<PAGE> 1
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1996
-------------
Commission file number 340-23520
---------
QUINTILES TRANSNATIONAL CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1714315
- ------------------------------------------ ---------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4709 Creekstone Dr., Suite 300
Durham, NC 27703-8411
- ------------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
(919) 941-2000
----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. X Yes No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
The number of shares of Common Stock, $.01 par value, outstanding as of August
1, 1996, was 21,793,072.
1
<PAGE> 2
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
Index
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets
June 30, 1996 and December 31, 1995 3
Condensed consolidated statements of
income - Three months ended
June 30, 1996 and 1995; six months 4
ended June 30, 1996 and 1995
Condensed consolidated statements of
cash flows - Six months ended
June 30, 1996 and 1995 5
Notes to condensed consolidated financial
statements - June 30, 1996 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II. Other Information 13
Signatures 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1996 1995
-------- --------
(Unaudited) (Note 1)
(In thousands, except share data)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $130,213 $ 69,146
Accounts receivable and unbilled services 89,598 57,165
Investments 35,422 -
Other current assets 8,744 5,170
-------- --------
Total current assets 263,977 131,481
Property and equipment 88,038 74,381
Less accumulated depreciation 23,203 17,523
-------- --------
64,835 56,858
Non-current assets:
Investments 10,710 -
Intangible and other assets 52,276 32,951
-------- --------
Total non-current assets 62,986 32,951
-------- --------
Total assets $391,798 $221,290
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses 26,494 20,754
Line of credit and current portion of debt 546 398
Unearned income 25,791 16,083
Income taxes and other current liabilities 7,667 -
-------- --------
Total current liabilities 60,498 37,235
Long-term liabilities:
Long-term debt, less current portion 140,355 433
Long-term obligation 19,827 19,514
Deferred income taxes 2,687 5,569
-------- --------
162,869 25,516
-------- --------
Total liabilities 223,367 62,751
Shareholders equity:
Common Stock, par value $.01 per share -
authorized 50,000,000 shares, issued and
outstanding 21,791,878 and 21,387,150 shares at
June 30, 1996 and December 31, 1995,
respectively 218 214
Additional paid-in capital and other
shareholders' equity 129,616 128,989
Retained earnings 38,597 29,336
-------- --------
Total shareholders' equity 168,431 158,539
-------- --------
Total liabilities and shareholders' equity $391,798 $221,290
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
1996 1995 1996 1995
------- ------- -------- --------
(In thousands, except per (In thousands, except per
share data) share data)
<S> <C> <C> <C> <C>
Professional fee income $81,426 $55,533 $147,309 $104,710
Less reimbursed costs:
Investigator payments 12,731 11,143 19,981 27,154
Travel and other 5,539 5,786 9,556 9,296
------- ------- -------- --------
Net revenue 63,156 38,604 117,772 68,260
Costs and expenses:
Direct costs 28,939 18,144 54,931 32,229
General and administrative expense 24,649 14,917 45,000 26,145
Depreciation and amortization 2,859 1,887 5,507 3,281
------- ------- -------- --------
56,447 34,948 105,438 61,655
------- ------- -------- --------
Income from operations 6,709 3,656 12,334 6,605
Other income, net 364 220 1,218 678
------- ------- -------- --------
Income before income taxes 7,073 3,876 13,552 7,283
Income taxes 2,154 1,406 4,291 2,646
------- ------- -------- --------
Net income $ 4,919 $ 2,470 $ 9,261 $ 4,637
======= ======= ======== ========
Net income per share $ 0.22 $ 0.13 $ 0.42 $ 0.24
======= ======= ======== ========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
----------------------------------
1996 1995
-------- --------
(In thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 9,261 $ 4,637
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 5,507 3,281
Change in operating assets and liabilities (7,987) (4,289)
Other operating activities (579) 125
-------- --------
Net cash provided by operating activities 6,202 3,754
INVESTING ACTIVITIES
Proceeds from disposition of property and equipment 34 35
Business merger, net of cash acquired (28,902) (4,447)
Acquisition of property and equipment (11,741) (8,331)
Purchase of investments (46,132) -
-------- --------
Net cash used in investing activities (86,741) (12,743)
FINANCING ACTIVITIES
Proceeds from borrowings and line of credit 140,891 10,258
Principal payments on borrowings and line of credit (502) (10,346)
Proceeds from issuance of common stock 1,374 453
Stock issuance costs (78) (14)
-------- --------
Net cash provided by financing activities 141,685 351
Effect of foreign currency exchange rate changes on cash (79) 102
-------- --------
Increase (Decrease) in cash and cash equivalents 61,067 (8,536)
Cash and cash equivalents at beginning of period 69,146 39,353
-------- --------
Cash and cash equivalents at end of period $130,213 $ 30,817
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1996
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three and
six month periods ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1996. For further
information, refer to the consolidated financial statements and notes thereto
included in Quintiles Transnational Corp. and Subsidiaries Annual Report on
Form 10-K for the year ended December 31, 1995.
The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and notes required by generally accepted accounting principles for complete
financial statements.
On February 15, 1996, the Company acquired PMC Contract Research AB ("PMC"), a
clinical research company based in Uppsala, Sweden. The acquisition has been
accounted for as a pooling-of-interests, and as such, all condensed
consolidated financial data for periods subsequent to January 1, 1996 have been
restated to include the results of the pooled company. Due to the fact that
the financial data of the pooled company prior to January 1, 1996 would have no
material impact on the condensed consolidated financial data previously
reported by the Company, the condensed consolidated financial data presented
for periods prior to January 1, 1996 have not been restated.
Earnings per share is based on the weighted average number of shares of common
stock outstanding during each period. Weighted average shares outstanding for
the three and six month periods ended June 30 were as follows:
<TABLE>
<CAPTION>
Weighted Average Shares Outstanding
1996 1995
---- ----
<S> <C> <C>
Three months ended June 30 22,290,196 19,505,628
Six months ended June 30 22,288,154 19,292,658
</TABLE>
6
<PAGE> 7
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited) -- Continued
2. Significant Customer
One customer accounted for greater than 10% of consolidated net revenue for the
three and six months ended June 30, 1996, as indicated below (in thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, 1996 June 30, 1996
------------------ ----------------
<S> <C> <C>
Customer A $8,075 17,338
</TABLE>
3. Acquisitions
On May 13, 1996, the Company acquired the operating assets of Lewin-VHI, Inc.,
a health care consulting company, for approximately $30 million in cash. The
acquired company, now called The Lewin Group, Inc. ("Lewin"), entered into
employment agreements with members of the former Lewin-VHI management group
("Lewin Management"). Also, the Company issued to the Lewin Management options
to purchase approximately 207,157 shares of the Company's common stock.
The acquisition was accounted for using the purchase method, with the assets
and liabilities of the acquired business recorded at their fair value at the
acquisition date. The excess of total acquisition cost over the fair value of
the net assets acquired was classified as goodwill and is being amortized on
the straight line basis over 35 years. The results of operations of the
acquired business are included in the accompanying condensed consolidated
statements of income as of the date of acquisition.
The following table presents the unaudited pro forma impact of the May 9, 1995
acquisition of Benefit International, a French company, and subsidiaries, and
the acquisition of Lewin, as if the acquisitions had been acquired at the
beginning of 1996 and 1995 (in thousands, except per share data):
<TABLE>
<CAPTION>
Six months ended June 30
1996 1995
---- ----
<S> <C> <C>
Net revenue $125,000 $81,119
Net income 9,161 3,538
Net income per share $ 0.41 $ 0.18
</TABLE>
The unaudited pro forma results have been prepared for comparative purposes
only and do not purport to be indicative of the results that would have
actually been attained if the above businesses had been acquired at the
beginning of the years presented.
7
<PAGE> 8
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
4. Convertible Note Placement
On May 23, 1996, the Company completed a private placement of $143.75 million
of 4.25% Convertible Subordinated Notes (the "Notes") due May 31, 2000. The
offering was increased from the original $125.0 million offering due to the
exercise of an $18.75 million underwriters' over-allotment option. Net
proceeds to the Company amounted to approximately $139.6 million. The Notes
will be convertible into the Company's common stock, at the option of the
holder, at a conversion price of $82.75 per share, subject to adjustment under
certain circumstances, at any time after August 21, 1996. The Notes will be
redeemable, at the option of the Company, beginning May 31, 1999. Interest is
payable on the notes semi-annually on May 31 and November 30 each year,
beginning November 30, 1996.
8
<PAGE> 9
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Three Months Ended June 30, 1996 and 1995
Professional fee income includes reimbursed costs which consist primarily of
payments to investigators, travel and certain other expenses that are billed to
clients at cost. Depending upon contract terms, investigator payments may be
administered by the Company or alternatively, may be paid directly from the
client to the investigators. Therefore, since reimbursed costs vary from
contract to contract and are not meaningful for analyzing trends in revenue,
they are included in professional fee income but excluded from net revenue.
Consistent with industry practice, the Company considers net revenue its
primary measure of revenue growth.
Net revenue increased 63.6% to $63.2 million for the second quarter of 1996, as
compared to $38.6 million for the second quarter of 1995. This growth can be
attributed to the increase in services rendered under existing contracts, the
initiation of services under contracts awarded subsequent to the first quarter
of 1995 and the Company's four acquisitions since May 9, 1995 which contributed
$8.8 million to the second quarter 1996 net revenue versus $1.1 million to the
second quarter 1995 net revenue. Also, net revenue from the Company's European
operations continue to grow, and this growth has been enhanced by the
operations of the Company's drug development facilities in Edinburgh, Scotland
and Strasbourg, France, which contributed $9.5 million to the second quarter
1996 net revenue versus $5.1 million to the second quarter 1995 net revenue.
Direct costs increased 59.5% to $28.9 million for the second quarter ended June
30, 1996 from $18.1 million for the second quarter ended June 30, 1995 as a
result of the increase in net revenue. These costs include compensation and
related fringe benefits for billable employees and any other expenses directly
related to contracts which are not included as reimbursed costs. Direct costs,
as a percentage of net revenue, decreased to 45.8% for the second quarter of
1996 versus 47.0% for the second quarter of 1995.
General and administrative expense increased 65.2% to $24.6 million from $14.9
million for the quarters ended June 30, 1996 and 1995, respectively. This
expense includes compensation and fringe benefits for administrative employees,
non- billable travel, professional services, advertising, computer expenses and
facility expenses. This increase is primarily the result of growth and
expansion, the initiation of new marketing campaigns, the increased commitment
to developing the Company's proprietary software systems and an increase in the
costs associated with personnel, facility management and outside services
brought on by the Company's growth. The general and administrative expense
increased slightly, as a percentage of net revenue, to 39.0% for the second
quarter of 1996 from 38.6% for the second quarter of 1995.
9
<PAGE> 10
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
Depreciation and amortization increased to $2.9 million for the second quarter
of 1996 from $1.9 million for the second quarter of 1995. Income from
operations was 10.6% of net revenue for the second quarter of 1996 versus 9.5%
for the second quarter of 1995.
Other income increased to $364,000 for the second quarter of 1996 as compared
to $220,000 for the second quarter of 1995. This increase is primarily due to
an increase of approximately $61,000 in net interest income and an increase in
other income of approximately $80,000. Amortization of the bond issuance costs
and interest relating to the private placement of the Notes of approximately
$750,000 is included in determining net interest income.
Income taxes, as a percentage of income before income taxes, decreased to 30.5%
for the second quarter of 1996 versus 36.3% for the second quarter of 1995.
This decrease is primarily due to an increase in profits in locations with
lower tax rates and a tax benefit of approximately $300,000 from tax advantaged
investment instruments.
Net income increased 99.1% to $4.9 million for the second quarter of 1996 from
$2.5 million for the second quarter of 1995. As a percentage of net revenue,
net income increased to 7.8% of net revenue for the three months ended June 30,
1996 from 6.4% of net revenue for the three months ended June 30, 1995.
Six Months Ended June 30, 1996 and 1995
Net revenue increased 72.5% to $117.8 million for the first six months of 1996,
as compared to $68.3 million for the first six months of 1995. This growth can
be attributed to the increase in services rendered under existing contracts,
the initiation of services under contracts awarded subsequent to the first six
months of 1995 and the Company's four acquisitions since May 9, 1995 which
contributed $13.7 million to the first six months of 1996 net revenue versus
$1.1 million to the first six months of 1995 net revenue. The Company's drug
development facilities in Edinburgh, Scotland and Strasbourg, France, which
were purchased in March 1995 and January 1996, respectively, contributed $18.4
million to net revenue for the first six months of 1996 versus $6.6 million to
the first six months of 1995.
Direct costs increased 70.4% to $54.9 million for the six months ended June 30,
1996 from $32.2 million for the six months ended June 30, 1995 as a result of
the increase in net revenue. These costs include compensation and related
fringe benefits for billable employees and any other expenses directly related
to contracts which are not included as reimbursed costs. Direct costs, as a
percentage of net revenue, have decreased to 46.6% for the second quarter of
1996 versus 47.2% for the second quarter of 1995.
General and administrative expense increased 72.1% to $45.0 million from $26.1
million for the six months ended June 30, 1996 and 1995, respectively. This
expense includes compensation and fringe benefits for administrative employees,
non-billable travel, professional services, advertising, computer expenses and
facility expenses. This increase is primarily the result of growth and
expansion, the initiation of new marketing campaigns, the increased commitment
to developing the
10
<PAGE> 11
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
Company's proprietary software systems and an increase in the costs associated
with personnel, facility management and outside services brought on by the
Company's growth. The general and administrative expense decreased, as a
percentage of net revenue, to 38.2% for the first six months of 1996 from 38.3%
for the first six months of 1995.
Depreciation and amortization increased to $5.5 million for the first six
months of 1996 from $3.3 million for the first six months of 1995. Income from
operations was 10.5% of net revenue for the first six months of 1996 versus
9.7% for the first six months of 1995.
Other income increased to $1.2 million for the first six months of 1996 as
compared to $678,000 for the first six months of 1995. This increase is
primarily due to increases in net interest income and other income of
approximately $536,000. Approximately $750,000 of interest expense and
amortization of bond issuance costs relating to the private placement of the
Notes is included in determining net interest income.
Income taxes, as a percentage of income before income taxes, decreased to 31.7%
for the first six months of 1996 versus 36.3% for the first six months of 1995.
This decrease is primarily due to an increase in profits in locations with
lower tax rates and a tax benefit of approximately $350,000 from tax advantaged
investment instruments.
Net income increased 99.7% to $9.3 million for the first six months of 1996
from $4.6 million for the first six months of 1995. As a percentage of net
revenue, net income increased to 7.9% of net revenue for the six months ended
June 30, 1996 from 6.8% of net revenue for the six months ended June 30, 1995.
Liquidity and Capital Resources
Cash flows from operations were $6.2 million for the six months ended June 30,
1996 versus $3.8 million for the comparable period of 1995. Investing
activities, for the six months ended June 30, 1996, consisted primarily of
capital asset purchases, investment purchases and the acquisition of Lewin.
These investing activities required an outlay of cash of $86.7 million for the
first six months of 1996 compared to an outlay of $12.7 million for investing
activities during the same period in 1995.
As of June 30, 1996, total working capital was $203.5 million versus $94.2
million as of December 31, 1995. Net receivables from clients (accounts
receivable and unbilled services net of unearned income) increased to $63.8
million at June 30, 1996 as compared to $41.1 million at the end of 1995.
During 1995, the Company acquired a drug development facility in Edinburgh,
Scotland. Related to this acquisition, the Company entered into a purchase
commitment valued at approximately $20.0 million with payment due in December
1999.
11
<PAGE> 12
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
On May 23, 1996, the Company completed a private placement of $143.75 million
of 4.25% Convertible Subordinated Notes due May 31, 2000. Net proceeds to the
Company amounted to approximately $139.6 million.
The Company has a $15.0 million unsecured line of credit with a U.S. bank and
an $8.0 million unsecured line of credit with a U.K. bank. At June 30, 1996,
the Company had $22.8 million in available credit under these line of credit
agreements.
The Company's primary cash needs on both a short-term and long-term basis are
for expansion of services, possible future acquisitions, working capital,
capital expenditures, geographic expansion, and other general corporate
purposes. Pending such uses, the Company is investing its excess cash balances
in investment grade, interest-bearing securities.
Based on its current operating plan, the Company believes that its available
cash and cash equivalents as of June 30, 1996, together with cash flow from
operations and borrowings under its line of credit agreements, will be
sufficient to meet its foreseeable cash needs, in connection with its current
operations.
Currently, the Company is evaluating a number of acquisition and expansion
possibilities. The Company may from time to time seek to obtain debt or equity
financing to facilitate possible acquisitions or expansion.
Recent Events
On July 31, 1996, the Company announced the signing of a non-binding letter of
intent to acquire BRI International, Inc. ("BRI"), a global contract research
organization based in Arlington, VA. The letter of intent contemplates an
exchange of 100% of BRI stock for 1.9 million shares of the Company's common
stock. The intention is to complete the deal as a pooling-of-interests. The
proposed agreement is subject to negotiation and execution of a definitive
agreement and other approvals. There can be no assurance that this acquisition
will be completed or will be completed on the terms announced.
12
<PAGE> 13
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
PART II. Other Information
Item 1. Legal Proceedings -- Not applicable
Item 2. Changes in Securities -- Not applicable
Item 3. Defaults upon Senior Securities -- Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
(a) On April 24, 1996, the Company held its Annual
Meeting of Shareholders during which the
shareholders:
(1) Elected four nominees to serve as Class II
directors with terms continuing until the
Annual Meeting of Shareholders in 1999. The
votes cast were as follows:
<TABLE>
<CAPTION>
Broker
For Withhold Non-vote
--- -------- --------
<S> <C> <C> <C>
John G. Fryer, Ph.D. 16,224,431 52,143 0
William A. Sollecito, Dr. P.H. 16,226,831 49,743 0
Sara B. Creagh 16,226,831 49,743 0
Rachel R. Selisker 16,226,831 49,743 0
</TABLE>
(2) Elected one nominee to serve as a Class III
director with a term continuing until the
Annual Meeting of Shareholders in 1997. The
votes cast were as follows:
<TABLE>
<CAPTION>
Broker
For Withhold Non-vote
--- -------- --------
<S> <C> <C> <C>
Eric J. Souetre, M.D., Ph.D. 16,226,831 49,743 0
</TABLE>
(3) Ratified the appointment of Ernst & Young LLP
as independent auditors for the Company and
its subsidiaries for the fiscal year ending
December 31, 1996. The votes cast were as
follows:
<TABLE>
<CAPTION>
Broker
Ratification of For Against Abstain Non-vote
--- ------- ------- --------
<S> <C> <C> <C> <C>
Ernst & Young LLP 16,212,599 10,625 53,350 0
</TABLE>
13
<PAGE> 14
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
Item 5. Other Information -- Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
4.01 Indenture, dated as of May 17, 1996,
between the Company and Marine
Midland Bank, as Trustee, with
respect to the Company's 4.25%
Convertible Subordinated Notes due
May 31, 2000.
4.02 Form of the Company's 4.25% Convertible
Subordinated Notes due May 31, 2000,
as included in the Indenture, filed
herewith as Exhibit 4.01.
4.03 Registration Rights Agreement, dated
as of May 17, 1996, by and among the
Company, Goldman Sachs International
and Smith Barney, Inc.
27 Financial Data Schedule (for SEC use only)
</TABLE>
(b) The Company filed one report on Form 8-K, dated April
23, 1996, during the three months ended June 30,
1996. The Company reported the signing of a
definitive agreement to purchase the operating assets
of the health care consulting firm, Lewin-VHI, Inc.,
from Value Health, Inc. The Company also filed the
Financial Statements of Lewin-VHI, Inc. as of
December 31, 1995 and Report of Independent Auditors.
The Company also filed the Unaudited Pro Forma
Combined Condensed Financial Data for the Registrant
as of December 31, 1995 reflecting the acquisitions
of Benefit International and its subsidiaries,
G.D.R.U. Limited and Lewin-VHI, Inc. Additionally,
the Company reported the commencement of a private
placement of its convertible, subordinated notes. No
other reports on Form 8-K have been filed since that
date.
14
<PAGE> 15
QUINTILES TRANSNATIONAL CORP. AND SUBSIDIARIES
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 thereunto duly authorized.
Quintiles Transnational Corp.
-----------------------------------
Registrant
Date August 14, 1996 /s/ Dennis B. Gillings
-------------------------- ------------------------------------
Dennis B. Gillings,
Chief Executive Officer
Date August 14, 1996 /s/ Rachel R. Selisker
--------------------------- ------------------------------------
Rachel R. Selisker,
Chief Financial Officer
15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page
------- ----------- ----
<S> <C> <C>
4.01 Indenture, dated as of May 17, 1996, between the Company
and Marine Midland Bank, as Trustee, with respect to the
Company's 4.25% Convertible Subordinated Notes due May 31,
2000.
4.02 Form of the Company's 4.25% Convertible Subordinated
Notes due May 31, 2000, as included in the Indenture,
filed herewith as Exhibit 4.01.
4.03 Registration Rights Agreement, dated as of May 17, 1996,
by and among the Company, Goldman Sachs International and
Smith Barney, Inc.
27 Financial Data Schedule (for SEC use only)
</TABLE>
<PAGE> 1
EXHIBIT 4.01
___________________________________
QUINTILES TRANSNATIONAL CORP.
ISSUER
TO
MARINE MIDLAND BANK
TRUSTEE
________________
INDENTURE
Dated as of May 17, 1996
________________
U.S.$143,750,000
4.25% CONVERTIBLE SUBORDINATED NOTES
DUE MAY 31, 2000
________________________________________
<PAGE> 2
.....................................
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(3) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . 6.13
6.9
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . 6.14
(b) . . . . . . . . . . . . . . . . . . . . . . 6.14
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . 15.1
15.2(a)
(b) . . . . . . . . . . . . . . . . . . . . . . 15.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . 15.2(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . 15.3(a)
(a)(4) . . . . . . . . . . . . . . . . . . . . . . 1.1
10.9
(b) . . . . . . . . . . . . . . . . . . . . . . 15.3(a)
(c) . . . . . . . . . . . . . . . . . . . . . . 15.3(a)
(d) . . . . . . . . . . . . . . . . . . . . . . 15.3(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . 15.4
(b) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(2) . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(3) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . 1.2
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . 6.1
(b) . . . . . . . . . . . . . . . . . . . . . . 6.2
(c) . . . . . . . . . . . . . . . . . . . . . . 6.1
(d) . . . . . . . . . . . . . . . . . . . . . . 6.1
(e) . . . . . . . . . . . . . . . . . . . . . . 5.14
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Trust Indenture Indenture
Act Section Section
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Section 316(a) . . . . . . . . . . . . . . . . . . . . . . 1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 5.2
5.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . 5.13
(a)(2) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . 5.8
(c) . . . . . . . . . . . . . . . . . . . . . . 1.4(g)
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 5.4
(b) . . . . . . . . . . . . . . . . . . . . . . 10.3
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . 1.13
</TABLE>
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TABLE OF CONTENTS
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RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agent Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Applicable Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bearer Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CEDEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing Price Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request or Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Constituent Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Conversion Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Definitive Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Determination Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Dollar or U.S.$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
EUROCLEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Exchange Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Initial Regulation S Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Initial Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Non-electing Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Principal Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Registrable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regulation D Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regulation S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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Regulation S Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regulation S Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regulation S Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regulation S Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Repurchase Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Repurchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Restricted Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Restricted Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Restricted Securities Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Restricted Securities Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Rule 144A Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Rule 144A Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Securities Act Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Security Register and Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Shelf Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Successor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Surrender Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Tax Affected Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Tax Law Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Temporary Global Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trading Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
United States Alien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
United States person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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Unrestricted Securities Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Western Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.2. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 1.3. Form of Documents Delivered to the Trustee . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 1.4. Acts of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.5. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 1.6. Notice to Holders of Securities; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 1.7. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.8. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.9. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.10. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.13. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE TWO
SECURITY FORMS . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.2. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.3. Form of Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 2.4. Form of Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 2.5. Form of Conversion Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE THREE
THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 3.1. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 3.2. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 3.3. Execution, Authentication, Delivery and Dating. . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 3.4. Temporary Global Bearer Security; Global Securities; Non-Global Registered Securities . . . 70
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SECTION 3.5. Registration, Registration of Transfer and Exchange; Restrictions on Transfer . . . . . . . 75
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities and Coupons . . . . . . . . . . . . . . . . 83
SECTION 3.7. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 3.8. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 3.9. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 3.10. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 3.11. Form of Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 3.12. CUSIP and ISIN Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 3.13. Notification of Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
ARTICLE FOUR
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . 91
SECTION 4.1. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 4.2. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE FIVE
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 5.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . 95
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 5.4. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 5.5. Trustee May Enforce Claims Without Possession
of Securities or Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 5.6. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 5.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest and
to Convert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 5.9. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
</TABLE>
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SECTION 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 5.12. Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 5.15. Waiver of Stay, Usury or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 102
ARTICLE SIX
THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 6.1. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 6.2. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 6.3. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . 106
SECTION 6.5. May Hold Securities, Act as Trustee Under Other
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 6.6. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 6.7. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 6.8. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 6.9. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . 107
SECTION 6.10. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 6.11. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 6.12. Authenticating Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 6.13. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 6.14. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . 111
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE . . . . . . . . . . . . . . . 112
SECTION 7.1. Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . 112
SECTION 7.2. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
</TABLE>
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . 114
SECTION 8.1. Supplemental Indentures Without Consent of Holders of Securities or Coupons . . . . . . . . 114
SECTION 8.2. Supplemental Indentures with Consent of Holders of Securities . . . . . . . . . . . . . . . 115
SECTION 8.3. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
SECTION 8.4. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
SECTION 8.5. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 117
SECTION 8.6. Notice of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . . . . 118
SECTION 9.1. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . . . 118
SECTION 9.2. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
SECTION 9.3. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
SECTION 9.4. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SECTION 9.5. Determination of Voting Rights; Conduct and Adjournment of Meetings . . . . . . . . . . . . 119
SECTION 9.6. Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . . . . . . . . . 120
ARTICLE TEN
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 10.1. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 10.2. Maintenance of Offices or Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 10.3. Money for Security Payments To Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 124
SECTION 10.4. Additional Amounts and Bearer Additional Amounts . . . . . . . . . . . . . . . . . . . . . 125
SECTION 10.5. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
SECTION 10.6. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
SECTION 10.7. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
SECTION 10.8. Registration and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
</TABLE>
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SECTION 10.9. Statement by Officers as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
SECTION 10.10. Delivery of Certain Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
SECTION 10.11. Resale of Certain Securities; Reporting Issuer . . . . . . . . . . . . . . . . . . . . . . 128
SECTION 10.12. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
SECTION 10.13. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
ARTICLE ELEVEN
REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . 131
SECTION 11.1. Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
SECTION 11.2. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
SECTION 11.3. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
SECTION 11.4. Selection by Trustee of Securities To Be Redeemed . . . . . . . . . . . . . . . . . . . . . 131
SECTION 11.5. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
SECTION 11.6. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 11.7. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
SECTION 11.8. Registered Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . 135
ARTICLE TWELVE
CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . 136
SECTION 12.1. Conversion Privilege and Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . . 136
SECTION 12.2. Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
SECTION 12.3. Fractions of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SECTION 12.4. Adjustment of Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SECTION 12.5. Notice of Adjustments of Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . . 143
SECTION 12.6. Notice of Certain Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
SECTION 12.7. Company to Reserve Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
SECTION 12.8. Taxes on Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
SECTION 12.9. Covenant as to Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
SECTION 12.10. Cancellation of Converted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
SECTION 12.11. Provision in Case of Consolidation, Merger
or Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
SECTION 12.12. Responsibility of Trustee for Conversion Provisions . . . . . . . . . . . . . . . . . . . . 147
</TABLE>
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ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 149
SECTION 13.1. Securities Subordinate to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 149
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc. . . . . . . . . . . . . . . . . . . . . . . 149
SECTION 13.3. No Payment When Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . . . . . 150
SECTION 13.4. Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
SECTION 13.5. Subrogation to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . 151
SECTION 13.6. Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . 152
SECTION 13.7. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
SECTION 13.8. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
SECTION 13.9. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
SECTION 13.10. Reliance on Judicial Order or Certificate of
Liquidating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
SECTION 13.11. Trustee Not Fiduciary for Holders of
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
SECTION 13.12. Rights of Trustee as Holder of Senior Indebtedness; Preservation of
Trustee's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
SECTION 13.13. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
SECTION 13.14. Certain Conversions and Repurchases Deemed Payment . . . . . . . . . . . . . . . . . . . . 155
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL . . . . . . . . . . . . . . . . . . . . 156
SECTION 14.1. Right to Require Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
SECTION 14.2. Conditions to the Company's Election to Pay the Repurchase Price
in Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
SECTION 14.3. Notices; Method of Exercising Repurchase Right, Etc . . . . . . . . . . . . . . . . . . . . 158
SECTION 14.4. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
</TABLE>
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ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . . . . . . . . . . . . 164
SECTION 15.1. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . 164
SECTION 15.2. Preservation of Information; Communication
to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
SECTION 15.3. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
SECTION 15.4. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
ANNEX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
ANNEX B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
ANNEX C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
ANNEX D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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<PAGE> 14
INDENTURE, dated as of May 17, 1996, between Quintiles
Transnational Corp., a corporation duly organized and existing under the laws
of the State of North Carolina, having its principal office at 4709 Creekstone
Drive, Riverbirch Building, Suite 300, Durham, North Carolina 27703-8411
(herein called the "Company"), and Marine Midland Bank, a New York banking
corporation and trust company, as Trustee hereunder (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its 4.25% Convertible Subordinated Notes due May 31, 2000 (herein called the
"Securities") and the coupons, if any, thereto appertaining, of substantially
the tenor and amount hereinafter set forth, and to provide therefor the Company
has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities and the coupons
thereto appertaining, when the Securities are executed by the Company and
authenticated and delivered hereunder, the valid obligations of the Company,
and to make this Indenture a valid agreement of the Company, in accordance with
their and its terms, have been done. Further, all things necessary to duly
authorize the issuance of the Common Stock of the Company issuable upon the
conversion of the Securities, and to duly reserve for issuance the number of
shares of Common Stock issuable upon such conversion, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities and
the coupons thereto appertaining, as follows:
<PAGE> 15
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has
the meaning specified in Section 1.4.
"Additional Amounts" has the meaning specified in
Section 2.2(a).
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent Member" means any member of, or participant in, the
Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of EUROCLEAR and CEDEL, and of the Depositary for such
Security, in each case to the extent applicable to such transaction and as in
effect from time to time.
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"Authenticating Agent" means any Person authorized pursuant to
Section 6.12 to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper, in an official
language of the country of publication or in the English language, customarily
published on each Monday, Tuesday, Wednesday, Thursday and Friday, whether or
not published on Saturdays, Sundays or holidays, and of general circulation in
the place in connection with which the term is used or in the financial
community of such place. Where successive publications are required to be made
in Authorized Newspapers, the successive publications may be made in the same
or in different newspapers in the same city meeting the foregoing requirements
and in each case on any Monday, Tuesday, Wednesday, Thursday and Friday. For
purposes of publication in London and Luxembourg, such term shall mean the
Financial Times and the Luxemburger Wort, respectively, unless such newspapers
are not available.
"Bearer Additional Amounts" has the meaning specified in
Section 2.2(a).
"Bearer Security" means any Security issued in substantially
the form set forth in Section 2.2(a).
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a resolution duly adopted by the
Board of Directors, a copy of which, certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, shall
have been delivered to the Trustee.
"Business Day", when used with respect to any Place of
Payment, Place of Conversion or any other place, as the case may be, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in such Place of Payment, Place of Conversion or other
place, as the case may be, are authorized or obligated by law or executive
order to close; provided, however, that a day on which banking institutions in
New York, New York are authorized or obligated by law or executive order to
close shall not be a Business Day for purposes of Section 13.9; provided,
further, that a day on which banking institutions in New York, New York or
London, England are authorized or obligated by law or executive order to close
shall not be a Business Day for purposes of Sections 10.1, 10.3 or 11.6.
"CEDEL" means Cedel Bank, S.A. (or any successor securities
clearing agency).
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<PAGE> 17
"Closing Price Per Share" means, with respect to the Common
Stock of the Company, for any day, the reported last sales price regular way
per share or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either
case (i) on the Nasdaq National Market or, if the Common Stock is not quoted on
the Nasdaq National Market, on the principal national securities exchange on
which the Common Stock is listed or admitted to trading, or (ii) if not quoted
on the Nasdaq National Market or listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Company for that purpose.
"Code" has the meaning specified in Section 2.1.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 3.4.
"Common Stock" means the Common Stock, par value $0.01 per
share, of the Company authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 12.11, shares issuable on
conversion or repurchase of Securities shall include only shares of Common
Stock or shares of any class or classes of common stock resulting from any
reclassification or reclassifications thereof; provided, however, that if at
any time there shall be more than one such resulting class, the shares so
issuable on conversion of Securities shall include shares of all such classes,
and the shares of each such class then so issuable shall be substantially in
the proportion which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
"common stock" includes any stock of any class of capital
stock 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 issuer thereof and which is not subject to redemption by the issuer
thereof.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Notice" has the meaning specified in Section 14.3.
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"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its Chief Executive Officer, its President or a
Vice President, and by its principal financial officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Constituent Person" has the meaning specified in Section
12.11.
"Conversion Agent" means any Person authorized by the Company
to convert Securities in accordance with Article Twelve. The Company has
initially appointed the Trustee as its Conversion Agent in the Borough of
Manhattan, The City of New York, Midland Bank plc as its Conversion Agent in
London, England, and Banque Internationale a Luxembourg S.A. as its Conversion
Agent in Luxembourg.
"Conversion Rate" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at 140 Broadway,
12th Floor, New York, New York 10005).
"corporation" means a corporation, company, association,
joint-stock company or business trust.
"coupon" means any interest coupon appertaining to a Bearer
Security.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Definitive Security" means any Security that is a Bearer
Security (other than the Temporary Global Bearer Security) or a Registered
Security.
"Depositary" means, with respect to any Registered Securities,
a clearing agency that is registered as such under the Exchange Act and is
designated by the Company to act as Depositary for such Registered Securities
(or any successor securities clearing agency so registered).
"Determination Notice" has the meaning specified in Section
2.2(a).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"DTC" means The Depository Trust Company, a New York
corporation.
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"EUROCLEAR" means the Euroclear Clearance System (or any
successor securities clearing agency).
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange Act
of 1934 (or any successor statute), as amended from time to time.
"Exchange Date" means the date and day on which the Restricted
Period expires.
"Global Security" means a Registered Security that is
registered in the Security Register in the name of a Depositary or a nominee
thereof. Such term does not include the Temporary Global Bearer Security.
"Holder", when used with respect to any Registered Security,
means the Person in whose name the Security is registered in the Security
Register, when used with respect to any Bearer Security or Temporary Global
Bearer Security, means the bearer thereof and, when used with respect to any
coupon, means the bearer thereof.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Regulation S Securities" means the Securities sold by
the Initial Underwriters in the initial offering contemplated by the
Underwriting Agreement in reliance on Regulation S.
"Initial Underwriters" means Goldman Sachs International and
Smith Barney Inc.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth
in Article Fourteen or otherwise.
"Non-electing Share" has the meaning specified in Section
12.11.
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"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the Chief Executive
Officer, the President or a Vice President and by the principal financial
officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities for the payment or redemption of
which money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities and any coupons thereto
appertaining, provided that if such Securities are to be
redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made; and
(iii) Securities which have been paid pursuant to
Section 3.6 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of
which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the
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<PAGE> 21
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or interest on any Securities on behalf of the Company
and, except as otherwise specifically set forth herein, such term shall include
the Company if it shall act as its own Paying Agent. The Company has initially
appointed the Trustee as its Paying Agent in the Borough of Manhattan, The City
of New York, Midland Bank plc, located at Mariner House, Pepys Street, London
EC3N 4DA, England, as its Paying Agent in London, England, and Banque
Internationale a Luxembourg S.A., located at 69, route d'Esch, L-1470,
Luxembourg, Grand Duchy of Luxembourg, as its Paying Agent in Luxembourg.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, trust, estate, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Conversion" has the meaning specified in Section
3.1.
"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Principal Paying Agent" means Midland Bank plc, located at
Mariner House, Pepys Street, London EC3N 4DA, England, until a successor, if
any, has been appointed pursuant to the terms hereof, or if there shall be no
Principal Paying Agent, the Trustee; provided that at all times that Bearer
Securities are outstanding, there shall be a Paying Agent outside the United
States.
"Record Date" means any Regular Record Date or Special Record
Date.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
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"Registered Security" means any Security issued in
substantially the form set forth in Section 2.2(b) and registered in the
Security Register. A Global Security is a Registered Security.
"Registrable Securities" has the meaning specified in Section
10.12.
"Regular Record Date" for interest payable in respect of any
Registered Security on any Interest Payment Date means the May 15 or November
15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Regulation D Securities" means the Securities sold by the
Initial Underwriters in the initial offering contemplated by the Underwriting
Agreement in reliance on an exemption from the registration requirements of the
Securities Act other than Rule 144A or Regulation S.
"Regulation S" means Regulation S under the Securities Act (or
any successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate substantially
in the form set forth in Annex A.
"Regulation S Global Security" has the meaning specified in
Section 2.1.
"Regulation S Legend" means a legend substantially in the form
of the legend required in the form of Security set forth in Section 2.2(b) to
be placed upon a Regulation S Security.
"Regulation S Securities" means all Securities required
pursuant to Section 3.5(c) to bear a Regulation S Legend. Such term includes
the Regulation S Global Security.
"Repurchase Date" has the meaning specified in Section 14.1.
"Repurchase Price" has the meaning specified in Section 14.1.
"Responsible Officer", when used with respect to the Trustee,
means any officer within the Corporate Trust Office of the Trustee including
without limitation any vice president, assistant vice president, assistant
treasurer, assistant secretary, corporate trust officer, assistant corporate
trust officer or other employee of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his knowledge and familiarity with
the particular subject.
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"Restricted Global Security" has the meaning specified in
Section 2.1.
"Restricted Period" means the period of 41 consecutive days
beginning on and including the later of (i) the day on which Securities are
first offered to persons other than distributors (as defined in Regulation S)
in reliance on Regulation S and (ii) the last original issuance date of the
Securities.
"Restricted Securities" means all Securities required pursuant
to Section 3.5(c) to bear any Restricted Securities Legend. Such term includes
the Restricted Global Security.
"Restricted Securities Certificate" means a certificate
substantially in the form set forth in Annex B.
"Restricted Securities Legend" means, collectively, the
legends substantially in the forms of the legends required in the form of
Security set forth in Section 2.2(b) to be placed upon each Restricted
Security.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section
10.10.
"Rule 144A Securities" means the Securities purchased by the
Initial Underwriters from the Company pursuant to the Underwriting Agreement
and resold by the Initial Underwriters, other than the Regulation D Securities
and the Initial Regulation S Securities.
"Securities" has the meaning ascribed to it in the first
paragraph under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of
1933 (or any successor statute), as amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend
or a Regulation S Legend.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.5.
"Senior Indebtedness" means the principal of (and premium, if
any) and interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding, whether or not a claim
for post-petition interest is
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<PAGE> 24
allowable as a claim in any such proceeding) on, and all fees and other amounts
payable in connection with, the following, whether absolute or contingent,
secured or unsecured, due or to become due, outstanding on the date of the
Indenture or thereafter created, incurred or assumed: (a) indebtedness of the
Company to banks, insurance companies and other financial institutions
evidenced by credit or loan agreements, notes or other written obligations, (b)
all other indebtedness of the Company (including indebtedness of others
guaranteed by the Company) other than the Securities, whether outstanding on
the date of this Indenture or thereafter created, incurred or assumed, which is
(i) for money borrowed or (ii) evidenced by a note or similar instrument given
in connection with the acquisition of any businesses, properties or assets of
any kind, (c) obligations of the Company as lessee under leases required to be
capitalized on the balance sheet of the lessee under generally accepted
accounting principles, (d) obligations of the Company under interest rate and
currency swaps, caps, floors, collars or similar agreements or arrangements
intended to protect the Company against fluctuations in interest or currency
exchange rates and (e) renewals, extensions, modifications, restatements and
refundings of, or any indebtedness or obligation issued in exchange for, any
such indebtedness or obligation described in clauses (a) through (e) of this
paragraph; provided, however, that Senior Indebtedness shall not include any
such indebtedness or obligation (a) if the terms of such indebtedness or
obligation (or the terms of the instrument under which, or pursuant to which,
it is issued) provides that such indebtedness or obligation is not superior in
right of payment to the Securities, (b) if such indebtedness or obligation is
non-recourse to the Company or (c) any conditional sale contract or any account
payable or any other indebtedness created or assumed by the Company in the
ordinary course of business in connection with the obtaining of materials,
inventories or services.
"Shelf Registration Statement" has the meaning specified in
Section 10.12.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Company pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
or a coupon representing such installment of interest as the fixed date on
which the principal of such Security or such installment of interest is due and
payable.
"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 or other similar interests in the corporation which ordinarily has or
have voting power for the election of directors, or persons performing similar
functions, whether at all times or only so long as no senior class of stock or
other interests has or have such voting power by reason of any contingency.
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<PAGE> 25
"Successor Security" of any particular Security means every
Security issued after, and evidencing all or a portion of the same debt as that
evidenced by, such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Surrender Certificate" means a certificate substantially in
the form set forth in Annex D.
"Tax Affected Security" means (i) all Bearer Securities if, as
a result of any Tax Law Change, the Company has or will become obligated to pay
Additional Amounts in respect of any Bearer Security and (ii) any Registered
Security (or, in the case of a Registered Security that is a Global Security,
any portion of such Registered Security) that, on or before the 30th day after
the date on which the Company publishes a notice of redemption pursuant to the
third paragraph of the reverse of the Registered Security in Section 2.2(b)
hereof, is delivered to the Trustee together with a written statement from or
on behalf of the beneficial owner of such Registered Security (or such portion,
in the case of a Registered Security that is a Global Security) to the effect
that such a beneficial owner has or will become entitled to receive Additional
Amounts as a result of such Tax Law Change.
"Tax Law Change" means any change in, or amendment to, the
laws (including any regulations or rulings promulgated thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in, or amendment to, the application
or official interpretation of such laws, regulations or rulings.
"Temporary Global Bearer Security" means any Security issued
in substantially the form set forth in Section 2.2(c).
"Trading Days" means (i) if the Common Stock is quoted on the
Nasdaq National Market or any other system of automated dissemination of
quotations of securities prices, days on which trades may be effected through
such system; (ii) if the Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities exchange
is open for business; or (iii) if the Common Stock is not listed or admitted
for trading on any national securities exchange or quoted on the Nasdaq
National Market or any other system of automated dissemination of quotation of
securities prices, days on which the Common Stock is traded regular way in the
over-the-counter market and for which a closing bid and a closing asked price
for the Common Stock are available.
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"Transfer Agent" has the meaning specified in Section 2.2(a).
The Company has initially appointed the Trustee as its Transfer Agent in the
Borough of Manhattan, The City of New York, Midland Bank plc as its Transfer
Agent in London, England and Banque Internationale a Luxembourg as its Transfer
Agent in Luxembourg.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Underwriting Agreement" means the Underwriting Agreement,
dated May 17, 1996, between the Company and the Initial Underwriters, as such
agreement may be amended from time to time.
"United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction (its "possessions" including Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands).
"United States Alien" has the meaning specified in Section
2.2(a). "United States person" has the meaning specified in Section 3.4(A).
"Unrestricted Securities Certificate" means a certificate
substantially in the form set forth in Annex C.
"Vice President", when used with respect to the Company, means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
"Western Europe" means Austria, Belgium, Denmark, France,
Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland and the United Kingdom.
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SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
or the Principal Paying Agent to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee or the Principal Paying
Agent, as the case may be, an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 10.9) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to the Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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<PAGE> 28
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.4. Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders of Securities may be embodied in and evidenced by (1)
one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent or proxy duly appointed in writing by such Holders or
(2) the record of Holders of Securities voting in favor thereof, either in
person or by proxies duly appointed in writing, at any meeting of Holders of
Securities duly called and held in accordance with the provisions of Article
Nine. Such action shall become effective when such instrument or instruments
or record is delivered to the Trustee and, where it is hereby expressly
required, to the Company. The Trustee shall promptly deliver to the Company
copies of all such instruments and records delivered to the Trustee. Such
instrument or instruments and record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
of Securities signing such instrument or instruments and so voting at such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent or proxy, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company if made in the manner
provided in this Section. The record of any meeting of Holders of Securities
shall be proved in the manner provided in Section 9.6.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer
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<PAGE> 29
acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
(c) The principal amount and serial number of any Bearer
Security held by any Person, and the date of his holding the same, may be
proved by: the production of such Bearer Security; or by a certificate executed
by any trust company, bank, broker or other depositary, wherever situated, if
such certificate shall be deemed by the Trustee or the Principal Paying Agent
to be satisfactory, showing that at the date therein mentioned such Person had
on deposit with such depositary, or exhibited to it, the Bearer Security
therein described; or such facts may be proved by the certificate or affidavit
of the Person holding such Bearer Security, if such certificate or affidavit is
deemed by the Trustee or the Principal Paying Agent to be satisfactory. The
Trustee, the Principal Paying Agent and the Company may assume that any Bearer
Security continues to be held by such Person until (1) another certificate or
affidavit bearing a later date issued in respect of such Bearer Security is
produced, or (2) such Bearer Security is produced to the Trustee or the
Principal Paying Agent by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding.
(d) The principal amount and serial numbers of Bearer
Securities held by the Person (so executing such instrument or writing as
proved pursuant to Section 1.4(b)) and the date of holding the same may also be
proved in any other manner which the Principal Paying Agent deems sufficient;
and the Principal Paying Agent may in any instance require further proof with
respect to any of the matters referred to in this Section 1.4.
(e) The principal amount and serial number of any Registered
Security held by any Person, and the date of his holding the same, shall be
proved by the Security Register.
(f) The fact and date of execution of any such instrument or
writing and the authority of the Person executing the same may also be proved
in any other manner which the Trustee or the Principal Paying Agent deems
sufficient; and the Trustee or the Principal Paying Agent may in any instance
require further proof with respect to any of the matters referred to in this
Section 1.4.
(g) The Company may set any day as the record date for the
purpose of determining the Holders entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or
to vote on any action, authorized or permitted by this Indenture to be given or
taken by Holders. Promptly and in any case not later than ten days after
setting a record date, the Company shall notify the Trustee, the Paying Agent
in London and the Holders of such record date. If not set by the Company prior
to the first solicitation of a Holder made by any Person in respect of
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<PAGE> 30
any such action, or, in the case of any such vote, prior to such vote, the
record date for any such action or vote shall be the 30th day (or, if later,
the date of the most recent list of Holders required to be provided pursuant to
Section 15.1) prior to such first solicitation or vote, as the case may be.
With regard to any record date, the Holders on such date (or their duly
appointed agents or proxies), and only such Persons, shall be entitled to give
or take, or vote on, the relevant action, whether or not such Holders remain
Holders after such record date. Notwithstanding the foregoing, the Company
shall not set a record date for, and the provisions of this paragraph shall not
apply with respect to, any notice, declaration or direction referred to in the
next paragraph.
Upon receipt by the Trustee or the Principal Paying Agent from
any Holder of (i) any notice of default or breach referred to in Section
5.1(4), if such default or breach has occurred and is continuing and the
Trustee shall not have given such a notice to the Company, (ii) any declaration
of acceleration referred to in Section 5.2, if an Event of Default has occurred
and is continuing and the Trustee shall not have given such a declaration to
the Company, or (iii) any direction referred to in Section 5.12, if the Trustee
shall not have taken the action specified in such direction, then a record date
shall automatically and without any action by the Company or the Trustee be set
for determining the Holders entitled to join in such notice, declaration or
direction, which record date shall be the close of business on the tenth day
(or, if such day is not a Business Day, the first Business Day thereafter)
following the day on which the Trustee receives such notice, declaration or
direction. Promptly after such receipt by the Trustee, and as soon as
practicable thereafter, the Trustee shall notify the Company and the Holders of
any such record date so fixed. The Holders on such record date (or their duly
appointed agents or proxies), and only such Persons, shall be entitled to join
in such notice, declaration or direction, whether or not such Holders remain
Holders after such record date; provided that, unless such notice, declaration
or direction shall have become effective by virtue of Holders of the requisite
principal amount of Securities on such record date (or their duly appointed
agents or proxies) having joined therein on or prior to the 90th day after such
record date, such notice, declaration or direction shall automatically and
without any action by any Person be cancelled and of no further effect.
Nothing in this paragraph shall be construed to prevent a Holder (or a duly
appointed agent or proxy thereof) from giving, before or after the expiration
of such 90-day period, a notice, declaration or direction contrary to or
different from, or, after the expiration of such period, identical to, the
notice, declaration or direction to which such record date relates, in which
event a new record date in respect thereof shall be set pursuant to this
paragraph. In addition, nothing in this paragraph shall be construed to render
ineffective any notice, declaration or direction of the type referred to in
this paragraph given at any time to the Trustee and the Company by Holders (or
their duly appointed agents or proxies) of the requisite principal amount of
Securities on the date such notice, declaration or direction is so given.
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<PAGE> 31
(h) Except as provided in Sections 5.12 and 5.13, any
request, demand, authorization, direction, notice, consent, election, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and any coupon appertaining thereto and the Holder of every
Security or coupon issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security or coupon.
(i) The provisions of this Section 1.4 are subject to the
provisions of Section 9.5.
SECTION 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of Holders of Securities or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee or the Principal Paying Agent by any Holder
of Securities or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the
Trustee and received at its Corporate Trust Office, Attention:
Corporate Trust Services--Quintiles, or to or with the Principal
Paying Agent and received at Mariner House, Pepys Street, London EC3N
4DA, England, Attention: Midland Securities Services, or
(2) the Company by the Trustee or by any Holder of Securities
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing, mailed, first-class postage
prepaid, or telecopied and confirmed by mail, first-class postage
prepaid, or delivered by hand or overnight courier, addressed to the
Company at 4709 Creekstone Drive, Riverbirch Building, Suite 300,
Durham, North Carolina 27703-8411, telecopy no.: (919) 941-9113,
Attention: Secretary, or at any other address previously furnished in
writing to the Trustee by the Company.
Any request, demand, authorization, direction, notice,
consent, election or waiver required or permitted under this Indenture shall be
in the English language, except that any published notice (other than a notice
published in Luxembourg) may be in an official language of the country of
publication.
SECTION 1.6. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of Securities of any event,
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(1) such notice shall be sufficiently given to Holders of
Bearer Securities or any Temporary Global Bearer Security if published
in an Authorized Newspaper in the City of London, England, and, so
long as the Securities are listed on the Luxembourg Stock Exchange and
such stock exchange shall so require, in Luxembourg or, if not
practicable in either London, England, or Luxembourg, elsewhere in any
country in Western Europe, on a Business Day at least twice, the first
such publication to be not earlier than the earliest date and the
second such publication to be not later than the latest date herein
prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such
event, at the address of such Holder as it appears in the Security
Register, not earlier than the earliest date and not later than the
latest date prescribed for the giving of such notice.
Neither the failure to give notice by publication to Holders
of Bearer Securities or any Temporary Global Bearer Security as provided above,
nor any defect in any notice so published, shall affect the sufficiency of any
notice mailed to Holders of Registered Securities as provided above. In case
by reason of the suspension of publication of any Authorized Newspaper or
Authorized Newspapers or by reason of any other cause it shall be impracticable
to publish any notice as provided above, then such notification as shall be
given with the approval of the Trustee, which approval shall not be
unreasonably withheld, shall constitute sufficient notice to such Holders for
every purpose hereunder.
In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder of a Registered Security shall
affect the sufficiency of such notice with respect to other Holders of
Registered Securities or the sufficiency of any notice by publication to
Holders of Bearer Securities or any Temporary Global Bearer Security given as
provided above. In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders of Registered Securities as shall be
made with the approval of the Trustee, which approval shall not be unreasonably
withheld, shall constitute a sufficient notification to such Holders for every
purpose hereunder.
In the case of paragraph (1) of this section, such notice
shall be deemed to have been given on the date of such publication or, if
published in Authorized Newspapers on different dates, on the date of the first
such publication.
In the case of paragraph (2) of this section, such notice
shall be deemed to have been given when such notice is mailed.
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Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders of Securities shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 1.8. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.9. Separability Clause.
In case any provision in this Indenture or the Securities or
coupons shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.10. Benefits of Indenture.
Except as provided in the next sentence, nothing in this
Indenture or in the Securities or coupons, express or implied, shall give to
any Person, other than the parties hereto and their successors and assigns
hereunder and the Holders of Securities and coupons, any benefit or legal or
equitable right, remedy or claim under this Indenture. The provisions of
Article Thirteen are intended to be for the benefit of, and shall be
enforceable directly by, the holders of Senior Indebtedness.
SECTION 1.11. Governing Law.
THIS INDENTURE AND THE SECURITIES AND COUPONS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
THE UNITED STATES OF AMERICA.
SECTION 1.12. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or coupon or the last day on
which a Holder of a Security has a right to convert his Security shall not be a
Business Day at a Place of Payment or Place of Conversion, as the case may be,
then (notwithstanding
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any other provision of this Indenture or of the Securities or coupons) payment
of principal of, premium, if any, or interest on, or the payment of the
Repurchase Price (whether the same is payable in cash or in shares of Common
Stock) with respect to, or delivery for conversion of, such Security need not
be made at such Place of Payment or Place of Conversion, as the case may be, on
or by such day, but may be made on or by the next succeeding Business Day at
such Place of Payment or Place of Conversion, as the case may be, with the same
force and effect as if made on the Interest Payment Date, Redemption Date or
Repurchase Date, or at the Stated Maturity or by such last day for conversion;
provided, however, that in the case that payment is made on such succeeding
Business Day, no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date, Repurchase Date,
Stated Maturity or last day for conversion, as the case may be.
SECTION 1.13. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under the Trust Indenture
Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be. Until such time as this Indenture shall be
qualified under the Trust Indenture Act, this Indenture, the Company and the
Trustee shall be deemed for all purposes hereof to be subject to and governed
by the Trust Indenture Act to the same extent as would be the case if this
Indenture were so qualified on the date hereof.
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ARTICLE TWO
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities and the coupons shall be in substantially the
forms set forth in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange, the Internal Revenue Code of 1986,
as amended, and regulations thereunder (the "Code"), or as may, consistently
herewith, be determined by the officers executing such Securities and coupons,
as evidenced by their execution thereof.
The Trustee's certificates of authentication shall be in
substantially the form set forth in Section 2.4.
Conversion notices shall be in substantially the form set
forth in Section 2.5.
Repurchase notices, in the case of Bearer Securities, shall be
substantially in the form set forth in Section 2.2(a), and in the case of
Registered Securities, shall be substantially in the form set forth in Section
2.2(b).
The Temporary Global Bearer Security may be printed,
lithographed, typewritten, mimeographed or otherwise produced, as determined by
the officers of the Company executing such Security, as evidenced by their
execution thereof. The format and spacing of the text of a Definitive Security
may be varied to facilitate such production.
The Definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities and coupons, as evidenced
by their execution thereof.
Upon their original issuance, Rule 144A Securities shall be
issued in the form of a Global Security registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as custodian for
DTC, for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct).
Such Global Security, together with its Successor
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Securities which are Global Securities other than the Regulation S Global
Security, are collectively herein called the "Restricted Global Security".
Upon their original issuance, Initial Regulation S Securities
shall be issued in the form of the Temporary Global Bearer Security as set
forth in Section 3.4(A)(a).
Upon their original issuance, Regulation D Securities shall be
issued as Registered Securities but not in the form of a Global Security or in
any other form intended to facilitate book-entry trading in beneficial
interests in such Securities.
After their original issuance, as provided in and subject to
the terms and conditions of Sections 3.4 and 3.5, Securities may be exchanged
for interests in a Global Security registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as custodian for
DTC, for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct),
provided that upon such deposit all such Securities shall be credited to or
through accounts maintained at DTC by or on behalf of EUROCLEAR or CEDEL. Such
Global Security, together with its Successor Securities which are Global
Securities other than the Restricted Global Security, are collectively herein
called the "Regulation S Global Security".
SECTION 2.2. Forms of Securities.
(a) Form of Bearer Security
[FORM OF FACE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE
SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN THEM IN REGULATION S
UNDER THE SECURITIES ACT.
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QUINTILES TRANSNATIONAL CORP.
4.25% CONVERTIBLE SUBORDINATED NOTE
DUE MAY 31, 2000
No. _____________ U.S. $5,000
ISIN No. XS0065915075
QUINTILES TRANSNATIONAL CORP., a corporation duly organized
and existing under the laws of the State of North Carolina (herein called the
"Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to bearer upon presentation and surrender of this Security the principal sum of
Five Thousand United States Dollars (U.S. $5,000) on May 31, 2000 and to pay
interest thereon, from May 23, 1996, or from the most recent Interest Payment
Date (as defined below) to which interest has been paid or duly provided for,
semi-annually in arrears on May 31 and November 30 in each year (each, an
"Interest Payment Date"), commencing November 30, 1996, at the rate of 4.25%
per annum, until the principal hereof is due, and at the rate of 4.25% per
annum on any overdue principal and premium, if any, and, to the extent
permitted by law, on any overdue interest. Such payments shall be made,
subject to any laws or regulations applicable thereto and to the right of the
Company (limited as provided in the Indenture) to terminate the appointment of
any such Paying Agent, at the option of the Holder at (a) the office of Midland
Bank plc, Mariner House, Pepys Street, London EC3N 4DA, England and (b) the
office of Banque Internationale a Luxembourg, 69, route D'Esch, L-1470,
Luxembourg, Grand Duchy of Luxembourg, or at such other offices or agencies
outside the United States (as defined below) as the Company may designate, at
the option of the Holder by United States Dollar check drawn on a bank in the
Borough of Manhattan, The City of New York or by transfer of United States
Dollars to an account maintained by the payee with a bank located outside the
United States (such a transfer to be made only to a Holder of an aggregate
principal amount of Securities in excess of U.S. $2,000,000 and only if such
Holder shall have furnished wire instructions in writing to the Principal
Paying Agent by no later than 15 days prior to the relevant payment date).
Interest on this Security due on or before Maturity shall be payable only upon
presentation and surrender at such an office or agency of the interest coupons
hereto attached as they severally mature. No payment of principal of, premium,
if any, or interest on, including Additional Amounts and Bearer Additional
Amounts (in each case, as defined below) with respect to this Security shall be
made at the Corporate Trust Office of the Trustee under the Indenture referred
to on the reverse hereof or at any other office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
provided, however, that payment of principal of, premium, if any,
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or interest on this Security and payment of any such Additional Amounts or
Bearer Additional Amounts may be made at the office of the Paying Agent in the
Borough of Manhattan, The City of New York, if (but only if) payment of the
full amount of such principal, premium, if any, interest, Additional Amounts or
Bearer Additional Amounts, as the case may be, at all offices outside the
United States maintained for such purpose by the Company in accordance with the
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions on the full payment or receipt of such amounts in United
States Dollars, as determined by the Company.
The Company will pay to the Holder of this Security or any
coupon appertaining hereto who is a United States Alien (as defined below) such
additional amounts ("Additional Amounts") as may be necessary in order that
every net payment of the principal of, premium, if any, and interest on this
Security (including payment on redemption or repurchase (including any payment
of the Repurchase Price)), after deduction or withholding for or on account of
any present or future tax, assessment or governmental charge imposed upon or as
a result of such payment by the United States or any political subdivision or
taxing authority thereof or therein, will not be less than the amount provided
for in this Security or in such coupon to be then due and payable; provided,
however, that the Company shall not be obligated to pay any Additional Amounts
in respect of payments becoming due on the Securities more than 15 days after
the Redemption Date with respect to any redemption of Tax Affected Securities
pursuant to the third paragraph of the reverse of this Security, except to the
extent that the Company's obligation to pay such Additional Amounts does not
arise from the Tax Law Change that resulted in such redemption; and provided
further, that the foregoing obligation to pay Additional Amounts will not apply
to:
(a) any tax, assessment or other governmental charge which
would not have been so imposed but for (i) the existence of any
present or former connection between such Holder (or between a
fiduciary, settlor, beneficiary, member, shareholder of or possessor
of a power over such Holder, if such Holder is an estate, a trust, a
partnership or a corporation) and the United States or any political
subdivision or taxing authority thereof or therein, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary,
member, shareholder or possessor) being or having been a citizen or
resident of the United States or treated as a resident thereof, or
being or having been engaged in trade or business or present therein,
or having or having had a permanent establishment therein, or (ii)
such Holder's present or former status as a personal holding company,
a foreign personal holding company with respect to the United States,
or a foreign private foundation or foreign tax exempt entity for
United States tax purposes, or a corporation which accumulates
earnings to avoid United States Federal income tax;
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<PAGE> 39
(b) any tax, assessment or other governmental charge which
would not have been so imposed but for the presentation by the Holder
of this Security or any coupon appertaining hereto for payment on a
date more than 15 days after the date on which such payment became due
and payable or the date on which payment thereof is duly provided for,
whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which
would not have been imposed but for the failure to comply with any
certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the
United States of the Holder or beneficial owner of this Security or
any coupon appertaining hereto, if compliance is required by statute
or by regulation of the United States as a precondition to relief or
exemption from such tax, assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on this Security;
(f) any tax, assessment or other governmental charge imposed
as a result of a Holder that actually or constructively owns 10% or
more of the total combined voting power of all classes of stock of the
Company entitled to vote or that is a controlled foreign corporation
related to the Company through stock ownership;
(g) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of the principal
of, premium, if any, or interest on this Security, if such payment can
be made without such withholding by any other Paying Agent in Western
Europe;
(h) any tax, assessment or other governmental charge imposed
on a Holder that is a partnership or a fiduciary or other than the
sole beneficial owner of such payment, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or
settlor with respect to the fiduciary would not have been entitled to
the payment of Additional Amounts had the beneficial owner, member,
beneficiary or settlor directly been the Holder of the Note or coupon;
or
(i) any combination of items (a), (b), (c), (d), (e), (f),
(g) and (h).
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<PAGE> 40
For purposes of this Security, "United States" means the
United States of America (including the States and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction
and a "United States Alien" is any person who, for United States federal income
tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is for United States federal
income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
Notwithstanding the foregoing, if and so long as a
certification, identification or other information reporting requirement
referred to in the fourth paragraph of the reverse hereof would be fully
satisfied by payment of a backup withholding tax or similar charge, the Company
may elect, by so stating in the Determination Notice (as defined on the reverse
hereof), to have the provisions of this paragraph apply in lieu of redeeming
this Security pursuant to such fourth paragraph. In such event, the Company
will pay as additional amounts ("Bearer Additional Amounts") such amounts as
may be necessary so that every net payment made, following the effective date
of such requirements, outside the United States by the Company or any Paying
Agent of principal and premium, if any, due in respect of this Security, or
interest represented by any coupon (including any payment of the Repurchase
Price with respect hereto or thereto), the beneficial owner of which is a
United States Alien (but without any requirement that the nationality,
residence or identity of such beneficial owner be disclosed to the Company, any
Paying Agent or any governmental authority), after deduction or withholding for
or on account of such backup withholding tax or similar charge, other than a
backup withholding tax or similar charge which is (a) the result of a
certification, identification or information reporting requirement described in
the first parenthetical clause of the first sentence of such fourth paragraph,
(b) imposed as a result of the fact that the Company or any Paying Agent has
actual knowledge that the beneficial owner of this Security or such coupon is
within the category of Persons described in clause (a) of the second preceding
paragraph or (c) imposed as a result of presentation of this Security or such
coupon for payment more than 15 days after the date on which such payment
becomes due and payable or on which payment thereof is duly provided for,
whichever occurs later, will not be less than the amount provided for in this
Security or such coupon to be then due and payable.
Except as specifically provided herein and in the Indenture,
the Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to the payment of the principal
of, premium, if any, or interest on, or in respect of, any Security or any
coupon appertaining thereto, such mention shall be deemed to include mention of
the payment of Additional Amounts and Bearer Additional Amounts payable as
described in the first and third preceding paragraphs, respectively, to the
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<PAGE> 41
extent that, in such context, Additional Amounts or Bearer Additional Amounts,
as the case may be, are, were or would be payable in respect of this Security
or any coupon appertaining hereto pursuant to such paragraphs, and express
mention of the payment of such Additional Amounts or Bearer Additional Amounts
(if applicable), as the case may be, in any provisions of this Security shall
not be construed as excluding Additional Amounts or Bearer Additional Amounts,
as the case may be, in those provisions of this Security where such express
mention is not made.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof or its Authenticating
Agent by the manual signature of one of its authorized signatories, neither
this Security, nor any coupon appertaining hereto, shall be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
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<PAGE> 42
IN WITNESS WHEREOF, the Company has caused this Security to be
duly executed under its corporate seal and coupons bearing the facsimile
signature of its Treasurer to be annexed hereto.
Dated as of May 23, 1996
QUINTILES TRANSNATIONAL CORP.
[Corporate Seal]
By:__________________________
Name:
Title:
Attest:
________________________
Name:
Title:
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<PAGE> 43
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities
of the Company designated as its "4.25% Convertible Subordinated Notes due May
31, 2000" (herein called the "Securities"), limited in aggregate principal
amount to U.S.$143,750,000, issued and to be issued under an Indenture, dated
as of May 17, 1996 (herein called the "Indenture"), between the Company and
Marine Midland Bank, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and any coupons appertaining thereto and of the terms upon which
the Securities are, and are to be, authenticated and delivered. The Securities
are issuable as Bearer Securities, with interest coupons attached, in the
denomination of U.S.$5,000 and as Registered Securities, without coupons, in
denominations of U.S.$1,000 and integral multiples of U.S.$1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Bearer Securities are exchangeable for a like aggregate
principal amount of Registered Securities of any authorized denominations as
requested by the Holder surrendering the same upon surrender of the Security or
Securities to be exchanged, with all unmatured coupons and all matured coupons
in default thereto appertaining, except as provided below, (a) at the Corporate
Trust Office of the Trustee or at such other office or agency of the Company as
may be designated by it for such purpose in The City of New York or (b) subject
to any laws or regulations applicable thereto and to the right of the Company
to terminate the appointment of any Transfer Agent (as defined below), (i) the
office of Midland Bank plc, Mariner House, Pepys Street, London EC3N 4DA,
England and (ii) the office of Banque Internationale a Luxembourg S.A., 69,
route d'Esch, L-1470, Luxembourg, Grand Duchy of Luxembourg, or at such other
offices or agencies outside the United States as the Company may designate
(each a "Transfer Agent"); provided, however, that such surrender may be made
at the Corporate Trust Office of the Trustee in the Borough of Manhattan, The
City of New York, if (but only if) such surrender at all offices outside the
United States maintained for such purpose by the Company in accordance with the
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions on the full payment or receipt of such amounts in United
States Dollars, as determined by the Company. Bearer Securities surrendered in
exchange for Registered Securities between a Record Date and the relevant
Interest Payment Date or date for payment of Defaulted Interest will not be
required to be surrendered with the coupon relating to such Interest Payment
Date or date for payment of Defaulted Interest. Bearer Securities may not be
issued in exchange for Registered Securities.
No sinking fund is provided for the Securities. The
Securities are subject to redemption at the option of the Company on or after
the close of business on May 31, 1999, in whole or in part, upon not less than
30 nor more than 60 days' notice to the
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<PAGE> 44
Holders prior to the Redemption Date, at a Redemption Price equal to 101.0625%
of the principal amount if redeemed on or prior to May 31, 2000 (the final
Stated Maturity of the Securities), together with accrued interest to the
Redemption Date, and certain Securities held by United States Aliens and Bearer
Securities are also redeemable in whole but not in part, under the
circumstances described in the next two succeeding paragraphs, respectively, at
a Redemption Price equal to 100% of the principal amount thereof plus interest
accrued to the Redemption Date; provided, however, that interest installments
on Bearer Securities whose Stated Maturity is on or prior to such Redemption
Date will be payable only upon presentation and surrender of coupons for such
interest (at an office or agency outside the United States except as herein
provided otherwise).
If as a result of a Tax Law Change, the Company has or will
become obligated to pay to the Holder of any Security or coupon Additional
Amounts, as described in the second paragraph of the face of this Security, and
such obligation cannot be avoided by the Company taking reasonable measures
available to it, then the Company may, at its option, redeem the Tax Affected
Securities as a whole, but not in part, upon not less than 30 nor more than 60
days' notice to the Holders prior to the Redemption Date, at a Redemption Price
equal to 100% of the principal amount plus interest accrued to the Redemption
Date, and any Additional Amounts then payable; provided, that (i) no such
notice of redemption shall be given earlier than 90 days prior to the earliest
date on which the Company would be obligated to pay any such Additional Amounts
were a payment in respect of the Tax Affected Securities then due and (ii) at
the time such notice of redemption is given, such obligation to pay such
Additional Amounts remains in effect. Prior to the publication of any notice
of redemption pursuant to this paragraph, the Company shall deliver to the
Trustee (a) an Officers' Certificate stating that the Company is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Company so to redeem have occurred and
(b) an Opinion of Counsel, to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such Tax Law Change.
The Company's right to redeem the Tax Affected Securities shall continue as
long as the Company is obligated to pay such Additional Amounts,
notwithstanding that the Company shall have made payments of Additional Amounts
specified in such second paragraph.
In addition, if the Company determines, based upon an Opinion
of Counsel that, as a result of a Tax Law Change, any payment made outside the
United States by the Company or any of its Paying Agents of the full amount of
principal, premium, if any, or interest due with respect to any Bearer Security
or coupon appertaining thereto (including any payment of the Repurchase Price
in respect thereof) would be subject to any certification, identification or
other information reporting requirement of any kind, the effect of which
requirement is the disclosure to the Company, any Paying Agent or any
governmental authority of the nationality, residence or identity of a
beneficial owner
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<PAGE> 45
of such Bearer Security or coupon who is a United States Alien (other than such
a requirement (a) which would not be applicable to a payment made by the
Company or any one of its Paying Agents (i) directly to the beneficial owner or
(ii) to any custodian, nominee or other agent of the beneficial owner or (b)
which can be satisfied by the custodian, nominee or other agent certifying that
such beneficial owner is a United States Alien, provided that, in each case
referred to in clauses (a)(ii) and (b), payment by such custodian, nominee or
agent to such beneficial owner is not otherwise subject to any such
requirement), the Company at its election will either (x) redeem the Bearer
Securities, as a whole but not in part, upon not less than 30 nor more than 60
days' notice prior to the Redemption Date, at a Redemption Price equal to 100%
of the principal amount thereof plus interest accrued to the Redemption Date,
or (y) if and so long as the conditions of the fourth paragraph on the face
hereof are satisfied, pay the Bearer Additional Amounts specified in such
paragraph. The Company will make such determination and election and notify
the Trustee and the Principal Paying Agent, thereof in writing as soon as
practicable, and the Trustee will promptly give notice of such determination in
the manner provided in the second following paragraph (the "Determination
Notice"), in each case stating the effective date of such certification,
identification or information reporting requirement, whether the Company will
redeem the Bearer Securities or will pay the Bearer Additional Amounts
specified in the fourth paragraph on the face hereof and (if applicable) the
last date by which the redemption of the Bearer Securities must take place. If
the Company shall elect to redeem the Bearer Securities pursuant to clause (x)
above, such redemption shall take place on such date, not later than one year
after the publication of the Determination Notice, as the Company shall elect
by notice given in writing to the Trustee and the Principal Paying Agent at
least 75 days before the Redemption Date, unless shorter notice shall be
acceptable to the Trustee. Notwithstanding the foregoing, the Company will not
so redeem the Bearer Securities if the Company, based upon an Opinion of
Counsel, subsequently determines, not less than 30 days prior to the Redemption
Date, that subsequent payments would not be subject to any such requirement, in
which case the Company will notify the Trustee in writing of its determination
not to so redeem the Securities, and the Trustee will promptly give notice to
the Holders of the Bearer Securities of that determination and any earlier
redemption notice will thereupon be revoked and of no further effect. If the
Company elects as provided in clause (y) above to pay Bearer Additional
Amounts, the Company may, as long as the Company is obligated to pay such
Bearer Additional Amounts, subsequently redeem the Bearer Securities, at any
time, as a whole but not in part, upon not less than 30 nor more than 60 days'
notice prior to the Redemption Date, at a Redemption Price equal to 100% of the
principal amount thereof plus interest accrued to the Redemption Date, and any
Additional Amounts or Bearer Additional Amounts.
In the event of a redemption of the Securities, the Company
will not be required (a) to register the transfer or exchange of Registered
Securities or to exchange Bearer Securities for Registered Securities for a
period of 15 days immediately preceding
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<PAGE> 46
the date notice is given identifying the serial numbers of the Securities
called for such redemption, (b) to register the transfer or exchange of any
Registered Security, or portion thereof, called for redemption, or (c) to
exchange any Bearer Security called for redemption; provided, however, that a
Bearer Security called for redemption may be exchanged for a Registered
Security which is simultaneously surrendered to the Registrar or Transfer Agent
making such exchange with written instructions for conversion consistent with
the provisions described in Sections 2.5 and 12.2 of the Indenture.
Notice of redemption will be given by publication in
Authorized Newspapers in the City of London, England, and, so long as the
Securities are listed on the Luxembourg Stock Exchange and the rules of such
stock exchange shall so require, in Luxembourg, or, if not practicable in
either London, England, or Luxembourg, elsewhere in a Western European city.
Notice to the Holders will be given not less than 30 nor more than 60 days
prior to the Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the
principal of, or premium, if any, or interest, including Additional Amounts and
Bearer Additional Amounts, on any Security or the last day on which a Holder of
a Security has a right to convert his Security shall be, at any Place of
Payment or Place of Conversion, as the case may be, a day on which banking
institutions at such Place of Payment or Place of Conversion are authorized or
obligated by law or executive order to close, then payment of principal,
premium, if any, or interest, including Additional Amounts and Bearer
Additional Amounts, or delivery for conversion of such Security need not be
made on or by such date at such place but may be made on or by the next
succeeding day at such place which is not a day on which banking institutions
are authorized or obligated by law or executive order to close, with the same
force and effect as if made on the date for such payment or the date fixed for
redemption or repurchase, or by such last day for conversion, and no interest
shall accrue on the amount so payable for the period after such date.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled, at his option, at any time
on or after August 21, 1996 and on or before the close of business on May 31,
2000, or in case this Security is called for redemption or the Holder hereof
has exercised his right to require the Company to repurchase this Security,
then in respect of this Security until and including, but (unless the Company
defaults in making the payment due upon redemption or repurchase, as the case
may be) not after, the close of business on the Redemption Date or the
Repurchase Date, as the case may be, to convert this Security into fully paid
and nonassessable shares of Common Stock of the Company at an initial
Conversion Rate of 12.0846 for each share of Common Stock (or at the current
adjusted Conversion Rate if an adjustment has been made as provided in the
Indenture) by surrender of this Security, together with all coupons
appertaining hereto that mature after the date of conversion, and also the
conversion notice hereon, duly executed, to the Company, subject to any laws or
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<PAGE> 47
regulations applicable thereto and subject to the right of the Company to
terminate the appointment of any Conversion Agent (as defined below), at (a)
the office of Midland Bank plc, Mariner House, Pepys Street, London EC3N 4DA,
England or (b) the office of Banque Internationale a Luxembourg, 69, route
d'Esch, L-1470, Luxembourg, Grand Duchy of Luxembourg, or at such other offices
or agencies outside the United States as the Company may designate (each a
"Conversion Agent"). Subject to the aforesaid requirement to surrender
coupons, no cash payment or adjustment is to be made on conversion, for
interest accrued hereon from the Interest Payment Date next preceding the date
of conversion, or for dividends on the Common Stock issued on conversion
hereof, unless this Security has been called for redemption on a Redemption
Date or is repurchasable on a Repurchase Date occurring, in either case, during
the period from the close of business on any Regular Record Date to the opening
of business on the next succeeding Interest Payment Date and is surrendered for
conversion during such period, in each of which cases the Holder of this
Security will be entitled to receive, upon surrender for such conversion (along
with such coupons), interest accruing hereon from the Interest Payment Date
next preceding the date of such conversion to such succeeding Interest Payment
Date. The Company shall thereafter deliver to the Holder the fixed number of
shares of Common Stock (together with any cash adjustment, as provided in the
Indenture) into which this Security is convertible and such delivery will be
deemed to satisfy the Company's obligation to pay the principal amount of this
Security. No fractions of shares or scrip representing fractions of shares
will be issued on conversion, but instead of any fractional interest
(calculated to the nearest 1/100th of a share) the Company shall pay a cash
adjustment as provided in the Indenture. The Conversion Rate is subject to
adjustment as provided in the Indenture. In addition, the Indenture provides
that in case of certain consolidations or mergers to which the Company is a
party or the conveyance, transfer, sale or lease of all or substantially all of
the property and assets of the Company, the Indenture shall be amended, without
the consent of any Holders of Securities, so that this Security, if then
Outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, transfer, sale or lease by a holder of the number of shares of
Common Stock of the Company into which this Security could have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease (assuming such holder of Common Stock is not a Constituent Person, failed
to exercise any rights of election and received per share the kind and amount
received per share by a plurality of Non-electing Shares and further assuming,
if such consolidation, merger, conveyance, transfer, sale or lease occurs prior
to the later of August 21, 1996 and the receipt of Securities in definitive
form (in the case of Securities initially represented by a Temporary Global
Bearer Security), that the Security was convertible at the time of such
occurrence at the Conversion Rate specified above as adjusted from the issue
date of such Security to such time as provided in the Indenture). No
adjustment in the Conversion Rate will be made until such adjustment would
require an increase or decrease of at least one percent of such rate, provided
that any adjustment that would
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<PAGE> 48
otherwise be made will be carried forward and taken into account in the
computation of any subsequent adjustment.
Subject to certain limitations in the Indenture, at any time
when the Company is not subject to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended, upon the request of a Holder of a
Restricted Security or the holder of shares of Common Stock issued upon
conversion thereof, the Company will promptly furnish or cause to be furnished
Rule 144A Information (as defined below) to such Holder of Restricted
Securities or such holder of shares of Common Stock issued upon conversion of
Restricted Securities, or to a prospective purchaser of any such security
designated by any such Holder or holder, as the case may be, to the extent
required to permit compliance by any such Holder or holder with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"), in
connection with the resale of any such security. "Rule 144A Information" shall
be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
If a Change in Control occurs, the Holder of this Security, at
the Holder's option, shall have the right, in accordance with the provisions of
the Indenture, to require the Company to repurchase this Security at a
Repurchase Price equal to 100% of the principal amount plus accrued interest to
the Repurchase Date; provided, however, that the Repurchase Price in respect of
any Bearer Security will be payable only upon presentation and surrender of
such Bearer Security at an office or agency outside the United States, except
in the limited circumstances described in the last sentence of the first
paragraph of the face hereof. At the option of the Company, the Repurchase
Price may be paid in cash or, subject to the conditions provided in the
Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. For purposes of this paragraph, 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 Per Share for the five
consecutive Trading Days ending on and including the third Trading Day
immediately preceding the Repurchase Date. Whenever in this Security there is
a reference, in any context, to the principal of any Security as of any time,
such reference shall be deemed to include reference to the Repurchase Price
payable in respect of such Security to the extent that such Repurchase Price
is, was or would be so payable at such time, and express mention of the
Repurchase Price in any provision of this Security shall not be construed as
excluding the Repurchase Price in those provisions of this Security when such
express mention is not made; provided, however, that, for the purposes of the
immediately succeeding paragraph, such reference shall be deemed to include
reference to the Repurchase Price only to the extent the Repurchase Price is
payable in cash.
The indebtedness evidenced by this Security and any coupons
appertaining hereto is, to the extent and in the manner provided in the
Indenture, subordinate and
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<PAGE> 49
subject in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, and this Security and each coupon appertaining
hereto is issued subject to such provisions of the Indenture with respect
thereto. Each Holder of this Security or any coupon appertaining to this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
If an Event of Default shall occur and be continuing, the
principal of all the Securities, together with accrued interest to the date of
declaration, may be declared due and payable in the manner and with the effect
provided in the Indenture. Upon payment (i) of the amount of principal so
declared due and payable, together with accrued interest to the date of
declaration, and (ii) of interest on any overdue principal and overdue
interest, all of the Company's obligations in respect of the payment of the
principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities and
coupons under the Indenture at any time by the Company and the Trustee with
either (a) the written consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding, or (b) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of 66-2/3% in principal amount of the
Outstanding Securities represented and entitled to vote at such meeting. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on
behalf of the Holders of all the Securities and coupons, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and any coupon appertaining hereto and
of any Security issued in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security or such other
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security or any coupon appertaining hereto shall not have
the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a
continuing Event of Default, the Holders of not less than 25% in principal
amount of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of the Securities
Outstanding a direction inconsistent with such request, and shall have failed
to institute any such proceeding, for
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<PAGE> 50
60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
or any coupon appertaining hereto for the enforcement of any payment of
principal hereof, premium, if any, or interest hereon (including any Additional
Amounts and Bearer Additional Amounts) on or after the respective due dates
expressed herein or for the enforcement of the right to convert this Security
as provided in the Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on (including Additional Amounts and Bearer Additional
Amounts, as described in the second and fourth paragraph, respectively, on the
face hereof) this Security at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
Title to this Security and the coupons appertaining hereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of this Security and any coupon
appertaining thereto as the owner thereof for all purposes, whether or not this
Security or such coupon be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.
THE INDENTURE, THE SECURITIES AND ANY COUPONS APPERTAINING
THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, UNITED STATES OF AMERICA.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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<PAGE> 51
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned
hereby elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Company to pay bearer
an amount in cash or, at the Company's election, shares of Common Stock valued
as set forth in the Indenture, equal to 100% of the principal amount hereof,
plus interest accrued to the Repurchase Date, as provided in the Indenture.
Dated:_______________________
_______________________
Signature
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<PAGE> 52
(b) Form of Registered Security
[FORM OF FACE]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED SECURITY
OTHER THAN ANY GLOBAL RESTRICTED SECURITY:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY SHARES OF
COMMON STOCK ISSUABLE UPON ITS CONVERSION MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. THIS SECURITY MAY ONLY BE SOLD IN ACCORDANCE WITH THE INDENTURE,
COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF
THE TRUSTEE. EACH PURCHASER OF THIS SECURITY WHICH IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IS
HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF
QUINTILES TRANSNATIONAL CORP. (THE "COMPANY") THAT (A) THIS SECURITY AND ANY
SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN
AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 OF REGULATION
S UNDER THE SECURITIES ACT, (III) IN THE CASE OF ANY PURCHASER, OTHER THAN A
PURCHASER WHO HAS OTHERWISE AGREED WITH THE COMPANY IN WRITING, TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (IV) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND IN EACH OF CASES (I) THROUGH (V) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS OF THE UNITED STATES, AND THAT (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER OF THIS SECURITY OR ANY SHARES OF COMMON STOCK ISSUABLE UPON
ITS CONVERSION IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY AND ANY
COMMON STOCK ISSUABLE UPON ITS CONVERSION FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
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<PAGE> 53
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS
CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER
TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE
HOLDER OF THIS SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE
OF THIS SECURITY AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED GLOBAL
SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY (OR ITS
PREDECESSOR) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND SUCH SECURITIES AND ANY SHARES OF COMMON STOCK ISSUABLE UPON THEIR
CONVERSION MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. SUCH SECURITIES MAY ONLY BE
SOLD IN ACCORDANCE WITH THE INDENTURE, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE. EACH PURCHASER OF ANY
BENEFICIAL INTEREST IN THE SECURITIES WHICH IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IS HEREBY NOTIFIED THAT THE
SELLER OF SUCH BENEFICIAL INTEREST IN THE SECURITIES MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES
EVIDENCED BY THIS GLOBAL SECURITY (INCLUDING ANY PARTICIPANT IN THE DEPOSITARY
HOLDING THE GLOBAL SECURITY THAT IS SHOWN AS HOLDING SUCH AN INTEREST ON THE
RECORDS OF SUCH DEPOSITARY AND EACH BENEFICIAL OWNER THAT HOLDS THROUGH ANY
SUCH PARTICIPANT) AGREES FOR THE BENEFIT OF QUINTILES TRANSNATIONAL CORP. (THE
"COMPANY") THAT (A) ANY BENEFICIAL INTEREST IN THE SECURITIES AND ANY SHARES OF
COMMON STOCK ISSUABLE UPON THEIR CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN
OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (III) IN THE CASE OF ANY PURCHASER, OTHER THAN A
PURCHASER WHO HAS OTHERWISE AGREED WITH THE COMPANY IN WRITING, TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" WITHIN THE
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<PAGE> 54
MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
(IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND
OTHER JURISDICTIONS OF THE UNITED STATES, AND THAT (B) THE BENEFICIAL OWNER
WILL, AND EACH SUBSEQUENT BENEFICIAL OWNER OF THIS SECURITY OR ANY SHARES OF
COMMON STOCK ISSUABLE UPON ITS CONVERSION IS REQUIRED TO, NOTIFY ANY PURCHASER
OF ANY BENEFICIAL INTEREST IN THE SECURITIES AND ANY COMMON STOCK ISSUABLE UPON
ITS CONVERSION FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS
CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER
TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE
HOLDER AND BENEFICIAL OWNERS OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED
BY THIS GLOBAL SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE
OF THIS GLOBAL SECURITY AND THE BENEFICIAL INTERESTS THEREIN AND ANY SUCH
SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL
PURPOSES.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY FOR
WHICH THE DEPOSITORY TRUST COMPANY IS TO BE THE DEPOSITARY:
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 OR 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
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<PAGE> 55
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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
REGISTERED SECURITIES IN DEFINITIVE REGISTERED FORM IN THE LIMITED
CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH REGULATION S SECURITY
OTHER THAN ANY REGULATION S GLOBAL SECURITY:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE
SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN THEM IN REGULATION S
UNDER THE SECURITIES ACT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH REGULATION S GLOBAL
SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY (OR ITS
PREDECESSOR) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE
THE MEANINGS GIVEN THEM IN REGULATION S UNDER THE SECURITIES ACT.]
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<PAGE> 56
QUINTILES TRANSNATIONAL CORP.
4.25% CONVERTIBLE SUBORDINATED NOTE
DUE MAY 31, 2000
No. _____________ U.S.$_____
[IF RESTRICTED GLOBAL SECURITY - CUSIP NO. 748767AA8]
[IF ANY REGULATION S SECURITY - CUSIP NO. U74896AA6]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. USU74896AA60]
[IF REGULATION D SECURITY - CUSIP NO. - 748767AB6]
QUINTILES TRANSNATIONAL CORP., a corporation duly organized
and existing under the laws of the State of North Carolina (herein called the
"Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to _______________, or registered assigns, the principal sum of _____________
United States Dollars (U.S.$ _____) [IF THIS SECURITY IS A GLOBAL SECURITY,
THEN INSERT -- (which principal amount may from time to time be increased or
decreased to such other principal amounts (which, taken together with the
principal amounts of all other Outstanding Securities, shall not exceed
$143,750,000 in the aggregate at any time) by adjustments made on the records
of the Trustee hereinafter referred to in accordance with the Indenture)] on
May 31, 2000 and to pay interest thereon, from May 23, 1996, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, semi-annually in arrears on May 31 and November 30 in
each year (each, an "Interest Payment Date"), commencing November 30, 1996, at
the rate of 4.25% per annum, until the principal hereof is due, and at the rate
of 4.25% per annum on any overdue principal and premium, if any, and, to the
extent permitted by law, on any overdue interest. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the May 15 or
November 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Company, notice
whereof shall be given to Holders of Registered Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all
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as more fully provided in the Indenture. Payments of principal shall be made
upon the surrender of this Security at the option of the Holder at the
Corporate Trust Office of the Trustee, or at such other office or agency of the
Company as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, or at such other offices or agencies as the Company
may designate, by United States Dollar check drawn on, or transfer to, a United
States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Registered Securities in excess of U.S.
$2,000,000, and only if such Holder shall have furnished wire instructions in
writing to the Trustee no later than 15 days prior to the relevant payment
date) maintained by the payee with a bank in the Borough of Manhattan, The City
of New York. Payment of interest on this Security may be made by United States
Dollar check drawn on a bank in the Borough of Manhattan, The City of New York
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register, or, upon written application by the Holder to
the Security Registrar setting forth wire instructions not later than the
relevant Record Date, by transfer to a United States Dollar account (such a
transfer to be made only to a Holder of an aggregate principal amount of
Registered Securities in excess of U.S.$2,000,000 and only if such Holder shall
have furnished wire instructions in writing to the Trustee no later than 15
days prior to the relevant payment date) maintained by the payee with a bank in
the Borough of Manhattan, The City of New York.
The Company will pay to the Holder of this Security who is a
United States Alien (as defined below) such additional amounts ("Additional
Amounts") as may be necessary in order that every net payment of the principal
of, premium, if any, and interest on this Security (including payment on
redemption or repurchase (including any payment of the Repurchase Price), after
deduction or withholding for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment
by the United States or any political subdivision or taxing authority thereof
or therein, will not be less than the amount provided for in this Security to
be then due and payable; provided, however, that the Company shall not be
obligated to pay any Additional Amounts in respect of payments becoming due on
the Securities more than 15 days after the Redemption Date with respect to any
redemption of Tax Affected Securities pursuant to the third paragraph of the
reverse of this Security, except to the extent that the Company's obligation to
pay such Additional Amounts does not arise from the Tax Law Change that
resulted in such redemption; and provided further, that the foregoing
obligation to pay Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which
would not have been so imposed but for (i) the existence of any
present or former connection between such Holder (or between a
fiduciary, settlor, beneficiary, member, shareholder of or possessor
of a power over such Holder, if such Holder is an estate, a trust, a
partnership or a corporation) and the United States or any
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<PAGE> 58
political subdivision or taxing authority thereof or therein,
including, without limitation, such Holder (or such fiduciary,
settlor, beneficiary, member, shareholder or possessor) being or
having been a citizen or resident of the United States or treated as a
resident thereof, or being or having been engaged in trade or business
or present therein, or having or having had a permanent establishment
therein, or (ii) such Holder's present or former status as a personal
holding company, a foreign personal holding company with respect to
the United States, or a foreign private foundation or foreign tax
exempt entity for United States tax purposes, or a corporation which
accumulates earnings to avoid United States Federal income tax;
(b) any tax, assessment or other governmental charge which
would not have been so imposed but for the presentation by the Holder
of this Security for payment on a date more than 15 days after the
date on which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which
would not have been imposed but for the failure to comply with any
certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the
United States of the Holder or beneficial owner of this Security, if
compliance is required by statute or by regulation of the United
States as a precondition to relief or exemption from such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on this Security;
(f) any tax, assessment or other governmental charge imposed
as a result of a Holder that actually or constructively owns 10% or
more of the total combined voting power of all classes of stock of the
Company entitled to vote or that is a controlled foreign corporation
related to the Company through stock ownership;
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<PAGE> 59
(g) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of the principal
of, premium, if any, or interest on this Security, if such payment can
be made without such withholding by any other Paying Agent in Western
Europe;
(h) any tax, assessment or other governmental charge imposed
on a Holder that is a partnership or a fiduciary or other than the
sole beneficial owner of such payment, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or
settlor with respect to the fiduciary would not have been entitled to
the payment of Additional Amounts had the beneficial owner, member,
beneficiary or; or
(i) any combination of items (a), (b), (c), (d), (e), (f),
(g) and (h).
For purposes of this Security, "United States" means the
United States of America (including the States and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction
and a "United States Alien" is any person who, for United States federal income
tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is for United States federal
income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
Except as specifically provided herein and in the Indenture,
the Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to the payment of the principal
of, premium, if any, or interest on, or in respect of, any Security such
mention shall be deemed to include mention of the payment of Additional Amounts
payable as described in the second preceding paragraph to the extent that, in
such context, Additional Amounts are, were or would be payable in respect of
this Security pursuant to such paragraph and express mention of the payment of
Additional Amounts (if applicable) in any provisions of this Security shall not
be construed as excluding Additional Amounts in those provisions of this
Security where such express mention is not made.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof or an Authenticating
Agent by the manual
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signature of one of their respective authorized signatories, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be
duly executed under its corporate seal.
Dated: May 23, 1996
QUINTILES TRANSNATIONAL CORP.
[Corporate Seal]
By:_____________________________
Name:
Title:
Attest:
________________________
Name:
Title:
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<PAGE> 61
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities
of the Company designated as its "4.25% Convertible Subordinated Notes due May
31, 2000" (herein called the "Securities"), limited in aggregate principal
amount to U.S.$143,750,000, issued and to be issued under an Indenture, dated
as of May 17, 1996 (herein called the "Indenture"), between the Company and
Marine Midland Bank, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and any coupons appertaining thereto and of the terms upon which
the Securities are, and are to be, authenticated and delivered. The Securities
are issuable as Bearer Securities, with interest coupons attached, in the
denomination of U.S.$5,000, and as Registered Securities, without coupons, in
denominations of U.S.$1,000 and integral multiples of U.S.$1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Registered Securities are exchangeable for a like aggregate
principal amount of Registered Securities of any authorized denominations as
requested by the Holder surrendering the same upon surrender of the Registered
Security or Registered Securities to be exchanged, at the Corporate Trust
Office of the Trustee or at such other office or agency of the Company as may
be designated by it for such purpose in the Borough of Manhattan, The City of
New York or at such other offices or agencies as the Company may designate
(each a "Transfer Agent"). The Transfer Agent (if other than the Trustee) will
then forward such surrendered Registered Securities (together with any payment
surrendered therewith) to the Trustee. The Trustee upon such surrender by the
Holder or receipt from the Transfer Agent will issue the new Registered
Securities in the requested denominations. Bearer Securities may not be issued
in exchange for Registered Securities.
No sinking fund is provided for the Securities. The
Securities are subject to redemption at the option of the Company on or after
the close of business on May 31, 1999, in whole or in part, upon not less than
30 nor more than 60 days' notice to the Holders prior to the Redemption Date at
a Redemption Price equal to 101.0625% of the principal amount if redeemed on or
prior to May 31, 2000 (the final Stated Maturity of the Securities), together
with accrued interest to the Redemption Date, and certain Securities held by
United States Aliens are also redeemable, in whole but not in part, under the
circumstances described in the next succeeding paragraph, at a Redemption Price
equal to 100% of the principal amount thereof plus interest accrued to the
Redemption Date; provided, however, that interest installments on Registered
Securities whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.
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<PAGE> 62
If as a result of a Tax Law Change, the Company has or will
become obligated to pay to the Holder of any Security or coupon Additional
Amounts, as described in the second paragraph of the face of this Security, and
such obligation cannot be avoided by the Company taking reasonable measures
available to it, then the Company may, at its option, redeem the Tax Affected
Securities as a whole, but not in part, upon not less than 30 nor more than 60
days' notice to the Holders prior to the Redemption Date, at a Redemption Price
equal to 100% of the principal amount plus interest accrued to the Redemption
Date, and any Additional Amounts then payable; provided, that (i) no such
notice of redemption shall be given earlier than 90 days prior to the earliest
date on which the Company would be obligated to pay any such Additional Amounts
were a payment in respect of the Tax Affected Securities then due and (ii) at
the time such notice of redemption is given, such obligation to pay such
Additional Amounts remains in effect; provided further, however, that such
redemption by the Company shall apply only to a Registered Security (or any
portion of a Registered Security that is a Global Security) the Holder of which
within 30 days of the publication of such notice of redemption provides a
written statement from or on behalf of the beneficial owner of such Registered
Security (or such portion, in the case of a Registered Security that is a
Global Security) to the Trustee or any Paying Agent to the effect that such
beneficial owner is entitled or will be entitled to receive Additional Amounts.
Prior to the publication of any notice of redemption pursuant to this
paragraph, the Company shall deliver to the Trustee (a) an Officers'
Certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right of the Company so to redeem have occurred and (b) an Opinion of Counsel
selected by the Company to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such Tax Law Change.
The Company's right to redeem the Tax Affected Securities shall continue as
long as the Company is obligated to pay such Additional Amounts,
notwithstanding that the Company shall have made payments of Additional Amounts
specified in such second paragraph.
In the event of a redemption of less than all of the
Securities (other than a redemption that by its terms is applicable solely to
Bearer Securities), the Company will not be required (a) to register the
transfer or exchange of Registered Securities or to exchange Bearer Securities
for Registered Securities for a period of 15 days immediately preceding the
date notice is given identifying the serial numbers of the Securities called
for such redemption, (b) to register the transfer or exchange of any Registered
Security, or portion thereof, called for redemption, or (c) to exchange any
Bearer Security called for redemption; provided, however, that a Bearer
Security called for redemption may be exchanged for a Registered Security which
is simultaneously surrendered to the Registrar or Transfer Agent making such
exchange with written instructions for conversion consistent with the
provisions described in Sections 2.5 and 12.2 of the Indenture.
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Notice of redemption will be given by publication in
Authorized Newspapers in the City of London, England, and, so long as the
Securities are listed on the Luxembourg Stock Exchange and the rules of such
stock exchange shall so require, in Luxembourg, or, if not practicable in
either London, England, or Luxembourg, elsewhere in a Western European city,
and by mail to Holders of Registered Securities. Notice to the Holders will be
given not less than 30 nor more than 60 days prior to the Redemption Date as
provided in the Indenture.
In any case where the due date for the payment of the
principal of, premium, if any, or interest, including Additional Amounts and
Bearer Additional Amounts, on any Security or the last day on which a Holder of
a Security has a right to convert his Security shall be, at any Place of
Payment or Place of Conversion, as the case may be, a day on which banking
institutions at such Place of Payment or Place of Conversion are authorized or
obligated by law or executive order to close, then payment of principal,
premium, if any, or interest, including Additional Amounts and Bearer
Additional Amounts, or delivery for conversion of such Security need not be
made on or by such date at such place but may be made on or by the next
succeeding day at such place which is not a day on which banking institutions
are authorized or obligated by law or executive order to close, with the same
force and effect as if made on the date for such payment or the date fixed for
redemption or repurchase, or by such last day for conversion, and no interest
shall accrue on the amount so payable for the period after such date.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled, at his option, at any time
on or after August 21, 1996, and on or before the close of business on May 31,
2000, or in case this Security or a portion hereof is called for redemption or
the Holder hereof has exercised his right to require the Company to repurchase
this Security or such portion hereof, then in respect of this Security until
and including, but (unless the Company defaults in making the payment due upon
redemption or repurchase, as the case may be) not after, the close of business
on the Redemption Date or the Repurchase Date, as the case may be, to convert
this Security (or any portion of the principal amount hereof that is an
integral multiple of U.S.$1,000, provided that the unconverted portion of such
principal amount is U.S.$1,000 or any integral multiple of U.S.$1,000 in excess
thereof) into fully paid and nonassessable shares of Common Stock of the
Company at an initial Conversion Rate of 12.0846 for each share of Common Stock
(or at the current adjusted Conversion Rate if an adjustment has been made as
provided in the Indenture) by surrender of this Security, duly endorsed or
assigned to the Company or in blank and, in case such surrender shall be made
during the period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date (except if this Security has been called for redemption on a
Redemption Date or is repurchasable on a Repurchase Date occurring, in either
case, during such period and is surrendered for such conversion during such
period), also accompanied by payment in
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New York Clearing House or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted (or, if this Security was issued
in exchange for a Bearer Security after the close of business on such Regular
Record Date, by surrender of one or more coupons relating to such Interest
Payment Date or by both payment in such funds and surrender of such coupon or
coupons, in either case, in an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted; provided that coupons may be so surrendered only at an office or
agency outside the United States designated pursuant to the Indenture), and
also the conversion notice hereon duly executed, to the Company at the
Corporate Trust Office of the Trustee, or at such other office or agency of the
Company, subject to any laws or regulations applicable thereto and subject to
the right of the Company to terminate the appointment of any Conversion Agent
(as defined below) as may be designated by it for such purpose in the Borough
of Manhattan, The City of New York, or at such other offices or agencies as the
Company may designate (each a "Conversion Agent"), provided further, that if
this Security or portion hereof has been called for redemption on a Redemption
Date or is repurchasable on a Repurchase Date occurring, in either case, during
the period from the close of business on any Regular Record Date next preceding
any Interest Payment Date to the opening of business on such succeeding
Interest Payment Date and is surrendered for conversion during such period,
then the Holder of this Security who converts this Security or a portion hereof
during such period will be entitled to receive the interest accruing hereon
from the Interest Payment Date next preceding the date of such conversion to
such succeeding Interest Payment Date and shall not be required to pay such
interest upon surrender of this Security for conversion. Subject to the
provisions of the preceding sentence and, in the case of a conversion after the
close of business on the Regular Record Date next preceding any Interest
Payment Date and or before the close of business on such Interest Payment Date,
to the right of the Holder of this Security (or any Predecessor Security of
record as of such Regular Record Date) to receive the related installment of
interest to the extent and under the circumstances provided in the Indenture,
no cash payment or adjustment is to be made on conversion for interest accrued
hereon from the Interest Payment Date next preceding the day of conversion, or
for dividends on the Common Stock issued on conversion hereof. The Company
shall thereafter deliver to the Holder the fixed number of shares of Common
Stock (together with any cash adjustment, as provided in the Indenture) into
which this Security is convertible and such delivery will be deemed to satisfy
the Company's obligation to pay the principal amount of this Security. No
fractions of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest (calculated to the nearest
1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture. The Conversion Rate is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the conveyance,
transfer, sale or lease of all or substantially all of the property and assets
of the Company, the Indenture shall be amended, without the consent of any
Holders of
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Securities, so that this Security, if then Outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, transfer, sale or lease
by a holder of the number of shares of Common Stock of the Company into which
this Security could have been converted immediately prior to such
consolidation, merger, conveyance, transfer, sale or lease (assuming such
holder of Common Stock is not a Constituent Person, failed to exercise any
rights of election and received per share the kind and amount received per
share by a plurality of Non-electing Shares and further assuming, if such
consolidation, merger, conveyance, transfer, sale or lease occurs prior to the
later of August 21, 1996 and the receipt of Securities in definitive form (in
the case of Securities initially represented by a Temporary Global Bearer
Security), that the Security was convertible at the time of such occurrence at
the Conversion Rate specified above as adjusted from the issue date of such
Security to such time as provided in the Indenture). No adjustment in the
Conversion Rate will be made until such adjustment would require an increase or
decrease of at least one percent of such rate, provided that any adjustment
that would otherwise be made will be carried forward and taken into account in
the computation of any subsequent adjustment.
Subject to certain limitations in the Indenture, at any time
when the Company is not subject to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended, upon the request of a Holder of a
Restricted Security or the holder of shares of Common Stock issued upon
conversion thereof, the Company will promptly furnish or cause to be furnished
Rule 144A Information (as defined below) to such Holder of Restricted
Securities or such holder of shares of Common Stock issued upon conversion of
Restricted Securities, or to a prospective purchaser of any such security
designated by any such Holder or holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), in connection with
the resale of any such security. "Rule 144A Information" shall be such
information as is specified pursuant to Rule 144A(d)(4) under the Securities
Act (or any successor provision thereto).
If this Security is a Registrable Security, then the Holder of
this Security and the Common Stock issuable upon conversion hereof is entitled
to the benefits of a Registration Rights Agreement, dated as of May 17, 1996
(the "Registration Rights Agreement"), executed by the Company. Pursuant to
the Registration Rights Agreement, the Company has agreed for the benefit of
the Holders from time to time of Registrable Securities (which term is defined
to include the Common Stock issuable upon conversion of such Securities), at
the Company's expense, (a) to use its best efforts to file within 90 days after
the first date of original issuance of the Securities, a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Registrable Securities, (b) thereafter to use reasonable
efforts to cause such
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Shelf Registration Statement to be declared effective by the Commission as
promptly as practicable, and (c) to use reasonable efforts to maintain such
Shelf Registration Statement continuously effective under the Securities Act
until a period of the three years from the last date of original issuance of
the Securities or, if earlier, until there are no outstanding Registrable
Securities.
Notwithstanding the foregoing, the Company will not be
required to file a Shelf Registration Statement and will be permitted to
suspend the use of the prospectus that is a part of the Shelf Registration
Statement during the existence of a state of facts or the happening of an event
(including without limitation pending negotiations relating to, or the
consummation of, a transaction or the occurrence of any event which in the
opinion of the Company might require additional disclosure of material,
non-public information by the Company in the Shelf Registration Statement as to
which the Company believes it has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply with the rules
and regulations under the Securities Act) which in the opinion of outside
counsel to the Company might reasonably result in the Shelf Registration
Statement, or any amendment or post-effective amendment thereto, or the
prospectus or any supplement thereto, or any document incorporated therein by
reference containing an untrue statement of material fact or omitting to state
a material fact.
If this Security is a Registrable Security and the Holder of
this Security elects to sell this Security pursuant to the Shelf Registration
Statement then, by its acceptance hereof, such Holder of this Security agrees
to be bound by the terms of the Registration Rights Agreement relating to the
Registrable Securities which are the subject of such election.
If a Change in Control occurs, the Holder of this Security, at
the Holder's option, shall have the right, in accordance with the provisions of
the Indenture, to require the Company to repurchase this Security (or any
portion of the principal amount hereof that is an integral multiple of $1,000,
provided that the portion of the principal amount of this Security to be
Outstanding after such repurchase is at least equal to U.S.$5,000) for cash at
a Repurchase Price equal to 100% of the principal amount thereof plus interest
accrued to the Repurchase Date. At the option of the Company, the Repurchase
Price may be paid in cash or, subject to the conditions provided in the
Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. For purposes of this paragraph, 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 Per Share for the five
consecutive Trading Days ending on and including the third Trading Day
immediately preceding the Repurchase Date. Whenever in this Security there is
a reference, in any context, to the principal of any Security as of any time,
such reference shall be deemed to include reference to the Repurchase Price
payable in respect of such Security to the extent that such Repurchase Price
is, was or
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would be so payable at such time, and express mention of the Repurchase Price
in any provision of this Security shall not be construed as excluding the
Repurchase Price so payable in those provisions of this Security when such
express mention is not made; provided, however, that, for the purposes of the
third succeeding paragraph, such reference shall be deemed to include reference
to the Repurchase Price only to the extent the Repurchase Price is payable in
cash.
[THE FOLLOWING PARAGRAPH SHALL APPEAR IN EACH REGISTERED
SECURITY THAT IS NOT A GLOBAL SECURITY:
In the event of redemption, repurchase or conversion of this
Security in part only, a new Registered Security or Registered Securities for
the unredeemed, unrepurchased or unconverted portion hereof will be issued in
the name of the Holder hereof.]
[THE FOLLOWING PARAGRAPH SHALL APPEAR IN EACH GLOBAL SECURITY:
In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, redemption, repurchase or conversion
of this Security in part only, the Trustee, as custodian of the Depositary,
shall make an adjustment on its records to reflect such deposit or withdrawal
in accordance with the Applicable Procedures.]
The indebtedness evidenced by this Security is, to the extent
and in the manner provided in the Indenture, subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness of the
Company, and this Security is issued subject to such provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the
principal of all the Securities, together with accrued interest to the date of
declaration, may be declared due and payable in the manner and with the effect
provided in the Indenture. Upon payment (i) of the amount of principal so
declared due and payable, together with accrued interest to the date of
declaration, and (ii) of interest on any overdue principal and overdue
interest, all of the Company's obligations in respect of the payment of the
principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities and
coupons under the Indenture at any time
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<PAGE> 68
by the Company and the Trustee with either (a) the written consent of the
Holders of a majority in principal amount of the Securities at the time
Outstanding, or (b) by the adoption of a resolution, at a meeting of Holders of
the Outstanding Securities at which a quorum is present, by the Holders of
66-2/3% in principal amount of the Outstanding Securities represented and
entitled to vote at such meeting. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the
Securities and coupons, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security or
such other Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver
or trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default,
the Holders of not less than 25% in principal amount of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of the Securities Outstanding a
direction inconsistent with such request, and shall have failed to institute
any such proceeding, for 60 days after receipt of such notice, request and
offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof, premium, if any, or interest hereon (including any Additional Amounts
or additional interest) on or after the respective due dates expressed herein
or for the enforcement of the right to convert this Security as provided in the
Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on (including Additional Amounts and additional interest,
as described herein) this Security at the times, places and rate, and in the
coin or currency, herein prescribed or to convert this Security as provided in
the Indenture.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of Registered Securities is
registrable on the Security Register upon surrender of a Registered Security
for registration of transfer (a) at the Corporate Trust Office of the Trustee
or at such other office or agency of the Company as may be designated by it for
such purpose in the Borough of Manhattan, The City of New York, or (b) subject
to any laws or regulations applicable thereto and to the right of the
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<PAGE> 69
Company to terminate the appointment of any Transfer Agent, at the offices of
the Transfer Agents described herein or at such other offices or agencies as
the Company may designate, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing, and thereupon one or more new Registered Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees by the Registrar. No service charge
shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to recover any tax or other
governmental charge payable in connection therewith.
Prior to due presentation of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Registered Security is
registered, as the owner thereof for all purposes, whether or not such Security
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES
OF AMERICA.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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<PAGE> 70
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned
hereby elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company
to pay it or __________________ an amount in cash or, at the Company's
election, Common Stock valued as set forth in the Indenture, equal to 100% of
the principal amount to be repurchased (as set forth below), plus interest
accrued to the Repurchase Date, as provided in the Indenture.
Dated: _______________________
_______________________
Signature
_______________________
Signature Guaranteed
Principal amount to be repurchased
(an integral multiple of U.S.$1,000): ______________________
Remaining principal amount following such repurchase
(not less than U.S.$5,000): ______________________
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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<PAGE> 71
(c) Form of Temporary Global Bearer Security
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
THE SECURITIES EVIDENCED BY THIS TEMPORARY GLOBAL BEARER SECURITY (OR ITS
PREDECESSOR) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE
THE MEANINGS GIVEN THEM IN REGULATION S UNDER THE SECURITIES ACT.
QUINTILES TRANSNATIONAL CORP.
4.25% CONVERTIBLE SUBORDINATED NOTES
DUE MAY 31, 2000
TEMPORARY GLOBAL BEARER SECURITY
ISIN No. XS0065915075
QUINTILES TRANSNATIONAL CORP., a corporation duly organized
and existing under the laws of the State of North Carolina (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Temporary Global Bearer Security the
principal sum of _____________ United States Dollars (U.S.$__________) on May
31, 2000, and to pay interest thereon, from May 23, 1996, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, semi-annually in arrears on May 31 and November 30 in
each year (each an "Interest Payment Date"), commencing November 30, 1996, at
the rate of 4.25% per annum, until the principal hereof is due and at the rate
of 4.25% per annum on any overdue principal and, to the extent permitted by
law, on any overdue interest; provided, however, that interest on this
Temporary Global Bearer Security shall be payable only after the issuance of
the Definitive
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<PAGE> 72
Securities in bearer form for which this Temporary Global Bearer Security is
exchangeable and, in the case of Definitive Securities in bearer form, only
upon presentation and surrender (at an office or agency outside the United
States, except as otherwise provided in the Indenture) of the interest coupons
thereto attached as they severally mature.
This Temporary Global Bearer Security is one of a duly
authorized issue of Securities of the Company designated as specified in the
title hereof, issued and to be issued under the Indenture, dated as of May 17,
1996 (herein called the "Indenture"), between the Company and Marine Midland
Bank, as Trustee. This Temporary Global Bearer Security is a temporary
security and is exchangeable in whole or from time to time in part without
charge upon request of the holder hereof for Definitive Securities in bearer
form, with interest coupons attached, of authorized denominations, (a) not
earlier than the Exchange Date and (b) as promptly as practicable following
presentation of certification, in one of the forms set forth in the Indenture
for such purpose, that the beneficial owner or owners of this Temporary Global
Bearer Security (or, if such exchange is only for a part of this Temporary
Global Bearer Security, of such part) are not United States persons, are
persons described in Section 1.163-5(c)(2)(i)(D)(6) of the United States
Treasury Regulations or are financial institutions that are holding such
Security for resale during the restricted period (as defined in Section
1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations) and that have
not acquired such Securities for purposes of resale directly or indirectly to a
United States person or within the United States. Definitive Securities in
bearer form to be delivered in exchange for any part of this Temporary Global
Bearer Security shall be delivered only outside the United States. Upon any
exchange of a part of this Temporary Global Bearer Security for Definitive
Securities, the portion of the principal amount hereof so exchanged shall be
endorsed by the Principal Paying Agent or its agent on the Schedule hereto, and
the principal amount hereof shall be reduced for all purposes by the amount so
exchanged.
Until exchanged in full for Definitive Securities, this
Temporary Global Bearer Security shall in all respects be entitled to the same
benefits under, and subject to the same terms and conditions of, the Indenture
as Bearer Securities authenticated and delivered thereunder, except that
neither the Holder hereof nor the beneficial owners of this Temporary Global
Bearer Security shall be entitled to receive payment of interest or other
payments hereon or to convert this Temporary Global Bearer Security into Common
Stock of the Company or any other security, cash or other property.
THE INDENTURE AND THIS TEMPORARY GLOBAL BEARER SECURITY SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA.
All terms used in this Temporary Global Bearer Security which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
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<PAGE> 73
Unless the certificate of authentication hereon has been
executed by the Trustee or an Authenticating Agent by the manual signature of
one of their respective authorized signatories, this Temporary Global Bearer
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Temporary
Global Bearer Security to be duly executed under its corporate seal.
Dated as of May 23, 1996
QUINTILES TRANSNATIONAL CORP.
[Corporate Seal]
By:___________________________
Name:
Title:
Attest:
____________________________
Name:
Title:
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<PAGE> 74
SCHEDULE OF EXCHANGES
<TABLE>
<CAPTION>
Principal Amount Remaining Principal
Date Exchanged for Amount Following Notation Made on Behalf of
Made Bearer Securities Such Exchange the Principal Paying Agent
---- ----------------- ------------- --------------------------
<S> <C> <C> <C>
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
-------- --------------------- --------------------- -------------------------------
</TABLE>
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<PAGE> 75
SECTION 2.3. Form of Coupon.
[FORM OF FACE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE
SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN THEM IN REGULATION S
UNDER THE SECURITIES ACT.
No.- _______________
ISIN No. XS0065915075
QUINTILES TRANSNATIONAL CORP.
U.S.$ _______
Due ________ __, ____
4.25% CONVERTIBLE SUBORDINATED NOTE
DUE MAY 31, 2000
Unless the Security to which this coupon appertains shall have
been redeemed, repurchased or converted prior to the date set forth hereon,
Quintiles Transnational Corp. (the "Company") shall, subject to and in
accordance with the terms and conditions of such Security and the Indenture
referred to therein, pay to the bearer on the date set forth hereon, upon
surrender hereof, the amount shown hereon (together with any Additional Amounts
and any Bearer Additional Amounts payable in respect thereof which the Company
may be required to pay according to the terms of said
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<PAGE> 76
Security) at the paying agencies set out on the reverse hereof or at such other
places outside the United States of America (including the States thereof and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction as the Company may determine from time to time.
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<PAGE> 77
[REVERSE OF COUPON]
TRANSFER, PAYING AND CONVERSION AGENTS
Midland Bank plc Banque Internationale a Luxembourg
Mariner House 69, Route d'Esch L-1470
Pepys Street Luxembourg
London EC3N 4DA Grand Duchy of Luxembourg
England
SECTION 2.4. Form of Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities referred to in the
within-mentioned Indenture.
Dated: _______________*
MARINE MIDLAND BANK,
as Trustee
[By Authenticating Agent,
as Authenticating Agent]**
By:___________________________
Authorized Signatory
* For Registered Securities only.
**For the Temporary Global Bearer Security or Bearer Securities in definitive
form.
SECTION 2.5. Form of Conversion Notice.
CONVERSION NOTICE
(a) For Bearer Securities:
The undersigned Holder of this Security hereby irrevocably
exercises the option to convert this Security into shares of Common Stock in
accordance with the terms of the Indenture referred to in this Security and
directs that such shares be registered in the name of and delivered, together
with a check in payment for any fractional share, to
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<PAGE> 78
the undersigned unless a different name has been indicated below. The address
for payment of any such check must be outside the United States. If shares are
to be registered in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Dated:
------------------- -----------------------------
Signature
If shares are to be registered
in the name of and delivered to
a Person other than the Holder,
please print such Person's name Please print name and address of Holder:
and address:
- --------------------------------- -----------------------------------------
Name Name
- --------------------------------- -----------------------------------------
Address Address
- --------------------------------- -----------------------------------------
- --------------------------------- -----------------------------------------
- --------------------------------- -----------------------------------------
Social Security or other Taxpayer Social Security or other Taxpayer
Indentification Number, if any Indentification Number, if any
Name and address (outside the
United States) to where any
check referred to in the first
paragraph of this Conversion
Notice should be mailed:
- ---------------------------------
Name
- ---------------------------------
Address
- ---------------------------------
Social Security or other Taxpayer
Indentification Number, if any
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<PAGE> 79
(b) For Registered Securities:
The undersigned Holder of this Security hereby irrevocably
exercises the option to convert this Security, or any portion of the principal
amount hereof (which is an integral multiple of U.S.$1,000, provided that the
unconverted portion of such principal amount is U.S.$1,000 or any integral
multiple of U.S.$1,000 in excess thereof) below designated, into shares of
Common Stock in accordance with the terms of the Indenture referred to in this
Security, and directs that such shares, together with a check in payment for
any fractional share and any Securities representing any unconverted principal
amount hereof, be delivered to and be registered in the name of the undersigned
unless a different name has been indicated below. If shares of Common Stock or
Securities are to be registered in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated:
------------------------
- ---------------------
Signature
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<PAGE> 80
If shares or Registered Securities If only a portion of the Sercurities is
are to be registered in the name of to be converted, please indicate:
a Person other than the Holder,
please print such Person's name and
address:
1. Principal amount to be
converted:
------------------------- U.S.$___________
Name
2. Principal amount
and denomination of
Registered Securities
representing unconverted
principal amount to be
------------------------- issued:
Address
Amount: U.S.$
---------
------------------------- Denominations:
Social Security or other U.S.$
Taxpayer Indentification --------
Number, if any (any integral multiple of U.S.$1,000,
provided that the unconverted portion of
such principal amount is U.S.$1,000 or
any integral multiple of U.S.$1,000 in
excess thereof)
[Signature Guaranteed]
-------------------------
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<PAGE> 81
ARTICLE THREE
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to
U.S.$143,750,000, except for Securities authenticated and delivered in exchange
for, or in lieu of, other Securities pursuant to Section 3.4, 3.5, 3.6, 8.5,
11.8, 12.2 or 14.3(f).
The Securities shall be known and designated as the "4.25%
Convertible Subordinated Notes due May 31, 2000" of the Company. Their Stated
Maturity shall be May 31, 2000 and they shall bear interest on their principal
amount from May 23, 1996, payable semi-annually in arrears on May 31 and
November 30 in each year, commencing November 30, 1996, at the rate of 4.25%
per annum until the principal thereof is due and at the rate of 4.25% per annum
on any overdue principal and, to the extent permitted by law, on any overdue
interest; provided, however, that payments shall only be made on Business Days
as provided in Section 1.12.
The principal of, premium, if any, and interest on the
Securities shall be payable as provided in the forms of Securities and coupon
set forth in Sections 2.2 and 2.3, and the Repurchase Price, whether payable in
cash or in shares of Common Stock, shall be payable at such places as are
identified in the Company Notice given pursuant to Section 14.3 (any city in
which any Paying Agent is located being herein called a "Place of Payment").
The Registrable Securities are entitled to the benefits of
registration rights as provided by the Registration Rights Agreement referenced
in Sections 2.2(b) and 10.12.
The Securities shall be redeemable at the option of the
Company at any time on or after May 31, 1999, in whole or in part, and at the
Company's option in the event of certain developments, including developments
with respect to changes in U.S. withholding taxes or certification
requirements, as provided in Article Eleven and in the forms of Securities set
forth in Section 2.2.
The Securities shall be convertible as provided in Article
Twelve (any city in which any Conversion Agent is located being herein called a
"Place of Conversion").
The Securities shall be subordinated in right of payment to
Senior Indebtedness of the Company as provided in Article Thirteen.
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<PAGE> 82
The Securities shall be subject to repurchase by the Company
at the option of the Holders as provided in Article Fourteen.
SECTION 3.2. Denominations.
The Definitive Securities shall be issuable (i) as Bearer
Securities, with interest coupons attached, in the denomination of U.S.$5,000
and (ii) as Registered Securities, without coupons, in denominations of
U.S.$1,000 and integral multiples of U.S.$1,000 in excess thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents, under a facsimile of its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee or to its order for authentication (or to the Principal
Paying Agent, or to its order, in the case of Bearer Securities or the
Temporary Global Bearer Security), together with a Company Order for the
authentication and delivery of such Securities, and the Trustee or an
Authenticating Agent in accordance with such Company Order shall authenticate
and make available for delivery such Securities as in this Indenture provided
and not otherwise. In connection with any Company Order for authentication
with respect to the initial issuance of the Securities, an Opinion of Counsel
pursuant to Section 1.2 shall not be required.
Each Bearer Security and the Temporary Global Bearer Security
shall be dated as of May 23, 1996. Each Registered Security shall be dated the
date of its authentication.
No Security (or coupon attached thereto) shall be entitled to
any benefit under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee or an
Authenticating Agent by manual signature of an authorized
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<PAGE> 83
signatory, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Except as permitted by Section 3.4 or 3.6, neither the
Trustee nor an Authenticating Agent shall authenticate and make available for
delivery any Bearer Security unless all coupons appurtenant thereto for
interest then matured have been detached and canceled.
SECTION 3.4. Temporary Global Bearer Security; Global Securities;
Non-Global Registered Securities.
(A) Temporary Global Security
The Initial Regulation S Securities shall be issued initially
in the form of one Temporary Global Bearer Security, which Temporary Global
Bearer Security shall be deposited on behalf of the subscribers for the
Securities represented thereby with Midland Bank plc, as common depositary (the
"Common Depositary"), for credit to their respective accounts (or to such other
accounts as they may direct) at MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
BRUSSELS OFFICE, as operator of EUROCLEAR, or CEDEL.
On or before the Exchange Date, the Company shall deliver to
the Principal Paying Agent at its principal London office located at Mariner
House, Pepys Street, London EC3N 4DA, England, or its designated agent, Bearer
Securities executed by the Company. On or after the Exchange Date, the
Temporary Global Bearer Security shall be surrendered by the Common Depositary
to the Trustee or its agent, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for Bearer Securities without
charge to Holders, and the Trustee or the Principal Paying Agent or other
Paying Agent outside the United States shall authenticate and deliver (at an
office or agency outside the United States), in exchange for the Temporary
Global Bearer Security or the portions thereof to be exchanged, an equal
aggregate principal amount of Bearer Securities, as shall be specified by the
beneficial owners thereof; provided, however, that upon such presentation by
the Common Depositary, the Temporary Global Bearer Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by
EUROCLEAR as to the portion of the Temporary Global Bearer Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of the Temporary Global
Bearer Security held for its account then to be exchanged, each to the effect
hereinafter provided. The Company hereby appoints the principal office of the
Principal Paying Agent in London, England, or its designated agent, as its
agent outside the United States where Bearer Securities may be delivered in
exchange for the Temporary Global Bearer Security or portions thereof. Each
beneficial owner of any portion of the Temporary Global Bearer Security shall
be entitled to take delivery of Bearer Securities only at such office.
Notwithstanding any other provision hereof or of the Securities, no Security
initially represented by the Temporary Global
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<PAGE> 84
Bearer Security will be mailed to or otherwise delivered in connection with its
original issuance to any location within the United States. The Trustee agrees
that it will cause the Principal Paying Agent to retain each certificate
provided by EUROCLEAR or CEDEL for a period of four calendar years following
the year in which the certificate is received and not to destroy or otherwise
dispose of any such certificate without first offering to deliver it to the
Company.
Each certificate to be provided by EUROCLEAR and CEDEL shall
be substantially to the following effect or with such changes therein as shall
be approved by the Company and Goldman Sachs International and be satisfactory
to the Trustee:
"CERTIFICATE
QUINTILES TRANSNATIONAL CORP.
4.25% CONVERTIBLE SUBORDINATED NOTES
DUE MAY 31, 2000
This is to certify that, based on certificates we have
received from our member organizations substantially in the form set out in
Section 3.11 of the Indenture relating to the above-captioned Securities, as of
the date hereof, U.S.$_____________ principal amount of the above-captioned
Securities acquired from Quintiles Transnational Corp. (i) is owned by persons
that are not United States persons (as defined below), (ii) is owned by United
States persons that are (a) foreign branches of United States financial
institutions (as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v) ("financial institutions")) purchasing for their own account
or for resale or (b) United States persons who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such financial institutions on the date hereof (and in the
case of either clause (a) or (b), each financial institution has agreed for the
benefit of Quintiles Transnational Corp. to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of
1986, as amended, and the regulations thereunder) or (iii) is owned by
financial institutions for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)).
Financial institutions described in clause (iii) of the preceding sentence
(whether or not also described in clause (i) or (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to United States persons or to persons within the United States or its
possessions.
As used in this Certificate, "United States person" is a
person that is, for United States federal income tax purposes, (a) a citizen or
resident of the United States, (b) a corporation, partnership or other entity
created or organized in or under the laws
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<PAGE> 85
of the United States or any political subdivision thereof, or (c) an estate or
trust the income of which is subject to United States Federal income taxation
regardless of the source; "United States" means the United States of America
(including the States thereof and the District of Columbia); and its
"possessions" include Puerto Rico, U.S. Virgin Islands, Guam, American Samoa,
Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available
herewith for exchange any portion of the Temporary Global Bearer Security
excepted in such certificates and (ii) as of the date hereof, we have not
received any notification from any of our member organizations to the effect
that the statements made by such member organizations with respect to any
portion of the part submitted herewith for exchange are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection
with certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceedings.
We agree to retain each statement provided by a member organization for a
period of four calendar years following the year in which the statement is
received.
Dated: _________, 19__*
*To be dated no
earlier than the
Exchange Date.
[MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, BRUSSELS OFFICE, AS OPERATOR
OF THE EUROCLEAR SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
By __________________________"
Each certificate received by EUROCLEAR and CEDEL from Persons
appearing in their records as Persons entitled to a portion of the Temporary
Global Bearer Security shall be substantially to the effect set forth in
Section 3.11.
Upon any such exchange of a portion of the Temporary Global
Bearer Security for Bearer Securities, the Temporary Global Bearer Security
shall be endorsed to reflect the reduction of the principal amount evidenced
thereby. Until so exchanged
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<PAGE> 86
in full, the Temporary Global Bearer Security shall in all respects be entitled
to the same benefits under, and subject to the same terms and conditions of,
this Indenture as Bearer Securities authenticated and delivered hereunder,
except that none of EUROCLEAR, CEDEL or the beneficial owners of the Temporary
Global Bearer Security shall be entitled to receive payment of interest or
other payments thereon or to convert the Temporary Global Bearer Security, or
any portion thereof, into Common Stock of the Company or any other security,
cash or other property.
Bearer Securities shall be exchangeable for Registered
Securities as provided in Section 3.5. Bearer Securities will not be issued in
exchange for any Registered Securities.
(B) Global Securities
(a) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated by the Company for
such Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Registered Securities
registered, and no transfer of a Global Security in whole or in part may be
registered, in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (i) such Depositary (A) has notified the
Company that it is unwilling or unable to continue as Depositary for such
Global Security or (B) has ceased to be a clearing agency registered as such
under the Exchange Act or announces an intention permanently to cease business
or does in fact do so, (ii) there shall have occurred and be continuing an
Event of Default with respect to such Global Security, or (iii) pursuant to the
following sentence. After the expiration of the Restricted Period (but not
earlier, unless any of the events specified in clauses (i) or (ii) of this
paragraph shall have then occurred), all or any portion of a Regulation S
Global Security may be exchanged for a Registered Security that has a like
aggregate principal amount and is not a Global Security, upon timely request
made by the Depositary or its authorized representative to the Trustee.
(c) If any Global Security is to be exchanged for other
Registered Securities or canceled in whole, it shall be surrendered by or on
behalf of the Depositary or its nominee to the Trustee, as Security Registrar,
for exchange or cancellation as provided in this Article Three. If any Global
Security is to be exchanged for other Registered Securities or cancelled in
part, or if another Security is to be exchanged in whole or in part for a
beneficial interest in any Global Security, in each case, as provided in
Section 3.5, then either (i) such Global Security shall be so surrendered for
exchange or cancellation as provided in this Article Three or (ii) the
principal amount thereof shall
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be reduced or increased by an amount equal to the portion thereof to be so
exchanged or cancelled, or equal to the principal amount of such other Security
to be so exchanged for a beneficial interest therein, as the case may be, by
means of an appropriate adjustment made on the records of the Trustee, as
Security Registrar, whereupon the Trustee, in accordance with the Applicable
Procedures, shall instruct the Depositary or its authorized representative to
make a corresponding adjustment to its records. Upon any such surrender or
adjustment of a Global Security, the Trustee shall, subject to Section 3.5 and
as otherwise provided in this Article Three, authenticate and deliver any
Registered Securities issuable in exchange for such Global Security (or any
portion thereof) to or upon the order of, and registered in such names as may
be directed by, the Depositary or its authorized representative. Upon the
request of the Trustee in connection with the occurrence of any of the events
specified in the preceding paragraph, the Company shall promptly make available
to the Trustee a reasonable supply of Registered Securities that are not in the
form of Global Securities. The Trustee shall be entitled to rely upon any
order, direction or request of the Depositary or its authorized representative
which is given or made pursuant to this Article Three if such order, direction
or request is given or made in accordance with the Applicable Procedures.
(d) Every Registered Security authenticated and delivered
upon registration of transfer of, or in exchange for or in lieu of, a Global
Security or any portion thereof, whether pursuant to this Article Three or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof, in
which case such Registered Security shall be authenticated and delivered in
definitive, fully registered form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under the Indenture and the Registered Securities, and owners of beneficial
interests in a Global Security shall hold such interests pursuant to the
Applicable Procedures. Accordingly, any such owner's beneficial interest in a
Global Security will be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee
or its Agent Members and such owners of beneficial interests in a Global
Security will not be considered the owners or holders thereof.
(C) Non-Global Registered Securities
(b) Regulation D Securities shall be initially issued as
Registered Securities in definitive, fully registered form, without interest
coupons, shall initially be registered in such names and be in such authorized
denominations as Goldman, Sachs & Co., on behalf of Goldman Sachs
International, shall designate and shall bear the legends required hereunder.
The Company will make available to the Trustee a reasonable supply of
Registered Securities in definitive form.
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Pending the preparation of definitive Registered Securities,
the Company may execute, and upon Company Order the Trustee shall authenticate
and make available for delivery, temporary Registered Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Registered Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Registered Securities may determine, as evidenced by
their execution of such Registered Securities.
If temporary Registered Securities are issued, the Company
will cause definitive Registered Securities to be prepared without unreasonable
delay. After the preparation of definitive Registered Securities, the
temporary Registered Securities shall be exchangeable for definitive Registered
Securities upon surrender of the temporary Registered Securities at any office
or agency of the Company designated pursuant to Section 10.2, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Registered Securities the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Registered Securities of authorized
denominations. Until so exchanged the temporary Registered Securities shall in
all respects be entitled to the same benefits under this Indenture as
definitive Registered Securities.
SECTION 3.5. Registration, Registration of Transfer and Exchange;
Restrictions on Transfer.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 10.2
being herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Registered Securities and of transfers of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers and exchanges of
Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered
Security at an office or agency of the Company designated pursuant to Section
10.2 for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
At the option of the Holder, and subject to the other
provisions of this Section 3.5, Registered Securities may be exchanged for
other Registered Securities of any authorized denomination and of a like
aggregate principal amount, upon surrender
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of the Registered Securities to be exchanged at any such office or agency.
Whenever any Registered Securities are so surrendered for exchange, and subject
to the other provisions of this Section 3.5, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive. Every Registered Security presented or
surrendered for registration of transfer or for exchange shall (if so required
by the Company or the Security Registrar) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
Bearer Securities will not be issued in exchange for
Registered Securities.
At the option of the Holder, upon written request, Bearer
Securities may be exchanged at any time after the Exchange Date for Registered
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Bearer Securities to be exchanged at any office
or agency outside the United States designated pursuant to Section 10.2, with
all unmatured coupons and all matured coupons in default thereto appertaining.
If the Holder of a Bearer Security is unable to produce any such unmatured
coupon or coupons or matured coupon or coupons in default, such exchange may be
effected if such Bearer Security is accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons or the surrender of such missing coupon or coupons may be waived by the
Company, the Trustee, and the Principal Paying Agent, if there is furnished to
them such security or indemnity as they may require to save each of them and
any Paying Agent harmless. If thereafter the Holder of such Bearer Security
shall surrender to any Paying Agent outside the United States any such missing
coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; provided, however,
that, except as otherwise provided in the form of Bearer Security set forth in
Section 2.2(a), interest represented by coupons shall be payable only upon
presentation and surrender of such coupons at an office or agency of the
Company outside the United States. Notwithstanding the foregoing, in case a
Bearer Security is surrendered in exchange for a Registered Security at an
office or agency of the Company outside the United States designated pursuant
to Section 10.2 after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or agency
on the next succeeding Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related date
for payment of Defaulted Interest, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date or proposed date of
payment, as the case may be, and interest or Defaulted Interest, as the case
may be, will not be payable on such Interest Payment Date or such related date
for payment of Defaulted Interest, as the case may be, in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.
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Whenever any Bearer Securities are so surrendered for
exchange, subject to the other provisions of this Section 3.5, the Company
shall execute, and the Trustee shall authenticate and deliver, the Registered
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and subject to the other provisions of this Section
3.5, entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
No service charge shall be made for any registration of
transfer or exchange of Securities except as provided in Section 3.6, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section
3.4, 8.5, 11.8, 12.2 or 14.3 (other than, in the case of the exchange of
Registered Securities, where the shares of Common Stock are to be issued or
delivered in a name other than that of the Holder of the Registered Security)
not involving any transfer and other than any stamp and other duties, if any,
which may be imposed in connection with any such transfer or exchange by the
United States or the United Kingdom or any political subdivision thereof or
therein, which shall be paid by the Company.
In the event of a redemption of the Securities in part (other
than, in the case of Bearer Securities, a redemption pursuant to the fourth
paragraph on the reverse of the Form of Bearer Security set forth in Section
2.2(a)), the Company will not be required (a) to register the transfer of or
exchange Registered Securities or to exchange Bearer Securities for Registered
Securities for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Securities called for such
redemption, (b) to register the transfer of or exchange any Registered
Security, or portion thereof, called for redemption, or (c) to exchange any
Bearer Security called for redemption; provided, however, that a Bearer
Security called for redemption may be exchanged for a Registered Security which
is simultaneously surrendered to the Registrar or Transfer Agent making such
exchange with written instructions for conversion consistent with the
provisions described in Sections 2.5 and 12.2.
(b) Certain Transfers and Exchanges. Notwithstanding any
other provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 3.5(b) shall be made only in accordance with this Section
3.5(b).
(i) Restricted Global Security to Regulation S Global
Security. If the owner of a beneficial interest in the Restricted
Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the
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form of a beneficial interest in the Regulation S Global Security,
such transfer may be effected only in accordance with the provisions
of this Clause (b)(i) and Clause (b)(vii) below and subject to the
Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Regulation
S Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in the
Restricted Global Security in an equal principal amount be debited
from another specified Agent Member's account and (B) a Regulation S
Certificate, satisfactory to the Trustee and duly executed by the
owner of such beneficial interest in the Restricted Global Security or
his attorney duly authorized in writing, then the Trustee, as Security
Registrar but subject to Clause (b)(vii) below, shall reduce the
principal amount of the Restricted Global Security and increase the
principal amount of the Regulation S Global Security by such specified
principal amount as provided in Section 3.4(B)(c).
(ii) Regulation S Global Security to Restricted Global
Security. If the owner of a beneficial interest in the Regulation S
Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Security, such transfer may be
effected only in accordance with this Clause (b)(ii) and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Restricted
Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in the
Regulation S Global Security in an equal principal amount be debited
from another specified Agent Member's account and (B) if such transfer
is to occur during the Restricted Period, a Restricted Securities
Certificate, satisfactory to the Trustee and duly executed by the
owner of such beneficial interest in the Regulation S Global Security
or his attorney duly authorized in writing, then the Trustee, as
Security Registrar, shall reduce the principal amount of the
Regulation S Global Security and increase the principal amount of the
Restricted Global Security by such specified principal amount as
provided in Section 3.4(B)(c).
(iii) Restricted Non-Global Security to Restricted
Global Security or Regulation S Global Security. If the Holder of a
Restricted Security (other than a Global Security) wishes at any time
to transfer all or any portion of such Restricted Security to a Person
who wishes to take delivery thereof in the form of a beneficial
interest in the Restricted Global Security or the Regulation S Global
Security, such transfer may be effected only in accordance with the
provisions of this Clause (b)(iii) and Clause (b)(vii) below and
subject to the Applicable Procedures. Upon receipt by the Trustee, as
Security Registrar, of
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(A) such Restricted Security as provided in Section 3.5(a) and
instructions satisfactory to the Trustee directing that a beneficial
interest in the Restricted Global Security or Regulation S Global
Security in a specified principal amount not greater than the
principal amount of such Security be credited to a specified Agent
Member's account and (B) a Restricted Securities Certificate, if the
specified account is to be credited with a beneficial interest in the
Restricted Global Security, or a Regulation S Certificate, if the
specified account is to be credited with a beneficial interest in the
Regulation S Global Security, in either case satisfactory to the
Trustee and duly executed by such Holder or his attorney duly
authorized in writing, then the Trustee, as Security Registrar but
subject to Clause (b)(vii) below, shall cancel such Restricted
Security (and issue a new Restricted Security in respect of any
untransferred portion thereof) as provided in Section 3.5(a) and
increase the principal amount of the Restricted Global Security or the
Regulation S Global Security, as the case may be, by the specified
principal amount as provided in Section 3.4(B)(c).
(iv) Regulation S Non-Global Security to Restricted
Global Security or Regulation S Global Security. If the Holder of a
Regulation S Security (other than a Global Security) wishes at any
time to transfer all or any portion of such Regulation S Security to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Security or the Regulation S Global
Security, such transfer may be effected only in accordance with this
Clause (b)(iv) and Clause (b)(vii) below and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of
(A) such Regulation S Security as provided in Section 3.5(a) and
instructions satisfactory to the Trustee directing that a beneficial
interest in the Restricted Global Security or Regulation S Global
Security in a specified principal amount not greater than the
principal amount of such Security be credited to a specified Agent
Member's account and (B) if the transfer is to occur during the
Restricted Period and the specified account is to be credited with a
beneficial interest in the Restricted Global Security, a Restricted
Securities Certificate satisfactory to the Trustee and duly executed
by such Holder or his attorney duly authorized in writing, then the
Trustee, as Security Registrar but subject to Clause (b)(vii) below,
shall cancel such Regulation S Security (and issue a new Regulation S
Security in respect of any untransferred portion thereof) as provided
in Section 3.5(a) and increase the principal amount of the Restricted
Global Security or the Regulation S Global Security, as the case may
be, by the specified principal amount as provided in Section
3.4(B)(c).
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(v) Non-Global Registered Security to Non-Global
Registered Security. A Registered Security that is not a Global
Security may be transferred, in whole or in part, to a Person who
takes delivery in the form of another Security that is not a Global
Security as provided in Section 3.5(a), provided that, if the Security
to be transferred in whole or in part is a (y) Restricted Security, or
is a Regulation S Security and the transfer is to occur during the
Restricted Period, then the Trustee shall have received (A) a
Restricted Securities Certificate, satisfactory to the Trustee and
duly executed by the transferor Holder or his attorney duly authorized
in writing, in which case the transferee Holder shall take delivery in
the form of a Restricted Security, or (B) a Regulation S Certificate,
satisfactory to the Trustee and duly executed by the transferor Holder
or his attorney duly authorized in writing, in which case the
transferee Holder shall take delivery in the form of a Regulation S
Security, or (z) a Restricted Security and the transfer is to occur
after the expiration of the Restricted Period, then the Trustee shall
have received a Regulation S Certificate, satisfactory to the Trustee
and duly executed by the transferor Holder or his attorney duly
authorized in writing, in which case the transferee Holder shall take
delivery in the form of a Regulation S Security (subject in every case
to Section 3.5(c)).
(vi) Exchanges between Global Security and Non-Global
Security. A beneficial interest in a Global Security may be exchanged
for a Security that is not a Global Security as provided in Section
3.4, provided that, if such interest is a beneficial interest in the
Restricted Global Security, or if such interest is a beneficial
interest in the Regulation S Global Security and such exchange is to
occur during the Restricted Period, then such interest shall be
exchanged for a Restricted Security (subject in each case to Section
3.5(c)). A Security that is not a Global Security may be exchanged
for a beneficial interest in a Global Security only if (A) such
exchange occurs in connection with a transfer effected in accordance
with Clause (b)(iii) or (iv) above or (B) such Security is a
Regulation S Security and such exchange occurs after the Restricted
Period.
(vii) Regulation S Global Security to be Held Through
EUROCLEAR or CEDEL during Restricted Period. The Company shall use
its best efforts to cause the Depositary to ensure that, until the
expiration of the Restricted Period, beneficial interests in the
Regulation S Global Security may be held only in or through accounts
maintained at the Depositary by EUROCLEAR or CEDEL (or by Agent
Members acting for the account thereof), and no person shall be
entitled to effect any transfer or exchange that would result in any
such interest being held otherwise than in or through such an account;
provided that this Clause (b)(vii) shall not prohibit any transfer or
exchange of such an interest in accordance with Clause (b)(ii) or (vi)
above.
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(viii) Exchange of Temporary Global Bearer Security for
Bearer Securities. Exchanges of interests in the Temporary Bearer
Global Security for Bearer Securities shall be accomplished in
accordance with the procedures set forth in Section 3.4(A).
(ix) Exchange of Bearer Securities for Registered
Securities. After the expiration of the Restricted Period (but not
earlier), Bearer Securities may be exchanged for any form of
Registered Securities in accordance with the applicable procedures set
forth in clauses (i) through (vi) above, except that the certification
requirements set forth in such clauses shall not apply to any
exchanges contemplated by this sentence. Under no circumstances will
any Registered Securities be exchangeable for Bearer Securities.
(c) Securities Act Legends. Rule 144A Securities,
Regulation D Securities and their respective Successor Securities shall bear
the applicable Restricted Securities Legend, and the Regulation S Securities
and their Successor Securities shall bear a Regulation S Legend, subject to the
following:
(i) subject to the following Clauses of this Section
3.5(c), a Security (including a Bearer Security) or any portion
thereof which is exchanged, upon transfer or otherwise, for a Global
Security or any portion thereof shall bear the Securities Act Legend
borne by such Global Security while represented thereby;
(ii) subject to the following Clauses of this Section
3.5(c), a new Registered Security which is not a Global Security and
is issued in exchange for another Registered Security (including a
Global Security) or any portion thereof, upon transfer or otherwise,
shall bear the Securities Act Legend borne by such other Security,
provided that, if such new Security is required pursuant to Section
3.5(b)(v) or (vi) to be issued in the form of a Restricted Security,
it shall bear a Restricted Securities Legend and, if such new Security
is so required to be issued in the form of a Regulation S Security, it
shall bear a Regulation S Legend; provided, further, that a new
Registered Security which is not a Global Security and which is issued
in exchange for a Bearer Security or any portion thereof shall bear
the applicable Restricted Securities Legend, if such new Registered
Security is a Restricted Security, or a Regulation S Legend, if such
new Registered Security is a Regulation S Security;
(iii) Any Securities which are sold or otherwise
disposed of pursuant to an effective registration statement under the
Securities Act (including the Shelf Registration Statement), together
with their Successor Securities shall not bear a Securities Act
Legend; the Company shall inform the Trustee in writing of the
effective date of any such registration statement registering the
Securities under the Securities Act and shall notify the Trustee at
any time when prospectuses may
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not be delivered with respect to Securities to be sold pursuant to
such registration statement. The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance
with the aforementioned registration statement.
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act,
a new Registered Security which does not bear a Securities Act Legend
may be issued in exchange for or in lieu of a Security (other than a
Global Security) or any portion thereof which bears such a legend if
the Trustee has received an Unrestricted Securities Certificate,
satisfactory to the Trustee and duly executed by the Holder of such
legended Security or his attorney duly authorized in writing, and
after such date and receipt of such certificate, the Trustee shall
authenticate and deliver such a new Security in exchange for or in
lieu of such other Security as provided in this Article Three,
(v) a new Security which does not bear a Securities
Act Legend may be issued in exchange for or in lieu of a Security
(other than a Global Security) or any portion thereof which bears such
a legend if, in the Company's judgment, placing such a legend upon
such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such a
new Security as provided in this Article Three, and
(vi) notwithstanding the foregoing provisions of this
Section 3.5(c), a Successor Security of a Security that does not bear
a particular form of Securities Act Legend shall not bear such form of
legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Security bearing a Restricted
Securities Legend in exchange for such Successor Security as provided
in this Article Three.
(d) (A) a new Bearer Security, or, subject to the provisions
of Section 3.5(b)(ix), a new Registered Security which does not bear the second
legend set forth on the face of the form of the Bearer Security set forth in
Section 2.2(a) may be issued in exchange for or in lieu of a Bearer Security
which bears such a legend and (B) a new coupon which does not bear the second
legend set forth on the face of the form of coupon set forth in Section 2.3 may
be issued in exchange for or in lieu of a coupon which bears such a legend, if,
in either case, in the Company's judgment, placing such a legend upon such new
Security or coupon, as the case may be, is not necessary to ensure compliance
with the registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such new
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Security or deliver such new coupon, as the case may be, as provided in this
Article Three.
(e) Neither the Trustee, the Principal Paying Agent nor any
of their agents shall (1) have any duty to monitor compliance with or with
respect to any federal or state or other securities or tax laws or (2) have any
duty to obtain documentation on any transfers or exchanges other than as
specifically required hereunder.
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities and Coupons.
If any mutilated Security or a Security with a mutilated
coupon appertaining to it is surrendered to the Trustee or to a Transfer Agent
outside the United States, the Company shall execute, the Trustee or an
Authenticating Agent shall authenticate and the Trustee or Transfer Agent shall
deliver in exchange therefor a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security;
provided, however, that any Bearer Security or any coupon shall be delivered
only outside the United States and, so long as the Securities are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require, such delivery shall occur at the Transfer Agent in Luxembourg; and
provided, further, that all Bearer Securities shall be delivered and received
in person.
If there be delivered to the Company and either to the Trustee
or to a Transfer Agent outside the United States:
(1) evidence to their satisfaction of the destruction, loss or
theft of any Security or coupon, and
(2) such security or indemnity as may be satisfactory to the
Company and the Trustee and such Transfer Agent to save each of them
and any agent of either of them harmless,
then, in the absence of actual notice to the Company, the Trustee or the
Transfer Agent that such Security or coupon has been acquired by a bona fide
purchaser, the Company shall execute, the Trustee or an Authenticating Agent
shall authenticate and the Trustee or Transfer Agent shall deliver, in lieu of
any such destroyed, lost or stolen Security or in exchange for the Security to
which such coupon appertains (together with all appurtenant coupons not
destroyed, lost or stolen), a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or appertaining to the Security to which such destroyed, lost
or stolen coupon appertains; provided, however, that any Bearer Security or any
coupon shall be delivered only outside the United States and, so long as the
Securities are listed on the
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Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require, such delivery shall occur at the Transfer Agent in Luxembourg; and
provided, further, that all Bearer Securities shall be delivered and received
in person.
In case any such mutilated, destroyed, lost or stolen Security
or coupon has become or is about to become due and payable, the Company in its
discretion, but subject to any conversion rights, may, instead of issuing a new
Security, pay such Security or coupon, upon satisfaction of the conditions set
forth in the preceding paragraph; provided, however, that, except as otherwise
provided in the form of Securities set forth in Section 2.2(a), the principal
of and interest on Bearer Securities shall be payable only at an office or
agency outside the United States and, in the case of interest, only upon
presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section 3.6,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto (other than
any stamp and other duties, if any, which may be imposed in connection
therewith by the United States or the United Kingdom or any political
subdivision thereof or therein, which shall be paid by the Company) and any
other expenses (including the fees and expenses of the Trustee, the Principal
Paying Agent and the Transfer Agent) connected therewith.
Every new Security with its coupons, if any, issued pursuant
to this Section 3.6 in lieu of any mutilated, destroyed, lost or stolen
Security or in exchange for a Security to which a mutilated, destroyed, lost or
stolen coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the mutilated, destroyed, lost or
stolen Security and its coupons, if any, or the mutilated, destroyed, lost or
stolen coupon shall be at any time enforceable by anyone, and such new Security
and coupons, if any, shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities and coupons duly
issued hereunder.
The provisions of this Section 3.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies of any Holder
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or coupons.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. In case a Bearer Security is surrendered in exchange for a
Registered Security at an office or agency of the Company designated pursuant
to Section 10.2 for the purpose after the close of business
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(at such office or agency) on any Regular Record Date and before the opening of
business (at such office or agency) on the next succeeding Interest Payment
Date, such Bearer Security shall be surrendered without the coupon relating to
such Interest Payment Date and interest will not be payable on such Interest
Payment Date in respect of the Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of such coupon when
due.
Interest on the Temporary Global Bearer Security shall be
payable only after the issuance of the Bearer Securities for which it is
exchangeable as provided in the form of Temporary Global Bearer Security set
forth in Section 2.2(c).
Any interest on any Registered Security which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered
Securities (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Registered Security,
the date of the proposed payment and the Special Record Date, and at
the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause
provided. The Special Record Date for the payment of such Defaulted
Interest shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Registered Securities at such Holder's
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Registered Securities (or their respective
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to
the following
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Clause (2). In case a Bearer Security is surrendered in exchange for
a Registered Security at an office or agency of the Company designated
pursuant to Section 10.2 for such purpose after the close of business
(at such office or agency) on any Special Record Date and before the
opening of business (at such office or agency) on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered outside the United States without the coupon relating to
such proposed date of payment and Defaulted Interest will not be
payable on such proposed date of payment in respect of the Registered
Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon upon surrender thereof at an
office or agency outside the United States designated pursuant to
Section 10.2 hereof.
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 3.5, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by
such other Security.
In the case of any Registered Security which is converted in
accordance with Section 12.2 after any Regular Record Date and on or prior to
the next succeeding Interest Payment Date (other than a Security whose Maturity
is prior to such Interest Payment Date), interest whose Stated Maturity is on
such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name such
Registered Security (or one or more Predecessor Securities) is registered at
the close of business on such Regular Record Date. Except as otherwise
expressly provided in the immediately preceding sentence or in Section 12.2, in
the case of any Security which is converted, interest whose Stated Maturity is
after the date of conversion of such Security shall not be payable.
SECTION 3.8. Persons Deemed Owners.
Title to any Bearer Security (including any Temporary Global
Bearer Security) or coupon shall pass by delivery. The Company, the Trustee,
the Principal Paying Agent and any other agent of the Company or the Trustee
may treat the bearer of any Bearer Security or the Temporary Global Bearer
Security and the bearer of any
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coupon as the absolute owner of such Security or coupon, as the case may be,
for the purpose of receiving payment thereof or on account thereof and for all
other purposes whatsoever, whether or not such Security or coupon be overdue,
and neither the Company, the Trustee, the Principal Paying Agent nor any other
agent of the Company or the Trustee shall be affected by notice to the
contrary. Prior to due presentment of a Registered Security for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Registered Security for the purpose of
receiving payment of principal of, premium, if any, and (subject to Section
3.7) interest on such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 3.9. Cancellation.
All Securities and coupons surrendered for payment,
redemption, repurchase, registration of transfer or exchange or conversion
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee. All Bearer Securities and coupons so surrendered shall be immediately
canceled by such Person upon receipt prior to being forwarded to the Trustee.
All Registered Securities so delivered to the Trustee shall be canceled
promptly by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section 3.9. The
Trustee shall destroy all canceled Securities and coupons in accordance with
applicable law and its customary practices in effect from time to time.
SECTION 3.10. Computation of Interest.
Interest on the Securities (including any additional interest)
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. Form of Certification.
Whenever any provision of this Indenture or the form of
Temporary Global Bearer Security contemplates that certification be given by a
beneficial owner of a portion of the Temporary Global Bearer Security, such
certification shall be provided substantially in the form of the following
certificate, with only such changes as shall be approved by the Company and
Goldman Sachs International:
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CERTIFICATE
QUINTILES TRANSNATIONAL CORP.
4.25% CONVERTIBLE SUBORDINATED NOTES
DUE MAY 31, 2000
This is to certify that as of the date hereof and except as
provided in the fourth paragraph hereof, the above-captioned Securities held by
you for our account (i) are owned by a person that is not a United States
person (as defined below), (ii) are owned by a United States person that is (A)
a foreign branch of a United States financial institution (as defined in United
States Treasury Regulations Section 1.165-12(c)(1)(v) (a "financial
institution")) purchasing for its own account or for resale or (B) a United
States person who acquired the Securities through a foreign branch of a United
States financial institution and who holds the Securities through such
financial institution on the date hereof (and in the case of either clause (A)
or (B), the financial institution hereby agrees for the benefit of Quintiles
Transnational Corp. to comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder) or (iii) are owned by a financial institution for
purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163- 5(c)(2)(i)(D)(7)). In addition, if we are
a financial institution described in clause (iii) of the preceding sentence
(whether or not also described in clause (i) or (ii)) we certify that we have
not acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its
possessions.
As used in this certificate, "United States person" is a
Person that is, for United States federal income tax purposes, (a) a citizen or
resident of the United States, (b) a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof or (c) an estate or trust the income of which is subject to
United States Federal income taxation regardless of the source; "United States"
means the United States of America (including the States thereof and the
District of Columbia); and its "possessions" includes Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands.
We undertake to advise you by telecopy, on or before the date
on which you intend to submit your certification relating to the
above-captioned Securities then appearing in your books as being held for our
account, if the above statement as to beneficial ownership is not correct on
such date as to all such Securities.
This certificate excepts and does not relate to U.S.$________
principal amount of the above-captioned Securities appearing on your books as
being held for our account as to which we are not yet able to certify and as to
which we understand that
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exchange and delivery of definitive Securities cannot be made until we are able
so to certify.
We understand that this certificate is required in connection
with certain tax regulations in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy hereof to any interested party in such proceedings.
Dated: ___________________, 19__*
*To be dated on or after
the 15th day before the
Exchange Date.
[Name of Account Holder]
------------------------
(Authorized Signatory)
Name:
Title:
SECTION 3.12. CUSIP and ISIN Numbers.
The Company in issuing Registered Securities may use "CUSIP"
numbers (if then generally in use) in addition to serial numbers, and in
issuing Bearer Securities may use "ISIN" numbers (if then generally in use); if
so, the Trustee shall use such "CUSIP" and "ISIN" numbers in addition to serial
numbers in notices of redemption and repurchase as a convenience to Holders;
provided that any such notice may state that no representation is made as to
the correctness of such CUSIP and ISIN numbers either as printed on the
Securities or as contained in any notice of a redemption or repurchase and that
reliance may be placed only on the serial or other identification numbers
printed on the Securities, and any such redemption or repurchase shall not be
affected by any defect in or omission of such CUSIP or ISIN numbers.
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SECTION 3.13. Notification of Withholding.
The Company shall notify the Trustee in writing of the
necessity, if any, to withhold any amounts from payments to Holders (and the
amount of any such withholding) arising from the delivery by a Holder of any
certificate pursuant to Section 2.5 or 3.11.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of conversion, or
registration of transfer or exchange, or replacement of Securities herein
expressly provided for and any right to receive Additional Amounts and Bearer
Additional Amounts as provided in the forms of Securities set forth in Section
2.2 and the Company's obligations to the Trustee pursuant to Section 6.7), and
the Trustee, at the expense of the Company, shall execute proper instruments in
form and substance satisfactory to the Trustee acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered and all coupons appertaining thereto (other than (i)
Securities and coupons which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 3.6, (ii) coupons appertaining to Securities called
for redemption or repurchased and maturing after the relevant
Redemption Date or Repurchase Date, as the case may be, whose
surrender has been waived as provided in Section 11.7 and
(iii) Securities and coupons for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
(B) all such Securities and all coupons
appertaining thereto not theretofore delivered to the Trustee
or the Principal Paying Agent or its agent for cancellation
(other than Securities or coupons referred to in clauses (i)
through (iii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of
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redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of clause (i), (ii) or (iii)
above, has deposited or caused to be deposited with the
Trustee as trust funds (immediately available to the Holders
in the case of clause (i)) in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on
such Securities and coupons not theretofore delivered to the
Trustee for cancellation, for principal, premium, if any, and
interest (including any applicable Additional Amounts and
Bearer Additional Amounts) to the date of such deposit (in the
case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.7, the
obligations of the Company to any Authenticating Agent under Section 6.12, the
obligation of the Company to pay Additional Amounts and Bearer Additional
Amounts and, if money shall have been deposited with the Trustee pursuant to
clause (1)(B) of this Section 4.1, the obligations of the Trustee under Section
4.2 and the last paragraph of Section 10.3 shall survive. Funds held in trust
pursuant to this Section are not subject to the provisions of Article Thirteen.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be
held in trust and applied by it, in accordance with the provisions of the
Securities, the coupons and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying
Agent), to the Persons entitled thereto, of the principal, premium, if any, and
interest for whose payment such money has been deposited with the Trustee.
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All moneys deposited with the Trustee pursuant to Section 4.1
(and held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
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ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Thirteen or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal of or premium, if
any, on any Security at its Maturity; or
(2) default in the payment of any interest (including any
Additional Amounts and Bearer Additional Amounts) upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(3) failure by the Company to give the Company Notice in
accordance with Section 14.3; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with), and continuance of such
default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company or under
any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company with a principal amount then outstanding
in excess of U.S.$10,000,000, whether such indebtedness now exists or
shall hereafter be created, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or such acceleration having
been rescinded or annulled, within a period of 30 days after there
shall have been
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given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice
specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such default to be cured or
waived or such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or similar relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default
specified in Section 5.1(6) or 5.1(7)) occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Securities may declare the principal of all the Securities
to be due and payable immediately, by a notice in writing to the Company (and
to the Trustee if given by the Holders), and upon
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any such declaration such principal and all accrued interest thereon shall
become immediately due and payable. If an Event of Default specified in
Section 5.1(6) or 5.1(7) occurs, the principal of, and accrued interest on, all
the Securities shall ipso facto become immediately due and payable without any
declaration or other Act of the Holders or any act on the part of the Trustee.
At any time after such declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article Five provided, the
Holders of a majority in principal amount of the Outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of and premium, if any, on any
Securities which have become due otherwise than by such
declaration of acceleration and any interest thereon at the
rate borne by the Securities,
(C) interest upon overdue interest at a rate of
4.25% per annum, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default, other than the nonpayment of
the principal of, and any premium and interest on, Securities which
have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
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(1) default is made in the payment of any interest
(including any Additional Amounts and Bearer Additional Amounts) on
any Security when it becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and any coupons appertaining thereto, the whole
amount then due and payable on such Securities and coupons for principal and
interest (including any Additional Amounts and Bearer Additional Amounts) and
interest on any overdue principal and premium, if any, and on any overdue
interest (including any Additional Amounts and Bearer Additional Amounts), at a
rate of 4.25% per annum, and in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders of Securities and coupons by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or coupons or the property of the Company or of such other
obligor or the creditors of either, the Trustee (irrespective of whether the
principal of, and any interest on, the Securities shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
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(1) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect
of the Securities and take such other actions, including participating
as a member, voting or otherwise, of any official committee of
creditors appointed in such matter, and to file such other papers or
documents, in each of the foregoing cases, as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders of
Securities and coupons allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities and coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
of a Security or coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the coupons or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or coupon in any such proceeding; provided, however, that
the Trustee may, on behalf of such Holders, vote for the election of a trustee
in bankruptcy or similar official.
SECTION 5.5. Trustee May Enforce Claims Without Possession
of Securities or Coupons.
All rights of action and claims under this Indenture or the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which judgment has been recovered.
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SECTION 5.6. Application of Money Collected.
Subject to Article Thirteen, any money collected by the
Trustee pursuant to this Article Five shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal, premium, if any, or interest, upon
presentation of the Securities or coupons, or both, as the case may be, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
SECOND: To the payment of the amounts then due and unpaid for
principal of, premium, if any, or interest on, the Securities and
coupons in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities and
coupons for principal, premium, if any, and interest, respectively;
and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 5.7. Limitation on Suits.
No Holder of any Security or coupon shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
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(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest and to Convert.
Notwithstanding any other provision in this Indenture, the
Holder of any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of, premium, if any, and
(subject to Section 3.7) interest on such Security or payment of such coupon on
the respective Stated Maturities expressed in such Security or coupon (or, in
the case of redemption or repurchase, on the Redemption Date or Repurchase
Date, as the case may be), and to convert such Security in accordance with
Article Twelve, and to institute suit for the enforcement of any such payment
and right to convert, and such rights shall not be impaired without the consent
of such Holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders of Securities and coupons shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and such Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter
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existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security or coupon to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or any acquiescence therein. Every right and remedy
given by this Article Five or by law to the Trustee or to the Holders of
Securities or coupons may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or (subject to the limitations contained in
this Indenture) by the Holders of Securities or coupons, as the case may be.
SECTION 5.12. Control by Holders of Securities.
The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults.
The Holders, either (a) through the written consent of not
less than a majority in principal amount of the Outstanding Securities, or (b)
by the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of at least 66-2/3% in
principal amount of the Outstanding Securities represented at such meeting, may
on behalf of the Holders of all the Securities and coupons waive any past
default hereunder and its consequences, except a default (1) in the payment of
the principal of, premium, if any, or interest on any Security, or (2) in
respect of a covenant or provision hereof which under Article Eight cannot be
modified or amended without the consent of the Holder of each Outstanding
Security affected.
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Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security or coupon by his acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Indenture, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.14 shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder of any Security or coupon for the enforcement of the
payment of the principal of, premium, if any, or interest on any Security or
the payment of any coupon on or after the respective Stated Maturity or
Maturities expressed in such Security or coupon (or, in the case of redemption
or repurchase, on or after the Redemption Date or Repurchase Date, as the case
may be) or for the enforcement of the right to convert any Security in
accordance with Article Twelve.
SECTION 5.15. Waiver of Stay, Usury or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, usury or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture, but not to verify the contents thereof.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit
the effect of paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
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(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount of
the Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 6.2. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder
as to which the Trustee has received written notice, the Trustee shall give to
all Holders of Securities, in the manner provided in Section 1.6, notice of
such default, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of, premium, if any, or interest on any Security or coupon, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders; and provided,
further, that in the case of any default of the character specified in Section
5.1(4), no such notice to Holders of Securities shall be given until at least
30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
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(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors shall be sufficiently
evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders of Securities or coupons pursuant
to this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document, but the Trustee may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(8) the permissive right of the Trustee to take or refrain
from taking any actions enumerated in this Indenture shall not be
construed as a duty and the Trustee shall not be answerable in such
actions other than for its own negligence or willful misconduct.
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SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except
the Trustee's certificates of authentication) and in the coupons shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture, of the Securities or coupons, or of the Common
Stock issuable upon the conversion of the Securities. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 6.5. May Hold Securities, Act as Trustee Under Other
Indentures.
The Trustee, any Authenticating Agent, any Paying Agent, any
Conversion Agent or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Conversion Agent or such other agent.
The Trustee may become and act as trustee under other
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding in the same
manner as if it were not Trustee hereunder.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the
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expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee (and its directors, officers,
employees and agents) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs, expenses and
reasonable attorneys' fees of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(6) or Section
5.1(7), the expenses (including the reasonable charges of its counsel) and the
compensation for the services are intended to constitute expenses of the
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination
of this Indenture or the earlier resignation or removal of the Trustee.
SECTION 6.8. Corporate Trustee Required; Eligibility.
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,
having a combined capital and surplus of at least U.S.$50,000,000, subject to
supervision or examination by federal or state authority, in good standing and
having an established place of business in the Borough of Manhattan, The City
of New York. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article and a successor shall
be appointed pursuant to Section 6.9.
SECTION 6.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.10.
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(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.10 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and the Company. If the instrument of acceptance by a
successor Trustee required by Section 6.10 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of removal, the removed
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8
after written request therefor by the Company or by any Holder of a
Security who has been a bona fide Holder of a Security for at least
six months, or
(2) the Trustee shall cease to be eligible under Section
6.8 and shall fail to resign after written request therefor by the
Company or any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee and shall comply with the applicable requirements of this
Section and Section 6.10. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in
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accordance with the applicable requirements of Section 6.10, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders of Securities and accepted appointment in the manner required by this
Section and Section 6.10, any Holder of a Security who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to all
Holders of Securities in the manner provided in Section 1.6. Each notice shall
include the name of the successor Trustee and the address of its Corporate
Trust Office.
SECTION 6.10. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be eligible under this
Article.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication
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and deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 6.12. Authenticating Agents.
The Principal Paying Agent may authenticate the Temporary
Global Bearer Security and Bearer Securities, and Banque Internationale a
Luxembourg S.A. may authenticate Bearer Securities, in each case as the
Trustee's Authenticating Agent. The Trustee may, with the consent of the
Company, appoint an additional Authenticating Agent or Agents acceptable to the
Company with respect to the Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities issued upon exchange or
substitution pursuant to this Indenture.
Securities authenticated by an Authenticating Agent shall be
entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder, and every
reference in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
subject to acceptance by the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America,
any State thereof, the District of Columbia, England and Wales or Luxembourg,
authorized under such laws to act as Authenticating Agent and subject to
supervision or examination by government or other fiscal authority. If at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.12.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section 6.12, without the execution or filing of
any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, the Trustee may appoint a
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successor Authenticating Agent which shall be subject to acceptance by the
Company. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section 6.12.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section 6.12.
If an Authenticating Agent is appointed with respect to the
Securities pursuant to this Section 6.12, the Securities may have endorsed
thereon, in addition to or in lieu of the Trustee's certification of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities referred to in the
within-mentioned Indenture.
Dated: MARINE MIDLAND BANK,
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By
------------------------------
Authorized Signatory
SECTION 6.13. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.14. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor).
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ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate or merge with or into any
other Person or convey, transfer or lease all its properties and assets
substantially as an entirety to any Person, and the Company shall not permit
any Person to consolidate with or merge into the Company or convey, transfer or
lease all or substantially all of its properties and assets to the Company,
unless:
(1) in case the Company shall consolidate or merge with or
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 or with 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 Additional Amounts and Bearer
Additional Amounts, if any, payable pursuant to Section 10.4) on all
of the Securities and coupons, as applicable, and the performance or
observance of every covenant of this Indenture on the part of the
Company to be performed or observed and shall have provided for
conversion rights in accordance with Article Twelve;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
as a result of such transaction as having been incurred by the Company
at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing; and
(3) the Company has delivered 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
provided for by Section 8.3.
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SECTION 7.2. Successor Substituted.
Upon any consolidation or merger of the Company with or into
any other Person or any conveyance, transfer or lease of all or substantially
all the properties and assets of the Company in accordance with Section 7.1,
the successor Person formed by such consolidation or into or with which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture, the Securities and the coupons, if any.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of Holders of
Securities or Coupons.
Without the consent of any Holders of Securities or coupons,
the Company, when authorized by a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants and
obligations of the Company herein and in the Securities and coupons as
permitted by this Indenture; or
(2) to add to the covenants of the Company for the benefit of
the Holders of Securities or coupons, or to surrender any right or
power herein conferred upon the Company; or
(3) to secure the Securities; or
(4) to permit Registered Securities to be exchanged for
Bearer Securities or to remove or relax the restrictions on payment of
principal, premium, if any, or interest in respect of Bearer
Securities in the United States to the extent then permitted under the
Code and applicable regulations of the United States Treasury
Department; provided, however, that no adverse consequences would
result to any Holder; or
(5) to make provision with respect to the conversion rights
of Holders of Securities pursuant to Section 12.11; or
(6) to make any changes or modifications to this Indenture
necessary in connection with the registration of any Registrable
Securities under the Securities Act as contemplated by Section 10.12,
provided, such action pursuant to this clause (6) shall not adversely
affect the interests of the Holders of Securities or coupons; or
(7) to comply with the requirements of the Trust Indenture
Act or the rules and regulations of the Commission thereunder in order
to effect or maintain
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the qualification of this Indenture under the Trust Indenture Act, as
contemplated by this Indenture or otherwise; or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or which is otherwise defective, or to make any other
provisions with respect to matters or questions arising under this
Indenture as the Company and the Trustee may deem necessary or
desirable, provided, such action pursuant to this clause (8) shall not
adversely affect the interests of the Holders of Securities or
coupons.
Upon Company Request, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and subject to
and upon receipt by the Trustee of the documents described in Section 8.3
hereof, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations which may be
therein contained.
SECTION 8.2. Supplemental Indentures with Consent of Holders of
Securities.
With either (a) the written consent of the Holders of not less
than a majority in principal amount of the Outstanding Securities, by the Act
of said Holders delivered to the Company and the Trustee, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of 66-2/3% in principal amount of
the Outstanding Securities represented at such meeting, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of Securities
or coupons under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent or affirmative vote of the Holder of each
Outstanding Security or coupon affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security or coupon appertaining
thereto, or reduce the principal amount or the rate of interest
payable thereon, or any premium payable upon redemption or mandatory
repurchase thereof, or change the obligation of the Company to pay
Additional Amounts and any Bearer Additional Amounts pursuant to
Section 10.4 in a manner adverse to the Holders, or change the coin or
currency in which any Security or the interest or any premium thereon
or any other amount in respect thereof is payable, or impair the right
to institute suit for the enforcement of any payment in respect of any
Security or coupon on or after the Stated Maturity thereof (or, in the
case of redemption or any repurchase, on or after the Redemption Date
or Repurchase Date, as the case may be) or, except
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as permitted by Section 12.11, adversely affect the right to convert
any Security as provided in Article Twelve, or modify the provisions
of this Indenture with respect to the subordination of the Securities
in a manner adverse to the Holders of Securities or coupons, or
(2) reduce the requirements of Section 9.4 for quorum or
voting, or reduce the percentage in principal amount of the
Outstanding Securities the consent of whose Holders is required for
any such supplemental indenture or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify the obligation of the Company to maintain an
office or agency in the Borough of Manhattan, The City of New York,
and in a city in a Western European country (or Luxembourg in
particular if so required) pursuant to Section 10.2, or
(4) modify any of the provisions of this Section or Section
5.13 or 10.13, except to increase any percentage contained herein or
therein or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; or
(5) modify the provisions of Article Fourteen in a manner
adverse to the Holders; or
(6) modify any of the provisions of Section 10.10 or 10.11.
It shall not be necessary for any Act of Holders of Securities
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 8.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
such supplemental indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture
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which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 8.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder and of any coupons appertaining thereto shall be bound
thereby.
SECTION 8.5. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Company and the Trustee, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
SECTION 8.6. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of Section 8.2, the
Company shall give notice to all Holders of Securities of such fact, setting
forth in general terms the substance of such supplemental indenture, in the
manner provided in Section 1.6. Any failure of the Company to give such
notice, or any defect therein, shall not in any way impair or affect the
validity of any such supplemental indenture.
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ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 9.1. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities.
SECTION 9.2. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 9.1, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or in the
City of London, England, as the Trustee shall determine. Notice of every
meeting of Holders of Securities, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 1.6, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in principal amount of the
Outstanding Securities shall have requested the Trustee to call a meeting of
the Holders of Securities for any purpose specified in Section 9.1, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall
not thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities in the amount specified, as the case
may be, may determine the time and the place in the Borough of Manhattan, The
City of New York, or in the City of London, England, for such meeting and may
call such meeting for such purposes by giving notice thereof as provided in
paragraph (a) of this Section.
SECTION 9.3. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of
Securities, a Person shall be (a) a Holder of one or more Outstanding
Securities, or (b) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at
any meeting of Holders shall be the Persons entitled to vote at such meeting
and their counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
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SECTION 9.4. Quorum; Action.
The Persons entitled to vote a majority in principal amount of
the Outstanding Securities shall constitute a quorum. In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities, be
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period not less
than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting (subject to repeated applications of this
sentence). Notice of the reconvening of any adjourned meeting shall be given
as provided in Section 9.2(a), except that such notice need be given only once
not less than five days prior to the date on which the meeting is scheduled to
be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the principal amount of the Outstanding Securities
which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting
adjourned for a lack of a quorum, the Persons entitled to vote 25% in principal
amount of the Outstanding Securities at the time shall constitute a quorum for
the taking of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid, any resolution and all matters (except
as limited by the proviso to Section 8.2) shall be effectively passed and
decided if passed or decided by the Persons entitled to vote not less than
66-2/3% in principal amount of Outstanding Securities represented and entitled
to vote at such meeting; provided, that such amount shall not be less than 25%
in principal amount of the then Outstanding Securities.
Any resolution passed or decisions taken at any meeting of
Holders of Securities duly held in accordance with this Section shall be
binding on all the Holders of Securities and coupons, whether or not present or
represented at the meeting. The Trustee shall, in the name and at the expense
of the Company, notify all the Holders of Securities of any such resolutions or
decisions pursuant to Section 1.6.
SECTION 9.5. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
Securities and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the
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right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 1.4 and the appointment of any proxy shall be proved in
the manner specified in Section 1.4 or by having the signature of the Person
executing the proxy witnessed or certified by any officer authorized by Section
1.4(c) to certify to the holding of Bearer Securities.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the
meeting shall have been called by the Company or by Holders of Securities as
provided in Section 9.2(b), in which case the Company or the Holders of
Securities calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the Persons entitled to vote a
majority in principal amount of the Outstanding Securities represented at the
meeting.
(c) At any meeting, each Holder of a Security or proxy shall
be entitled to one vote for each U.S.$1,000 principal amount of Securities held
or represented by him; provided, however, that no vote shall be cast or counted
at any meeting in respect of any Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of
the meeting shall have no right to vote, except as a Holder of a Security or
proxy.
(d) Any meeting of Holders of Securities duly called pursuant
to Section 9.2 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities represented at the meeting, and the meeting may be held as so
adjourned without further notice.
SECTION 9.6. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of
Holders of Securities shall be by written ballots on which shall be subscribed
the signatures of the Holders of Securities or of their representatives by
proxy and the principal amounts at Stated Maturity and serial numbers of the
Outstanding Securities held or represented by them. The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all votes
cast at the meeting for or against any resolution and who shall make and file
with the secretary of the meeting their verified written reports in duplicate
of all votes cast at the meeting. A record, at least in duplicate, of the
proceedings of each meeting of Holders of Securities shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
given as provided in Section 9.2 and, if applicable, Section 9.4. Each copy
shall
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be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to the Company
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
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ARTICLE TEN
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and
punctually pay the principal of and premium, if any, and interest on the
Securities in accordance with the terms of the Securities, the coupons
appertaining thereto and this Indenture. The interest due on the Bearer
Securities on or before Maturity, other than Additional Amounts and Bearer
Additional Amounts payable as provided in Section 10.4, in respect of principal
of such a Security, shall be payable only upon presentation and surrender of
the several coupons for such interest installments as are evidenced thereby as
they severally mature. The Company will deposit or cause to be deposited with
the Trustee, one Business Day prior to the Stated Maturity of any Security or
at or prior to 10:00 a.m. (New York City time) on the due date for any
installment of interest, all payments so due, which payments shall be in
immediately available funds on the date of such Stated Maturity or due date, as
the case may be.
SECTION 10.2. Maintenance of Offices or Agencies.
The Company hereby appoints (a) the Corporate Trust Office of
the Trustee as its agent in the Borough of Manhattan, The City of New York,
where Registered Securities may be presented or surrendered for payment, where
Bearer Securities and coupons may be presented or surrendered for payment in
the circumstances described below (and not otherwise), where Registered
Securities may be surrendered for registration of transfer or exchange, where
Registered Securities may be surrendered for conversion, where Bearer
Securities may be surrendered for conversion in the circumstances described
below (and not otherwise) and where notices and demands to or upon the Company
in respect of the Securities and coupons and this Indenture may be served, and
(b) (i) the office of Midland Bank plc, Mariner House, Pepys Street, London
EC3N 4DA, England and (ii) the office of Banque Internationale a Luxembourg
S.A., 69, route d'Esch, L-1470, Luxembourg, Grand Duchy of Luxembourg, as its
agents outside of the United States where, subject to any applicable laws or
regulations, Bearer Securities and coupons may be presented and surrendered for
payment, where, subject to any applicable laws and regulations, Registered
Securities may be surrendered for payment, where Registered Securities may be
surrendered for registration of transfer or exchange, where Bearer Securities
may be presented for exchange, where Securities may be surrendered for
conversion, and where the written statements to be delivered by Holders of
Registered Securities as contemplated by third paragraph on the reverse of the
form of Registered Security may be delivered. Payment of principal of,
premium, if any, or interest on Bearer Securities, including any Additional
Amounts and any Bearer
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Additional Amounts payable on Bearer Securities pursuant to Section 10.4, may
be made at the Corporate Trust Office of the Trustee in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount of
such principal, interest, Additional Amounts or Bearer Additional Amounts at
all offices outside the United States maintained for such purpose by the
Company in accordance with this Indenture is illegal or effectively precluded
by exchange controls or other similar restrictions on the full payment or
receipt of such amounts in United States Dollars, as determined by the Company.
The Company may at any time and from time to time vary or
terminate the appointment of any such agent or appoint any additional agents
for any or all of such purposes; provided, however, that until all of the
Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of, premium, if any, and interest on the
Securities have been made available for payment and either paid or returned to
the Company pursuant to the provisions of Section 10.3, the Company will
maintain (1) in the Borough of Manhattan, The City of New York, an office or
agency where Registered Securities may be presented or surrendered for payment
and conversion, where Bearer Securities and coupons may be presented or
surrendered for payment and conversion in the circumstances described in the
last sentence of the first paragraph of this Section (and not otherwise), where
Registered Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and coupons and this Indenture may be served, and (2) subject to any
laws or regulations applicable thereto, in any city in a Western European
country, an office or agency where Securities and coupons may be presented and
surrendered for payment, where Securities may be presented for registration of
transfer or exchange or conversion and where the written statements to be
delivered by Holders of Registered Securities as contemplated by the third
paragraph on the reverse of the form of Registered Security may be delivered;
and provided, further, that so long as the Securities are listed on the
Luxembourg Stock Exchange and such stock exchange shall so require, the Company
will maintain a Paying Agent and Conversion Agent in Luxembourg. The Company
will give prompt written notice to the Trustee, and notice to the Holders in
accordance with Section 1.6, of the appointment or termination of any such
agents and of the location and any change in the location of any such office or
agency.
If at any time the Company shall fail to maintain any such
required office or agency, or shall fail to furnish the Trustee with the
address thereof, presentations and surrenders may be made and notices and
demands may be served on the Corporate Trust Office of the Trustee, except that
Bearer Securities and coupons may be presented and surrendered for payment and
conversion to the Principal Paying Agent at its office in the City of London,
England or other Paying Agent or conversion agent outside the United States,
and the Company hereby appoints the Principal Paying Agent as its agent to
receive such respective presentations, surrenders, notices and demands.
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SECTION 10.3. Money for Security Payments To Be Held in Trust.
If the Company shall act as its own Paying Agent, it will, on
or before each due date of the principal of, premium, if any, or interest on
any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal, premium, if
any, or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and the Company will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, one Business Day prior to each due date of the principal of, premium, if
any, or at or prior to 10:00 a.m. (New York City time) on each due date of
interest on any Securities, deposit with the Trustee a sum sufficient to pay
the principal, premium, if any, or interest so becoming due, such sum to be
held for the benefit of the Persons entitled to such principal, premium, if
any, or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of any failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of, premium, if any, or interest on Securities for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company
(or any other obligor upon the Securities) in the making of any
payment of principal, premium, if any, or interest; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
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Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of,
premium, if any, or interest on any Security and remaining unclaimed for two
years after such principal, premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security or any coupon appertaining thereto shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in an Authorized Newspaper in each Place of Payment, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 10.4. Additional Amounts and Bearer Additional Amounts.
The Company will pay to the Holder of any Bearer Security or
any coupon appertaining thereto Additional Amounts and Bearer Additional
Amounts as provided in the form of Bearer Security and to a Holder of any
Registered Security Additional Amounts as provided in the form of Registered
Security, in each case set forth in Section 2.2. Whenever in this Indenture
there is mentioned, in any context, the payment of the principal of, premium,
if any, or interest on, or in respect of, any Security or any coupon, such
mention shall be deemed to include mention of the payment of Additional Amounts
and Bearer Additional Amounts provided for in this Section to the extent that,
in such context, Additional Amounts and Bearer Additional Amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of Additional Amounts and Bearer Additional
Amounts (if applicable) in any provisions hereof shall not be construed as
excluding Additional Amounts and Bearer Additional Amounts in those provisions
hereof where such express mention is not made.
At least 10 days prior to November 30, 1996, or an earlier
Redemption Date or Repurchase Date (and at least 10 days prior to each date of
payment of principal, premium, if any, or interest after November 30, 1996, or
such earlier Redemption Date or Repurchase Date, if there has been any change
with respect to the matters set forth in the below-mentioned Officers'
Certificate), the Company will furnish the Trustee and the Company's Paying
Agents in London, England, and in the Borough of Manhattan, The City of New
York, if other than the Trustee, with an Officers' Certificate instructing the
Trustee and such Paying Agents whether such payment of principal of, premium,
if any, or interest on the Securities shall be made to Holders of Securities or
coupons who are not United States persons without withholding for or on account
of any tax,
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assessment or other governmental charge described in the second paragraph of
the face of the forms of Definitive Securities set forth in Section 2.2. If
any such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities or coupons and the Company will pay to the
Trustee or the Principal Paying Agent the Additional Amounts required by this
Section to be paid in the event of any such withholding. The Company covenants
to indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section, except to the extent such loss,
liability or expense is attributable to the Trustee's negligence or bad faith.
SECTION 10.5. Existence.
Subject to Article Seven, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 10.6. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 10.7. Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or
discharged, before the same may become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, (2)
all claims for labor, materials and supplies which, if unpaid, might by law
become a lien or charge upon the property of the Company or any Subsidiary, and
(3) all stamps and other duties, if any, which
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may be imposed by the United States or the United Kingdom or any political
subdivision thereof or therein in connection with the issuance, transfer,
exchange or conversion of any Securities or coupons or with respect to this
Indenture; provided, however, that, in the case of clauses (1) and (2), the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 10.8. Registration and Listing.
Within a reasonable time after the issuance of the Temporary
Global Bearer Security (and, in any event, prior to the Exchange Date), the
Company (i) will effect all registrations with, and obtain all approvals by,
all governmental authorities that may be necessary under any United States
Federal or state law (including the Securities Act, the Exchange Act and state
securities and Blue Sky laws) before the shares of Common Stock issuable upon
conversion of Securities may be lawfully issued and delivered, and thereafter
publicly traded (if permissible under the Securities Act), and qualified or
listed as contemplated by clause (ii) (it being understood that the Company
shall not be required to register the Securities under the Securities Act,
except pursuant to the Registration Rights Agreement referred to in Section
10.12); and (ii) will qualify the shares of Common Stock required to be issued
and delivered upon conversion of Securities, prior to such issuance or
delivery, for quotation on the Nasdaq National Market or, if the Common Stock
is not then quoted on the Nasdaq National Market, list the Common Stock on each
national securities exchange on which outstanding Common Stock is listed or
quoted at the time of such delivery. Nothing in this Section 10.8 will limit
the application of Section 10.12.
SECTION 10.9. Statement by Officers as to Default.
The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company an Officers' Certificate stating
that in the course of performance by the signers of their duties as such
officers of the Company they would normally obtain knowledge of whether any
default exists in the performance and observance of any of the terms,
provisions and conditions of this Indenture and whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture. Such
Certificate shall further state, as to each such officer signing such
Certificate, to the best of the knowledge of such officer, as of the date of
such Officers' Certificate, (a) whether any such default exists, (b) whether
the Company during the preceding fiscal year kept, observed, performed and
fulfilled each and every covenant and obligation of the Company under this
Indenture and (c) whether there was any default in the performance and
observance of any of the terms, provisions or conditions of this Indenture
during such preceding fiscal year. If the officers signing the Certificate
know of such a default, whether then existing or occurring during such
preceding fiscal
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year, the Officers' Certificate shall describe such default and its status with
particularity. The Company shall also promptly notify the Trustee if the
Company's fiscal year is changed so that the end thereof is on any date other
than the then current fiscal year end date.
The Company will deliver to the Trustee, forthwith upon
becoming aware of any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 10.9 shall
be delivered to the Trustee at its Corporate Trust Office.
SECTION 10.10. Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder of a Restricted
Security or the holder of shares of Common Stock issued upon conversion
thereof, the Company will promptly furnish or cause to be furnished Rule 144A
Information (as defined below) to such Holder of Restricted Securities or such
holder of shares of Common Stock issued upon conversion of Restricted
Securities, or to a prospective purchaser of any such security designated by
any such Holder or holder, as the case may be, to the extent required to permit
compliance by such Holder or holder with Rule 144A under the Securities Act (or
any successor provision thereto) in connection with the resale of any such
security; provided, however, that the Company shall not be required to furnish
such information in connection with any request made on or after the date which
is three years from the later of (i) the date such a security (or any such
predecessor security) was last acquired from the Company or (ii) the date such
a security (or any such predecessor security) was last acquired from an
"affiliate" of the Company within the meaning of Rule 144 under the Securities
Act (or any successor provision thereto). "Rule 144A Information" shall be
such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
SECTION 10.11. Resale of Certain Securities; Reporting Issuer.
During the period beginning on the last date of original
issuance of the Securities and ending on the date that is three years from such
date, the Company will not, will not permit any Subsidiary to, and will use its
best efforts not to permit any of its "affiliates" (as defined under Rule 144
under the Securities Act or any successor provision thereto) to, resell (x) any
Securities which constitute "restricted securities" under Rule 144 or (y) any
securities into which the Securities have been converted under this Indenture
which constitute "restricted securities" under Rule 144, that in either case
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have been reacquired by any of them. The Trustee shall have no responsibility
in respect of the Company's performance of its agreement in the preceding
sentence. The Company will continue to be a "reporting issuer" for purposes of
Rule 903 under the Securities Act until the full principal amount of the
Temporary Global Bearer Security has been exchanged for Bearer Securities in
accordance with this Indenture.
SECTION 10.12. Registration Rights.
The Company agrees that the Holders from time to time of
Registrable Securities (as defined below) are entitled to the benefits of a
Registration Rights Agreement, dated as of May 17, 1996 (the "Registration
Rights Agreement"), executed by the Company. Pursuant to the Registration
Rights Agreement, the Company has agreed for the benefit of the Holders from
time to time of Registrable Securities, at the Company's expense, (i) to use
its best efforts to file within 90 days after the first date of original
issuance of the Securities, a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Registrable Securities, (ii) thereafter use reasonable efforts to cause such
Shelf Registration Statement to be declared effective by the Commission as
promptly as practicable, and (iii) to use reasonable efforts to maintain such
Shelf Registration Statement continuously effective under the Securities Act of
1933, as amended, until a period of three years from the last date of original
issuance of the Securities or, if earlier, until there are no outstanding
Registrable Securities.
Notwithstanding the foregoing, the Company will not be
required to file a Shelf Registration Statement and will be permitted to
suspend the use of the prospectus that is a part of the Shelf Registration
Statement during the existence of a state of facts or the happening of an event
(including without limitation pending negotiations relating to, or the
consummation of, a transaction or the occurrence of any event which in the
opinion of the Company might require additional disclosure of material,
non-public information by the Company in the Shelf Registration Statement as to
which the Company believes it has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply with the rules
and regulations under the Securities Act) which in the opinion of outside
counsel to the Company might reasonably result in the Shelf Registration
Statement, or any amendment or post-effective amendment thereto, or the
prospectus or any supplement thereto, or any document incorporated therein by
reference containing an untrue statement of material fact or omitting to state
a material fact.
For the purposes of the Registration Rights Agreement,
"Registrable Securities" means all or any portion of the Registered Securities
issued from time to time under this Indenture and the shares of Common Stock
issuable upon conversion of such Securities, including any Securities initially
issued in bearer form and constituting the unsold allotment of a distributor
(within the meaning of Regulation S) of such Securities
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and later exchanged for Registered Securities; provided; however, that a
Security ceases to be a Registrable Security when it is no longer a Restricted
Registrable Security. For the purposes of the Registration Rights Agreement,
"Restricted Registrable Security" means any Security or share of Common Stock
issuable upon conversion thereof except any such Security or share of Common
Stock which (i) has been effectively registered under the Securities Act and
sold in a manner contemplated by the Shelf Registration Statement, (ii) has
been transferred in compliance with Rule 144 or is transferable pursuant to
paragraph (k) of such Rule 144 (or any successor provision thereto), (iii) has
been sold in compliance with Regulation S and does not constitute the unsold
allotment of a distributor within the meaning of Regulation S, or (iv) has
otherwise been transferred and a new Security or share of Common Stock not
subject to transfer restrictions under the Securities Act has been delivered by
or on behalf of the Company in accordance with Section 3.5(b) of this
Indenture.
If a Security is a Registrable Security, and the Holder
thereof elects to sell such Security pursuant to the Shelf Registration
Statement then, by its acceptance thereof, the Holder of such Security will
have agreed to be bound by the terms of the Registration Rights Agreement
relating to the Registrable Securities which are the subject of such election.
The Company does not grant registration rights under this
Section 10.12. This Section 10.12 is qualified in its entirety by the
Registration Rights Agreement (a copy of which is available for inspection by
any Holder of Registrable Securities at the Company's offices, at the Corporate
Trust Office and at the offices of the other Paying Agents during the term of
the Securities, as provided in the Registration Rights Agreement).
SECTION 10.13. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any covenant or conditions set forth in Sections 10.5 to 10.7, inclusive (other
than a covenant or condition which under Article Eight cannot be modified or
amended without the consent of the Holder of each Outstanding Security
affected), if before the time for such compliance the Holders shall, through
the written consent of, or the adoption of a resolution at a meeting of Holders
of the Outstanding Securities at which a quorum is present by, not less than a
majority in principal amount of the Outstanding Securities, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company and the duties of the
Trustee or any Paying or Conversion Agent in respect of any such covenant or
condition shall remain in full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption.
The Securities may be redeemed in accordance with the
provisions of the forms of Securities set forth in Section 2.2.
SECTION 11.2. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of the Securities or this
Indenture, shall be made in accordance with such provision and this Article
Eleven.
SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of any of the Securities, the Company shall, at least 60 days (or
75 days in the case of a redemption pursuant to the fourth paragraph of the
reverse of the form of Bearer Security set forth in Section 2.2(a)) prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date. If the Securities are to be redeemed pursuant to an election of the
Company which is subject to a condition specified in the forms of Securities
set forth in Section 2.2, the Company shall furnish the Trustee with an
Officers' Certificate stating that the Company is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Company so to redeem have occurred.
SECTION 11.4. Selection by Trustee of Securities To Be Redeemed.
If less than all the Securities are to be redeemed (other than
pursuant to the third or fourth paragraph on the reverse of the form of Bearer
Security in Section 2.2(a) or the third paragraph on the reverse of the form of
Registered Security in Section 2.2(b)), the particular Securities to be
redeemed shall be selected by the Trustee within two Business Days after it
receives the notice described in 11.3, from the Outstanding Securities not
previously called for redemption, individually by lot in the case of Bearer
Securities, and by such method as the Trustee may deem substantially equivalent
thereto in the case of Registered Securities and under circumstances intended
not to discriminate between Registered and Bearer Securities to be redeemed
pursuant to the terms thereof and hereof in the selection of Securities (or
portion thereof) selected for redemption.
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Partial redemption must be in an amount not less than U.S.$1,000,000 principal
amount of Securities.
If any Registered Security selected for partial redemption is
converted in part before termination of the conversion right with respect to
the portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed may be treated by the Trustee as Outstanding for the purpose of such
selection.
The Trustee shall promptly notify the Company and each
Security Registrar in writing of the securities selected for redemption and, in
the case of any Registered Securities selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 11.5. Notice of Redemption.
Notice of redemption shall be given in the manner provided in
Section 1.6 to the Holders of Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date, and (except, in the case of a
redemption pursuant to the fourth paragraph of the form of reverse of the
Bearer Security set forth in Section 2.2(a), to the extent otherwise expressly
provided in such form) such notice shall be irrevocable.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, and accrued interest, if any,
(3) if less than all Outstanding Securities are to be
redeemed, the aggregate principal amount of Securities to be redeemed
and the aggregate principal amount of Securities which will be
outstanding after such partial redemption,
(4) that on the Redemption Date the Redemption Price, and
accrued interest, if any, will become due and payable upon each such
Security to be redeemed, and that interest thereon shall cease to
accrue on and after said date,
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(5) the Conversion Rate, the date on which the right to
convert the Securities to be redeemed will terminate and the places
where such Securities, together with all unmatured coupons
appertaining thereto, may be surrendered for conversion,
(6) the place or places where such Securities, together with
all coupons appertaining thereto, if any, maturing after the
Redemption Date, are to be surrendered for payment of the Redemption
Price and accrued interest, if any, and
(7) in the case of a notice of redemption pursuant to the
third paragraph on the reverse of the form of Registered Security, a
form of written certification of each beneficial owner of a Registered
Security as to such beneficial owner's entitlement to Additional
Amounts.
In case of a partial redemption, the first notice given shall
specify the last date on which exchanges or transfers of Securities may be made
pursuant to Section 3.5 and the second notice shall specify the serial number
and ISIN number (if any) of the Bearer Securities (either individually or in
group, from one number to another, or by last digit or digits) called for
redemption and, in the case of Registered Securities, the serial and CUSIP
numbers (if any) and the portions thereof called for redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name of and at the expense of the
Company. Notice of redemption of Securities to be redeemed at the election of
the Company received by the Trustee shall be given by the Trustee to each
Paying Agent in the name of and at the expense of the Company.
SECTION 11.6. Deposit of Redemption Price.
Not less than one Business Day prior to any Redemption Date,
the Company shall deposit with the Trustee or with the Principal Paying Agent
if so directed by the Trustee (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money (which shall be in immediately available funds on such Redemption Date)
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date other than any Securities called for
redemption on that date which have been converted prior to the date of such
deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security,
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if a Registered Security, or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.7) be paid to the Company on
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 11.7. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price,
including accrued interest) such Securities shall cease to bear interest and
the coupons for such interest appertaining to Bearer Securities shall, except
to the extent provided below, be void. Upon surrender of any Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price together with accrued and unpaid
interest to the Redemption Date; provided, however, that installments of
interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only upon presentation and surrender of
coupons for such interest (at an office or agency outside the United States,
except as otherwise provided in the form of Bearer Security set forth in
Section 2.2(a)); and provided, further, that installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal amount of, premium, if
any, and, to the extent permitted by applicable law, accrued interest on such
Security shall, until paid, bear interest from the Redemption Date at a rate of
4.25% per annum and such Security shall remain convertible until the principal
of such Security (or portion thereof, as the case may be) shall have been paid
or duly provided for.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons or the surrender of such missing
coupons or coupon may be waived by the Company and the Trustee or the Principal
Paying Agent or its agent, if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made from the Redemption Price, such Holder shall be entitled to receive
the amount so deducted; provided, however, that interest represented by coupons
shall be payable only upon presentation and surrender of those coupons at an
office or agency located outside of the United States (except as otherwise
provided in the form of Bearer Security set forth in Section 2.2(a)).
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SECTION 11.8. Registered Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part
shall be surrendered at an office or agency of the Company designated for that
purpose pursuant to Section 10.2 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Registered Security without service charge, a new Registered
Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Registered Security so surrendered.
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ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1. Conversion Privilege and Conversion Rate.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security other than the
Temporary Global Bearer Security may be converted into fully paid and
nonassessable shares (calculated as to each conversion to the nearest 1/100th
of a share) of Common Stock of the Company at the Conversion Rate, determined
as hereinafter provided, in effect at the time of conversion. Such conversion
right shall commence on the 90th day after the last original issuance date of
the Securities and expire at the close of business on May 31, 2000, subject, in
the case of conversion of any Global Security, to any Applicable Procedures.
In case a Security or portion thereof is called for redemption at the election
of the Company or the Holder thereof exercises his right to require the Company
to repurchase the Security, such conversion right in respect of the Security,
or portion thereof so called, shall expire at the close of business on the
Redemption Date or the Repurchase Date, as the case may be, unless the Company
defaults in making the payment due upon redemption or repurchase, as the case
may be (in each case subject as aforesaid to any Applicable Procedures with
respect to any Global Security).
The rate at which shares of Common Stock shall be delivered
upon conversion (herein called the "Conversion Rate") shall be initially
12.0846 shares of Common Stock for each U.S.$1,000 principal amount of
Securities. The Conversion Rate shall be adjusted in certain instances as
provided in this Article Twelve.
SECTION 12.2. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of
any Definitive Security to be converted shall surrender such Definitive
Security, duly endorsed or assigned to the Company or in blank (in the case of
any Registered Security), at any office or agency of the Company maintained for
that purpose pursuant to Section 10.2, accompanied by a duly signed conversion
notice substantially in the form set forth in Section 2.5 stating that the
Holder elects to convert such Definitive Security or, if less than the entire
principal amount thereof is to be converted (in the case of any Registered
Security), the portion thereof to be converted. Each Bearer Security
surrendered for conversion must be surrendered together with all coupons
appertaining thereto that mature after the date of conversion. If any Bearer
Security surrendered for conversion shall not be accompanied by all such
appurtenant coupons, the surrender of any or all of such missing coupons may be
waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them
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and any Paying Agent harmless. Matured coupons not in default (including
coupons maturing on the date of conversion) will be payable against surrender
thereof, and matured coupons previously surrendered and in default will
continue to be payable, notwithstanding the exercise of the right of conversion
by the Holder of the Security to which the coupon appertains, but coupons
maturing after the date of conversion will not be paid. Each Registered
Security surrendered for conversion (in whole or in part) during the period
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
shall (except in the case of any Security or portion thereof which has been
called for redemption on a Redemption Date, or is repurchasable on a Repurchase
Date, occurring, in either case, within such period) be accompanied by payment
in New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of such Registered Security (or part thereof, as the case may
be) being surrendered for conversion (or, if such Registered Security was
issued in exchange for a Bearer Security after the close of business on such
Regular Record Date, by surrender of one or more coupons relating to such
Interest Payment Date or by both payment in such funds and surrender of such
coupon or coupons, in either case in an amount equal to the interest payable on
such Interest Payment Date on the principal amount of such Registered Security
(or portion thereof) then being converted). The interest so payable on such
Interest Payment Date with respect to any Security (or portion thereof, if
applicable) which has been called for redemption on a Redemption Date, or is
repurchasable on a Repurchase Date, occurring, in either case, during the
period from the close of business on any Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date,
which Security (or portion thereof, if applicable) is surrendered (along with,
in the case of any Bearer Security, coupons appertaining thereto maturing after
the date of conversion) for conversion during such period, shall be paid to the
Holder of such Security being converted in an amount equal to the interest that
would have been payable on such Security if such Security had been converted as
of the close of business on such Interest Payment Date. The interest so
payable on such Interest Payment Date in respect of any Registered Security (or
portion thereof, as the case may be) which has not been called for redemption
on a Redemption Date, or is not eligible for repurchase on a Repurchase Date,
occurring, in either case, during the period from the close of business on any
Record Date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date, which Registered Security (or portion thereof,
as the case may be) is surrendered for conversion during such period, shall be
paid to the Holder of such Security as of such Regular Record Date. Interest
payable in respect of any Registered Security surrendered for conversion on or
after an Interest Payment Date shall be paid to the Holder of such Security as
of the next preceding Regular Record Date, notwithstanding the exercise of the
right of conversion. Except as provided in this paragraph and subject to the
last paragraph of Section 3.7, no cash payment or adjustment shall be made upon
any conversion on account of any interest accrued from the Interest Payment
Date next preceding the conversion date, in respect of any
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Definitive Security (or part thereof, as the case may be) surrendered for
conversion, or on account of any dividends on the Common Stock issued upon
conversion. The Company's delivery to the Holder of the number of shares of
Common Stock (and cash in lieu of fractions thereof, as provided in this
Indenture) into which a Definitive Security is convertible will be deemed to
satisfy the Company's obligation to pay the principal amount of the Security.
Definitive Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Securities for conversion in accordance with the foregoing provisions, and at
such time the rights of the Holders of such Securities as Holders shall cease,
and the Person or Persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock at such time. As promptly as practicable on or after the
conversion date, the Company shall issue and deliver to the Trustee, for
delivery to the Holder, a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, together with payment in lieu
of any fraction of a share, as provided in Section 12.3.
All shares of Common Stock delivered upon such conversion of
Restricted Securities shall bear restrictive legends substantially in the form
of the legends required to be set forth on the Restricted Securities pursuant
to Section 3.5 and shall be subject to the restrictions on transfer provided in
such legends. Neither the Trustee nor any agent maintained for the purpose of
such conversion shall have any responsibility for the inclusion or content of
any such restrictive legends on such Common Stock; provided, however, that the
Trustee or any agent maintained for the purpose of such conversion shall have
provided, to the Company or to the Company's transfer agent for such Common
Stock, prior to or concurrently with a request to the Company to deliver such
Common Stock, written notice that the Securities delivered for conversion are
Restricted Securities.
In the case of any Registered Security which is converted in
part only, upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company,
a new Registered Security or Securities of authorized denominations in an
aggregate principal amount equal to the unconverted portion of the principal
amount of such Security. A Registered Security may be converted in part, but
only if the principal amount of such Security to be converted is any integral
multiple of U.S.$1,000 and the principal amount of such security to remain
Outstanding after such conversion is equal to U.S.$1,000 or any integral
multiple of $1,000 in excess thereof.
If shares of Common Stock to be issued upon conversion of a
Restricted Security, or Registered Securities to be issued upon conversion of a
Restricted Security
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in part only, are to be registered in a name other than that of the beneficial
owner of such Restricted Security, then such Holder must deliver to the
Conversion Agent a Surrender Certificate, dated the date of surrender of such
Restricted Security and signed by such beneficial owner, as to compliance with
the restrictions on transfer applicable to such Restricted Security. Neither
the Trustee nor any Conversion Agent, Registrar or Transfer Agent shall be
required to register in a name other than that of the beneficial owner, shares
of Common Stock or Registered Securities issued upon conversion of any such
Restricted Security not so accompanied by a properly completed Surrender
Certificate.
SECTION 12.3. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon
conversion of any Definitive Security or Securities. If more than one
Definitive Security shall be surrendered for conversion at one time by the same
Holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Definitive Securities (or specified portions thereof) so surrendered. Instead
of any fractional share of Common Stock which would otherwise be issuable upon
conversion of any Definitive Security or Securities (or specified portions
thereof), the Company shall calculate and pay a cash adjustment in respect of
such fraction (calculated to the nearest 1/100th of a share) in an amount equal
to the same fraction of the Closing Price Per Share at the close of business on
the day of conversion. Such cash payments shall, in the case of a conversion
of Bearer Securities, be made to an address outside of the United States as
requested in writing by such Holder.
SECTION 12.4. Adjustment of Conversion Rate.
The Conversion Rate shall be subject to adjustments from time
to time as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in shares of
Common Stock, the Conversion Rate in effect at the opening of business on the
day following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased by dividing such
Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the opening
of business on the day following the date fixed for such determination. For
the purposes of this paragraph (1), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common
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Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the current
market price per share (determined as provided in paragraph (8) of this Section
12.4) of the Common Stock on the date fixed for the determination of
shareholders entitled to receive such rights, options or warrants, the
Conversion Rate in effect at the opening of business on the day following the
date fixed for such determination shall be increased by dividing such
Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock
so offered for subscription or purchase would purchase at such current market
price and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock so offered for subscription or
purchase, such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (2), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. The Company will not issue any
rights, options or warrants in respect of shares of Common Stock held in the
treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Rate
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase
or reduction, 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.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness,
shares of any class of capital stock, or other property (including securities,
but excluding (i) any rights, options or warrants referred to in paragraph (2)
of this Section, (ii) any dividend or distribution paid exclusively in cash,
(iii) any dividend or distribution referred to in paragraph (1) of this Section
and (iv) any merger or consolidation to which Section 12.11 applies), the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by
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dividing the Conversion Rate in effect immediately prior to the close of
business on the date fixed for the determination of shareholders entitled to
receive such distribution by a fraction of which the numerator shall be the
current market price per share (determined as provided in paragraph (8) of this
Section 12.4) of the Common Stock on the date fixed for such determination less
the then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution filed
with the Trustee) of the portion of the assets, shares or evidences of
indebtedness so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common Stock,
such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such distribution.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 12.11 applies or as
part of a distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (I) the aggregate amount of any
other cash distributions to all holders of its Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such distribution
and in respect of which no adjustment pursuant to this paragraph (5) has been
made and (II) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) of consideration payable in respect of any
tender offer by the Company or any of its subsidiaries for all or any portion
of the Common Stock concluded within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment pursuant to
paragraph (6) of this Section 12.4 has been made (the "combined cash and tender
amount") exceeds 12.5% of the product of the current market price per share
(determined as provided in paragraph (8) of this Section 12.4) of the Common
Stock on the date for the determination of holders of shares of Common Stock
entitled to receive such distribution times the number of shares of Common
Stock outstanding on such date (the "aggregate current market price"), then,
and in each such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate in effect immediately
prior to the close of business on the date fixed for determination of the
shareholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the current market price per share
(determined as provided in paragraph (8) of this Section) of the Common Stock
on the date fixed for such determination less an amount equal to the quotient
of (x) the excess of such combined cash and tender amount over such aggregate
current market price divided by (y) the number of shares of Common Stock
outstanding on such date for determination and (ii) the denominator of which
shall be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 12.4) of the Common Stock on such date for
determination.
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(6) In case a tender offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender offer (as amended upon the expiration thereof) shall require the payment
to shareholders (based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (I) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any other tender
offer by the Company or any Subsidiary for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to this paragraph (6) has
been made and (II) the aggregate amount of any cash distributions to all
holders of the Company's Common Stock within 12 months preceding the expiration
of such tender offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section has been made (the "combined tender and cash
amount") exceeds 10% of the product of the current market price per share of
the Common Stock (determined as provided in paragraph (8) of this Section 12.4)
as of the last time (the "Expiration Time") tenders could have been made
pursuant to such tender offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares) as of the
Expiration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Expiration Time, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate immediately prior to close of business on the date
of the Expiration Time by a fraction (i) the numerator of which shall be equal
to (A) the product of (I) the current market price per share of the Common
Stock (determined as provided in paragraph (8) of this Section 12.4) on the
date of the Expiration Time multiplied by (II) the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time less
(B) the combined tender and cash amount, and (ii) the denominator of which
shall be equal to the product of (A) the current market price per share of the
Common Stock (determined as provided in paragraph (8) of this Section 12.4) as
of the Expiration Time multiplied by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time less the
number of all shares validly tendered and not withdrawn as of the Expiration
Time (the shares deemed so accepted up to any such maximum, being referred to
as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 12.11 applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of shareholders entitled
to receive such distribution" and "the date fixed for such
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determination" within the meaning of paragraph (4) of this Section), and (b) a
subdivision or combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which
such subdivision or combination becomes effective" within the meaning of
paragraph (3) of this Section 12.4).
(8) For the purpose of any computation under paragraphs (2), (4),
(5) or (6) of this Section 12.4, the current market price per share of Common
Stock on any date shall be calculated by the Company and be deemed to be the
average of the daily Closing Prices Per Share for the five consecutive Trading
Days selected by the Company commencing not more than 10 Trading Days before,
and ending not later than, the earlier of the day in question and the day
before the "ex" date with respect to the issuance or distribution requiring
such computation. For purposes of this paragraph, the term "'ex' date", when
used with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way in the applicable securities market
or on the applicable securities exchange without the right to receive such
issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent in
such rate; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
shall be made to the nearest cent or to the nearest one-hundredth of a share,
as the case may be.
(10) The Company may make such increases in the Conversion Rate, for
the remaining term of the Securities or any shorter term, in addition to those
required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 12.4, as
it considers to be advisable in order to avoid or diminish any income tax to
any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax purposes.
The Company shall have the power to resolve any ambiguity or correct any error
in this paragraph (10) and its actions in so doing shall, absent manifest
error, be final and conclusive.
SECTION 12.5. Notice of Adjustments of Conversion Rate.
Whenever the Conversion Rate is adjusted as herein provided:
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(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 12.4 and shall prepare a certificate signed by the
Chief Financial Officer of the Company setting forth the adjusted
Conversion Rate and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall promptly be filed with the
Trustee and with each Conversion Agent; and
(2) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be required,
and as soon as practicable after it is required, such notice shall be
provided by the Company to all Holders in accordance with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.
SECTION 12.6. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require any adjustment
pursuant to Section 12.4; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company, or of
any consolidation, merger or share exchange to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the conveyance, sale, transfer or lease of all or
substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer for
all or a portion of the Company's outstanding shares of Common Stock (or
shall amend any such tender offer);
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then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 10.2, and shall
cause to be provided to all Holders in accordance with Section 1.6, at least 20
days (or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record, expiration or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights, options or warrants, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined, (y) the date on which the right to make tenders under such tender
offer expires or (z) the date on which such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, conveyance, transfer, sale,
lease, dissolution, liquidation or winding up. Neither the failure to give
such notice or the notice referred to in the following paragraph nor any defect
therein shall affect the legality or validity of the proceedings described in
clauses (a) through (e) of this Section 12.6. If at the time the Trustee shall
not be a conversion agent, a copy of such notice shall also forthwith be filed
by the Company with the Trustee.
The preceding paragraph to the contrary notwithstanding, the Company
shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2, and shall cause to be
provided to all Holders in accordance with Section 1.6, notice of any tender
offer by the Company or any Subsidiary for all or any portion of the Common
Stock at or about the time that such notice of tender offer is provided to the
public generally.
SECTION 12.7. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all Outstanding Securities.
SECTION 12.8. Taxes on Conversions.
Except as provided in the next sentence, the Company will pay any and
all taxes and duties that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Securities pursuant hereto. The
Company shall not, however, be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock in a name other than that of the Holder of the Security or
Securities to be converted, and no such issue or delivery shall be made unless
and until the Person requesting such issue has paid to the Company
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the amount of any such tax or duty, or has established to the satisfaction of
the Company that such tax or duty has been paid.
SECTION 12.9. Covenant as to Common Stock.
The Company agrees that all shares of Common Stock which may be
delivered upon conversion of Securities, upon such delivery, will have been
duly authorized and validly issued and will be fully paid and nonassessable
and, except as provided in Section 12.8, the Company will pay all taxes, liens
and charges with respect to the issue thereof.
SECTION 12.10. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee or the Principal Paying Agent or its agent to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in
Section 3.9.
SECTION 12.11. Provision in Case of Consolidation, Merger or Sale of
Assets.
In case of any consolidation or merger of the Company with or into
any other Person, any merger of another Person with or into the Company (other
than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any conveyance, sale, transfer or lease of all or substantially all of the
assets of the Company, the Person formed by such consolidation or resulting
from such merger or which acquires such assets, as the case may be, shall
execute and deliver to the Trustee a supplemental indenture providing that the
Holder of each Security then Outstanding shall have the right thereafter,
during the period such Security shall be convertible as specified in Section
12.1, to convert such Security only into the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, conveyance,
sale, transfer or lease by a holder of the number of shares of Common Stock of
the Company into which such Security might have been converted immediately
prior to such consolidation, merger, conveyance, sale, transfer or lease,
assuming such holder of Common Stock of the Company (i) is not a Person with
which the Company consolidated or merged with or into or which merged into or
with the Company or to which such conveyance, sale, transfer or lease was made,
as the case may be ("Constituent Person"), or an Affiliate of a Constituent
Person and (ii) failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease (provided that if
the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer, or lease is not the same for
each share of Common Stock of the Company held immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election
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shall not have been exercised ("Non-electing Share"), then for the purpose of
this Section 12.11 the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, sale, transfer or lease
by the holders of each Non-electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the Non-electing Shares), and
further assuming, if such consolidation, merger, conveyance, transfer, sale or
lease occurs prior to the later of August 21, 1996 and the receipt of
Securities in definitive form (in the case of Securities initially represented
by a Temporary Global Bearer Security), that the Security was convertible at
the time of such occurrence at the Conversion Rate specified in Section 12.1 as
adjusted from the issue date of such Security to such time as provided in this
Article Twelve. Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article. The above provisions of this Section
12.11 shall similarly apply to successive consolidations, mergers, conveyances,
sales, transfers or leases. Notice of the execution of such a supplemental
indenture shall be given by the Company to the Holder of each Security as
provided in Section 1.6 promptly upon such execution.
Neither the Trustee, any Paying Agent nor any Conversion Agent shall
be under any responsibility to determine the correctness of any provisions
contained in any such supplemental indenture relating either to the kind or
amount of shares of stock or other securities or property or cash receivable by
Holders of Securities upon the conversion of their Securities after any such
consolidation, merger, conveyance, transfer, sale or lease or to any such
adjustment, but may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, an Opinion of Counsel
with respect thereto, which the Company shall cause to be furnished to the
Trustee upon request.
SECTION 12.12. Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 6.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Rate, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same, or whether a supplemental indenture need be entered into. Neither the
Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 6.1, nor any
Conversion Agent shall be responsible for any failure of the Company to make or
calculate any cash payment or to issue, transfer or deliver
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any shares of Common Stock or share certificates or other securities or
property or cash upon the surrender of any Security for the purpose of
conversion; and the Trustee, subject to the provisions of Section 6.1, and any
Conversion Agent shall not be responsible for any failure of the Company to
comply with any of the covenants of the Company contained in this Article.
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ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article Thirteen (subject to the
provisions of Article Four), the indebtedness represented by the Securities and
the payment of the principal of (and premium, if any) and interest on each and
all of the Securities are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all Senior Indebtedness.
Whenever in this Article Thirteen there is a reference, in any context, to the
principal of any Security as of any time, such reference shall be deemed to
include reference to the Repurchase Price payable in cash in respect of such
Security to the extent that such Repurchase Price payable in cash is, was or
would be so payable at such time, and express mention of the Repurchase Price
in any provision of this Article Thirteen shall not be construed as excluding
the Repurchase Price payable in cash in those provisions of this Article
Thirteen when such express mention is not made.
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of the
Company, then and in any such event the holders of Senior Indebtedness shall be
entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Indebtedness in cash before the Holders of the
Securities are entitled to receive any payment on account of principal of (or
premium, if any) or interest (including any Additional Amounts or Bearer
Additional Amounts) on the Securities or on account of the purchase, redemption
or other acquisition of Securities, and to that end the holders of Senior
Indebtedness shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, which may be payable or deliverable in respect of the
Securities in any such case, proceeding, dissolution, liquidation or other
winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, securities or other
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property, before all Senior Indebtedness is paid in full, and if such fact
shall, at or prior to the time of such payment or distribution, have been made
known to the Trustee or, as the case may be, such Holder, then and in such
event such payment or distribution shall be paid over or delivered forthwith to
the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of assets of the Company
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
For purposes of this Article only, the words "cash, securities or
other property" 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 which
shares of stock are subordinated in right of payment to all then outstanding
Senior Indebtedness to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
Seven shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of
assets and liabilities of the Company for the purposes of this Section if the
Person formed by such consolidation or into which the Company is merged or
which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article Seven.
SECTION 13.3. No Payment When Senior Indebtedness in Default.
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on (including a
default under any redemption or repurchase obligation with respect to) any
Senior Indebtedness beyond any applicable grace period with respect thereto or
in the event that any other event of default with respect to any Senior
Indebtedness shall have occurred and be continuing which would then permit the
holders of such Senior Indebtedness to declare such Senior Indebtedness due and
payable prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured or waived
or shall have ceased to exist after written notice to the Company and the
Trustee by any holder of such Senior Indebtedness, or (b) in the event any
judicial proceeding shall be pending with respect to any such default in
payment or event of default, then no payment shall be made by the Company on
account of principal of (or premium, if any) or interest on the Securities or
on account of the purchase, redemption or other acquisition of Securities.
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In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company, in the case of the Trustee, or the Trustee,
in the case of such Holder.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.4. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Securities shall prevent (a) the Company, at any time except
during the pendency of any case, proceeding, dissolution, liquidation or other
winding up, assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company referred to in Section 13.2 or under the
conditions described in Section 13.3, from making payments at any time of
principal of (and premium, if any) or interest on the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of (and premium, if any) or interest
on the Securities or the retention of such payment by the Holders, if, at the
time of such application by the Trustee, it did not have knowledge that such
payment would have been prohibited by the provisions of this Article.
SECTION 13.5. Subrogation to Rights of Holders of Senior
Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full. For
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 Securities or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to the holders of Senior Indebtedness by Holders of the Securities
or the Trustee, shall, as among the Company, its creditors other than holders
of Senior Indebtedness and the Holders of the Securities, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
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SECTION 13.6. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of (and premium, if any) and interest
on the Securities as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Securities and creditors of the Company other
than the holders of Senior Indebtedness; or (c) prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article of the holders of Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder.
SECTION 13.7. Trustee to Effectuate Subordination.
Each holder of a Security 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 and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 13.8. No Waiver of Subordination Provisions.
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 of any
Senior Indebtedness, or by any non-compliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement
under
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which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of Senior Indebtedness; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.
SECTION 13.9. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.1, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least two Business Days
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of
(and premium, if any) or interest on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the purpose for
which such money was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to such
date.
Subject to the provisions of Section 6.1, the Trustee 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 Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). 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, 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, 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.
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SECTION 13.10. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
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.
SECTION 13.11. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
it shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article or otherwise.
SECTION 13.12. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
SECTION 13.13. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that Section 13.12 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
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SECTION 13.14. Certain Conversions and Repurchases Deemed Payment.
For the purposes of this Article only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article
Twelve or upon the repurchase of Securities in accordance with Article Fourteen
shall not be deemed to constitute a payment or distribution on account of the
principal of or premium or interest on Securities or on account of the purchase
or other acquisition of Securities, and (2) the payment, issuance or delivery
of cash, property or securities (other than junior securities) upon conversion
of a Security shall be deemed to constitute payment on account of the principal
of such Security. For the purposes of this Section, the term "junior
securities" means (a) shares of any stock of any class of the Company and any
cash, property or securities into which the Securities are convertible pursuant
to Article Twelve and (b) securities of the 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 Securities are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in
this Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of the Securities, the right, which is absolute and unconditional, of
the Holder of any Security to convert such Security in accordance with Article
Twelve or to exchange such Security for Common Stock in accordance with Article
Fourteen if the Company elects to satisfy the obligations under Article
Fourteen by the delivery of Common Stock.
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ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 14.1. Right to Require Repurchase.
In the event that a Change in Control (as hereinafter defined) shall
occur, then each Holder shall have the right, at the Holder's option, but
subject to the provisions of Section 14.2, to require the Company to
repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Securities, or any portion of the principal amount thereof
that is equal to U.S.$5,000 or any integral multiple of U.S.$1,000 in excess
thereof (provided that no single Bearer Security may be repurchased in part,
and no single Registered Security may be repurchased in part unless the portion
of the principal amount of such Registered Security to be Outstanding after
such repurchase is equal to U.S.$5,000 or integral multiples of U.S.$1,000 in
excess thereof), on the date (the "Repurchase Date") that is 45 days after the
date of the Company Notice (as defined in Section 14.3) at a purchase price
equal to 100% of the principal amount of the Securities to be repurchased plus
interest accrued to the Repurchase Date (the "Repurchase Price"); provided,
however, that installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Repurchase Date shall be payable only upon
presentation and surrender of coupons for such interest (at an office or agency
outside the United States, except as otherwise provided in the form of Bearer
Security set forth in Section 2.2(a)); and provided, further, that installments
of interest on Registered Securities whose Stated Maturity is on or prior to
the Repurchase Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 3.7. Such right to
require the repurchase of the Securities shall not continue after a discharge
of the Company from its obligations with respect to the Securities in
accordance with Article Four, unless a Change in Control shall have occurred
prior to such discharge. At the option of the Company, the Repurchase Price
may be paid in cash or, subject to the fulfillment by the Company of the
conditions set forth Section 14.2, by delivery of shares of Common Stock having
a fair market value equal to the Repurchase Price. Whenever in this Indenture
(including Sections 2.2, 3.1, 5.1(2) and 5.8) there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect of
such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made; provided, however, that for the purposes of Article Thirteen such
reference shall be deemed to
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include reference to the Repurchase Price only to the extent the Repurchase
Price is payable in cash.
SECTION 14.2. 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 14.1 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 this Section 14.2, 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 Per Share for
the five consecutive Trading Days ending on and including the third Trading Day
immediately preceding the Repurchase Date;
(b) In the event any shares of Common Stock to be issued upon
repurchase of Securities hereunder 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 such
repurchase, such registration shall have been completed and shall have become
effective prior to the Repurchase Date; and
(c) In the event any shares of Common Stock to be issued upon
repurchase of Securities hereunder 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 such repurchase, such
registration shall have been completed, and shall have become effective and
such approval shall have been obtained, in each case, prior to the Repurchase
Date;
(d) The shares of Common Stock deliverable in payment of the
Repurchase Price are, or shall have been, approved for quotation on the Nasdaq
National Market or are, or shall have been, listed on a national securities
exchange, in either case, prior to the Repurchase Date; and
(e) All shares of Common Stock deliverable in payment of the
Repurchase Price shall 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 14.2 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 14.3. Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption
all of the Outstanding Securities, on or before the 30th day after the
occurrence of a Change of Control, the Company or, at the request and expense
of the Company on or before the 15th day after such occurrence, the Trustee,
shall give to all Holders of Securities and coupons, in the manner provided in
Section 1.6, notice (the "Company Notice") of the occurrence of the Change of
Control and of the repurchase right set forth herein arising as a result
thereof. The Company shall also deliver a copy of such notice of a repurchase
right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and whether the Repurchase Price shall be
paid by the Company in cash or by delivery of shares of Common Stock,
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where such
Securities, together with all coupons appertaining thereto, if any,
maturing after the Repurchase Date, are to be surrendered for payment of
the Repurchase Price and accrued interest, if any,
(5) that on the Repurchase Date the Repurchase Price, and accrued
interest, if any, will become due and payable upon each such Security
designated by the Holder to be repurchased, and that interest thereon
shall cease to accrue on and after said date,
(6) the Conversion Rate then in effect, the date on which the right
to convert the principal amount of the Securities to be repurchased will
terminate and the place or places where such Securities, together with all
unmatured coupons and any matured coupons in default appertaining thereto,
may be surrendered for conversion, and
(7) the place or places that the certificate required by Section 2.2
shall be delivered, and the form of such certificate and the place or
places that the Surrender Certificate required by Section 14.3(k) shall be
delivered.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
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If any of the foregoing provisions or other provisions of this
Article Fourteen are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 30th day after the date of the
Company Notice (i) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the
Securities to be repurchased (and, if any Registered Security is to repurchased
in part, the serial number thereof, the portion of the principal amount thereof
to be repurchased and the name of the Person in which the portion thereof to
remain Outstanding after such repurchase is to be registered) and a statement
that an election to exercise the repurchase right is being made thereby, and,
in the event that the Repurchase Price shall be paid in shares of Common Stock,
the name or names (with addresses) in which the certificate or certificates for
shares of Common Stock shall be issued, and (ii) the Securities with respect to
which the repurchase right is being exercised, together with all coupons, if
any, appertaining thereto maturing after the Repurchase Date; provided,
however, that Bearer Securities shall be delivered only to an office of a
Paying Agent located outside the United States except in the limited
circumstances described in Section 10.2. Such written notice shall be
irrevocable, except that the right of the Holder to convert the Securities with
respect to which the repurchase right is being exercised shall continue until
the close of business on the Repurchase Date.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
or the Paying Agent in London the Repurchase Price in cash or shares of Common
Stock, as provided above, for payment to the Holder on the Repurchase Date or,
if shares of Common Stock are to be paid, as promptly after the Repurchase Date
as practicable, together with accrued and unpaid interest to the Repurchase
Date payable with respect to the Securities as to which the purchase right has
been exercised; provided, however, that installments of interest that mature on
or prior to the Repurchase Date shall be payable in cash, in the case of
Registered Securities, to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Date and, in the case of Bearer Securities, to the
holder of the coupon with respect thereto, in each case according to the terms
and provisions of Article Three; and provided, further, that Bearer Securities
and coupons shall be so payable only at an office or agency outside the United
States (except as otherwise provided in the form of Bearer Security set forth
in Section 2.2(a)).
(d) If any Bearer Security surrendered for repurchase shall not be
accompanied by all appurtenant coupons maturing after the Repurchase Date, such
Bearer Security may be paid after deducting from the Repurchase Price an amount
equal to the face amount of all such missing coupons or the surrender of such
missing coupons or coupon may be waived by the Company and the Trustee, if
there be furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent
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harmless. If thereafter the Holder of such Bearer Security shall surrender to
any Paying Agent any such missing coupon in respect of which a deduction shall
have been made from the Repurchase Price, if any, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
by coupons shall be payable only upon presentation and surrender of those
coupons at an office or agency located outside of the United States (except as
otherwise provided in the form of Bearer Security set forth in Section 2.2(a)).
(e) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate of 4.25% per annum, and each Security shall remain convertible into
Common Stock until the principal of such Security (or portion thereof, as the
case may be) shall have been paid or duly provided for.
(f) Any Registered Security which is to be repurchased only in part
shall be surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Registered Security without service charge, a new Registered
Security or Registered Securities, containing identical terms and conditions,
each in an authorized denomination in aggregate principal amount equal to and
in exchange for the unrepurchased portion of the principal of the Registered
Security so surrendered.
(g) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such repurchase shall be deemed to have become on the
Repurchase Date the holder or holders of record of the shares represented
thereby; provided, however, that any surrender for repurchase on a date when
the stock transfer books of the Company shall be closed shall constitute the
Person or Persons in whose name or names the certificate or certificates for
such shares are to be issued as the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued upon repurchase of any
Security declared prior to the Repurchase Date.
(h) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same
Holder and the Repurchase Price shall be payable in shares of Common Stock, the
number of full shares which shall be issuable upon such repurchase shall be
computed on the basis of the aggregate
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principal amount of the Securities so repurchased. Instead of any fractional
share of Common Stock which would otherwise be issuable on the repurchase of
any Security or Securities, the Company will deliver to the applicable Holder
its check for the current market value of such fractional share. The current
market value of a fraction of a share is determined by multiplying the current
market price of a full share by the fraction, and rounding the result to the
nearest cent. For purposes of this Section, the current market price of a
share of Common Stock is the Closing Price Per Share of the Common Stock on the
Trading Day immediately preceding the Repurchase Date.
(i) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of the Holder
of the Securities being repurchased, and no such issuance or delivery shall be
made unless and until the Person requesting such issuance or delivery has paid
to the Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(j) All shares of Common Stock delivered upon repurchase of
Restricted Securities shall bear restrictive legends substantially in the form
of the legends required to be set forth on the Restricted Securities pursuant
to Section 3.5 and shall be subject to the restrictions on transfer provided in
such legends. Neither the Trustee, the Principal Paying Agent nor any other
agents maintained for the purpose of such repurchase (as shall be set forth in
the Company Notice) shall have any responsibility for the inclusion or content
of any such restrictive legends on such Common Stock; provided, however, that
the Trustee or any agent maintained for the purpose of such repurchase shall
have provided, to the Company or to the Company's transfer agent for such
Common Stock, prior to or concurrently with a request to the Company to deliver
such Common Stock, written notice that the Securities delivered for repurchase
are Restricted Securities.
(k) If shares of Common Stock to be delivered upon repurchase of a
Restricted Security are to be registered in a name other than that of the
beneficial owner of such Restricted Security, then such Holder must deliver to
the Trustee, the Principal Paying Agent or any other agent maintained for the
purpose of such repurchase (as shall be set forth in the Company Notice) a
Surrender Certificate, dated the date of surrender of such Restricted Security
and signed by such beneficial owner, as to compliance with the restrictions on
transfer applicable to such Restricted Security. Neither the Trustee nor any
Paying Agent, Registrar or Transfer Agent or other agents shall be required to
register in a name other than that of the beneficial owner shares of Common
Stock issued
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upon repurchase of any such Restricted Security not so accompanied by a
properly completed Surrender Certificate.
(l) All Securities delivered for repurchase shall be delivered to
the Trustee, the Principal Paying Agent or any other agents (as shall be set
forth in the Company Notice) to be canceled by or at the direction of the
Trustee, which shall dispose of the same as provided in Section 3.9.
SECTION 14.4. Certain Definitions.
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3, as in effect on the date of the original execution of this
Indenture, promulgated by the Commission pursuant to the Exchange Act;
(b) a "Change in Control" shall be deemed to have occurred at the
time, after the original issuance of the Securities, of:
(i) the acquisition by any Person of beneficial ownership, directly
or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of capital
stock of the Company entitling such person to exercise 50% or
more of the total voting power of all shares of capital stock of
the Company entitled to vote generally in the elections of
directors (any shares of voting stock of which such person or
group is the beneficial owner that are not then outstanding
being deemed outstanding for purposes of calculating such
percentage), other than any such acquisition by the Company, any
Subsidiary of the Company or any employee benefit plan of the
Company existing on the date of this Indenture; or
(ii) any consolidation or merger of the Company with or into, any
other Person, any merger of another person with or into the
Company, or any conveyance, sale, transfer or lease of all or
substantially all of the assets of the Company to another Person
(other than (a) any such transaction (x) which does not result in
any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock and (y) pursuant to which
holders of Common Stock immediately prior to such transaction
have the entitlement to exercise, directly or indirectly, 50%
or more of the total voting power of all shares of capital stock
entitled to vote generally in the election of directors of the
continuing or surviving person immediately after such
transaction and (b) any merger which is effected solely to
change the jurisdiction of incorporation of the Company and
results in a
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reclassification, conversion or exchange of outstanding shares
of Common Stock into solely shares of common stock);
provided, however, that a Change in Control shall not be deemed to have
occurred if the Closing Price Per Share on any five Trading Days within the
period of 10 consecutive Trading Days ending immediately after the later of the
date of the Change in Control or the date of the public announcement of the
Change in Control (in the case of a Change in Control under Clause (i) above)
or the period of 10 consecutive Trading Days ending immediately prior to the
date of the Change in Control (in the case of a Change in Control under Clause
(ii) above) shall equal or exceed 105% of the Conversion Price;
(c) the term "Conversion Price" shall equal U.S.$1,000 divided by the
Conversion Rate; and
(d) for the purposes of Section 14.4(b)(i), the term "Person" shall
include any syndicate or group which would be deemed to be a "person" under
Section 13(d)(3) of the Exchange Act, as in effect on the date of the original
execution of this Indenture.
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ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 15.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after the Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Registered Securities as of such
Regular Record Date, and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 15.2. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 15.1 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 15.1 upon receipt of a new list so furnished.
(b) After this Indenture has been qualified under the Trust
Indenture Act, the rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, 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 made
pursuant to the Trust Indenture Act.
SECTION 15.3. Reports by Trustee.
(a) After this Indenture has been qualified under the Trust
Indenture Act, the Trustee shall transmit to Holders such reports concerning
the Trustee and its actions
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under this Indenture as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant thereto.
(b) After this Indenture has been qualified under the Trust
Indenture Act, a copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 15.4. Reports by Company.
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, 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 Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
_____________________
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
QUINTILES TRANSNATIONAL CORP.
By
---------------------------
Name:
Title:
Attest:
- -----------------------------
Name:
Title:
MARINE MIDLAND BANK, Trustee
By
--------------------------
Name:
Title:
Attest:
- -----------------------------
Name:
Title:
-166-
<PAGE> 180
STATE OF )
) : ss.:
COUNTY OF )
On the day of May, 1996, before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he is
of Quintiles Transnational Corp., one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
-----------------------------
Notary Public
STATE OF NEW YORK )
) : ss.:
COUNTY OF NEW YORK )
On the day of May, 1996, before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he is
of Marine Midland Bank, one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
pursuant to the bylaws of said corporation; and that he signed his name thereto
by like authority.
-----------------------------
Notary Public
-167-
<PAGE> 181
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Section 3.5(b)(i), (iii) and (v)
of the Indenture)
Marine Midland Bank,
as Trustee
140 Broadway, 12th Floor
New York, New York 10005
Re: 4.25% Convertible Subordinated due May 31, 2000
of Quintiles Transnational Corp. (the "Securities")
Reference is made to the Indenture, dated as of May 17, 1996 (the
"Indenture"), from Quintiles Transnational Corp. (the "Company") to Marine
Midland Bank, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
---------------------------
CERTIFICATE No(s).
---------------------
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so.
Such beneficial owner or owners are referred to herein collectively as the
"Owner". If the Specified Securities are represented by a Global Security,
they are held through the Depositary or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are not
represented by a Global Security, they are registered in the name of the
Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Regulation S Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 904 or Rule 144 under the Securities Act and
A-1
<PAGE> 182
with all applicable securities laws of the states of the United States and
other jurisdictions. Accordingly, the Owner hereby further certifies as
follows:
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities, an
affiliate of the Company or any such distributor or a person acting
on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either:
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and any
person acting on its behalf reasonably believed that the
Transferee was outside the United States, or
(ii) the transaction is being executed in, on or through
the facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another designated
offshore securities market and neither the Owner nor any person
acting on its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a
selling concession, fee or other remuneration in respect of the
Specified Securities, and the transfer is to occur during the
Restricted Period, then the requirements of Rule 904(c)(1) have been
satisfied; and
(F) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule
144) has elapsed since the date the Specified Securities were
acquired from the Company or from an affiliate (as such term is
defined in Rule 144) of the Company, whichever is
A-2
<PAGE> 183
later, and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of paragraphs (e),
(f) and (h) of Rule 144; or
(B) the transfer is occurring after a period of at least three
years has elapsed since the date Specified Securities were acquired
from the Company or from an affiliate (as such term is defined in
Rule 144) of the Company, whichever is later, and the Owner is not,
and during the preceding three months has not been, an affiliate of
the Company.
A-3
<PAGE> 184
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Underwriters.
Dated:
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
A-4
<PAGE> 185
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 3.5(b)(ii), (iii), (iv) and (v)
of the Indenture)
Marine Midland Bank,
as Trustee
140 Broadway, 12th Floor
New York, New York 10005
Re: 4.25% Convertible Subordinated due May 31, 2000
of Quintiles Transnational Corp. (the "Securities")
Reference is made to the Indenture, dated as of May 17, 1996 (the
"Indenture"), from Quintiles Transnational Corp. (the "Company") to Marine
Midland Bank, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
---------------------------
CERTIFICATE No(s).
---------------------
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so.
Such beneficial owner or owners are referred to herein collectively as the
"Owner". If the Specified Securities are represented by a Global Security,
they are held through the Depositary or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are not
represented by a Global Security, they are registered in the name of the
Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Restricted Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it
B-1
<PAGE> 186
is being effected in accordance with Rule 144A or Rule 144 under the Securities
Act and all applicable securities laws of the states of the United States and
other jurisdictions. Accordingly, the Owner hereby further certifies as:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe
is a "qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the
Owner may be relying on Rule 144A in connection with the transfer;
and
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule
144) has elapsed since the date the Specified Securities were
acquired from the Company or from an affiliate (as such term is
defined in Rule 144) of the Company, whichever is later, and is being
effected in accordance with the applicable amount, manner of sale and
notice requirements of paragraphs (e), (f) and (h) of Rule 144; or
(B) the transfer is occurring after a period of at least three
years has elapsed since the date Specified Securities were acquired
from the Company or from an affiliate (as such term is defined in
Rule 144) of the Company, whichever is later, and the Owner is not,
and during the preceding three months has not been, an affiliate of
the Company.
B-2
<PAGE> 187
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Underwriters.
Dated:
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
B-3
<PAGE> 188
ANNEX C -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section 3.5(c))
Marine Midland Bank,
as Trustee
140 Broadway, 12th Floor
New York, New York 10005
Re: 4.25% Convertible Subordinated due May 31, 2000
of Quintiles Transnational Corp. (the "Securities")
Reference is made to the Indenture, dated as of May 17, 1996 (the
"Indenture"), from Quintiles Transnational Corp. (the "Company") to Marine
Midland Bank, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
---------------------------
CERTIFICATE No(s).
---------------------
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so.
Such beneficial owner or owners are referred to herein collectively as the
"Owner". If the Specified Securities are represented by a Global Security,
they are held through the Depositary or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are not
represented by a Global Security, they are registered in the name of the
Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged
for Securities bearing no Securities Act Legend pursuant to Section 3.5(c) of
the Indenture. In connection with such exchange, the Owner hereby certifies
that the exchange is occurring after a period of at least three years has
elapsed since the date the Specified Securities were acquired from the Company
or from an affiliate (as such term is defined
C-1
<PAGE> 189
in Rule 144) of the Company, whichever is later, and the Owner is not, and
during the preceding three months has not been, an affiliate of the Company.
The Owner also acknowledges that any future transfers of the Specified
Securities must comply with all applicable securities laws of the states of the
United States and other jurisdictions.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Underwriters.
Dated:
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
C-2
<PAGE> 190
ANNEX D -- Form of
Surrender Certificate
In connection with the certification contemplated by Section 12.2 or
14.3(k) relating to compliance with certain restrictions relating to transfers
of Restricted Securities, such certification shall be provided substantially in
the form of the following certificate, with only such changes thereto as shall
be approved by the Company and Goldman Sachs International:
"CERTIFICATE
QUINTILES TRANSNATIONAL CORP.
4.25% CONVERTIBLE NOTES DUE MAY 31, 2000
This is to certify that as of the date hereof with respect to
U.S.$________ principal amount (as defined in the Indenture) of the
above-captioned securities surrendered on the date hereof (the "Surrendered
Securities") for registration of transfer, or for conversion or repurchase
where the securities issuable upon such conversion or repurchase are to be
registered in a name other than that of the undersigned Holder (each such
transaction being a "transfer"), the undersigned Holder (as defined in the
Indenture) certifies that the transfer of Surrendered Securities associated
with such transfer complies with the restrictive legend set forth on the face
of the Surrendered Securities for the reason checked below:
_______ The transfer of the Surrendered Securities complies with
Rule 144 under the United States Securities Act of 1933, as
amended (the "Securities Act"); or
_______ The transfer of the Surrendered Securities complies with
Rule 144A under the Securities Act; or
_______ The transfer of the Surrendered Securities complies with
Rule 904 under the Securities Act; or
_______ The transfer of the Surrendered Securities has been made to
an institution that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act in a transaction exempt from the
registration requirements of the Securities Act.
[Name of Holder]
--------------------
Dated: ____________, ____*"
* To be dated the date
of surrender
D-1
<PAGE> 1
EXHIBIT 4.03
- -------------------------------------------------------------------------------
REGISTRATION RIGHTS
AGREEMENT
Dated as of May 17, 1996
By and Among
QUINTILES TRANSNATIONAL CORP.
and
GOLDMAN SACHS INTERNATIONAL
SMITH BARNEY INC.
- -------------------------------------------------------------------------------
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of May 17, 1996, by and among
Quintiles Transnational Corp., a North Carolina corporation (the "Company"),
Goldman Sachs International and Smith Barney, Inc. (collectively referred to
herein as the "Underwriters").
RECITALS
WHEREAS, the Company and the several Underwriters have entered into an
Underwriting Agreement, dated May 17, 1996 (the "Underwriting Agreement"),
providing for, among other things, the sale by the Company and the purchase by
the Underwriters of an aggregate of U.S.$143,750,000 principal amount of the
Company's 4.25% Convertible Subordinated Notes due May 31, 2000, convertible
into shares of Common Stock (as defined herein) of the Company as provided in
the Indenture (as defined herein); and
WHEREAS, this Agreement is being entered into pursuant to the
Underwriting Agreement in connection with the sale of the Securities (as
defined herein) pursuant thereto;
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants, representations, warranties and agreements herein contained, the
Company hereby agrees with the Underwriters, (i) for the benefit of the
Underwriters, and (ii) the holders (as defined herein) from time to time of the
Registrable Securities (as defined herein), as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
(a) "Closing Date" shall mean the First Time of Delivery as defined in
the Underwriting Agreement.
(b) "Commission" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
(c) "Common Stock" means the Common Stock, par value $0.01 per share,
of the Company, and any securities of the Company or any successor which may be
issuable upon conversion of the Securities or in exchange for the Securities
pursuant to Articles Twelve and Fourteen of the Indenture.
(d) "Electing Holder" shall have the meaning assigned thereto in
Section 3(b) of this Agreement.
(e) "Effective Time" shall mean the date on which the Commission
declares the Registration Statement effective or on which the Registration
Statement otherwise becomes effective.
<PAGE> 3
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, or
any successor thereto, as the same shall be amended from time to time.
(g) The term "holder," when used with respect to any Registrable
Security, means the person in whose name the Security is registered in the
Security Register as defined in the Indenture.
(h) "Indenture" shall mean the Indenture, dated as of May 17,
1996, between the Company and Marine Midland Bank, as trustee (the "Trustee"),
as amended and supplemented from time to time in accordance with its terms.
(i) The term "person" shall have the meaning specified in the
Indenture.
(j) "Prospectus" shall mean the prospectus (including any
preliminary prospectus and any final prospectus) included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by the Registration Statement and by all other amendments and
supplements to such prospectus, including all material incorporated by
reference in such prospectus and all documents filed after the date of such
prospectus by the Company under the Exchange Act and incorporated by reference
therein.
(k) "Registrable Securities" shall mean all or any portion of the
Securities issued from time to time under the Indenture in registered form and
the shares of Common Stock issuable upon conversion of such Securities,
including any Securities initially issued in bearer form and constituting the
unsold allotment of a distributor (within the meaning of Regulation S under the
Securities Act) of such Securities and later exchanged for Securities in
registered form; provided, however, that a security ceases to be a Registrable
Security when it is no longer a Restricted Security.
(l) "Registration Expenses" shall have the meaning assigned
thereto in Section 4 of this Agreement.
(m) "Registration Statement" shall mean a "shelf" registration
statement filed under the Securities Act providing for the registration of, and
the sale on a continuous or delayed basis by the holders of, all of the
Registrable Securities pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission, filed by the Company
pursuant to the provisions of Section 2 of this Agreement, including the
Prospectus contained therein, any amendments and supplements to such
registration statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in such registration statement.
(n) "Restricted Security" shall mean any Security or share of
Common Stock issuable upon conversion thereof except any such Security or share
of Common Stock which (i) has been effectively registered under the Securities
Act and sold in a manner contemplated by the Registration Statement, (ii) has
been transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
such Rule 144 (or any successor provision thereto), (iii) has been sold in
compliance with Regulation S under the Securities Act (or any successor
thereto) and does not constitute the
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<PAGE> 4
unsold allotment of a distributor within the meaning of Regulation S under the
Securities Act, or (iv) has otherwise been transferred and a new Security or
share of Common Stock not subject to transfer restrictions under the Securities
Act has been delivered by or on behalf of the Company in accordance with
Section 3.5(b) of the Indenture.
(o) "Rules and Regulations" shall mean the published rules and
regulations of the Commission promulgated under the Securities Act or the
Exchange Act, as in effect at any relevant time.
(p) "Securities" shall mean the Company's 4.25% Convertible
Subordinated Notes due May 31, 2000, to be issued pursuant to the Indenture and
sold pursuant to the Underwriting Agreement and any securities issued in
exchange therefor or in lieu thereof pursuant to the Indenture.
(q) "Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
(r) "Trust Indenture Act" shall mean the Trust Indenture Act of
1939, or any successor thereto, and the rules, regulations and forms
promulgated thereunder, all as the same shall be amended from time to time.
(s) The term "underwriter" shall hereinafter mean any person that
is, or may be deemed to be, an underwriter (as such term is defined in Section
2(11)) of the Securities Act) of, or with respect to, the Registrable
Securities.
(t) Wherever there is a reference in this Agreement to a
percentage of the "principal amount" of the Registrable Securities or to a
percentage of Registrable Securities, Common Stock shall be treated as
representing the principal amount of Securities which was surrendered for
conversion or exchange in order to receive such number of shares of Common
Stock.
2. Registration Under the Securities Act.
(a) The Company hereby agrees, at its expense, (i) to use its best
efforts to file with the Commission a Registration Statement with respect to
the Registrable Securities, on or prior to the 90th day after the Closing Date
and (ii) thereafter to use reasonable efforts to cause such Registration
Statement to be declared effective by the Commission under the Securities Act
as promptly as practicable; provided, however, that notwithstanding anything to
the contrary herein, the Company shall not be required to file a Registration
Statement in the event of the existence of a state of facts or the happening of
any event of the kind described in Section 3(c)(iv)(E) hereof.
(b) Subject to the issuance of any notice by the Company in
accordance with Section 3(c)(iv) hereof of the existence of any fact or the
happening of any event of the kind described in Section 3(c)(iv)(E) hereof, the
Company shall use all reasonable efforts, and will file such supplements or
amendments to the Registration Statement as may be necessary or appropriate, to
keep the Registration Statement continuously effective under the Securities Act
with a Prospectus that is usable by holders for resales of Registrable
Securities for a period
-3-
<PAGE> 5
of three years from the latest Time of Delivery (as such term is defined in the
Underwriting Agreement) or, if earlier, until there are no outstanding
Registrable Securities.
(c) Subject to the issuance of any notice by the Company in
accordance with Section 3(c)(iv) hereof of the existence of any fact or the
happening of any event of the kind described in Section 3(c)(iv)(E) hereof,
upon the occurrence of any event that would cause such Registration Statement
or the Prospectus contained therein (A) to contain a material misstatement or
omission or (B) not to be effective and usable for resales of Registered
Securities during the period required by this Agreement, the Company shall file
promptly an appropriate amendment to such Registration Statement correcting any
such misstatement or omission, and, in the case of either clause (A) or (B),
use all reasonable efforts to cause such amendment to be declared effective and
such Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter.
3. Registration Procedures.
(a) If the Company files a Registration Statement with respect to
the Registrable Securities pursuant to Section 2 hereof, then, prior to or at
the Effective Time, the Company shall qualify the Indenture under the Trust
Indenture Act; in connection with such qualification, the Company shall
cooperate with the Trustee under the Indenture and the Holders (as defined in
the Indenture) to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the Trust
Indenture Act; and the Company shall execute and use all reasonable efforts to
cause the Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner. In
the event that any such amendment or modification referred to in Section 3(a)
hereof involves the appointment of a new trustee under the Indenture, the
Company shall appoint a new trustee thereunder pursuant to the applicable
provisions of the Indenture.
(b) Not less than 30 days prior to the filing of the Registration
Statement, the Company shall give notice of its intention to make such filing
to each of the holders of the Registrable Securities in the same manner as the
Company would give notice to holders of Securities under Section 1.6 of the
Indenture. Such notice shall seek a determination from each of such holders as
to whether such holder elects to sell Registrable Securities pursuant to the
Registration Statement (any such holder so electing being referred to herein as
an "Electing Holder" with respect to the Registrable Securities which are the
subject of such election). In the event of any such election the Company may
require the undertaking of such Electing Holder contemplated by Section 5(b) of
this Agreement, and any Electing Holder of any Registrable Securities may, as a
condition to being an Electing Holder, itself require the undertaking
contemplated by Section 5(g) of this Agreements of any person that has a
beneficial interest in the Registrable Securities which are the subject of such
election. The Company also may require each Electing Holder to furnish to the
Company such information as may be required by law or by the Commission in
connection with any registration of the Registrable Securities which are the
subject of any such election by such Electing Holder, including any such
information regarding the distribution of such Registrable Securities as may be
so required. Each such Electing Holder agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Electing Holder to the Company or of the occurrence of any
event in either case as a result of which
-4-
<PAGE> 6
any Prospectus included in such Registration Statement contains or would
contain an untrue statement of a material fact regarding such Electing Holder
or such Electing Holder's intended method of distribution of such Registrable
Securities or omits to state any material fact regarding such Electing Holder
or such Electing Holder's intended method of distribution of such Registrable
Securities necessary to make the statements therein, in light of the
circumstances then existing, not misleading, and promptly to furnish to the
Company any additional information required to correct and update any
previously furnished information or required so that such Prospectus shall not
contain, with respect to such Electing Holder or the distribution of such
Registrable Securities, 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 then existing, not misleading.
(c) In connection with the Company's obligations with respect to
the Registration Statement, the Company shall use reasonable efforts to cause
the Registration Statement to permit the sale of the Registrable Securities by
the holders thereof in accordance with the method or methods of distribution
elected by such holders and as described in the Registration Statement,
provided, however, that in no event will such methods or methods of
distribution take the form of an underwritten offering of the Registrable
Securities unless the Company otherwise agrees. In connection therewith, the
Company shall, as expeditiously as possible:
(i) before filing a Registration Statement or Prospectus
or any amendments or supplements thereto, including documents
incorporated by reference in the Registration Statement, furnish to
the holders of the Registrable Securities covered by such Registration
Statement and underwriters, if any, copies of all such documents
proposed to be filed, which documents will be subject to the review of
such holders and underwriters, if any, and their respective
representatives. The Company will consider all reasonable comments of
any such persons before filing any Registration Statement or amendment
thereto or any Prospectus or any supplement thereto (including such
documents incorporated by reference and proposed to be filed after the
initial filing of the Registration Statement), but the Company may
proceed to file such documents as it deems reasonably necessary;
(ii) for a reasonable period prior to the filing of the
Registration Statement and throughout the period specified in Section
2(b) hereof, make available for inspection, at such times as are
mutually convenient to Company and the other persons referred to in
this clause, by a representative or representatives of the holders of
not less than 20% of the principal amount of the Registrable
Securities, any underwriter participating in any disposition pursuant
to a Registration Statement, and any attorney or accountant retained
by such selling holders or underwriter, (i) all financial and other
records, pertinent corporate documents and properties of the Company,
and (ii) cause the Company's officers, and independent public accounts
and counsel, to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in connection
with such Registration Statement, in each case, as is customary for
similar "due diligence" examinations; provided that any records,
information or documents that are designated by the Company in
writing, in good faith, as confidential shall be kept confidential by
such persons unless disclosure of such records, information or
documents is required by court or
-5-
<PAGE> 7
administrative order, or such information becomes available to the
public generally or through a third party without an accompanying
obligation of confidentiality;
(iii) subject to the issuance of any notice by the Company
in accordance with Section 3(c)(iv) hereof of the existence of any
fact or the happening of any event of the kind described in Section
3(c)(iv)(E) hereof, prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement, and such supplements to the Prospectus, as may be required
by the Rules and Regulations or the instructions applicable to the
registration form utilized by the Company or by the Securities Act or
otherwise necessary to keep the Registration Statement effective for
the period specified in Section 2(b) and cause the Prospectus as so
supplemented to be filed pursuant to Rule 424 under the Securities
Act; and comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such
Registration Statement during the period specified in Section 2(b) in
accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus;
(iv) use reasonable efforts to notify the selling holders
of Registrable Securities promptly, and confirm such advice in
writing, (A) when the Registration Statement, any pre-effective
amendment thereto, the Prospectus or any prospectus supplement or
post-effective amendment to the Registration Statement has been filed,
and, with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any comments by
the Commission or the "Blue Sky" or securities commissioner or
regulator of any state with respect to the Registration Statement, the
Prospectus or any prospectus supplement or any request by the
Commission or any such Securities Commissioner or regulator for
amendments or supplements to the Registration Statement, the
Prospectus or any prospectus supplement or for additional information,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceedings for that purpose, (D) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale under the
securities or "Blue Sky" laws of any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (E) of the
existence of a state of facts or the happening of an event (including
without limitation pending negotiations relating to, or the
consummation of, a transaction or the occurrence of any event which in
the opinion of the Company might require additional disclosure of
material, non-public information by the Company in the Registration
Statement as to which the Company believes it has a bona fide business
purpose for preserving confidentiality or which renders the Company
unable to comply with the Rules and Regulations) which in the opinion
of outside counsel to the Company might reasonably result in (y) the
Registration Statement, any amendment or post-effective amendment
thereto, or any document incorporated therein by reference containing
an untrue statement of a material fact or omitting to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or (z) the Prospectus, any prospectus
supplement, or any document incorporated therein by reference
including an untrue statement of material fact or omitting to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, provided that the
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<PAGE> 8
Company will not be required to provide the selling holders of
Registrable Securities and the underwriter or underwriters, if any, of
any details or information as to any such facts or events referred to
in this clause (E);
(v) use all reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of the Registration
Statement as soon as practicable;
(vi) if requested by any holder of Registrable Securities
being sold or by any underwriter of such Registrable Securities, as
soon as practicable incorporate in a prospectus supplement or
post-effective amendment to the Registration Statement such
information as is required by the applicable Rules and Regulations and
such holder or underwriter reasonably specifies should be included
therein relating to the terms of the sale of the Registrable
Securities, including without limitation, information with respect to
the principal amount or number of shares of Registrable Securities
being sold by such holder to any underwriter or underwriters, the name
and description of such holder or underwriter, the offering price of
such Registrable Securities and any discount, commission or other
compensation payable in respect thereof, and the purchase price being
paid therefor by such underwriter or underwriters; and make all
required fillings of such prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment;
(vii) furnish to each selling holder of Registrable
Securities and underwriter, if any, without charge, an executed copy
of the Registration Statement, each amendment and supplement thereto
(in each case including all exhibits thereto and documents
incorporated by reference therein) and such number of copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference therein) as such persons may reasonably
request in order to facilitate the offering and disposition of the
Registrable Securities;
(viii) deliver to each selling holder of Registrable
Securities and underwriter, if any, without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto, and such other documents, as such
persons may reasonably request in order to facilitate the offering and
disposition of the Registrable Securities and to permit any of such
persons to satisfy the prospectus delivery requirements of the
Securities Act; and the Company hereby consents to the use of the
Prospectus or any amendment or supplement thereto by each of the
selling holders of Registrable Securities and by each underwriter
thereof, if any, in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(ix) prior to any public offering of Registrable
Securities, use all reasonable efforts to (A) register or qualify the
Registrable Securities covered by the Registration Statement for offer
and sale under the securities or "Blue Sky" laws of such jurisdictions
within the United States as any selling holder or underwriter
reasonably shall request, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such
jurisdictions for so long as may be necessary to enable any such
holder or underwriter,
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<PAGE> 9
if any, to complete its distribution of Registrable Securities
pursuant to the Registration Statement and (C) take any and all other
actions as may be reasonably necessary or advisable to enable the
disposition in such jurisdictions of such Registrable Securities;
provided, however, that the Company shall not be required for any such
purpose to qualify as a foreign corporation in any jurisdiction
wherein it would not otherwise be required to qualify but for the
requirements of this Section 3(c)(ix) or consent to general service of
process in any such jurisdiction;
(x) provide a CUSIP number for all Registrable Securities
which are debt securities not later than the effective date of the
Registration Statement; cooperate with the selling holders of
Registrable Securities, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be
sold, which certificates shall not bear any restrictive legends and
which, if so required by any securities exchange upon which any
Registrable Securities are listed, shall be penned, lithographed or
engraved, or produced by any combination of such methods, on steel
engraved borders; enable such Registrable Securities to be in such
denominations and registered in such names as the selling holder may
reasonably request at least two business days prior to any delivery of
Registrable Securities; and, if required, provide any necessary
documentation in connection with making the Registrable Securities
eligible for deposit with the Depository Trust Company;
(xi) use all reasonable efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with
or approved by such other governmental agencies or authorities,
federal, state or local, within the United States as may be necessary
to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such
Registrable Securities; provided, however, that the Company shall not
be required to register the Registrable Securities in any jurisdiction
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,
or to require the Company to qualify to do business in any
jurisdiction where it has not been so qualified;
(xii) as soon as reasonably practicable after the occurrence
of any fact or event of the kind described in subparagraph (iv)(E) of
this Section, prepare a post-effective amendment or supplement to the
Registration Statement or the related Prospectus, any prospectus
supplement, or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Registrable Securities, the Prospectus will not contain
an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that notwithstanding anything to the contrary herein, the
Company shall not be required to prepare and file any such supplement
or post-effective amendment or document if the fact or event no longer
exists; and provided further, however, that if there continues to
exist a state of facts or an event of the kind described in
subparagraph (iv)(E) of this Section which in the opinion of outside
counsel to the Company might reasonably result in the effects
contemplated by clause (y) or (z) of such subparagraph (iv)(E), then
for so long as such fact or event continues to
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<PAGE> 10
exist, the Company shall not be required to prepare and file any such
supplement or post-effective amendment or document pursuant to the
terms of this Agreement;
(xiii) use all reasonable efforts to cause the shares of
Common Stock constituting Registrable Securities covered by the
Registration Statement to qualify for quotation on the Nasdaq National
Market or, if the Common Stock is not then quoted on the Nasdaq
National Market, to list such shares on each securities exchange on
which outstanding Common Stock of the Company is then listed, if any;
(xiv) enter into such customary agreements and, subject to
the issuance of any notice by the Company in accordance with Section
3(c)(iv) hereof of the existence of any fact or the happening of any
event of the kind described in Section 3(c)(iv)(E) hereof, take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of any Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into
and whether or not the Registrable Securities are to be sold in an
underwritten offering:
(A) make such representations and warranties to
the holders of such Registrable Securities and the underwriter
or underwriters, if any, in form, substance and scope as are
customarily made in connection with primary underwritten
offerings of equity or convertible debt securities; and
(B) cause to be delivered to the sellers of
Registrable Securities and the underwriter or underwriters, if
any, opinions of counsel to the Company, dated the effective
date of the Registration Statement (which counsel and opinions
(in form, scope and substance) shall be reasonably
satisfactory to the appointed representative of or counsel to
the holders of at least 50% in aggregate principal amount of
the Registrable Securities being registered), addressed to
each selling holder and each underwriter, if any, covering the
matters customarily covered in opinions requested in primary
underwritten offerings of equity and convertible debt
securities and such other matters as may be reasonably
requested by the appointed representative of or counsel to
holders of at least 50% in aggregate principal amount of the
Registrable Securities being sold;
(xv) otherwise use all reasonable efforts to comply with
all applicable Rules and Regulations, and to make generally available
to its security holders as soon as practicable, but in any event not
later than eighteen months after (i) the effective date (as defined in
Rule 158(c) under the Securities Act) of the Registration Statement,
(ii) the effective date of each post-effective amendment to the
Registration Statement, and (iii) the date of each filing by the
Company with the Commission of an Annual Report on Form 10-K that is
incorporated by reference in the Registration Statement, an earning
statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule
158);
(xvi) notify in writing each holder of Registrable
Securities of any proposal by the Company to amend or waive any
provision of this Agreement pursuant to Section
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<PAGE> 11
7(h) hereof and of any amendment or waiver effected pursuant thereto,
each of which notices shall contain the text of the amendment or
waiver proposed or effected, as the case may be; and
(xvii) in the event that any broker-dealer registered under
the Exchange Act shall be an "Affiliate" (as defined in Schedule E to
the By-Laws of the National Association of Securities Dealers, Inc.
("NASD")) of the Company or has a "Conflict of Interest" (as defined
in such Schedule) and such broker-dealer shall underwrite, participate
as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of such Schedule) of any
Registrable Securities, whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, assist such
broker-dealer in complying with the requirements of such Schedule,
including, without limitation, by (A) engaging a "qualified
independent underwriter" (as defined in such Schedule) to participate
in the preparation of the registration statement relating to such
Registrable Securities, to exercise usual standards of due diligence
in respect thereto and to recommend the public offering price of such
Registrable Securities, (B) indemnifying such qualified independent
underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof, and (C) providing such information to
such broker-dealer as may be required in order for such broker-dealer
to comply with the requirements of the Rules of Fair Practice of the
NASD.
(d) Each Electing Holder of Registrable Securities agrees that,
upon receipt of any notice from the Company of the existence of any fact or the
happening of any event of the kind described in Section 3(c)(iv)(E) hereof,
such Electing Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement until such Electing Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(c)(xii) hereof, or until it is advised in writing by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
Prospectus, and, if so directed by the Company, such Electing Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Electing Holder's possession of the
Prospectus covering such Registrable Securities at the time of receipt of such
notice.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly
upon request being made therefor all expenses incident to the Company's
performance of or compliance with this Agreement, including, without
limitation, (a) all Commission and any NASD registration and filing fees and
expenses, (b) all fees and expenses in connection with the registration or
qualification of the Registrable Securities for offering and sale under the
State securities and blue sky laws referred to in Sections 3(c)(ix) and (xi)
hereof and determination of their eligibility for investment under the laws of
such United States jurisdictions as the holders or underwriters, if any, of
such Registrable Securities may designate, including reasonable fees and
disbursements, if any, of counsel for the selling holders or underwriters in
connection with such registrations or qualifications and determination, (c) all
expenses relating to the preparation, printing, distribution and reproduction
of the Registration Statement
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<PAGE> 12
required to be filed hereunder, each prospectus included therein or prepared
for distribution pursuant hereto, each amendment or supplement to the
foregoing, the expenses of preparing the Registrable Securities for delivery
and the expenses of printing or producing any underwriting agreement(s),
agreement(s) among underwriters and "Blue Sky" or legal investment memoranda,
any selling agreements and all other documents in connection with the offering,
sale or delivery of Registrable Securities to be disposed of (including
certificates representing the Registrable Securities), (d) the Company's
messenger, telephone and delivery expenses, (e) fees and expenses of any
Trustee under the Indenture, any Transfer Agent and Registrar with respect to
the Registrable Securities and any escrow agent or custodian, (f) internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties), (g)
fees, disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or "cold
comfort" letters required by or incident to such performance and compliance),
(h) fees, disbursements and expenses of any "qualified independent underwriter"
engaged pursuant to Section 3(c)(xvii) hereof, (i) fees, disbursements and
expenses of one counsel for the holders of Registrable Securities retained in
connection with such registration, as selected by the holders of at least 50%
in aggregate principal amount of the outstanding Registrable Securities being
registered, and one counsel for each holder of more than 10% of the outstanding
Registrable Securities retained in connection with such registration, as
selected by such holder (each of which counsel shall be reasonably satisfactory
to the Company) up to a maximum of $50,000 in the aggregate, (j) fees, expenses
and disbursements of any other persons, including special experts, retained by
the Company in connection with such registration, and (k) all fees and expenses
incurred in connection with the qualification of the shares of Common Stock
constituting Registrable Securities for quotation on the Nasdaq National
Market, or the listing of such shares on any securities exchange, pursuant to
Section 3(c)(xiii) (collectively, the "Registration Expenses"). To the extent
that any Registration Expenses are incurred, assumed or paid by any holder of
Registrable Securities or any underwriter thereof, the Company shall reimburse
such person for the full amount of the Registration Expenses so incurred,
assumed or paid promptly after receipt of a request therefor. Notwithstanding
the foregoing, the holders of the Registrable Securities being registered shall
pay all agency fees and commissions and underwriting discounts and commissions
attributable to the sale of such Registrable Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
holders (severally or jointly), other than the counsel and experts specifically
referred to above.
5. Indemnification.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, and in consideration of
the agreements of the Electing Holders and any underwriters, selling agents or
other securities professionals contained in Section 5(b) hereof, the Company
shall, and it hereby agrees to, indemnify and hold harmless each Electing
Holder and each underwriter, selling agent or other securities professional, if
any, which facilitates the disposition of Registrable Securities, and each of
their respective officers and directors and each person who controls such
Electing Holder, underwriter, selling agent or other securities professional
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each such person being sometimes referred to as an "Indemnified
Person") against any losses, claims, damages or liabilities, joint or several,
to
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<PAGE> 13
which such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement under which such Registrable Securities are to be registered under
the Securities Act, or any Prospectus contained therein or furnished by the
Company to any Indemnified Person, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company hereby agrees to
periodically reimburse such Indemnified Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person 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 such Registration Statement or Prospectus, or
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Indemnified Person expressly for
use therein.
(b) Indemnification by the Holders and any Agents and
Underwriters. The Company may require, as a condition to including any
Registrable Securities in any Registration Statement filed, that the Company
shall have received an undertaking reasonably satisfactory to it from each
Electing Holder and from each underwriter, selling agent or other securities
professional, if any, which facilitates the disposition of Registrable
Securities, severally and not jointly, to (i) indemnify and hold harmless the
Company, its directors, officers who sign any Registration Statement and each
person, if any, who controls the Company within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which the Company or such other persons may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement, or any Prospectus contained
therein or furnished by the Company to any such Electing Holder, underwriter,
selling agent or other securities professional, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case 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 in writing to the Company by such Electing
Holder, underwriter, selling agent or other securities professional expressly
for use therein, and (ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred;
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5,
notify such indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 5. In case any such action shall be brought against any indemnified
party and it shall notify an indemnifying party of the
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<PAGE> 14
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party under this Section 5 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) Contribution. Each party hereto agrees that, if for any
reason the indemnification provided for in this Section 5 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them 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 this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Electing Holders and any
underwriters, selling agents or other securities professionals in this Section
5(d) to contribute shall be several in proportion to the percentage of
principal amount of Registrable Securities registered or underwritten, as the
case may be, by them and not joint.
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<PAGE> 15
(e) Notwithstanding any other provision of this Section 5, in no
event will any (i) Electing Holder be required to undertake liability to any
person under this Section 5 for any amounts in excess of the dollar amount of
the proceeds to be received by such Electing Holder from the sale of such
Electing Holder's Registrable Securities (after deducting any fees, discounts
and commissions applicable thereto) pursuant any Registration Statement under
which such Registrable Securities are to be registered under the Securities Act
and (ii) underwriter, selling agent or other securities professional be
required to undertake liability to any person hereunder for any amounts in
excess of the discount, commission or other compensation payable to such
underwriter, selling agent or other securities professional with respect to the
Registrable Securities underwritten by it and distributed to the public.
(f) The obligations of the Company under this Section 5 shall be
in addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 5 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.
(g) Indemnification of Electing Holders by Beneficial Owners. Any
Electing Holder of any Registrable Securities may itself require, as a
condition to being an Electing Holder, an undertaking of any person that has a
beneficial interest in the Registrable Securities which are the subject of such
election (such person, a "beneficial owner") that such beneficial owner
indemnify and hold harmless the Electing Holder to the same extent and manner
that such Electing Holder may be required to indemnify and hold harmless the
Company pursuant to this Section 5.
6. Rule 144.
The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including, but not limited to, the reports under
Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of
Rule 144 under the Securities Act) and the Rules and Regulations, and shall
take such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act
within the limitations of the exemption provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission. Upon the request of
any holder of Registrable Securities, the Company shall deliver to such holder
a written statement as to whether it has complied with such requirements.
7. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not on or after
the date of this Agreement grant registration rights with respect to
Registrable Securities or any other securities, or enter into any agreement
with respect to its securities, which is inconsistent with
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the rights granted to the holders of Registrable Securities in this Agreement
or otherwise conflicts with the provisions hereof. The Company is not
currently a party to any agreement with respect to any of its equity or debt
securities granting any registration rights to any person which would or could
conflict with the execution, delivery or performance by the Company of this
Agreement.
(b) Specific Performance. The parties hereto acknowledge that
there may be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement, in any court of
the United States or any State thereof having jurisdiction.
(c) Notices. All notices, requests, claims, demands, waivers and
other communications hereunder shall be given in the manner provided for in the
Indenture.
(d) Parties in Interest. The parties to this Agreement intend
that all holders of Registrable Securities shall be entitled to receive the
benefits of this Agreement and that any Electing Holder shall be bound by the
terms and provisions of this Agreement by reason of such election with respect
to the Registrable Securities which are the subject of the election of such
Electing Holder pursuant to Section 3(b) hereof. All the terms and provisions
of this Agreement shall be binding upon, shall inure to the benefit of and
shall be enforceable by the respective successors and assigns of the parties
hereto and any holder from time to time of the Registrable Securities to the
aforesaid extent. In the event that any transferee of any holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be
entitled to receive the benefits of and, if an Electing Holder, be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement to the aforesaid extent.
(e) Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this
Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof) made
by or on behalf of any holder of Registrable Securities, any director, officer
or partner of such holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling person of any of the foregoing, and shall
survive delivery of and payment for the Registrable Securities pursuant to the
Underwriting Agreement and the transfer and registration of Registrable
Securities by such holder.
(f) LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
(g) Headings. The descriptive headings of the several Sections
and paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
-15-
<PAGE> 17
(h) Amendments and Waivers. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively) only by a
written instrument duly executed by the Company and the holders of at least a
majority of the principal amount of the Registrable Securities at the time
outstanding. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 7(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or
is delivered to such holder.
(i) Inspection. For so long as this Agreement shall be in effect,
this Agreement and a complete list of the names and addresses of all the
holders of record of Registrable Securities shall be made available for
inspection and copying on any business day by any holder of Registrable
Securities at the offices of the Company at the address set forth in the
Indenture.
(j) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-16-
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first written above.
QUINTILES TRANSNATIONAL CORP.
By: /s/ Rachel R. Selisker
------------------------------------
Name: Rachel R. Selisker
Title: Chief Financial Officer,
Vice President Finance
and Treasurer
GOLDMAN SACHS INTERNATIONAL
SMITH BARNEY INC.
By: GOLDMAN SACHS INTERNATIONAL
By: /s/ Shelley A. Hartman
-----------------------------------
(Attorney-in-fact)
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
See notes to condensed consolidated financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 130,213
<SECURITIES> 35,422
<RECEIVABLES> 89,598
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 263,977
<PP&E> 88,038
<DEPRECIATION> 23,203
<TOTAL-ASSETS> 391,798
<CURRENT-LIABILITIES> 60,498
<BONDS> 139,947
0
0
<COMMON> 218
<OTHER-SE> 168,213
<TOTAL-LIABILITY-AND-EQUITY> 391,798
<SALES> 0
<TOTAL-REVENUES> 117,772
<CGS> 0
<TOTAL-COSTS> 105,438
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 749,877
<INCOME-PRETAX> 13,552
<INCOME-TAX> 4,291
<INCOME-CONTINUING> 9,261
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,261
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0
</TABLE>
