of this Agreement and the Registration Rights Agreement, insofar as
the indemnification, contribution and waiver provisions thereof may be
limited by applicable law, equitable principles or public policy and except
with respect to all such agreements, as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the creditors' rights generally or by general equitable
principles;
(H) The terms and provisions of the capital stock of the Company and
the terms and provisions of the Notes and Indenture conform in all material
respects to the description thereof contained in the Final Memorandum;
(I) The statements in the Final Memorandum under the captions
"Description of Notes," "Description of Capital Stock," "Certain Federal
Income Tax Considerations," "Business -- Legal Proceedings," "Business --
Government Regulation" and "Transfer Restrictions," "Voice-Tel
Acquisitions -- Proprietary Rights," "Voice-Tel Acquisitions --
Legal Proceedings," insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, have been
reviewed by such counsel and fairly present the information which would be
called for if such statements were made in a registration statement on Form
S-1 with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(J) The descriptions in the Final Memorandum of the articles of
incorporation and bylaws of the Company and of statutes and contracts are
accurate in all material respects;
(K) The execution and delivery by the Company of, and performance of
its obligations under, this Agreement, the Indenture, the Registration
Rights Agreement and the Notes and the consummation of the transactions
provided for herein and therein (other than performance of the Company's
indemnification and contribution obligations hereunder and under the
Registration Rights Agreement, concerning
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which no opinion need be expressed) do not and will not (a) result in any
violation of the Company's articles of incorporation or bylaws, or (b) conflict
with or result in the breach or violation of any of the terms and provisions, or
constitute a default under, any of the Material Contracts or the agreements
listed in Section 6(i) of this Agreement, or any applicable statute, rule or
regulation or, to such counsel's knowledge, any order, writ or decree of any
court or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries, or over any of their properties or operations; provided
however, that no opinion need be rendered concerning state securities or Blue
Sky laws;
(L) No authorization, approval or consent of any federal, Georgia or
Delaware governmental authority or agency is necessary in connection with the
consummation of the transactions contemplated by this Agreement, the Indenture,
the Registration Rights Agreement and the Notes, except such as have been
obtained under the Act or such as may be required under state or other
securities or Blue Sky laws in connection with the purchase and the distribution
of the Notes by the Initial Purchasers;
(M) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company or any of its subsidiaries
which are of the type that would be required to be disclosed in an Annual Report
on Form 10-K for the Company (if filed at the date of such opinion) other than
proceedings fairly summarized in all material respects in the Final Memorandum;
(N) To such counsel's knowledge and except as specifically described in
the Final Memorandum, neither the Company nor any of its subsidiaries is
presently (a) in material violation of its respective charter or bylaws, or (b)
in breach of any material applicable statute, rule or regulation known to such
counsel or, to such counsel's knowledge, any material order, writ or decree of
any court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries, or over any of their properties or operations;
(O) The Firm Notes or Option Notes, as the case may be, satisfy the
requirements set forth in Rule 144A(d)(3) under the Act for securities to be
eligible for trading pursuant to Rule 144A;
(P) Each document incorporated by reference in the Final Memorandum
(except for financial statements, supporting schedules and other financial and
statistical data derived therefrom as to which such counsel need not express any
opinion), when filed with the Commission complied as to form in all material
respects with the Exchange Act and the rules and regulations of the Commission
thereunder;
(Q) Based upon the representations, warranties and agreements of the
Company in Sections 2(v), 2(w), 4(e), 4(f) and 4(i) of this Agreement, and of
the Initial Purchasers in Sections 3(d) and 3(e) of this Agreement, it is not
necessary in connection with the offer, sale and delivery of the Firm Notes and
Option Notes to the Initial Purchasers under this Agreement or in connection
with the initial resale of such Firm Notes and Option Notes by the Initial
Purchasers in accordance with Section 3 of this Agreement to register the Notes
under the Act or to qualify the Indenture under the Trust Indenture Act of 1939,
as amended;
(R) The Company is not an "investment company" or an entity "controlled"
by an "investment company" within the meaning of the 1940 Act;
(S) To such counsel's knowledge, except as set forth in the Final
Memorandum, no holders of Common Stock or other securities of the Company have
registration rights with respect to securities of the Company; and
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(T) The statements in the Final Memorandum under the captions "Voice-
Tel Acquisitions -- Terms of Acquisition," fairly summarize the matters
referred to therein.
In addition, such counsel shall state that such counsel has participated in
conferences with officials and other representatives of the Company, the Initial
Purchasers, Initial Purchasers' counsel and the independent certified public
accountants of the Company, at which such conferences the contents of the
Preliminary Memorandum and the Final Memorandum and related matters were
discussed, and although they have not verified the accuracy or completeness of
the statements contained in the Final Memorandum, nothing has come to the
attention of such counsel which leads them to believe that, on the date of the
Final Memorandum and at all times subsequent thereto up to and on the Closing
Date or the applicable Option Closing Date, as the case may be, the Final
Memorandum contained any untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading (it being
understood that such counsel will express no opinion with respect to the
financial statements, including supporting schedules and other financial and
statistical information derived therefrom).
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or the States of Georgia or Delaware
upon opinions of local counsel, and as to questions of fact upon representations
or certificates of officers of the Company, and of government officials, in
which case their opinion is to state that they are so relying and that they have
no knowledge of any material misstatement or inaccuracy in such opinions,
representations or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you and to Initial Purchasers'
counsel.
(d) You shall have received on the Closing Date or on the applicable Option
Closing Date, as the case may be, an opinion of Wilson Sonsini Goodrich &
Rosati, P.C., in form and substance satisfactory to you, with respect to the
sufficiency of all such corporate proceedings and other legal matters relating
to this Agreement, the Indenture, the Registration Rights Agreement, the Notes
and the Underlying Securities and the transactions contemplated hereby and
thereby as you may reasonably require, and the Company shall have furnished to
such counsel such documents as they may have requested for the purpose of
enabling them to pass upon such matters.
(e) You shall have received on the Closing Date or on the applicable Option
Closing Date, as the case may be, a letter from Arthur Anderson LLP addressed to
the Initial Purchasers, dated the Closing Date or the applicable Option Closing
Date, as the case may be, confirming that they are independent certified public
accountants with respect to the Company and its subsidiaries within the meaning
of the Act and the Rules and Regulations and based upon the procedures described
in their letter delivered to you concurrently with the execution of this
Agreement (herein called the "Original Letter"), but carried out to a date not
more than five business days prior to the Closing Date or the applicable Option
Closing Date, as the case may be, (i) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate as of
the Closing Date or the applicable Option Closing Date, as the case may be; and
(ii) setting forth any revisions and additions to the statements and conclusions
set forth in the Original Letter which are necessary to reflect any changes in
the facts described in the Original Letter since the date of such letter, or to
reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change or any development
involving a prospective change, in or affecting the business or properties of
the Company and its subsidiaries which, in your sole judgment makes it
impracticable or inadvisable to proceed with the sale of the Firm Notes and the
Option Notes as contemplated by the Memorandum. The Original Letter from Arthur
Anderson LLP shall be addressed to or for the use of the Initial Purchasers in
form and substance satisfactory to the Initial Purchasers and shall (i)
represent, to the extent true, that they are independent certified public
accountants with respect to the Company and its subsidiaries within the meaning
of the Act and the applicable Rules and Regulations, (ii) set forth their
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opinion with respect to their examination of the consolidated balance sheets of
the Company as of December 31, 1995 and 1996 and related consolidated statements
of operations, shareholders' equity, and cash flows for the nine months ended
December 31, 1994 and the twelve months ended December 31, 1995 and 1996, (iii)
set forth their opinion with respect to their examination of the balance sheets
of VTE, VTN and the Significant Franchisees (as such terms are defined in the
Final Memorandum) and the related consolidated statements of operations,
shareholders' equity, and cash flows as of and for the periods incorporated by
reference into the Final Memorandum, (iv) state that Arthur Anderson LLP has
performed the procedures set out in the Statement on Auditing Standards No. 71
("SAS 71") for a review of interim financial information as of and for the three
month periods ended March 31, 1994, 1996 and 1997 for the Company (the "Interim
Financial Statements"), (v) state that in the course of such review, nothing
came to their attention that leads them to believe that any material
modifications need to be made to any of the Interim Financial Statements in
order for them to be in compliance with generally accepted accounting principles
consistently applied, (vi) state that nothing came to their attention that
caused them to believe that the pro forma financial statements included or
incorporated by reference in the Final Memorandum do not comply as to form in
all material respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X and that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such statements, and
(v) address other matters agreed upon by Arthur Anderson LLP and you.
(f) You shall have received on the Closing Date or on the applicable Option
Closing Date, as the case may be, a certificate of the Company, dated the
Closing Date or the applicable Option Closing Date, as the case may be, signed
on behalf of the Company by the President and the Senior Vice President of
Finance and Legal of the Company, to the effect that, and you shall be satisfied
that:
(i) The representations and warranties of the Company in this Agreement
are true and correct, as if made on and as of the Closing Date or the applicable
Option Closing Date, as the case may be, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date or the applicable Option Closing Date,
as the case may be;
(ii) As of the date of this Agreement and at all times subsequent
thereto up to the delivery of such certificate, the Final Memorandum did not and
does not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances in which made, not misleading, and, since the date of this
Agreement, there has occurred no event necessary to be set forth in an amended
or supplemented Final Memorandum in order to make any statements in such Final
Memorandum, in light of the circumstances under which made, not misleading,
which has not been so set forth; and
(iii) Subsequent to the respective dates as of which information is
given in each Memorandum, there has not been (A) any material adverse change in
the business, properties or assets described or referred to in the Final
Memorandum or in the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries considered as
one enterprise or any change which would adversely affect the power or ability
of the Company to perform its obligations under this Agreement, the Indenture,
the Registration Rights Agreement or the Notes, (B) any transaction which is
material to the Company and its subsidiaries considered as one enterprise,
except transactions entered into in the ordinary course of business, (C) any
obligation, direct or contingent, incurred by the Company or any of its
subsidiaries which is material to the Company and its subsidiaries considered as
one enterprise, except obligations incurred in the ordinary course of business,
(D) any change in the capital stock or outstanding indebtedness of the Company
or any of its subsidiaries which is material to the Company and its subsidiaries
considered as one enterprise, except for the issuance of the Notes pursuant
hereto, (E) any dividend or distribution of any kind declared, paid or made
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on the capital stock of the Company or any of its subsidiaries, or (F) any
loss or damage (whether or not insured) to the property of the Company or
any of its subsidiaries which has been sustained or will have been
sustained which has a material adverse effect on the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise.
(g) The Company shall have executed and delivered to you on the Closing
Date the Registration Rights Agreement substantially in the form attached hereto
as Schedule E (the "Registration Rights Agreement");
----------
(h) The Company shall have obtained and delivered to you an agreement from
each executive officer and director of the Company in writing prior to the date
hereof that such person will not, during the Lock-up Period, effect the
Disposition of any Company Securities now owned or hereafter acquired directly
by such person or with respect to which such person has or hereafter acquires
the power of disposition, otherwise than (i) as a bona fide gift or gifts,
provided the donee or donees thereof agree in writing to be bound by this
restriction, (ii) as a distribution to limited partners or shareholders of such
person, provided that the distributees thereof agree in writing to be bound by
the terms of this restriction, or (iii) with the prior written consent of
Robertson, Stephens & Company LLC. The foregoing restrictions shall have been
expressly agreed to preclude the holder of the Company Securities from engaging
in any hedging or other transaction which is designed to or reasonably expected
to lead to or result in a Disposition of Company Securities during the Lock-up
Period, even if such Company Securities would be disposed of by someone other
than the such holder. Such prohibited hedging or other transactions would
including, without limitation, any short sale (whether or not against the box)
or any purchase, sale or grant of any right (including, without limitation, any
put or call option) with respect to any Company Securities or with respect to
any security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from Company Securities.
Furthermore, such person will have also agreed and consented to the entry of
stop transfer instructions with the Company's transfer agent against the
transfer of the Company Securities held by such person except in compliance with
this restriction. The Company shall have also obtained and delivered to you an
agreement in writing of each officer and director of the Company, each other
"affiliate" (as defined under Rule 144 of the Rules and Regulations) of the
Company and each "affiliate" (as defined under Rule 144 of the Rules and
Regulations) of each of the foregoing not to purchase any of the Securities,
other than Securities that have been or are being sold in a transaction
registered under the Act or in any other transaction as a result of which such
person receives Securities without any restrictive legends, directly or
indirectly, until after two years following the later to occur of the Closing
Date or the latest Option Closing Date, if any.
(i) You shall have received on the Closing Date or on the applicable Option
Closing Date, as the case may be, a certificate of the Company, dated the
Closing Date or the applicable Option Closing Date, as the case may be, signed
on behalf of the Company by the President and Senior Vice President of Finance
and Legal of the Company, to the effect that, and you shall be satisfied that:
(i) The only indentures, mortgages, deeds of trust, loan agreements,
bonds, debentures, note agreeents or other evidences of indebtedness (x) to
which the Company is a party or by which it is bound or (y) which individually
exceed $100,000 and to which any of the Significant Subsidiaries is a party or
by which any of them are bound, are as set forth on Schedule F attached hereto
----------
(true, correct and complete copies of which have been delivered to
counsel for the Initial Purchasers).
(ii) As of the Closing Date or the applicable Option Closing Date, as
the case may be, the Company is not in breach of, or default under the
provisions of the agreements and instruments referred to in paragraph (i) above,
and the issuance by the Company of $150,000,000 aggregate principal amount of
the Notes and the issuance by the Company of an additional $22,500,000 aggregate
principal amount of the
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<PAGE>
Notes, upon the exercise by the Initial Purchasers of their over-allotment
option under this Agreement, pursuant to the Indenture and their sale would not
result in a breach of, or constitute a default under, the provisions of the
agreements and instruments referred to in paragraph (i) above including, without
limitation, with respect to the financial covenants in such agreements and
instruments. The Company will attach as an exhibit to such certificate the
computations demonstrating the compliance of such financial covenants. Such
computations have been made in conformity with the provisions of such agreements
and instruments, and the terms used in such agreements and instruments, and the
terms used in such computations have the meanings assigned thereto in such
agreements and instruments.
(iii) Attached as an exhibit to such certificate are copies of waivers
or amendments or consents in respect of the agreements referred to above.
(iv) To such officers' knowledge (after reasonable inquiry),
as of the date of this Agreement, and as of the Closing Date or the applicable
Option Closing Date, as the case may be, the Company is not in default under, or
in breach of, any of the agreements and instruments referred to in paragraph (i)
above, nor does any condition exist which, with the giving of notice or passage
of time, would constitute such a default or breach.
(j) The Company shall have furnished to you such further certificates and
documents as you shall reasonably request (including certificates on behalf of
the Company by officers of the Company), as to the accuracy of the
representations and warranties of the Company herein, as to the performance by
the Company of its obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Initial Purchasers hereunder.
(k) You shall have received on the Closing Date or on the applicable Option
Closing Date, as the case may be, an opinion of Goldberg, Godles, Wiener &
Wright, regulatory counsel for the Company and its subsidiaries, dated the
Closing Date or the applicable Option Closing Date, as the case may be,
addressed to the Initial Purchasers substantially to the effect that:
(A) The information in the Final Memorandum under the captions "Risk
Factors--Regulation" and "Business--Government Regulation" (collectively, the
"Regulatory Sections"), to the extent that it constitutes matters of law or
legal conclusions, has been review by such counsel and is a fair and accurate
summary of such matters and conclusions.
In addition, such counsel shall state that such counsel has participated in
conferences with officers of the Company, Company counsel and counsel for the
Initial Purchasers in which the Regulatory Sections of the Final Memorandum were
discussed, and, although they are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Regulatory Sections of the Final Memorandum (except to the
extent provided in the foregoing opinion), nothing has come to the attention of
such counsel that leads such counsel to believe that, on the date of the Final
Memorandum and at all times subsequent thereto up to and on the Closing Date or
the applicable Option Closing Date, as the case may be, the information
contained in the Regulatory Sections of the Final Memorandum contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such
counsel will express no opinion with respect to the financial statements,
including supporting schedules and other financial and statistical information
derived therefrom).
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<PAGE>
(l) You shall have received on the Closing Date or on the applicable Option
Closing Date, as the case may be, an opinion of Kilpatrick Stockton, LLP,
intellectual property counsel for the Company and its subsidiaries, dated the
Closing Date or the applicable Option Closing Date, as the case may be,
addressed to the Initial Purchasers substantially to the effect that:
(A) The information in the Final Memorandum under the captions "Risk
Factors--Limited Protection of Proprietary Technology," "Risk Factors--
Risks of Infringement Claims" and "Business--Proprietary Rights"
(collectively, the "Intellectual Property Sections"), to the extent that it
constitutes matters of law or legal conclusions, has been review by such
counsel and is a fair and accurate summary of such matters and conclusions.
In addition, such counsel shall state that such counsel has participated in
conferences with officers of the Company, Company counsel and counsel for the
Initial Purchasers in which the Intellectual Property Sections of the Final
Memorandum were discussed, and, although they are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Intellectual Property Sections of the Final
Memorandum (except to the extent provided in the foregoing opinion), nothing has
come to the attention of such counsel that leads such counsel to believe that,
on the date of the Final Memorandum and at all times subsequent thereto up to
and on the Closing Date or the applicable Option Closing Date, as the case may
be, the information contained in the Intellectual Property Sections of the Final
Memorandum contained any untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading (it being
understood that such counsel will express no opinion with respect to the
financial statements, including supporting schedules and other financial and
statistical information derived therefrom).
All opinions, certificates, letters and documents referred to in this
Section 6 will be in compliance with the provisions hereof only if they are
reasonably satisfactory to Initial Purchasers' counsel. The Company will
furnish you with such number of conformed copies of such opinions, certificates,
letters and documents as you shall reasonably request.
7. Option Securities.
-----------------
(a) On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, the Company hereby
grants to the Initial Purchasers, for the purpose of covering over-allotments in
connection with their sale of the Firm Notes only, a nontransferable option to
purchase up to an aggregate of $22,500,000 additional principal amount of its 5-
3/4% Convertible Subordinated Notes due 2004 at the purchase price for the Firm
Notes set forth in Section 3 hereof (which shall include accrued interest, if
any, from June 30, 1997). Such option may be exercised by the Initial Purchasers
on one or more occasions in whole or in part during the period of thirty (30)
days from and after the date on which the Firm Notes are initially sold, by
giving written notice to the Company. The aggregate principal amount of Option
Notes to be purchased by each Initial Purchaser upon the exercise of such option
shall be the same proportion that the total principal amount of Firm Notes
purchased by such Initial Purchaser (set forth in Schedule A hereto) bears to
----------
the total principal amount of Firm Notes purchased by the Initial Purchasers
(set forth in Schedule A hereto), adjusted by the Initial Purchasers in such
----------
manner as to avoid issuance of Notes in principal amounts that are not a
multiple of $1,000.
Delivery of definitive certificates for the Option Notes to be purchased by
the Initial Purchasers pursuant to the exercise of the option granted by this
Section 7 shall be made against payment of the purchase price therefor by the
Initial Purchasers by wire transfer, payable to the order of the Company in
Federal (same day)
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<PAGE>
funds. Such delivery and payment shall take place at the offices of Alston &
Bird LLP, One Atlantic Center, 1201 West Peachtree Street, Atlanta, Georgia
30309, or at such other place as may be agreed upon among the Initial Purchasers
and the Company (i) on the Closing Date, if written notice of the exercise of
such option is received by the Company at least two full business days prior to
the Closing Date or (ii) on a later date which shall not be later than the third
(3rd) full business day following the date the Company receives written notice
of the exercise of such option, if such notice is received by the Company less
than two (2) full business days prior to the Closing Date (each such date, as
"Option Closing Date").
The certificates (including one or more global certificates), if any, for
the Option Notes so to be delivered will be made available to you at such office
or other location including, without limitation, in New York City, as you may
reasonably request for checking at least one full business day prior to the date
of payment and delivery and will be in such names and denominations as you may
request, such request to be made at least two full business days prior to such
date of payment and delivery. To the extent that the Initial Purchasers so
elect, delivery of the Option Notes in global form may be made by credit through
full fast transfer to the accounts at DTC designated by the Initial Purchasers.
(b) Upon exercise of any option provided for in Section 7(a) hereof, the
obligations of the Initial Purchasers to purchase such Option Notes will be
subject (as of the date hereof and as of the date of payment for such Option
Notes) to the accuracy of and compliance with the representations and warranties
of the Company herein, to the accuracy of the statements of the Company and
officers of the Company on the Company's behalf made pursuant to the provisions
hereof, to the performance by the Company of its obligations under this
Agreement, the Indenture, the Registration Rights Agreement and the Firm Notes
and the Option Notes, and to the condition that all proceedings taken at or
prior to the payment date in connection with the sale and transfer of such
Option Notes shall be satisfactory in form and substance to you and to Initial
Purchasers' counsel, and you shall have been furnished with all such documents,
certificates and opinions as you may request in order to evidence the accuracy
and completeness of any of the representations, warranties or statements, the
performance of any of the covenants of the Company or the compliance with any of
the conditions herein contained.
8. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser against any losses, claims, damages or liabilities, joint or several,
to which such Initial Purchaser may become subject under the Act, the Exchange
Act or otherwise, specifically including, but not limited to losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon (i) any breach of any representation, warranty, agreement or covenant of
the Company herein contained, or (ii) any untrue statement or alleged untrue
statement of any material fact contained in any Memorandum, or the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; and agrees to reimburse each Initial Purchaser for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Memorandum, in reliance upon and in conformity with written information
relating to any Initial Purchaser furnished to the Company by such Initial
Purchaser specifically for use in the preparation thereof and, provided further,
that the indemnity agreement provided in this Section 8(a) with respect to the
Preliminary Memorandum shall not inure to the benefit of any Initial Purchaser
from whom the person asserting any losses, claims, damages, liabilities or
actions based upon any untrue statement or alleged untrue statement of material
fact or omission or alleged omission to state therein a material fact purchased
Notes, if a copy of the Final Memorandum (as then amended or supplemented if the
Company shall have furnished any amendments or
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<PAGE>
supplements thereto) in which such untrue statement or alleged untrue statement
or omission or alleged omission was corrected had not been sent or given to such
person, within the time required by law, unless such failure is the result of
noncompliance by the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Initial Purchaser within the meaning of the Act or the
Exchange Act. This indemnity agreement shall be in addition to any liabilities
which the Company may otherwise have.
(b) Each Initial Purchaser, severally and not jointly, agrees to indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities, joint or several, to which the Company may become subject under the
Act, the Exchange Act or otherwise, specifically including, but not limited to,
losses, claims, damages or liabilities (or actions in respect thereof) arising
out of or based upon (i) any breach of any representation, warranty, agreement
or covenant of such Initial Purchaser herein contained, or (ii) any untrue
statement or alleged untrue statement of any material fact contained in any
Memorandum, or the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in light of the circumstances in which
made, not misleading, in the case of subparagraph (ii) of this Section 8(b) to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Initial
Purchaser specifically for inclusion therein, and agrees to reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action.
The indemnity agreement in this Section 8(b) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each officer and
director of the Company, and each person, if any, who controls the Company
within the meaning of the Act and the Exchange Act. This indemnity agreement
shall be in addition to any liabilities which each Initial Purchaser may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof,
but the omission so to notify the indemnifying party (i) will not relieve the
indemnifying party from liability under paragraph (a) or (b) above except to the
extent, and only to the extent, that such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. In case any such action is brought against any
indemnified party, and it notified the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party, and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
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<PAGE>
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with one local
counsel) approved by the indemnifying party, representing all the indemnified
parties under Section 8(a) or 8(b) hereof who are parties to such action), (ii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of such settlement, provided however, that
such consent shall not be unreasonably withheld. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnification could have
been sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability on all
claims that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in any action
in which a claim for indemnification is made pursuant to this Section 8 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 8 provides for indemnification
in such case, the Company, on the one hand, and the Initial Purchasers,
severally and not jointly, on the other, agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, on the one hand, and the Initial
Purchasers, on the other, may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and by
the Initial Purchasers, on the other, from the offering of the Notes; provided,
--------
however, that in no case shall any Initial Purchaser be responsible for any
- - -------
amount in excess of the purchase discount or commission applicable to the Notes
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company, on
the one hand, and the Initial Purchasers, on the other, shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, on the one hand, and of the Initial
Purchasers, on the other, in connection with the statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses), and benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions received by the Initial Purchasers from the Company in
connection with the purchase of the Notes hereunder. Relative fault shall be
determined by reference to, among other things, whether any alleged untrue
statement or omission relates to information provided by the Company or the
Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation that does not take account of the equitable considerations
referred to above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities, expenses or judgments
referred to in the immediately preceding paragraph shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The contribution agreement in this Section 8(d)
shall extend upon the same terms and conditions to, and shall inure to the
benefit of, each person, if any, who controls any Initial Purchaser or the
Company within the meaning of the Act or the Exchange Act and each officer of
the Company and each director of the Company.
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<PAGE>
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 8, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Memorandum.
9. Representations, Warranties and Agreements to Survive Delivery. All
--------------------------------------------------------------
representations, warranties, covenants and agreements of the Company and the
Initial Purchasers herein or in certificates delivered pursuant hereto, and the
indemnity and contribution agreements contained in Section 8 hereof shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Initial Purchaser or any person controlling any Initial
Purchaser within the meaning of the Act or the Exchange Act, or by or on behalf
of the Company or any of its officers, directors or controlling persons within
the meaning of the Act or the Exchange Act, and shall survive the delivery of
the Notes to the Initial Purchasers hereunder or termination of this Agreement.
10. Substitution of Initial Purchasers. If any Initial Purchaser or Initial
----------------------------------
Purchasers shall fail to take up and pay for the number of Firm Notes agreed by
such Initial Purchaser or Initial Purchasers to be purchased hereunder upon
tender of such Firm Notes in accordance with the terms hereof, and if the
aggregate number of Firm Notes that such defaulting Initial Purchaser or Initial
Purchasers so agreed but failed to purchase does not exceed 5% of the aggregate
principal amount of the Firm Notes, the remaining Initial Purchasers shall be
obligated, severally in proportion to their respective commitments hereunder, to
take up and pay for the Firm Notes that such defaulting Initial Purchaser or
Initial Purchasers agreed but failed to purchase.
If any Initial Purchaser or Initial Purchasers so defaults and the
aggregate number of Firm Notes that such defaulting Initial Purchaser or Initial
Purchasers agreed but failed to take up and pay for exceeds 5% of the aggregate
principal amount of the Firm Notes, the remaining Initial Purchasers shall have
the right, but shall not be obligated, to take up and pay for (in such
proportions as may be agreed upon among them) the Firm Notes which the
defaulting Initial Purchaser or Initial Purchasers so agreed but failed to
purchase. If such remaining Initial Purchasers do not, at the Closing Date,
take up and pay for the Firm Notes which the defaulting Initial Purchaser or
Initial Purchasers so agreed but failed to purchase, the Closing Date shall be
postponed for twenty-four hours (including non-business hours) to allow the
remaining Initial Purchasers the privilege of substituting within such twenty-
four hour period (including non-business hours) another purchaser or purchasers
(which may include any nondefaulting Initial Purchaser) reasonably satisfactory
to the Company. If no such purchaser or purchasers shall have been substituted
as aforesaid by such postponed Closing Date, the Closing Date may, at the option
of the Company, be postponed for a further twenty-four hours, if necessary, to
allow the Company the privilege of finding another purchaser or purchasers,
reasonably satisfactory to you, to purchase the Firm Notes which the defaulting
Initial Purchaser or Initial Purchasers so agreed but failed to purchase. If it
shall be arranged for the remaining Initial Purchasers or substituted purchasers
to take up the Firm Notes of the defaulting Initial Purchaser or Initial
Purchasers as provided in this Section, (i) the Company shall have the right to
postpone the time of delivery for a period of not more than seven full business
days, in order to effect whatever changes may thereby be made necessary in the
Memorandum, or in any other documents or arrangements, and the Company agrees
promptly to prepare and deliver any amendments or supplements to the Memorandum
or other such documents which may thereby be made necessary, and (ii) the
respective number of Firm Notes to be purchased by the remaining Initial
Purchasers and substituted purchasers shall be taken as the basis of their
obligation to purchase hereunder. If the remaining Initial Purchasers shall not
take up and pay for all such Firm Notes so agreed to be purchased by the
defaulting Initial Purchaser or Initial Purchasers or substitute another
purchaser or purchasers as aforesaid, and the Company shall not find or shall
not elect to seek another purchaser or purchasers for such Firm Notes as
aforesaid, then this Agreement shall terminate.
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<PAGE>
In the event of any termination of this Agreement pursuant to the preceding
paragraph of this Section, the Company shall not be liable to any Initial
Purchaser (except as provided in Sections 4(j), 5 and 8 hereof) and no Initial
Purchaser (other than an Initial Purchaser who shall have failed, otherwise than
for some reason permitted under this Agreement, to purchase the principal amount
of Firm Notes agreed by such Initial Purchaser to be purchased hereunder, which
Initial Purchaser shall remain liable to the Company and the other Initial
Purchasers for damages, if any, resulting from such default) shall be liable to
the Company (except to the extent provided in Sections 5 and 8 hereof).
The term "Initial Purchaser" in this Agreement shall include any person
substituted for an Initial Purchaser under this Section.
11. Effective Date of this Agreement and Termination.
------------------------------------------------
(a) This Agreement shall become effective as of the initial offering of the
Firm Notes. The time of the initial offering shall mean the time at which the
Firm Notes are first generally offered by the Initial Purchasers to investors by
letter or telegram or telecopy, whichever shall first occur. By giving notice as
set forth in Section 12 before the time this Agreement becomes effective, you,
or the Company, may prevent this Agreement from becoming effective without
liability of any party to any other party, except as provided in Sections 4(j),
5 and 8 hereof.
(b) You shall have the right to terminate this Agreement by giving notice
as hereinafter specified at any time on or prior to the Closing Date or on or
prior to the applicable Option Closing Date, as the case may be, (i) if the
Company shall have failed, refused or been unable, at or prior to the Closing
Date, or on or prior to the applicable Option Closing Date, as the case may be,
to perform any agreement on its part to be performed, or because any other
condition of the Initial Purchasers' obligations hereunder required to be
fulfilled is not fulfilled, including, without limitation, any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one enterprise from
that set forth in the Final Memorandum, which, in your sole judgment, is
material and adverse, or (ii) if additional material governmental restrictions,
not in force and effect on the date hereof, shall have been imposed upon trading
in securities generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock Exchange or
in the over-the-counter market by the NASD, or trading in securities generally
shall have been suspended on either such exchange or in the over the counter
market by the NASD, or if a banking moratorium shall have been declared by
federal, New York or California authorities, (iii) if the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured, or (iv) if there shall have been a material adverse change in the
general political or economic conditions or financial markets as in your
reasonable judgment makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Firm Notes and the Option Notes, or (v) if
there shall have been an outbreak or escalation of hostilities or of any other
insurrection or armed conflict or the declaration by the United States of a
national emergency which, in the reasonable opinion of the Initial Purchasers,
makes it impracticable or inadvisable to offer or sell the Firm Notes or the
Option Notes. In the event of termination solely pursuant to Section 11(b)(i)
hereof, the Company shall remain obligated to pay costs and expenses pursuant to
Sections 4(j), 5 and 8 hereof. Any termination pursuant to any of subparagraphs
11(b)(ii) through (v) hereof shall be without liability of any party to any
other party except as provided in Sections 5 and 8 hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 11, you shall promptly
notify the Company by telephone, telecopy or telegram, in each
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<PAGE>
case confirmed by letter, in the manner required by Section 12. If the Company
shall elect to prevent this Agreement from becoming effective, the Company shall
promptly notify you by telephone, telecopy or telegram, in each case, confirmed
by letter in the manner required by Section 12.
12. Notices. All notices or communications hereunder, except as herein
-------
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered, telegraphed (and confirmed by letter) or telecopied (and
confirmed by letter) to you c/o Robertson, Stephens & Company LLC, 555
California Street, Suite 2600, San Francisco, California 94104, telecopier
number (415) 781-0278, Attention: General Counsel, with a copy to Wilson Sonsini
Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304,
telecopier number (415) 493-6811, Attention: John A. Fore, and if sent to the
Company, such notice shall be mailed, delivered, telegraphed (and confirmed by
letter) or telecopied (and confirmed by letter) to Premiere Technologies, Inc.,
3399 Peachtree Road, N.E., The Lenox Building, Suite 400, Atlanta, Georgia,
30326, telecopier number (404) 262-8540, Attention: Senior Vice President of
Finance and Legal, with a copy to Alston & Bird LLP, 1201 West Peachtree Street,
N.E., Atlanta, Georgia, 30309-3424, telecopier number (404) 881-7777, Attention:
Jeffrey A. Allred.
13. Parties. This Agreement shall inure to the benefit of and be binding
-------
upon the Initial Purchasers and the Company, and their respective executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or corporation,
other than the parties hereto and their respective executors, administrators,
successors and assigns, and the controlling persons, officers and directors
referred to in Section 8 hereof, any legal or equitable right, remedy or claim
or in respect of this Agreement or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective executors, administrators, successors and assigns and said
controlling persons and said officers and directors, and for the benefit of no
other person or corporation. No purchaser of any of the Notes from any Initial
Purchaser shall be construed a successor or assign by reason merely of such
purchase.
In all dealings with the Company under this Agreement, the Company shall be
entitled to act and rely upon any statement, request, notice or agreement made
or given by you jointly or by Robertson, Stephens & Company LLC on behalf of
you.
14. Applicable Law. This Agreement shall be governed by, and construed in
--------------
accordance with, the internal laws of the State of California.
15. Counterparts. This Agreement may be signed in several counterparts, each
------------
of which will constitute an original and all of which together will constitute a
single instrument.
16. Integration. This agreement constitutes the entire agreement among the
-----------
parties with respect to the subject matter hereof and supersedes and replaces
all prior agreements or understandings among them.
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<PAGE>
If the foregoing correctly sets forth the understanding among the
Company and the Initial Purchasers, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among the Company and the Initial Purchasers.
Very truly yours,
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
--------------------
Printed Name: Patrick G. Jones
----------------
Title: Senior Vice President
---------------------
Accepted as of the date first
above written:
ROBERTSON, STEPHENS & COMPANY LLC
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By ROBERTSON, STEPHENS & COMPANY LLC
By ROBERTSON, STEPHENS & COMPANY GROUP, L.L.C.
By: /s/ Kenneth R. Fitzsimmons
--------------------------
Authorized Signatory
<PAGE>
SCHEDULE A
Aggregate
Principal Amount
of Firm Securities
Initial Purchasers to be Purchased
------------------ ------------------
Robertson, Stephens & Company LLC........................ $ 60,000,000
Alex. Brown & Sons Incorporated.......................... 45,000,000
Donaldson, Lufkin & Jenrette Securities Corporation...... 45,000,000
------------
Total............................................ $150,000,000
============
<PAGE>
SCHEDULE B
All Subsidiaries
Premiere Communications, Inc. (FL)
Voice-Tel Enterprises, Inc. (DE)
VTN, Inc. (OH)
Premiere Acquisition Corporation (GA)
Voice-Tel Network Limited Partnership (DE General Partnership)
EBIS Communications, Inc. (GA)
Voice-Tel Canada Limited (Canada)
Voice-Tel Pty Ltd. (Australia & New Zealand)
In-Touch Technologies, Inc. (CA)
Car Zee, Inc. (CA)
VT of Long Island Inc. (NY)
Voice-Net Communications Systems, Inc. (NY)
Brooks-Sloan, Inc. (AL)
AudioInfo, Inc. (TX)
John & Eileen Dodson, Inc. (CA)
MMP Communications, Inc. (CA)
Taft Communications, Inc. (CA)
Voice Partners Company (OH Limited Partnership)
Emjay Enterprises, Inc. (SC)
Program Marketing, Inc. (NC)
Voice Systems of Greater Dayton, Inc. (OH)
BV Communications, Inc. (NC)
Tel-Tek, Inc. (MI)
Service Communications, Inc. (GA)
Voice Mail Services, Inc. (CT)
Houston Telecommunications, Inc. (TX)
Indiana Communicator Incorporated (IN)
Lar-Lin Enterprises, Inc. (KS)
Lar-Lin Investments, Inc. (KS)
Voice-Mail Solutions, Inc. (KS)
Voice-Tel, Inc. (TN)
Inter-Net, Inc. (AK)
Voice Link, Inc. (LA)
Allagash Communications, Inc. (ME)
Stay-In-Touch Technologies, Inc. (CA)
Lauger International, Inc. (MD)
Voice Technology, Inc. (MA)
Gulf States Communications Corporation (AL)
New West Communications, Inc. (NV)
Charp-Tel Enterprises, Inc. (RI)
Rambl Corporation (NH)
Voice-Tel of Northern New Jersey, Inc. (NJ)
DARP, Inc. (NJ)
Voice Telecommunications, Inc. (NY)
Tri-C Communications Corp. (NY)
<PAGE>
RGB Enterprises, Inc. (OK)
Voice Message of Northeastern OK, Inc. (OK)
Voice Communications, Inc. (FL)
Interactive Communications Corp. (PA)
Tri-State VMS, Inc. (PA)
Simmoor Corp. (CA)
The Hennig Company (GA)
Voice Management, Inc. (MO)
B & AH of Northwest Florida, Inc. (FL)
E & BH, Inc. (FL)
Voice Tel of South Texas, Inc. (TX)
Caldwell, Inc. (WV)
J.B. Enterprises-Wisconsin, Inc. (WI)
SDRAWKCAB Corporation (PA)
Mitchell E. Eil, Inc. (NY)
G. D. Enterprises, Inc. (MI)
Digicall Cellular Corporation (CA)
Digitele Corporation (CA)
Advanced Resource Technologies, Inc. (NY)
Voice-Tel of Oregon, Inc. (OR)
CommTel/USA, Inc. (FL)
WN Communication Systems, Inc. (TN)
<PAGE>
SCHEDULE C
Significant Subsidiaries
Premiere Communications, Inc. (FL)
Voice-Tel Enterprises, Inc. (DE)
VTN, Inc. (OH)
Premiere Acquisition Corporation (GA)
<PAGE>
SCHEDULE D
Indenture
For an executed version of this document, see Exhibit 4.1 filed in
connection herewith.
<PAGE>
SCHEDULE E
REGISTRATION RIGHTS AGREEMENT
For an executed version of this document, see Exhibit 4.3 filed in
connection herewith.
<PAGE>
SCHEDULE F
EXISTING INDEBTEDNESS
1. Promissory Note dated April 30, 1997 made by Premiere Communications,
Inc. in favor of NationsBank, N.A. (South). Guaranteed by Premiere Technologies,
Inc.
2. Indebtedness of VTG, Inc. in favor of William Payne. VTG, Inc. has been
merged into Premiere Acquisition Corporation.
3. Indebtedness of VTG, Inc. in favor of J. Richard Payne. VTG, Inc. has
been merged into Premiere Acquisition Corporation.
