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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 18, 1996
FPA MEDICAL MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24276 33-0604264
(State or other juris- (Commission File (IRS Employer
diction of incorporation) Number) Identification No.)
3636 Nobel Drive, Suite 200, San Diego, California 92122
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code): (619) 453-1000
2878 Camino del Rio South, Suite 301, San Diego, California 92108-3846
(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 1.1 Purchase Agreement dated December 13, 1996 by and
among the Registrant and the Initial Purchasers
Exhibit 4.1 Indenture dated as of December 18, 1996 by and between
the Registrant and the Trustee
Exhibit 4.2 Registration Rights Agreement dated December 13,
1996 by and among the Registrant and the Initial
Purchasers
Exhibit 4.4 Form of Rule 144A Restricted Global Debenture
Exhibit 4.5 Form of Regulation S Global Debenture
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
Pursuant to a purchase agreement (the "Purchase Agreement") dated
December 13, 1996 between the Registrant and Smith Barney Inc., Bear, Stearns &
Co. Inc., Lehman Brothers Inc., Oppenheimer & Co., Inc. and Needham & Company,
Inc. (the "Initial Purchasers"), on December 18, 1996, the Registrant sold
$75,000,000 aggregate principal amount of its 6 1/2% Convertible Subordinated
Debentures due 2001 (the "Debentures") to the Initial Purchasers at an initial
offering price of 100% of the principal amount thereof, less 2.5% in discounts
and commissions. The Debentures were offered and sold to the Initial Purchasers
in reliance on an exemption from registration under the Securities Act of 1933,
as amended (the "Act"), pursuant to Section 4(2) under the Act.
The Initial Purchasers advised the Registrant that the Debentures
were resold at 100% of the principal amount thereof (i) to "qualified
institutional buyers" in reliance on Rule 144A under the Act and (ii) outside
the United States to certain persons in reliance on Regulation S under the Act.
The Initial Purchasers advised the Registrant that $500,000 aggregate principal
amount of Debentures were sold outside the United States to certain persons in
reliance on Regulation S under the Act.
In connection with sales of the Debentures outside the United
States, each Initial Purchaser of the Debentures has agreed that, except for the
sales described above, it will offer and sell the Debentures (i) as part of such
Initial Purchaser's distribution at any time and (ii) otherwise until 40 days
after the later of the commencement of the offering of the Debentures and the
last closing date with respect to the Debentures only in accordance with Rule
903 of Regulation S, and that, at or prior to confirmation of the sale of
Debentures to non-U.S. persons
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(as defined in Regulation S) other than a sale pursuant to Rule 144A, it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Debentures from such Initial Purchaser
during such period a confirmation or other notice setting forth the restrictions
on offers and sales of the Debentures within the United States or to, or for the
account or benefit of, U.S. persons.
The Debentures were issued under an Indenture, dated as of December
18, 1996 (the "Indenture"), between the Registrant and First Union National
Bank, as Trustee. The Debentures are convertible at the option of the holder
thereof into shares of the Registrant's common stock, par value $.002 per share
(the "Common Stock"), at any time after the 60th day following December 18,
1996, subject to prior redemption, at a fixed conversion price per share equal
to $25.95, subject to adjustment in certain circumstances.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FPA MEDICAL MANAGEMENT, INC.
(Registrant)
Dated: January 2, 1997 By: /s/ JAMES A. LEBOVITZ
_______________________________________
James A. Lebovitz
Senior Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit No. Exhibit Page Number
- ----------- ------- -----------
1.1 Purchase Agreement dated
December 13, 1996 by and
among the Registrant and
the Initial Purchasers
4.1 Indenture dated as of
December 18, 1996 by and
between the Registrant
and the Trustee
4.2 Registration Rights Agreement
dated December 13, 1996 by and
among the Registrant and the
Initial Purchasers
4.4 Form of Rule 144A Restricted
Global Debenture
4.5 Form of Regulation S Global
Debenture
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Exhibit 1.1
$75,000,000
FPA MEDICAL MANAGEMENT, INC.
6 1/2% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2001
PURCHASE AGREEMENT
December 13, 1996
SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
OPPENHEIMER & CO., INC.
NEEDHAM & COMPANY, INC.
As Initial Purchasers
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
FPA Medical Management, Inc., a Delaware corporation (the
"Company"), proposes, upon the terms and conditions set forth herein, to issue
and sell to you, as the initial purchasers (the "Initial Purchasers"),
$75,000,000 aggregate principal amount of its 6 1/2% Convertible Subordinated
Debentures due 2001 (the "Firm Debentures"). The Company also proposes, upon the
terms and conditions set forth herein, to issue and sell to the Initial
Purchasers up to an additional $11,250,000 aggregate principal amount of its 6
1/2% Convertible Subordinated Debentures due 2001 (the "Additional Debentures").
The Firm Debentures and the Additional Debentures are hereinafter collectively
referred to as the "Debentures." The Debentures will be issued pursuant to the
provisions of an Indenture, to be dated as of December 18, 1996 (the
"Indenture"), between the Company and First Union National Bank, as Trustee (the
"Trustee"). The Company's common stock, $.002 par value, is hereinafter referred
to as the "Common Stock."
The Company wishes to confirm as follows its agreement with the
Initial Purchasers in connection with the purchase and resale of the Debentures.
1. Preliminary Offering Memorandum and Offering Memorandum. The
Debentures will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on an exemption pursuant to Section 4(2) under the Act. The Company has
prepared a preliminary offering memorandum, dated November 26, 1996 (the
"Preliminary Offering Memorandum"), and an offering memorandum, dated December
13, 1996 (the "Offering Memorandum"), setting forth information regarding the
Company and the Debentures. Any references herein to the Preliminary Offering
Memorandum and the Offering Memorandum shall be deemed to include all amendments
and supplements thereto and any documents incorporated by reference therein,
including those documents which have been filed under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder (collectively, the "Exchange
Act"). As used herein, the term "Incorporated Documents" means the documents
which
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at the time are incorporated by reference in the Preliminary Offering
Memorandum, the Offering Memorandum or any amendment or supplement thereto. The
Company hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum and the Offering Memorandum in connection with the offering
and resale of the Debentures by the Initial Purchasers.
The Company understands that the Initial Purchasers propose to make
offers and sales (the "Exempt Resales") of the Debentures purchased by the
Initial Purchasers hereunder only on the terms and in the manner set forth in
the Offering Memorandum and Section 2 hereof as soon as the Initial Purchasers
deem advisable after this Agreement has been executed and delivered (i) to
persons who are or whom the Initial Purchasers reasonably believe to be
qualified institutional buyers ("Qualified Institutional Buyers") as defined in
Rule 144A under the Act, as such rule may be amended from time to time ("Rule
144A"), in transactions under Rule 144A, (ii) to a limited number of other
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Act) that are institutional investors (the "Institutional Accredited Investors")
and that agree to comply with the transfer restrictions set forth in the letter
containing certain representations and agreements substantially in the form
attached hereto as Exhibit A and (iii) outside the United States to non-U.S.
persons in offshore transactions in reliance upon Regulation S (as those terms
are defined in Regulation S under the Act) ("Regulation S") under the Act (such
persons specified in clauses (i), (ii) and (iii) being referred to herein as the
"Eligible Purchasers"). As used herein the terms "offshore transactions,"
"United States" and "U.S. persons" have the meanings given them in Regulation S.
It is understood and acknowledged that upon original issuance
thereof, and until such time as the Debentures (and all securities issued in
exchange therefor, in substitution thereof or upon conversion thereof (including
the Common Stock)) have been (i) effectively registered under the Act and
disposed of in accordance with an effective registration statement under the
Act, (ii) distributed to the public pursuant to Rule 144 or (ii) sold or
transferred pursuant to Rule 144(k) under the Act (or any similar provisions
then in force), any certificate representing such securities shall bear the
following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO IS OR WHO THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) TO AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),(2),(3)
OR (7) UNDER THE SECURITIES ACT) THAT IS AN INSTITUTIONAL INVESTOR AND THAT
PRIOR TO SUCH TRANSFER, FURNISHES TO FIRST UNION NATIONAL BANK OR AMERICAN STOCK
TRANSFER & TRUST COMPANY A SIGNED LETTER CONTAINING
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CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (WHICH FORM OF LETTER CAN BE OBTAINED FROM
FIRST UNION NATIONAL BANK OR AMERICAN STOCK TRANSFER & TRUST COMPANY, (E)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (F)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT SUBJECT TO THE COMPANY'S, FIRST UNION NATIONAL BANK'S AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSES (C), (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES PROVIDED THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO FIRST UNION NATIONAL BANK AND AMERICAN STOCK TRANSFER & TRUST
COMPANY, AND SUBJECT TO ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE THEN HOLDER OF THIS SECURITY AFTER THE RESALE
RESTRICTION TERMINATION DATE.
It is also understood and acknowledged that holders (including
subsequent transferees) of the Debentures and, if such Debentures are
subsequently converted into Common Stock, the Common Stock, will have the
registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), dated the date hereof, in the form of Exhibit
B hereto, for so long as such Debentures and Common Stock constitute "Transfer
Restricted Securities" (as defined in the Registration Rights Agreement).
Pursuant to the Registration Rights Agreement, the Company will agree (i) to
file with the Commission under the circumstances set forth therein a
registration statement on the appropriate form under the Act relating to the
resale of the Debentures and the Common Stock by certain holders thereof from
time to time in accordance with the methods of distribution set forth in such
registration statement and Rule 415 under the Act (the "Shelf Registration
Statement") and (ii) to use its best efforts to cause such Shelf Registration
Statement to be declared effective. This Agreement, the Indenture and the
Registration Rights Agreement are hereinafter referred to collectively as the
"Operative Documents."
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Indenture or the Offering Memorandum.
2. Agreements to Sell, Purchase and Resell. (a) The Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to each Initial Purchaser and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, each Initial Purchaser agrees to purchase
from the Company, at a purchase price of 97.5% of the principal amount thereof,
the principal amount of Firm Debentures set forth opposite the name of such
Initial Purchaser in Schedule I hereto.
(b) The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Initial Purchasers, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Initial Purchasers
shall have the right to purchase from the Company pursuant to an option (the
"over-allotment option"), which may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time, on the 30th day after the date of
the Offering Memorandum (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to $11,250,000 principal amount of Additional Debentures
at the same purchase price as the Firm Debentures, plus accrued interest, if
any, from the date of issuance of the Firm Debentures to the date of delivery
and payment. Upon any exercise of the over-allotment option, each Initial
Purchaser, severally and not jointly, agrees to purchase that principal amount
of Additional Debentures which bears the same proportion to the aggregate
principal amount of Additional Debentures to be purchased by the
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Initial Purchasers as the principal amount of Firm Debentures set forth opposite
the name of such Initial Purchaser bears to the aggregate principal amount of
Firm Debentures.
(c) The Initial Purchasers have advised the Company that they
propose to offer the Debentures for sale upon the terms and conditions set forth
in this Agreement and in the Offering Memorandum. Each Initial Purchaser hereby
agrees that it will not take any action that would constitute a public offering
of the Debentures in any jurisdiction and further agrees that, with respect to
the offer or sale of any Debentures or the delivery or distribution of any
Offering Memorandum, it will comply with applicable laws and regulations in such
jurisdictions or to which it is otherwise subject. Each Initial Purchaser hereby
represents and warrants to the Company that such Initial Purchaser (i) is a
Qualified Institutional Buyer within the meaning of Rule 144A and, assuming the
accuracy of the Company's representations and warranties contained herein, is
purchasing the Debentures pursuant to a private sale exempt from registration
under the Act and is not purchasing the Debentures with a view to or for offer
or sale in connection with any distribution that would be in violation of
foreign or U.S. federal or state securities laws, (ii) will not solicit offers
for, or offer or sell, the Debentures by means of any form of general
solicitation or general advertising or in any manner involving a public offering
within the meaning of Section 4(2) of the Act and (iii) has solicited and will
solicit offers for the Debentures only from, and has offered and will offer,
sell or deliver the Debentures prior to the filing of the Shelf Registration
Statement, only to (A) persons who are or whom the Initial Purchasers reasonably
believe to be Qualified Institutional Buyers, or if any such person is buying
for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to the Initial
Purchaser that each such account is a Qualified Institutional Buyer, to whom
notice has been given that such sale or delivery is being made in reliance on
Rule 144A, in each case, in transactions under Rule 144A, (B) to Institutional
Accredited Investors and (C) outside the United States to certain persons in
offshore transactions in reliance on Regulation S. The Initial Purchasers have
advised the Company that they will offer the Debentures to Eligible Purchasers
at a price initially equal to 100% of the principal amount thereof, plus accrued
interest, if any, from the date of issuance of the Firm Debentures. Such price
may be changed by the Initial Purchasers at any time thereafter without notice.
(d) The Initial Purchasers represent and warrant that they (i) have
not offered or sold and prior to the date that is six months after the closing
date with respect to the Offering will not offer or sell any Debentures to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which will not involve an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995
(the "Regulations"); (ii) have complied with and will comply with all applicable
provisions of the Financial Services Act of 1986 and the Regulations with
respect to anything done by them in relation to the Debentures in, from, or
otherwise involving the United Kingdom; and (iii) have only issued or passed on
and will only issue or pass on to any person in the United Kingdom any document
received by them in connection with the offer of the Debentures if that person
is of a kind described in Article 11(3) of the Financial Services Act of 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
(e) The Initial Purchasers represent and warrant that they have
offered and sold the Debentures and agree that they will offer and sell the
Debentures (i) as part of their distribution at any time, and (ii) otherwise
until 40 days after the later of the commencement of the offering of the
Debentures and the Closing Date, only in accordance with Rule 903 of Regulation
S or as otherwise permitted pursuant to paragraph (c) above. Accordingly, the
Initial Purchasers represent and agree that none of such Initial Purchasers,
their affiliates nor any persons acting on their behalf have engaged or will
engage in any directed selling efforts (as defined in Regulation S under the
Act) with respect to the Debentures, and they have complied and will comply with
the offering restrictions requirement of Regulation S. Such Initial Purchasers
agree that, at or prior to confirmation of the sale of Debentures to non-U.S.
persons (as defined in Regulation S under the Act) other than a sale pursuant to
Rule 144A, they will have sent to each
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distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Debentures from such Initial Purchasers during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
offering and the closing date, except in either case in accordance with
Regulation S (or Rule 144A) under the Securities Act. Terms used above
have the meaning given to them by Regulation S."
The Initial Purchasers understand that the Company and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Sections
7(c) and 7(h) hereof, counsel to the Company and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and agreements and the Initial Purchasers hereby consent to such
reliance.
3. Delivery of the Debentures and Payment Therefor. Delivery to the
Initial Purchasers of and payment for the Firm Debentures shall be made at the
office of Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at 10:00
A.M., New York City time, on December 18, 1996 (the "Closing Date"). The place
of closing for the Firm Debentures and the Closing Date may be varied by
agreement between the Initial Purchasers and the Company.
Delivery to the Initial Purchasers of and payment for any Additional
Debentures to be purchased by the Initial Purchasers shall be made at the
aforementioned office of Smith Barney Inc. at such time on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from the Initial Purchasers to the
Company of the Initial Purchasers' determination to purchase the principal
amount of Additional Debentures specified in such notice. The place of closing
for any Additional Debentures and the Option Closing Date for such Additional
Debentures may be varied by agreement between the Initial Purchasers and the
Company.
The Firm Debentures and any Additional Debentures which the Initial
Purchasers may elect to purchase will be delivered to the Initial Purchasers
against payment of the purchase price therefor in immediately available funds.
Debentures being sold by the Initial Purchasers in Exempt Resales to Qualified
Institutional Buyers in reliance on Rule 144A will be initially evidenced by a
global security and will be registered in the name of Cede & Co. ("Cede"), as
nominee of The Depository Trust Company ("DTC"). Debentures being sold by the
Initial Purchasers in Exempt Resales to certain persons in offshore transactions
in reliance on Regulation S will be initially evidenced by a global security
which will be deposited with, or on behalf of, DTC and registered in the name of
Cede as DTC's nominee, for the accounts of Morgan Guaranty Trust Company of New
York, Brussels office, or Citibank, N.A., as operators of the Euroclear System
and Cedel, S.A., respectively. The Debentures to be delivered to the Initial
Purchasers shall be made available to the Initial Purchasers in New York City
for inspection and packaging not later than 9:30 a.m., New York City time, on
the business day next preceding the Closing Date or the Option Closing Date, as
the case may be.
4. Agreements of the Company. The Company agrees with the Initial
Purchasers as follows:
(a) The Company will advise the Initial Purchasers promptly and, if
requested by them, will confirm such advice in writing, within the period of
time referred to in paragraph (e) below, of any material change in the condition
(financial or otherwise), results of operations or business of the
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Company, the Subsidiaries and the Professional Corporations (each as defined
herein), taken as a whole, or of the happening of any event which makes any
statement of a material fact made in the Offering Memorandum (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Offering Memorandum (as then amended or supplemented) in order to make
the statements therein not misleading, or of the necessity to amend or
supplement the Offering Memorandum (as then amended or supplemented) to comply
with any applicable law.
(b) The Company will furnish to the Initial Purchasers, without
charge, as of the date of the Offering Memorandum, such number of copies of the
Offering Memorandum (as then amended or supplemented) as they may reasonably
request.
(c) The Company will not make any amendment or supplement to the
Preliminary Offering Memorandum or to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised and provided a copy of
prior to the making thereof or to which they shall reasonably object after being
so advised or file any document which upon filing becomes an Incorporated
Document without delivering a copy of such document to the Initial Purchasers
prior to such filing.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to the Initial Purchasers, without charge,
in such quantities as the Initial Purchasers shall have reasonably requested or
may hereafter reasonably request, copies of the Preliminary Offering Memorandum.
The Company consents to the use, in accordance with the securities or Blue Sky
laws of the jurisdictions in which the Debentures are offered by the Initial
Purchasers and by dealers, prior to the date of the Offering Memorandum, of each
Preliminary Offering Memorandum so furnished by the Company. The Company
consents to the use of the Offering Memorandum (and of any amendment or
supplement thereto) in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Debentures are offered by the Initial Purchasers and
by all dealers to whom Debentures may be sold, in connection with the offering
and sale of the Debentures.
(e) If, at any time prior to completion of the distribution of the
Debentures by the Initial Purchasers to Eligible Purchasers, any event shall
occur as a result of which it becomes necessary to amend or supplement the
Offering Memorandum (as then amended or supplemented) in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or to file under the Exchange Act any document which upon
filing becomes an Incorporated Document, to comply with any applicable law, the
Company will, subject to Section 4(c) hereof, forthwith prepare an appropriate
supplement or amendment thereto, or will prepare and file such document, as the
case may be, and will expeditiously furnish to the Initial Purchasers and
dealers a reasonable number of copies thereof.
(f) The Company will cooperate with the Initial Purchasers and with
their counsel in connection with the registration or qualification of the
Debentures and the Common Stock issuable upon conversion of the Debentures for
offering and sale by the Initial Purchasers and by dealers under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchasers may designate
and will file such consents to service of process or other documents necessary
or appropriate in order to effect such qualification; provided that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Debentures, in any jurisdiction where it is not now so subject.
(g) So long as any of the Debentures are outstanding, the Company
will furnish to the Initial Purchasers (i) as soon as available, a copy of each
report of the Company mailed to stockholders or filed with the Commission and
(ii) such other publicly available information concerning the Company and the
Subsidiaries as the Initial Purchasers may reasonably request.
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(h) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than
pursuant to Section 10 hereof or by notice given by the Initial Purchasers
terminating this Agreement pursuant to Section 9 or Section 11 hereof) or if
this Agreement shall be terminated by the Initial Purchasers because of any
failure or refusal on the part of the Company to comply with the terms or
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the Initial Purchasers for all out-of-pocket expenses (including the reasonable
fees and expenses of their counsel) incurred by them in connection herewith.
(i) The Company will apply the net proceeds from the sale of the
Debentures in the manner described in the Offering Memorandum under the caption
"Use of Proceeds."
(j) The Company will not, without the prior written consent of Smith
Barney Inc., sell, contract to sell or otherwise dispose of any Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or grant any options or warrants or rights to purchase Common Stock, for a
period of 90 days after the date of the Offering Memorandum, except (i) pursuant
to this Agreement, (ii) upon conversion of the Debentures in accordance with
their terms, (iii) upon the exercise of stock options pursuant to the stock
option plans and upon the exercise of warrants, in each case described in the
Offering Memorandum or a document incorporated by reference therein, (iv)
pursuant to the AHI Merger (as and to the extent described in the Offering
Memorandum or a document incorporated by reference therein) or (v) to comply
with its obligations under the Registration Rights Agreement dated as of
November 29, 1996 between the Company and Foundation Health Corporation.
(k) The Company has furnished or will furnish to the Initial
Purchasers "lock-up" letters, in form and substance reasonably satisfactory to
the Initial Purchasers, signed by each of its current directors and officers and
such stockholders of the Company designated by the Initial Purchasers.
(l) Except as stated in this Agreement, the Preliminary Offering
Memorandum and the Offering Memorandum, the Company has not taken, nor will it
take, directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Debentures to facilitate the sale or resale of the Debentures. The Company will
not distribute any offering material in connection with the Exempt Resales other
than the Preliminary Offering Memorandum and the Offering Memorandum.
(m) The Company will use its reasonable best efforts to cause the
Debentures to be eligible for trading on The PORTAL Market.
(n) From and after the Closing Date, so long as any of the
Debentures are "restricted securities" within the meaning of Rule 144(a)(3)
under the Act, the Company will furnish to holders of the Debentures and
prospective purchasers of Debentures designated by such holders, upon request of
such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Act to permit compliance with
Rule 144A in connection with resale of the Debentures, if at the time of such
request the Company is not subject to Section 13 or 15(d) of the Exchange Act.
(o) The Company agrees not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Debentures in a manner that would
require the registration under the Act of the sale to the Initial Purchasers or
the Eligible Purchasers of the Debentures.
(p) The Company agrees to comply in all material respects with all
of the terms and conditions of the Indenture, the Registration Rights Agreement
and all agreements set forth in the representation letters of the Company to DTC
relating to the approval of the Debentures by DTC for "book entry" transfer.
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<PAGE> 8
(q) The Company agrees that prior to or simultaneously with any
registration of the Debentures pursuant to the Registration Rights Agreement, or
at such earlier time as may be so required, the Indenture shall be qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act"), and will
cause to be entered into any necessary supplemental indentures in connection
therewith.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Initial Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering Memorandum
have been prepared by the Company for use by the Initial Purchasers in
connection with the Exempt Resales. No order or decree preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum or any amendment or
supplement thereto, or any order asserting that the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has been
issued, and no proceeding for that purpose has commenced or is pending or, to
the knowledge of the Company, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering Memorandum
as of their respective dates and the Offering Memorandum as of the Closing Date
did not and will not at any time contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they are
made, not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Preliminary Offering Memorandum and
the Offering Memorandum (or any supplement or amendment thereto) made in
reliance upon and in conformity with information relating to the Initial
Purchasers furnished to the Company in writing by or on behalf of the Initial
Purchasers expressly for use therein.
(c) The Incorporated Documents heretofore filed with the Commission
were filed in a timely manner and, when they were filed (or, if any amendment
with respect to any such document was filed, when such document was filed),
conformed in all material respects to the requirements of the Exchange Act and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and any further Incorporated Documents will, when so
filed, be filed in a timely manner and conform in all material respects to the
requirements of the Exchange Act and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(d) The Indenture has been duly and validly authorized by the
Company and, upon its execution and delivery by the Company and assuming due
authorization, execution and delivery by the Trustee, will be a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles, and
the Indenture conforms in all material respects to the description thereof in
the Offering Memorandum; no qualification of the Indenture under the 1939 Act is
required in connection with the offer and sale of the Debentures contemplated
hereby or in connection with the Exempt Resales.
(e) The Debentures have been duly authorized by the Company and,
when executed by the Company and authenticated by the Trustee in accordance with
the Indenture and delivered to the Initial Purchasers against payment therefor
in accordance with the terms hereof, will have been validly issued and
delivered, and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles, and the Debentures will conform in all material respects
to the description thereof in the Offering Memorandum.
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<PAGE> 9
Except as described in the Offering Memorandum, no person has the right,
contractual or otherwise, to cause the Company to sell or otherwise issue to
them, or to permit them to underwrite the sale of, any of the Debentures.
(f) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights and were issued and sold in
compliance with all applicable federal and state securities laws; the shares of
Common Stock issuable upon conversion of the Debentures have been duly
authorized and reserved for issuance and, when delivered upon conversion of the
Debentures, will be validly issued, fully paid and nonassessable and free of any
preemptive or similar rights; the authorized capital stock of the Company
conforms in all material respects to the description thereof in the Offering
Memorandum and the authorized and outstanding capital stock of the Company is as
set forth under the caption "Capitalization" in the Offering Memorandum. Except
as described in or contemplated by the Offering Memorandum, there are no
outstanding options, warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue, any shares of capital
stock of the Company or any security convertible into or exchangeable or
exercisable for capital stock of the Company.
(g) The only entities in which the Company has a material direct or
indirect equity or other ownership interest are the corporations listed,
together with their states of incorporation, on Schedule II hereto, collectively
(the "Subsidiaries"). Each of the Company and the Subsidiaries has been duly
organized, each is validly existing as a corporation in good standing under the
laws of its state of incorporation and has full corporate power and authority to
carry on its business as it is currently being conducted (and, in the case of
the Company, to authorize the offering of the Debentures and to execute, deliver
and perform this Agreement and to issue, sell and deliver the Debentures) and to
own, lease and operate its properties, and, except where such failure would not
have a material adverse effect, singly or in the aggregate, on the condition
(financial or otherwise), results of operations or business of the Company, the
Subsidiaries and the Professional Corporations, taken as a whole (a "Material
Adverse Effect"), each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification. The Company does not own, lease or license any asset or property
or conduct any business outside the United States of America. Except as
disclosed in the Offering Memorandum, each of Family Practice Associates of San
Diego, Inc., an Osteopathic corporation, FPA Medical Group of California, as
Osteopathic corporation, FPA Medical Group of New Jersey, a professional
corporation, FPA Medical Group of Pennsylvania, a medical corporation, Arizona
Managed Care Providers Ltd., William Gonzaba, M.D., a professional, d/b/a/
Gonzaba Medical Group, FPA Independent Practice Association, an Osteopathic
corporation, FPA Medical Group of South Carolina, P.C., VIP IPA, a professional
medical corporation, Foundation Health IPA, Century Family Medical Group, Inc.,
FPA Medical Group of Delaware, P.A., Family Practice Associates of Southern
California, an Osteopathic Medical Corporation, FPA Medical Group of Texas, a
Texas Professional Association, and Sterling Healthcare of Texas, a Texas
professional association (collectively, the "Professional Corporations") has all
requisite corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of and from all
governmental or regulatory bodies and all other persons and entities, to own,
lease and license its assets and properties and conduct its businesses as now
being conducted and as described in the Offering Memorandum except where the
lack of such authorization, approval, consent, order, license, certificate or
permit would not have a Material Adverse Effect; no such authorization,
approval, consent, order, license, certificate or permit relating specifically
to the type of business conducted by the Company, any of its Subsidiaries or any
of the Professional Corporations contains a materially burdensome restriction
other than as disclosed in the Offering Memorandum. The Subsidiaries and the
Professional Corporations are the only entities whose financial positions and
results of operations are consolidated with those of the Company in preparation
of the financial statements included in the Offering Memorandum.
(h) All of the issued and outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued and are owned directly
or indirectly by the Company, and all such
9
<PAGE> 10
shares in the Subsidiaries are fully paid and nonassessable and are beneficially
owned, directly or indirectly, by the Company free and clear of any security
interest, mortgage, pledge, claim, lien, encumbrance or adverse interest of any
nature (each, a "Lien"), except for liens created in connection with The
Company's acquisition of certain entities from Foundation Health Corporation and
its Amended and Restated Credit Agreement dated as of November 29, 1996. There
are no outstanding subscriptions, rights, warrants, options, calls, convertible
or exchangeable securities, commitments of sale, or Liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of any of the Subsidiaries.
(i) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements included or
incorporated by reference in the Offering Memorandum are independent public
accountants with respect to the Company, the Subsidiaries and the Professional
Corporations, as required by the Act. The consolidated historical financial
statements, together with related notes, set forth or incorporated by reference
in the Offering Memorandum comply as to form in all material respects with the
requirements of the Act applicable to a prospectus included in a registration
statement on Form S-3. Except as otherwise expressly stated therein, such
historical financial statements fairly present the consolidated financial
position of the Company, the Subsidiaries and Professional Corporations and of
acquired companies or companies the acquisition of which is probable
("Acquisition Companies"), at the respective dates indicated and the results of
their operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles ("GAAP") consistently
applied throughout such periods. The other financial and statistical information
and data relating to the Company, the Subsidiaries, the Professional
Corporations and the Acquisition Companies included in the Offering Memorandum
are, in all material respects, accurately presented and prepared on a basis
consistent with applicable financial statements and the books and records of the
Company. The pro forma financial statements included or incorporated by
reference in the Offering Memorandum have been prepared on a basis consistent
with such historical statements, except for the pro forma adjustments specified
therein and as otherwise expressly stated therein, give effect to assumptions
made on a reasonable basis and present fairly the historical and proposed
transactions contemplated by the Offering Memorandum. Except as otherwise
expressly stated therein, the other financial and statistical information and
data included in the Offering Memorandum (both historical and pro forma) are in
all material respects accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company.
(j) Except as disclosed in the Offering Memorandum, as of the date
hereof, (i) neither the Company nor any of the Subsidiaries or Professional
Corporations has incurred any liabilities or obligations, direct or contingent,
which are material to the Company and the Subsidiaries and Professional
Corporations, taken as a whole, nor entered into any transaction not in the
ordinary course of business that is material to the Company and the Subsidiaries
and Professional Corporations, taken as a whole, (ii) there has been no decision
or judgment in the nature of litigation adverse to the Company, the Subsidiaries
or the Professional Corporations which is material to the Company, the
Subsidiaries and the Professional Corporations, taken as a whole, (iii) there
has been no material adverse change in the condition (financial or otherwise),
results of operations, business or prospects of the Company, the Subsidiaries
and Professional Corporations, taken as a whole, (iv) neither the Company nor
any of the Subsidiaries or Professional Corporations has sustained any material
loss or interference with its assets, businesses or properties from fire,
explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any court or legislative or other governmental action, order
or decree, (v) none of the Company, the Subsidiaries or the Professional
Corporations has received a notice of, or been threatened with, termination of a
contractual relationship with a third party payor, which such termination would,
individually or in the aggregate, have a Material Adverse Effect, and (vi)
neither the Agreement and Plan of Merger by and among the Company, FPA
Acquisition Corp. and AHI Healthcare Systems, Inc. ("AHI") dated as of November
8, 1996 (the "AHI Merger Agreement") nor the transaction contemplated by the AHI
Merger Agreement shall have been terminated nor threatened to be terminated by
any party thereto or pursuant to the terms of the AHI Merger Agreement (any of
the above, a "Material Adverse Change").
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<PAGE> 11
(k) Except as would not have a Material Adverse Effect, neither the
Company nor any of the Subsidiaries or Professional Corporations is in violation
of, or in default in the performance of, their respective charters or bylaws, or
of any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of the Subsidiaries or Professional
Corporations or of any decree of any court or governmental agency or body, or
any bond, debenture, note or any other evidence of indebtedness or any
indenture, mortgage, deed of trust or other material contract, lease or other
instrument to which the Company or any of the Subsidiaries or Professional
Corporations is a party or by which any of them is bound, or to which any of the
property or assets of any of them is subject. There are no agreements,
contracts, indentures, leases or other instruments that would be required to be
described in the Offering Memorandum if it were a prospectus included in a
registration statement on Form S-3 but are not described as would be required,
or that are required to be described in or filed as an exhibit to any
Incorporated Document that are not described or filed as are required. The
descriptions of the terms of any such contracts or documents contained in the
Offering Memorandum are correct and complete in all material respects. Each
material agreement to which the Company, a Subsidiary or a Professional
Corporation is a party is in full force and effect and is valid and enforceable
by the Company, such Subsidiary or such Professional Corporation, as the case
may be, in accordance with its terms, assuming the due authorization, execution
and delivery thereof by each of the other parties thereto.
(l) Each of this Agreement, the Registration Rights Agreement and
the AHI Merger Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that (i) enforcement may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or (ii) rights to indemnity hereunder may
be limited by federal or state securities laws or the public policy underlying
such laws.
(m) Except as would not have a Material Adverse Effect, the
execution, delivery, and performance of this Agreement, the Indenture, the
Registration Rights Agreement and the AHI Merger Agreement and the consummation
of the transactions contemplated hereby and thereby will not (i) conflict with
or result in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) or require consent under, or result in the creation or
imposition of any Lien upon any property or assets of the Company or any of the
Subsidiaries or Professional Corporations, pursuant to the terms of any
agreement, instrument, franchise, license or permit to which the Company or any
of the Subsidiaries or Professional Corporations is a party or by which any of
such corporations or their respective properties or assets may be bound or (ii)
violate or conflict with any provision of the charter or by-laws of the Company
or the Subsidiaries or Professional Corporations or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or the
Subsidiaries or Professional Corporations or any of their respective properties
or assets. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of the Subsidiaries or Professional Corporations or any of the their
respective properties or assets is required for the execution, delivery and
performance of this Agreement, the Indenture, the Registration Rights Agreement
or the AHI Merger Agreement and the consummation of the transactions
contemplated hereby and thereby, including the issuance, sale and delivery of
the Debentures to be issued, sold and delivered by the Company hereunder and the
issuance of the Common Stock upon conversion of the Debentures, except in
connection with the registration under the Act of the Debentures and the
underlying Common Stock in accordance with the Registration Rights Agreement,
the qualification of the Indenture under the 1939 Act and such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Debentures by the
Initial Purchasers.
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<PAGE> 12
(n) Except as described in the Offering Memorandum, there is no
action, suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, pending against the Company, any of the Subsidiaries
or the Professional Corporations which would reasonably be expected to have a
Material Adverse Effect, or materially and adversely affect the Company's
ability to perform its obligations pursuant to this Agreement, the Indenture,
the Registration Rights Agreement or the AHI Merger Agreement or the Company's
obligations pursuant to the transactions contemplated hereby and thereby and, to
the best of the Company's knowledge, no such proceedings are contemplated or
threatened. No action has been taken with respect to the Company or any of the
Subsidiaries or Professional Corporations, and no statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency which
prevents the issuance of the Debentures and the underlying Common Stock,
prevents or suspends the use of the Preliminary Offering Memorandum or the
Offering Memorandum or suspends the sale of the Debentures in any jurisdiction
referred to in Section 4(f) hereof, no injunction, restraining order or order of
any nature by a Federal or state court of competent jurisdiction has been issued
with respect to the Company or any of the Subsidiaries or Professional
Corporations which would prevent the issuance of the Debentures, prevent or
suspend the use of the Preliminary Offering Memorandum or the Offering
Memorandum or suspend the sale of the Debentures in any jurisdiction referred to
in Section 4(f) hereof; and no action, suit or proceeding before any court or
arbitrator or any governmental body, agency or official (domestic or foreign),
is pending against or, to the best knowledge of the Company, threatened against,
the Company or any of the Subsidiaries or Professional Corporations which, if
adversely determined, could reasonably be expected to (a) interfere with or
adversely affect the issuance of the Debentures being sold by the Company
hereunder or (b) in any manner invalidate this Agreement, the Indenture, the
Registration Rights Agreement or the AHI Merger Agreement.
(o) Except as would not have a Material Adverse Effect and as
disclosed in the Offering Memorandum, the Company, each of the Subsidiaries and
each of the Professional Corporations possess such licenses, certificates,
authorizations, approvals, franchises, trademarks, service marks, trade names,
permits and other rights issued by local, state, federal or foreign regulatory
agencies or bodies (collectively, "Permits") as are necessary to own, lease,
enter into options to lease or purchase and operate their respective properties
and to conduct the businesses now conducted (as described in the Prospectus) by
them; the Company, each of the Subsidiaries and each of the Professional
Corporations, to the Company's knowledge, have fulfilled and performed all of
their material obligations with respect to such Permits, and neither the Company
nor any of the Subsidiaries, and to the best knowledge of the Company, none of
the Professional Corporations, has received any notice of proceedings relating
to the revocation or modification of any Permit, and no such Permits contain any
restrictions that are materially burdensome to the Company, any of the
Subsidiaries or the Professional Corporations.
(p) Neither the Company nor any of the Subsidiaries and, to the best
knowledge of the Company, none of the Professional Corporations, has, directly
or indirectly, paid or delivered any fee, commission or other sum of money or
item of property, however characterized, to any finder, agent, government
official or other party, in the United States or any other country, which is in
any manner related to the business or operations now conducted or proposed to be
conducted (as described in the Offering Memorandum) of the Company and any of
the Subsidiaries which the Company knows or has reason to believe to have been
illegal under any Federal, state or local laws of the United States or any other
country having jurisdiction with respect to the Company, its subsidiaries and
the Professional Corporations.
(q) All tax returns required to be filed by the Company and each of
the Subsidiaries in any jurisdiction have been filed, other than those that are
being contested in good faith, and all taxes, including withholding taxes,
penalties and interest, assessments, fees and other governmental charges due or
claimed to be due from such entities have been paid, other than those contested
in good faith and for which adequate reserves have been provided or those
currently payable without penalty or interest.
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<PAGE> 13
(r) Except as otherwise set forth in the Offering Memorandum or as
would not have a Material Adverse Effect, each of the Company and the
Subsidiaries and Professional Corporations has good and marketable title, free
and clear of all Liens, to all property and assets necessary for the conduct of
their respective businesses or described in the Offering Memorandum as being
owned by it. All leases to which the Company, any of the Subsidiaries or any of
the Professional Corporation is a party are valid and binding and no default has
occurred or is continuing thereunder, and the Company, the Subsidiaries and the
Professional Corporations enjoy peaceful and undisturbed possession under all
such leases to which any of them is a party as lessee with such exceptions as do
not materially interfere with the use made by the Company, the Subsidiaries or
the Professional Corporations.
(s) The Company, the Subsidiaries and the Professional Corporations
maintain insurance covering their properties, operations, personnel and
businesses which insures against such losses and risks as is adequate in
accordance with customary industry practice to protect the Company, the
Subsidiaries and the Professional Corporations and their businesses. None of the
Company, the Subsidiaries and the Professional Corporations has received notice
from any insurer or agent of such insurer that substantial capital improvements
or other expenditures will have to be made to continue such insurance. All such
insurance is outstanding and duly in force on the date hereof and will be
outstanding and duly in force on the Closing Date and on each Additional Closing
Date (as defined below).
(t) Neither the Company nor any of the Subsidiaries is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(u) Except as disclosed in the Offering Memorandum, no holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company.
(v) The Company and the Subsidiaries maintain systems of internal
accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability, (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) Based upon the assumptions and subject to the qualifications set
forth therein, the statements made in the Offering Memorandum under the caption
"Certain United States Federal Income Tax Consequences" accurately summarize the
material United States federal income tax consequences of the ownership,
conversion and disposition of the Debentures for United States holders who
acquire Debentures on original issue and who hold Debentures as "capital assets"
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code").
(x) When the Debentures are issued and delivered pursuant to this
Agreement, such Debentures will not be of the same class (within the meaning of
Rule 144A(d)(3) under the Act) as any security of the Company that is listed on
a national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated interdealer quotation system.
(y) After giving effect to the intended use of proceeds from the
offering of the Debentures as described in the Offering Memorandum under the
caption "Use of Proceeds," the Debentures will not constitute "corporate
acquisition indebtedness" within the meaning of Section 279 of the Code.
(z) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D ("Regulation D") under the Act) of the Company has directly, or
through any agent (provided that no
13
<PAGE> 14
representation is made as to the Initial Purchasers or any person acting on
their behalf), (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Act) which is or will
be integrated with the offering and sale of the Debentures in a manner that
would require the registration of the Debentures under the Act or (ii) engaged
in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offering of the Debentures.
(aa) The Company is not required to deliver the information
specified in Rule 144A(d)(4) in connection with the offering and resale of the
Debentures by the Initial Purchasers.
(ab) Assuming (i) that the representations and warranties of the
Initial Purchasers in Section 2 hereof are true, (ii) the Initial Purchasers
comply with the covenants set forth in Section 2 hereof and (iii) that each
person to whom the Initial Purchasers offer, sell or deliver the Debentures is a
Qualified Institutional Buyer, an Institutional Accredited Investor or a person
other than a U.S. person outside the United States in reliance on Regulation S
under the Act, the purchase and sale of the Debentures pursuant hereto
(including the Initial Purchasers' proposed offering of the Debentures on the
terms and in the manner set forth in the Offering Memorandum and Section 2
hereof) is exempt from the registration requirements of the Act. None of the
Company, the Subsidiaries or Professional Corporations or other affiliates or
any person acting on their behalf (provided that no representation is made as to
the Initial Purchasers or any person acting on their behalf) has engaged in any
directed selling efforts (as that term is defined in Regulation S) with respect
to the Debentures, and the Company, the Subsidiaries and the Professional
Corporations and each person acting on their behalf (provided that no
representation is made as to the Initial Purchasers or any person acting on
their behalf) have complied with the offering restrictions requirement of
Regulation S.
(ac) Except as permitted by the Act, the Company has not distributed
and, prior to the later to occur of (i) the Closing Date or the Option Closing
Date, if any, and (ii) completion of the distribution of the Debentures, will
not distribute any offering material in connection with the offering and sale of
the Debentures other than the Preliminary Offering Memorandum and the Offering
Memorandum.
(ad) Except as described in the Offering Memorandum, to the
Company's knowledge (i) the AHI SEC Reports (as defined below) do not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (ii) since the
respective dates of the AHI SEC Reports and except as otherwise disclosed
therein (A) neither AHI nor any of the AHI Affiliates (as defined below) has
incurred any liabilities or obligations, direct or contingent, which are
material to AHI and the AHI Affiliates, taken as a whole (the "AHI Group"), nor
entered into any transaction not in the ordinary course of business that is
material to the AHI Group, (B) there has been no decision or judgment in the
nature of litigation adverse to any member of the AHI Group which is material to
the AHI Group, (C) there has been no material adverse change in the condition
(financial or otherwise) or in the results of operations or business of the AHI
Group, (D) there has been no material loss or interference with the assets,
business or properties of the AHI Group from fire, explosion, earthquake, flood
or other calamity, whether or not covered by insurance, or from any court or
legislative or other governmental action, order or decree and (E) no member of
the AHI Group has received a notice of, or been threatened with, termination of
a contractual relationship with a third party payor, which termination would
have a material adverse effect on the condition (financial or otherwise),
results of operations or business of the AHI Group. For purposes of the
foregoing, "AHI SEC Reports" shall mean the Annual Report on Form 10-K of AHI
for the year ended December 31, 1995 as filed with the Commission pursuant to
the Exchange Act, all other reports filed with the Commission by AHI pursuant to
the Exchange Act subsequent to December 31, 1995 and any amendments to any such
reports; and "AHI Affiliates" shall mean all subsidiaries (as defined in the
Act) of AHI and all entities whose financial positions and results of operations
are consolidated with those of AHI in preparation of the financial statements of
AHI included in the AHI SEC Reports.
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<PAGE> 15
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Offering Memorandum or in the
Offering Memorandum or in any amendment or supplement thereto, or arising out of
or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
such Initial Purchaser furnished in writing to the Company by or on behalf of
such Initial Purchaser expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to the Preliminary Offering Memorandum shall not inure to the benefit of any
Initial Purchaser (or to the benefit of any person controlling such Initial
Purchaser) on account of any such loss, claim, damage, liability or expense
arising from the sale of Debentures by such Initial Purchaser to any person if
the untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in the Preliminary Offering Memorandum was
corrected in the Offering Memorandum and such Initial Purchaser sold Debentures
to that person without sending or giving, at or prior to the written
confirmation of sale, a copy of the Offering Memorandum (as then amended or
supplemented) if the Company had previously furnished sufficient copies thereof
to such Initial Purchaser. The foregoing indemnity agreement shall be in
addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Initial Purchaser or any person controlling any Initial Purchaser in respect of
which indemnity may be sought against the Company, such Initial Purchaser or
such controlling person shall promptly notify the Company, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses; provided, however, that the omission so to notify the
Company shall not relieve the Company from any liability that it may have to any
Initial Purchaser (except to the extent that the Company is materially
prejudiced or otherwise forfeits substantive rights or defenses by reason of
such failure). Such Initial Purchaser or any such controlling person shall have
the right to employ separate counsel in any such action, suit or proceeding and
to participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Initial Purchaser or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses, (ii)
the Company has failed to assume the defense and employ counsel or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Initial Purchaser or such controlling person and the
Company and such Initial Purchaser or such controlling person shall have been
advised by its counsel that representation of such indemnified party and the
Company by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Initial Purchaser or such
controlling person). It is understood, however, that the Company shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such Initial
Purchasers and controlling persons not having actual or potential differing
interests among themselves, which firm shall be designated in writing by Smith
Barney Inc., and that all such fees and expenses shall be reimbursed as they are
incurred. The Company shall not be liable for any settlement of any such action,
suit or proceeding effected without its written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the Company agrees to indemnify and hold
harmless any Initial Purchaser and any such controlling person, to the extent
provided in the preceding paragraph, from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
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(c) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers and any
person who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to each Initial Purchaser, but only with respect to information
relating to such Initial Purchaser furnished in writing to the Company by or on
behalf of such Initial Purchaser expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum, or any amendment or supplement thereto.
If any action, suit or proceeding shall be brought against the Company, any of
its directors or officers or any such controlling person based on the
Preliminary Offering Memorandum or the Offering Memorandum, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Initial Purchaser pursuant to this paragraph (c), such Initial Purchaser shall
have the rights and duties given to the Company by paragraph (b) above (except
that if the Company shall have assumed the defense thereof such Initial
Purchaser shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Initial Purchaser's expense), and the Company, its
directors and officers and any such controlling person shall have the rights and
duties given to the Initial Purchasers by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which the Initial
Purchasers may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchasers on the other hand from the
offering of the Debentures, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Initial
Purchasers on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Initial Purchasers on the other hand shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
discounts and commissions received by the Initial Purchasers, in each case as
set forth in the table on the cover page of the Offering Memorandum; provided
that, in the event that the Initial Purchasers shall have purchased any
Additional Debentures hereunder, any determination of the relative benefits
received by the Company and the Initial Purchasers from the offering of the
Debentures shall include the net proceeds (before deducting expenses) received
by the Company, and the discounts and commissions received by the Initial
Purchasers, from the sale of such Additional Debentures, in each case computed
on the basis of the respective amounts set forth in the notes to the table on
the cover page of the Offering Memorandum. The relative fault of the Company on
the one hand and the Initial Purchasers on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or by the Initial
Purchasers on the other hand and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
(e) The Company and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 6 were determined
by a pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section
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<PAGE> 17
6, no Initial Purchasers shall be required to contribute any amount in excess of
the amount by which the total price of the Debentures underwritten by it and
distributed to the public exceeds the amount of any damages which such Initial
Purchasers has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 6 are several in proportion to the respective numbers
of Firm Debentures set forth opposite their names in Schedule I hereto (or such
numbers of Firm Debentures increased as set forth in Section 10 hereof) and not
joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser, the Company, its directors or officers or any
person controlling the Company, (ii) acceptance of any Debentures and payment
therefor hereunder and (iii) any termination of this Agreement. A successor to
any Initial Purchaser or any person controlling any Initial Purchaser, or to the
Company, its directors or officers, or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 6.
7. Conditions of the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the Firm Debentures hereunder
are subject to the following conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Preliminary Offering
Memorandum or the Offering Memorandum or any amendment or supplement thereto or
any order asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Act shall have been issued and
no proceedings for that purpose shall have been commenced or shall be pending
or, to the knowledge of the Company, be contemplated. No stop order suspending
the sale of the Debentures in any jurisdiction designated by the Initial
Purchasers shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending or, to the knowledge of the Company, shall be
contemplated.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), results of
operations or business of the Company, the Subsidiaries or the AHI Group not
contemplated by the Offering Memorandum, which in the opinion of the Initial
Purchasers, would materially adversely affect the market for the Debentures, or
(ii) any event or development relating to or involving the Company, the
Subsidiaries, the Professional Corporations or any officer or director thereof
or the AHI Group or any officer or director thereof which makes any statement
made in the Offering Memorandum untrue or which, in the opinion of the Company
and its counsel or the Initial Purchasers and their counsel, requires the making
of any addition to or change in the Offering Memorandum in order to state a
material fact required by any law (or that would have been required had the
Offering Memorandum been a prospectus included in a registration statement on
Form S-3) to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Offering
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<PAGE> 18
Memorandum to reflect such event or development would, in the opinion of the
Initial Purchasers, materially adversely affect the market for the Debentures.
(c) The Initial Purchasers shall have received on the Closing Date
an opinion of Ballard Spahr Andrews & Ingersoll, counsel for the Company, dated
the Closing Date and addressed to the Initial Purchasers, to the effect that:
(i) The Incorporated Documents filed with the Commission (except for
the financial statements and the notes thereto and the schedules and other
financial and statistical data included therein, as to which such counsel
need not express any opinion) comply as to form in all material respects
with the requirements of the Exchange Act;
(ii) The Indenture has been duly and validly authorized, executed
and delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee, is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as enforcement
of rights to indemnity and contribution thereunder may be limited by
Federal or state securities laws or principles of public policy and except
to the extent that enforceability thereof is subject to (i) applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting creditors'
rights generally and (ii) general principles of equity whether such
principles are considered in a proceeding at law or in equity; and no
qualification of the Indenture under the 1939 Act is required in
connection with the offer and sale of the Debentures contemplated hereby
or in connection with the Exempt Resales;
(iii) The Debentures have been duly and validly authorized by the
Company and when executed by the Company in accordance with the Indenture
and, assuming due authentication of the Debentures by the Trustee, upon
delivery to the Initial Purchasers against payment therefor in accordance
with the terms hereof, will have been validly issued and delivered, and
will constitute valid and binding obligations of the Company entitled to
the benefits of the Indenture, except to the extent that enforceability
thereof is subject to (i) applicable bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting creditors' rights generally and (ii) general
principles of equity, whether such principles are considered in a
proceeding at law or in equity;
(iv) The shares of Common Stock issuable upon conversion of the
Debentures have been duly authorized and reserved for issuance and, when
issued and delivered upon conversion of the Debentures, in accordance with
the terms thereof, will be validly issued, fully paid and nonassessable
and will be free of any preemptive rights under the Delaware General
Corporation Law and the Company's certificate of incorporation and by-laws
(each as amended) and, to the knowledge of such counsel, other rights that
entitle any person to acquire any Common Stock upon the issuance of the
Debentures and the issuance of the Common Stock by the Company upon
conversion of the Debentures;
(v) No registration of the Debentures under the Act is required for
the sale of the Debentures to the Initial Purchasers as contemplated in
this Agreement or for the Exempt Resales (assuming (A) that all
representations and warranties made by the Initial Purchasers and the
Company in this Agreement and in the Offering Memorandum are true, correct
and accurate (including but not limited to the representations by the
Initial Purchasers and the Company regarding the absence of general
solicitation in connection with the Exempt Resales and regarding offers
and sales outside the United States in reliance on Regulation S), (B) the
Initial Purchasers comply with all of the covenants set forth in this
Agreement (including but not limited to the covenants set forth in Section
2 hereof), (C) none of the Company, the Subsidiaries or the Professional
Corporations or any person acting on their behalf have complied with the
offering
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<PAGE> 19
restrictions requirements of Regulation S, (D) that each person to whom
the Initial Purchasers offer, sell or deliver the Debentures in the Exempt
Resales is (x) a Qualified Institutional Buyer, (y) an Institutional
Accredited Investor or (z) a person other than a U.S. person outside the
United States in reliance on Regulation S under the Act, and (E) that the
representations made by each person to whom Debentures are sold in
reliance on Rule 144A or Regulation S are true, correct and accurate);
(vi) When the Debentures are issued and delivered pursuant to this
Agreement, such Debentures will not be of the same class (within the
meaning of Rule 144A(d)(3) under the Act) as any security of the Company
that is listed on a national securities exchange registered under Section
6 of the Exchange Act or that is quoted in a United States automated
interdealer quotation system;
(vii) The Company is not required to deliver the information
specified in Rule 144A(d)(4) in connection with the offering and resale of
the Debentures by the Initial Purchasers;
(viii) Based upon the assumptions and subject to the qualifications
set forth therein, the statements made in the Offering Memorandum under
the caption "Certain United States Federal Income Tax Consequences"
accurately summarize the material United States federal income tax
consequences of the ownership, conversion and disposition of the
Debentures for United States persons who acquire Debentures on original
issue and who hold Debentures as "capital assets" within the meaning of
Section 1221 of the Internal Revenue Code of 1986, as amended;
(ix) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering
Memorandum (and any amendment or supplement thereto);
(x) Each Subsidiary and Professional Corporation is a corporation
duly incorporated and validly existing and in good standing under the laws
of the jurisdiction of its organization, with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum (and any amendment or
supplement thereto); and all the outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are owned of record by the Company
directly or indirectly through one of the other Subsidiaries to such
counsel's knowledge free and clear of any adverse claim, except as
disclosed in the Offering Memorandum (or any amendment or supplement
thereto);
(xi) The authorized capital stock of the Company is as set forth
under the caption "Capitalization" in the Offering Memorandum, and the
authorized capital stock of the Company conforms in all material respects
as to legal matters to the description contained in the Offering
Memorandum under the caption "Description of Capital Stock";
(xii) All the shares of capital stock of the Company outstanding
prior to the issuance of the Debentures have been duly authorized and
validly issued, are fully paid and nonassessable and were issued and sold
in all material respects in compliance with all applicable federal
securities laws;
(xiii) The Company has the corporate power and authority to enter
into this Agreement and the Registration Rights Agreement and to issue,
sell and deliver the Debentures to the Initial Purchasers as provided
herein, and each of this Agreement and the Registration Rights Agreement
has been duly authorized, executed and delivered by the Company and is a
valid, legal and binding
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<PAGE> 20
agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforcement of rights to indemnity and
contribution hereunder may be limited by federal or state securities laws
or principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights generally and by
general equitable principles;
(xiv) Neither the offer, sale or delivery of the Debentures, the
issuance of Common Stock upon conversion of the Debentures in accordance
with the terms of the Debentures, the execution, delivery or performance
of this Agreement, the Indenture, the Registration Rights Agreement and
the AHI Merger Agreement, compliance by the Company with the provisions
hereof and thereof nor consummation by the Company of the transactions
contemplated hereby and thereby (A) conflicts with or constitutes a breach
of, or a default under, the certificate of incorporation or bylaws, or
other organizational documents, of the Company or any indenture, bond,
note, lease or other agreement or instrument to which the Company is a
party or by which the Company or its properties is bound that is described
in the Offering Memorandum or is made an exhibit to any Incorporated
Document, (B) will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or (C)
will result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities or Blue Sky laws
and, in the case of the Registration Rights Agreement, the Act and the
1939 Act), judgment, injunction, order or decree known to such counsel and
applicable to the Company or any of its properties. When used in this
opinion, the phrase "conflict with" shall comprehend obligations or
options to take action under the Debentures, this Agreement, the
Indenture, the Registration Rights Agreement and the AHI Merger Agreement
which, if performed today, would constitute a breach or default under, or
result in the creation or imposition of any lien on the Company's property
or other assets under, or result in any requirement for mandatory
prepayment or purchase of debt or in a resetting of interest rates under a
relevant document listed in this clause (xiv). The opinion expressed in
this clause (xiv) assumes, without investigation, that the transactions
contemplated by this Agreement, the Indenture, the Registration Rights
Agreement and the AHI Merger Agreement will not result in a violation of
covenants containing financial ratios or any other provisions in the
agreements to which the Company is a party that are based upon the
financial statements or the financial conditions of the Company, the
Subsidiaries and the Professional Corporations;
(xv) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official is required on the
part of the Company or any of the Subsidiaries or Professional
Corporations (except as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Debentures, such as
may be required under the 1939 Act and such as may be required under the
Act in connection with the performance by the Company of its obligations
under the Registration Rights Agreement) for the valid issuance and sale
of the Debentures to the Initial Purchasers as contemplated by this
Agreement;
(xvi) Such counsel shall confirm that to the knowledge of such
counsel, (A) other than as described in the Offering Memorandum there are
no legal or governmental proceedings pending or threatened against the
Company or any of the Subsidiaries or Professional Corporations, or to
which the Company or any of the Subsidiaries or Professional Corporations
or any of their respective properties is subject, which are of the type
that would be required to be described in any of the Incorporated
Documents and (B) there are no agreements, contracts, indentures, leases
or other instruments that are of the type that would be required to be
described in the Offering Memorandum if it were a prospectus included in a
registration statement on Form S-3 but are not described as would be
required or that are required to be filed as an exhibit to any
Incorporated Document that are not filed as required;
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<PAGE> 21
(xvii) The statements in the Offering Memorandum, insofar as they
are descriptions of contracts, agreements or other legal documents, or
refer to statements of law or legal conclusions, are accurate in all
material respects and present fairly the information required to be shown;
(xviii) Except as described in the Offering Memorandum, such counsel
does not know of any holder of any securities of the Company or any other
person who has a contractual right to cause the Company to sell or
otherwise issue to them any of the Debentures or the right to have any
securities of the Company included in the Shelf Registration Statement or
the right, as a result of the filing of the Shelf Registration Statement,
to require the Company to register under the Act any securities of the
Company; and
(xix) The Company is not an "investment company" or a person
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In addition, such counsel shall state that, although such counsel
has not undertaken, except as otherwise indicated in its opinion, to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Offering Memorandum, such
counsel has participated in the preparation of the Offering Memorandum,
including review and discussion of the content thereof, and nothing has come to
the attention of such counsel that has caused it to believe that the Offering
Memorandum, as of its date and as of the Closing Date or the Option Closing
Date, as the case may be, contained or contains an untrue statement of a
material fact or omitted or omits 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 or that any amendment or supplement to the Offering
Memorandum, as of its date and as of the Closing Date or the Option Closing
Date, as the case may be, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes thereto and the
schedules and other financial and statistical data included or incorporated by
reference in the Offering Memorandum).
In rendering their opinion as aforesaid, counsel may rely, as to
factual matters, upon certificates of officers of the Company attached to such
opinion.
(d) The Initial Purchasers shall have received on the Closing Date
an opinion of James A. Lebovitz, Esq., Senior Vice President and General Counsel
of the Company, dated the Closing Date and addressed to the Initial Purchasers,
to the effect that:
(i) To the knowledge of such counsel, neither the Company nor any of
the Subsidiaries or Professional Corporations is in violation of any law,
ordinance, administrative or governmental rule or regulation applicable to
the Company or any of the Subsidiaries or Professional Corporations, the
violation of which would have a Material Adverse Effect, or of any decree
of any court or governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries or Professional Corporations;
(ii) To the knowledge of such counsel, each of the Company and the
Subsidiaries and Professional Corporations has all necessary Permits
(except where the failure to so have any such Permits, individually or in
the aggregate, would not have a Material Adverse Effect) to own its
properties and to conduct its business as now being conducted as described
in the Offering Memorandum;
(iii) The Company is duly registered and qualified to conduct its
business and is in good standing as a foreign corporation in each
jurisdiction or place where the nature of its properties
21
<PAGE> 22
or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify would
not have a Material Adverse Effect;
(iv) Each Subsidiary and Professional Corporation is duly registered
and qualified to conduct its business and is in good standing as a foreign
corporation in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify or to be
in good standing would not have a Material Adverse Effect;
(v) To the knowledge of such counsel, neither the Company nor any of
the Subsidiaries or Professional Corporations is in violation of its
certificate of incorporation or bylaws, or other organizational documents,
or in default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness, or in any agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries or Professional Corporations
is a party or by which any of them or any of their respective properties
may be bound, in each case that is described in the Offering Memorandum or
is made an exhibit to any Incorporated Document; and
(vi) To the knowledge of such counsel, neither the offer, sale or
delivery of the Debentures, the issuance of Common Stock upon conversion
of the Debentures in accordance with the terms of the Debentures, the
execution, delivery or performance of this Agreement, the Indenture, the
Registration Rights Agreement and the AHI Merger Agreement, compliance by
the Company of the provisions hereof and thereof nor consummation by the
Company of the transactions contemplated hereby and thereby (A) conflicts
with or constitutes a breach of, or a default under, the certificate of
incorporation or by-laws, or other organizational documents, of any of the
Subsidiaries or Professional Corporations or any indenture, bond, note,
lease or other agreement or instrument to which any of the Subsidiaries or
Professional Corporations is a party or by which any of them or any of
their respective properties is bound that is described in the Offering
Memorandum or is made an exhibit to any Incorporated Document, (B) will
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or (C) will result in any
violation of any existing law, regulation, ruling (assuming compliance
with all applicable state securities or Blue Sky laws and, in the case of
the Registration Rights Agreement, the Act and the 1939 Act), judgment,
injunction, order or decree applicable to the Subsidiaries and the
Professional Corporations.
In addition, such counsel shall state that, although such counsel
has not undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Offering Memorandum, such
counsel has participated in the preparation of the Offering Memorandum,
including review and discussion of the content thereof, and nothing has come to
the attention of such counsel that has caused it to believe that the Offering
Memorandum, as of its date and as of the Closing Date or the Option Closing
Date, as the case may be, contained or contains an untrue statement of a
material fact or omitted or omits 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 or that any amendment or supplement to the Offering
Memorandum, as of its date and as of the Closing Date or the Option Closing
Date, as the case may be, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes thereto and the
schedules and other financial and statistical data included or incorporated by
reference in the Offering Memorandum).
(e) The Initial Purchasers shall have received on the Closing Date
an opinion of Dewey Ballantine, counsel for the Initial Purchasers, dated the
Closing Date, and addressed to the Initial
22
<PAGE> 23
Purchasers, with respect to the matters referred to in clauses (i), (ii), (iii),
(iv), (v) and (xiii) of the foregoing paragraph (c) and the penultimate
paragraph of the foregoing paragraph (c) and such other related matters as the
Initial Purchasers may request.
(f) The Initial Purchasers shall have received letters addressed to
the Initial Purchasers and dated the date hereof from Deloitte & Touche LLP,
Coopers & Lybrand L.L.P. and Stevenson, Jones, Imig, Holmaas & Kleinhans, P.C.,
independent certified public accountants, and a letter dated the Closing Date
from Deloitte & Touche LLP, substantially in the forms heretofore approved by
the Initial Purchasers.
(g) (i) There shall not have been any change in the capital stock of
the Company nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth or
contemplated in the Offering Memorandum (or any amendment or supplement
thereto); (ii) there shall not have been, since the respective dates as of which
information is given in the Offering Memorandum (or any amendment or supplement
thereto), except as may otherwise be stated in the Offering Memorandum (or any
amendment or supplement thereto), any material adverse change in the condition
(financial or other), results of operations or business of the Company, the
Subsidiaries and the Professional Corporations, taken as a whole; (iii) the
Company, the Subsidiaries and the Professional Corporations shall not have any
liabilities or obligations, direct or contingent (whether or not in the ordinary
course of business), that are material to the Company, the Subsidiaries and the
Professional Corporations, taken as a whole, other than those reflected in the
Offering Memorandum (or any amendment or supplement thereto); and (iv) all the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date as if made on and as of the Closing Date, and the
Initial Purchasers shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company (or such other officers as are acceptable to the Initial Purchasers), to
the effect set forth in this Section 7(g) and in Section 7(h) hereof.
(h) The Company shall not have failed in any material respect at or
prior to the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(i) The Initial Purchasers shall have received a certificate dated
the Closing Date signed by the chief financial officer of the Company
substantially in the form approved by the Initial Purchasers respecting the
Company's compliance with the financial covenants set forth in its credit
agreement with Banque Paribas, as agent.
(j) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of Rule
436(g) under the Act, that (i) it is downgrading its rating assigned to any
class of securities of the Company or (ii) it is reviewing its ratings assigned
to any class of securities of the Company with a view to possible downgrading,
or with negative implications, or direction not determined.
(k) The Debentures shall have been designated for trading on PORTAL.
(l) The Company shall have executed and delivered the Indenture and
the Registration Rights Agreement.
(m) The Company shall have furnished or caused to be furnished to
the Initial Purchasers such further certificates and documents as the Initial
Purchasers shall have reasonably requested.
23
<PAGE> 24
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers and counsel for the
Initial Purchasers.
Any certificate or document signed by any officer of the Company and
delivered to the Initial Purchasers, or to counsel for the Initial Purchasers,
shall be deemed a representation and warranty by the Company to the Initial
Purchasers as to the statements made therein.
The obligations of the Initial Purchasers to purchase any Additional
Debentures hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 7, except that, if any
Option Closing Date is other than the Closing Date, the certificates, opinions
and letters referred to in paragraphs (c) through (g) and paragraphs (i) and (m)
shall be dated the Option Closing Date in question and the opinions called for
by paragraphs (c) through (e) shall be revised to reflect the sale of Additional
Debentures.
8. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction of the
Offering Memorandum (including financial statements thereto), and each amendment
or supplement thereto; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Offering Memorandum, the Preliminary Offering Memorandum,
the Incorporated Documents, and all amendments or supplements to any of them as
may be reasonably requested for use in connection with the offering and sale of
the Debentures; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Debentures, including any stamp taxes in
connection with the original issuance and sale of the Debentures; (iv) the
printing (or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Debentures;
(v) the application for designation of the Debentures on PORTAL; (vi) the
registration of the Common Stock and the listing of the shares of Common Stock
issuable upon conversion of the Debentures on the Nasdaq National Market; (vii)
the qualification of the Debentures and the shares of Common Stock issuable upon
conversion of the Debentures for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 4(f) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Initial
Purchasers relating to the preparation, printing or reproduction and delivery of
the preliminary and supplemental Blue Sky Memoranda and such qualification);
(viii) the transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of
the Debentures; (ix) the performance by the Company of its obligations under the
Indenture and the Registration Rights Agreement; and (x) the fees and expenses
of the Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company.
9. Effective Date of Agreement. This Agreement shall become
effective upon the execution and delivery hereof by all the parties hereto.
Until such time as this Agreement shall have become effective, it may be
terminated by the Company, by notifying the Initial Purchasers, or by the
Initial Purchasers, by notifying the Company. Any notice under this Section 9
may be given by telegram, telecopy or telephone but shall be subsequently
confirmed by letter.
10. Default by an Initial Purchaser. If any one or more of the
Initial Purchasers shall fail or refuse to purchase the Debentures which it is
obligated to purchase on the Closing Date, and arrangements satisfactory to the
non-defaulting Initial Purchasers or by another party or parties satisfactory to
the non-defaulting Initial Purchasers and the Company for the purchase of such
Debentures by the non-defaulting Initial Purchasers and the Company are not made
within thirty-six (36) hours after such default, this Agreement shall terminate
without liability on the part of the non-defaulting Initial Purchasers or the
Company. In any such case which does not result in termination of this
Agreement, either the non-defaulting Initial Purchasers or the Company shall
have the right to postpone the Closing Date, but in no
24
<PAGE> 25
event for longer than seven days, in order that the required changes, if any, in
the Offering Memorandum or any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve the defaulting Initial
Purchasers from liability in respect of such default under this Agreement. The
term "Initial Purchaser" as used in this Agreement includes, for all purposes of
this Agreement, any party not identified in this Agreement who purchases
Debentures which a defaulting Initial Purchaser is obligated, but fails or
refuses to purchase.
11. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchasers to the Company, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Debentures), as the
case may be, (i) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or The Nasdaq Stock Market's National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either federal or
state authorities, or (iii) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Initial Purchasers, impracticable or inadvisable to commence or continue the
offering of the Debentures on the terms set forth on the cover page of the
Offering Memorandum or to enforce contracts for the resale of the Debentures by
the Initial Purchasers. Notice of such termination may be given to the Company
by telegram, telecopy or telephone and shall be subsequently confirmed by
letter.
12. Information Furnished by the Initial Purchasers. The statements
set forth in the last paragraph on the cover page, the stabilization legend on
page 4 and the third, fourth, fifth and sixth paragraphs under the caption "Plan
of Distribution" in the Preliminary Offering Memorandum and Offering Memorandum
constitute the only information furnished by or on behalf of the Initial
Purchasers as such information is referred to in Sections 5(b) and 6 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 4, 9 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 3636 Nobel Drive, Suite 200, San Diego, California 92122, Attention:
James A. Lebovitz, Senior Vice President, General Counsel and Secretary, or (ii)
if to the Initial Purchasers, to Smith Barney Inc., 388 Greenwich Street, New
York, NY 10013, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Initial Purchasers, the Company, its directors, its officers and the controlling
persons referred to in Section 6 hereof and their respective successors and
assigns, to the extent provided herein, and no other person shall acquire or
have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Initial Purchasers of any of the Debentures
in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York without
giving effect to the choice of laws or conflict of laws principles thereof.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
25
<PAGE> 26
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchasers.
Very truly yours,
FPA MEDICAL MANAGEMENT, INC.
By: /s/ JAMES A. LEBOVITZ
________________________________
Confirmed as of the date first above mentioned.
SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
OPPENHEIMER & CO., INC.
NEEDHAM & COMPANY, INC.
By: SMITH BARNEY INC.
By: /s/ BENJAMIN D. LORELLO
_____________________________________
26
<PAGE> 27
SCHEDULE I
FPA Medical Management, Inc.
<TABLE>
<CAPTION>
Principale Amount
Initial Purchaser of Firm Debentures
- ----------------- ------------------
<S> <C>
Smith Barney Inc. .................. $37,500,000
Bear, Stearns & Co. Inc. ........... 11,250,000
Lehman Brothers Inc. ............... 11,250,000
Oppenheimer & Co., Inc. ............ 11,250,000
Needham & Company, Inc. ............ 3,750,000
-----------
Total ........................... $75,000,000
===========
</TABLE>
<PAGE> 28
SCHEDULE II
FPA MEDICAL MANAGEMENT, INC.
NAME STATE OF INCORPORATION
- ---- ----------------------
<PAGE> 29
EXHIBIT A
FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
FPA Medical Management, Inc.
3636 Nobel Drive
Suite 200
San Diego, CA 92122
Smith Barney Inc.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Oppenheimer & Co. Inc.
Needham & Company, Inc.
As Initial Purchasers
c/o Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
Gentlemen:
We are delivering this letter in connection with an offering of 6 1/2%
Convertible Subordinated Debentures due 2001 (the "Debentures"), which are
convertible into shares of the Common Stock, $.002 par value per share (the
"Common Stock"), of FPA Medical Management, Inc. (the "Company"), all as
described in the Offering Memorandum (the "Offering Memorandum") relating to the
offering.
We hereby confirm that:
(i) we are an institution that is an "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933, as amended (the "Securities Act"), or an entity in which all of the
equity owners are accredited investors within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional
Accredited Investor");
(ii)(A) any purchase of Debentures by us will be for our own account
or for the account of one or more other Institutional Accredited Investors
or as fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment
discretion or (B) we are a "bank," within the meaning of Section 3(a)(2)
of the Securities Act, or a "savings and loan association" or other
institution described in Section 3(a)(5)(A) of the Securities Act that is
acquiring Debentures as fiduciary for the account of one or more
institutions for which we exercise sole investment discretion;
(iii) in the event that we purchase any Debentures, we will acquire
Debentures having a minimum principal amount of not less than $100,000 for
our own account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing the Debentures;
(v) we are not acquiring Debentures with a view to distribution
thereof or with any present intention of offering or selling Debentures or
the Common Stock issuable upon conversion thereof, except as permitted
below; provided that the disposition of our property and property of any
accounts for which we are acting as fiduciary shall remain at all times
within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such
<PAGE> 30
questions of representatives of the Company and receive answers thereto,
as we deem necessary in connection with our decision to purchase
Debentures.
We understand that the Debentures are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and any applicable state securities laws and that the Debentures
and the shares of Common Stock issuable upon conversion thereof have not been
registered under such laws, and we agree, on our own behalf and on behalf of
each account for which we acquire any Debentures, that if in the future we
decide to resell or otherwise transfer such Debentures or the Common Stock
issuable upon conversion thereof, such Debentures or Common Stock may be resold
or otherwise transferred only (a) to the Company, or any of its subsidiaries or
(b) pursuant to a registration statement which has been declared effective under
the Securities Act or (c) for so long as the Debentures are eligible for resale
pursuant to Rule 144A under the Securities Act, to a person who is or who the
holder reasonably believes is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act ("QIB") that purchases for its own
account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) to an Institutional
Accredited Investor that, prior to such transfer, furnishes to the transfer
agent or registrar for such securities a signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
securities (the form of which letter can be obtained from such transfer agent or
registrar), (e) pursuant to offers and sales to non-U.S. persons that occur
outside the United States within the meaning of Regulation S under the
Securities Act, or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of its property
or the property of such investor account or accounts be at all times within its
or their control and subject to any applicable securities laws. We further agree
to provide any person purchasing from us any of the Debentures or the Common
Stock issuable upon conversion thereof other than pursuant to clause (b) above a
notice advising such purchaser that resales of such securities are restricted as
stated herein. We understand that the registrar and transfer agent for the
Debentures and the Common Stock will not be required to accept for registration
of transfer any Debentures or any shares of Common Stock issued upon conversion
of the Debentures except upon presentation of evidence satisfactory to the
Company that the foregoing restrictions on transfer have been complied with. We
further understand that any Debentures and any certificates representing Common
Stock will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph other
than certificates representing Common Stock transferred pursuant to clause (b)
above.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
------------------------------
(Name of Purchaser)
------------------------------
By:
Name:
Title:
Address:
<PAGE> 31
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
<PAGE> 1
Exhibit 4.1
FPA MEDICAL MANAGEMENT, INC.
and
FIRST UNION NATIONAL BANK,
as Trustee
INDENTURE
Dated as of December 18, 1996
$86,250,000
6 1/2% Convertible Subordinated Debentures due 2001
<PAGE> 2
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<S> <C> <C>
Section 310 (a)(1) ..................................... 609
(a)(2) ........................................... 609
(a)(3) ........................................... Not Applicable
(a)(4) ........................................... Not Applicable
(a)(5) ........................................... 609
(b) ........................................... 608
Section 311 (a) ..................................... 613
(b) ........................................... 613
Section 312 (a) ..................................... 701
........................................... 702(a)
(b) ........................................... 702(b)
(c) ........................................... 702(c)
Section 313 (a) ..................................... 703(a)
(b) ........................................... 703(a)
(c) ........................................... 703(a)
(d) ........................................... 703(b)
Section 314 (a) ..................................... 704
(a)(4) ........................................... 1004
(b) ........................................... Not Applicable
(c)(1) ........................................... 102
(c)(2) ........................................... 102
(c)(3) ........................................... Not Applicable
(d) ........................................... Not Applicable
(e) ........................................... 102
Section 315 (a) ..................................... 601
(b) ........................................... 602
(c) ........................................... 601
(d) ........................................... 601
(e) ........................................... 514
Section 316 (a)(1)(A)................................... 502
........................................... 512
(a)(1)(B) ........................................... 513
(a)(2) ........................................... Not Applicable
(b) ........................................... 508
(c) ........................................... 104(c)
Section 317 (a)(1) ..................................... 503
(a)(2) ........................................... 504
(b) ........................................... 1003
Section 318 (a)......................................... 107
</TABLE>
- ------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
i
<PAGE> 3
TABLE OF CONTENTS*
Page
----
<TABLE>
<S> <C>
Parties.............................................................. 1
Recitals of the Company.............................................. 1
</TABLE>
ARTICLE ONE
<TABLE>
<S> <C> <C>
Definitions and Other Provisions
of General Application...................... 1
SECTION 101. Definitions.................................. 1
"Act" ............................................. 2
"Affiliate" ............................................. 2
"Authenticating Agent"................................... 2
"Beneficial Owner"....................................... 2
"Board of Directors" .................................... 2
"Board Resolution"....................................... 2
"Business Day"........................................... 2
"Cedel" ............................................. 2
"Change in Control"...................................... 2
"Closing Date"........................................... 3
"Commission"............................................. 3
"Common Stock"........................................... 3
"Company" ............................................. 3
"Company Request" or "Company Order"..................... 3
"Corporate Trust Office"................................. 3
"Corporation"............................................ 3
"Current Market Price"................................... 3
"DTC" ............................................. 3
"Defaulted Interest"..................................... 4
"Definitive Security" or "Definitive Securities"......... 4
"Depositary"............................................. 4
"Euroclear" ............................................. 4
"Event of Default"....................................... 4
"Exchange Act"........................................... 4
"Global Security or "Global Securities".................. 4
"Holder" ............................................. 4
"Indenture" ............................................. 4
</TABLE>
- --------
*Note: This table of contents shall not, for any purposes, be deemed to be a
part of the Indenture.
ii
<PAGE> 4
<TABLE>
<S> <C>
"Initial Purchasers"..................................... 4
"Interest Payment Date".................................. 4
"Maturity," ............................................. 4
"Officers' Certificate".................................. 4
"144A Global Security"................................... 5
"Opinion of Counsel"..................................... 5
"Outstanding"............................................ 5
"Paying Agent"........................................... 5
"Person" ............................................. 6
"Predecessor Security"................................... 6
"Purchase Agreement"..................................... 6
"Record Date"............................................ 6
"Redemption Date"........................................ 6
"Redemption Price"....................................... 6
"Registration Rights Agreement".......................... 6
"Regular Record Date".................................... 6
"Regulation S"........................................... 6
"Regulation S Global Security"........................... 6
"Repurchase Date"........................................ 6
"Repurchase Event"....................................... 6
"Repurchase Price"....................................... 6
"Resale Restriction Termination Date".................... 6
"Responsible Officer".................................... 7
"Securities Custodian"................................... 7
"Security Register" and "Security Registrar"............. 7
"Senior Indebtedness".................................... 7
"Shelf Registration Statement............................ 7
"Special Record Date".................................... 7
"Stated Maturity"........................................ 8
"Subsidiary"............................................. 8
"Termination of Trading"................................. 8
"Transfer Restricted Securities"......................... 8
"Trust Indenture Act".................................... 8
"Trustee" ............................................. 8
"Vice President"......................................... 8
</TABLE>
<TABLE>
<S> <C> <C>
SECTION 102. Compliance Certificates and Opinions......... 8
SECTION 103. Form of Documents Delivered to Trustee....... 9
SECTION 104. Acts of Holders; Record Dates................ 9
SECTION 105. Notices, Etc., to Trustee and Company........ 11
SECTION 106. Notice to Holders; Waiver.................... 11
SECTION 107. Conflict with Trust Indenture Act............ 12
SECTION 108. Effect of Headings and Table of Contents..... 12
SECTION 109. Successors and Assigns....................... 12
SECTION 110. Separability Clause.......................... 12
SECTION 111. Benefits of Indenture........................ 12
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 112. Governing Law................................ 12
SECTION 113. Legal Holidays............................... 13
SECTION 114. No Security Interest Created................. 13
SECTION 115. Limitation on Individual Liability........... 13
ARTICLE TWO
Security Forms.......................... 14
SECTION 201. Forms Generally.............................. 14
SECTION 202. Form of Face of Security..................... 15
SECTION 203. Form of Reverse of Global Securities and Definitive
Securities................................... 19
SECTION 204. Form of Trustee's Certificate of Authentication 29
ARTICLE THREE
The Securities.......................... 30
SECTION 301. Title and Terms.............................. 30
SECTION 302. Denominations................................ 31
SECTION 303. Execution, Authentication, Delivery and Dating 31
SECTION 304. Temporary Securities......................... 31
SECTION 305. Registration, Registration of Transfer and
Exchange..................................... 32
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities 41
SECTION 307. Payment of Interest; Interest Rights Preserved 42
SECTION 308. Persons Deemed Owners........................ 44
SECTION 309. Cancellation................................. 44
SECTION 310. Computation of Interest...................... 44
ARTICLE FOUR
Satisfaction and Discharge.................... 45
SECTION 401. Satisfaction and Discharge of Indenture...... 45
SECTION 402. Application of Trust Money................... 46
SECTION 403. Reinstatement................................ 46
ARTICLE FIVE
Remedies............................. 47
SECTION 501. Events of Default............................ 47
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.................................... 49
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C> <C>
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee................................... 50
SECTION 504. Trustee May File Proofs of Claim............. 51
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities................................... 52
SECTION 506. Application of Money Collected............... 52
SECTION 507. Limitation on Suits.......................... 52
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert.......... 53
SECTION 509. Restoration of Rights and Remedies........... 53
SECTION 510. Rights and Remedies Cumulative............... 54
SECTION 511. Delay or Omission Not Waiver................. 54
SECTION 512. Control by Holders........................... 54
SECTION 513. Waiver of Past Defaults...................... 55
SECTION 514. Undertaking for Costs........................ 55
ARTICLE SIX
The Trustee........................... 56
SECTION 601. Certain Duties and Responsibilities.......... 56
SECTION 602. Notice of Defaults........................... 57
SECTION 603. Certain Rights of Trustee.................... 57
SECTION 604. Not Responsible for Recitals or Issuance of
Securities................................... 58
SECTION 605. May Hold Securities.......................... 58
SECTION 606. Money Held in Trust.......................... 58
SECTION 607. Compensation and Reimbursement............... 59
SECTION 608. Disqualification; Conflicting Interests...... 60
SECTION 609. Corporate Trustee Required; Eligibility...... 60
SECTION 610. Resignation and Removal; Appointment of
Successor.................................... 60
SECTION 611. Acceptance of Appointment by Successor....... 62
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business..................................... 62
SECTION 613. Preferential Collection of Claims Against Company 62
SECTION 614. Appointment of Authenticating Agent.......... 63
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company........ 65
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders................................... 65
SECTION 702. Preservation of Information; Communication to
Holders...................................... 65
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C> <C>
SECTION 703. Reports by Trustee........................... 65
SECTION 704. Reports by Company........................... 66
SECTION 705. Rule 144A Information Requirement............ 66
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease....... 66
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms........................................ 66
SECTION 802. Successor Substituted........................ 67
ARTICLE NINE
Supplemental Indentures..................... 68
SECTION 901. Supplemental Indentures Without Consent of
Holders...................................... 68
SECTION 902. Supplemental Indentures with Consent of Holders 68
SECTION 903. Execution of Supplemental Indentures......... 69
SECTION 904. Effect of Supplemental Indentures............ 70
SECTION 905. Conformity with Trust Indenture Act.......... 70
SECTION 906. Reference in Securities to Supplemental Indentures 70
SECTION 907. Notice of Supplemental Indenture............. 70
ARTICLE TEN
Covenants............................ 70
SECTION 1001. Payment of Principal, Premium and Interest... 70
SECTION 1002. Maintenance of Office or Agency.............. 70
SECTION 1003. Money for Security Payments to Be Held in Trust 71
SECTION 1004. Statement by Officers as to Default.......... 72
SECTION 1005. Existence.................................... 72
SECTION 1006. Waiver of Certain Covenants.................. 73
ARTICLE ELEVEN
Redemption of Securities..................... 73
SECTION 1101. Right of Redemption.......................... 73
SECTION 1102. Applicability of Article..................... 73
SECTION 1103. Election to Redeem; Notice to Trustee........ 73
SECTION 1104. Selection by Trustee of Securities to be Redeemed 74
SECTION 1105. Notice of Redemption......................... 74
SECTION 1106. Deposit of Redemption Price.................. 75
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C> <C>
SECTION 1107. Securities Payable on Redemption Date........ 75
SECTION 1108. Securities Redeemed in Part.................. 76
ARTICLE TWELVE
Subordination of Securities................... 76
SECTION 1201. Securities Subordinated to Senior Indebtedness 76
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc 76
SECTION 1203. Prior Payment to Senior Indebtedness upon
Acceleration of Securities................... 77
SECTION 1204. No Payment When Senior Indebtedness in Default 78
SECTION 1205. Payment Permitted If No Default.............. 78
SECTION 1206. Subrogation to Rights of Holders of Senior
Indebtedness................................. 79
SECTION 1207. Provisions Solely to Define Relative Rights.. 79
SECTION 1208. Trustee to Effectuate Subordination.......... 80
SECTION 1209. No Waiver of Subordination Provisions........ 80
SECTION 1210. Notice to Trustee............................ 80
SECTION 1211. Reliance on Judicial Order or Certificate of
Liquidating Agent............................ 81
SECTION 1212. Trustee Not Fiduciary for Holders of Senior
Indebtedness................................. 81
SECTION 1213. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights............. 82
SECTION 1214. Article Applicable to Paying Agents.......... 82
SECTION 1215. Certain Conversions Deemed Payment........... 82
SECTION 1216. No Suspension of Remedies.................... 83
ARTICLE THIRTEEN
Conversion of Securities..................... 83
SECTION 1301. Conversion Privilege and Conversion Price.... 83
SECTION 1302. Exercise of Conversion Privilege............. 83
SECTION 1303. Fractions of Shares.......................... 84
SECTION 1304. Adjustment of Conversion Price............... 85
SECTION 1305. Notice of Adjustments of Conversion Price.... 91
SECTION 1306. Notice of Certain Corporate Action........... 92
SECTION 1307. Company to Reserve Common Stock.............. 93
SECTION 1308. Taxes on Conversions......................... 93
SECTION 1309. Covenant as to Common Stock.................. 93
SECTION 1310. Cancellation of Converted Securities......... 93
SECTION 1311. Provisions of Consolidation, Merger or Sale of
Assets....................................... 93
SECTION 1312. Trustee's Disclaimer......................... 94
</TABLE>
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<PAGE> 9
<TABLE>
ARTICLE FOURTEEN
<S> <C> <C>
Right to Require Repurchase................... 95
SECTION 1401. Right to Require Repurchase.................. 95
SECTION 1402. Notice; Method of Exercising Repurchase Right 95
SECTION 1403. Deposit of Repurchase Price.................. 96
SECTION 1404. Securities Not Repurchased on Repurchase Date 96
SECTION 1405. Securities Repurchased in Part............... 97
SECTION 1406. Certain Definitions.......................... 97
</TABLE>
viii
<PAGE> 10
INDENTURE, dated as of December 18, 1996 between FPA MEDICAL
MANAGEMENT, INC., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal
executive offices at 3636 Nobel Drive, Suite 200, San Diego, California 92122,
and First Union National Bank, a national banking corporation, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 6
1/2% Convertible Subordinated Debentures due 2001 (herein called the
"Securities") 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, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, 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.
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 agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. 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 other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
<PAGE> 11
"generally accepted accounting principles" with respect to any computation
required and permitted hereunder shall mean such accounting principles as
are generally accepted and accepted and adopted by the Company at the date
of this Indenture; and
(4) 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.
Certain terms used in Articles Twelve, Thirteen and Fourteen are
defined in such Articles.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
The term "Beneficial Owner" is determined in accordance with Rule
13d- 3, promulgated by the Commission under the Exchange Act.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York or
the city in which the Corporate Trust Office is located are authorized or
obligated to close by law or executive order.
"Cedel" means Cedel Bank societe anonyme.
"Change in Control" has the meaning specified in Section 1406.
2
<PAGE> 12
"Closing Date" means December 18, 1996.
"Commission" means the Securities and Exchange Commission as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the Company. However, subject
to the provisions of Section 1311, shares issuable on conversion of Securities
shall include only shares of the class designated as Common Stock of the Company
at the date of this Indenture or shares of any class or classes resulting from
any reclassification or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided, that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall principally be
administered, which office is, at the date as of which this Indenture is dated,
located at 123 S. Broad Street, Philadelphia, PA 19109, Attention: Corporate
Trust Administration. The Trustee also maintains an office at 40 Broad Street,
New York, NY 10004 at which it is authorized to receive notices hereunder.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Current Market Price" has the meaning specified in Section 1304.
"DTC" has the meaning specified in Section 305.
3
<PAGE> 13
"Defaulted Interest" has the meaning specified in Section 307.
"Definitive Security" or "Definitive Securities" means a Security or
Securities that are in the form of the Security set forth in Sections 202 and
203 hereof, containing the legend specified for a Definitive Security and not
including the additional language referred to in footnote 1 or the additional
schedule referred to in footnote 2.
"Depositary" has the meaning specified in Section 305.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Global Security or "Global Securities" means a Security or
Securities in the form of the Security set forth in Sections 202, 203 and 204
hereof containing the legend specified for a Global Security, the additional
language referred to in footnote 1 and the additional schedule referred to in
footnote 2.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"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 Purchasers" means Smith Barney Inc., Bear, Stearns & Co.
Inc., Lehman Brothers Inc., Needham & Company, Inc. and Oppenheimer & Co., Inc.
"Interest Payment Date" means the Stated Maturity of an instalment
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 thereof or by declaration of
acceleration, redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the Chief Executive Officer, the President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers'
4
<PAGE> 14
Certificate given pursuant to Section 1004 shall be the principal executive,
financial or accounting officer of the Company.
"144A Global Security" has the meaning specified in Section 201.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of 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 canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount have 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;
provided, that if such Securities, or portions thereof, 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 306 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 the Outstanding Securities 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 of 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 request, demand, authorization, direction, notice,
consent or waiver, only Securities as to which the Trustee has actual knowledge
of such ownership shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with 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 of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, or interest on any Securities on behalf of the
Company.
5
<PAGE> 15
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"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 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means that certain Purchase Agreement dated
December 13, 1996 between the Company and the Initial Purchasers.
"Record Date" means either a Regular Record Date or a Special Record
Date, as applicable.
"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 on the applicable Redemption Date.
"Registration Rights Agreement" means that certain Registration
Rights Agreement dated as of December 13, 1996 between the Company and the
Initial Purchasers.
"Regular Record Date", for the interest payable on any Interest
Payment Date means June 1 or December 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act of 1933,
as amended.
"Regulation S Global Security" has the meaning specified in Section
201.
"Repurchase Date" has the meaning specified in Section 1401.
"Repurchase Event" has the meaning specified in Section 1406.
"Repurchase Price" has the meaning specified in Section 1401.
"Resale Restriction Termination Date" means, with respect to any
Security, the date which is three years after the later of (i) the original
issue date of such
6
<PAGE> 16
Security and (ii) the last date on which the Company or any Affiliate of the
Company was the owner of such Security (or any Predecessor Security).
"Responsible Officer" means, when used with respect to the Trustee,
an officer of the Trustee assigned and duly authorized by the Trustee to
administer its corporate trust matters.
"Securities Custodian" means the Trustee, as custodian with respect
to the Securities in global form, or any successor entity thereto.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of and premium, if any,
and interest on (a) all secured indebtedness of the Company for money borrowed
under the Company's primary credit facility and any predecessor or successor
credit facilities thereto, whether outstanding on the date of execution of the
Indenture (such as the Company's credit facility of $55 million, any increase in
the maximum principal amount thereof and any predecessor or successor facilities
thereto) or thereafter created, incurred or assumed, (b) all secured
indebtedness of the Company for money borrowed, whether outstanding on the date
of execution of the Indenture or thereafter created, incurred or assumed, except
any such other indebtedness that by the terms of the instrument or instruments
by which such indebtedness was created or incurred expressly provides that it
(i) is junior in right of payment to the Debentures or (ii) ranks pari passu in
right of payment with the Debentures, and (c) any amendments, renewals,
extensions, modifications, refinancings and refundings of the foregoing. For the
purposes of this definition, "indebtedness for money borrowed" when used with
respect to the Company means (i) any obligation of, or any obligation guaranteed
by, the Company for the repayment of borrowed money (including without
limitation fees, penalties or other obligations in respect thereof), whether or
not evidenced by bonds, debentures, notes or other written instruments, (ii) any
deferred payment obligation of, or any such obligation guaranteed by, the
Company for the payment of the purchase price of property or assets evidenced by
a note or similar instrument, and (iii) any obligation of, or any such
obligation guaranteed by, the Company for the payment of rent or other amounts
under a lease of property or assets which obligation is required to be
classified and accounted for as a capitalized lease on the balance sheet of the
Company under generally accepted accounting principles.
"Shelf Registration Statement" means the Registration Statement with
respect to the Debentures and the Common Stock the Issuer is required to file
pursuant to the Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
7
<PAGE> 17
"Stated Maturity", when used with respect to any Security or any
instalment of interest thereon, means the date specified in such Security as the
fixed date on which the principal of such Security or such instalment 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 which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Termination of Trading" has the meaning specified in Section 1406.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 305 hereof.
"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.
"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".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
8
<PAGE> 18
(1) a statement that each individual or firm 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 each such individual or such
firm, he has or they have made such examination or investigation as is
necessary to enable him or them 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 or such firm, such condition or covenant has been complied
with.
SECTION 103. Form of Documents Delivered to 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 Person may certify to
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certification 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 his 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 of public
officials or 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 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may
9
<PAGE> 19
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(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 acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix 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 to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of 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 701)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant action.
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 Act by the
Holders pursuant to Section 501, 502 or 512.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer therefor 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.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or by
one or more duly
10
<PAGE> 20
appointed agents each of which may do so pursuant to such appointment with
regard to all or any different part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any Act of Holders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or at any other address previously furnished in
writing to the Holders and the Company by the Trustee; or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company,
addressed to it at the address of its principal executive offices
specified in the first paragraph of this instrument or at any other
address previously furnished in writing to the Trustee by the Company.
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; two Business Days after
being deposited in the mail, registered or certified with postage prepaid, if
mailed; when answered back if telexed; when receipt acknowledged, if telecopied;
and the next Business Day after timely delivery to the courier, if sent by
nationally recognized overnight air courier guaranteeing next day delivery.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if made, given, mailed or otherwise furnished or filed in writing to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. 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 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. All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two Business Days
after being deposited in the mail, registered or certified with postage prepaid,
if mailed; when answered back if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by nationally recognized overnight air courier guaranteeing next day
delivery.
11
<PAGE> 21
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 as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act or another provision that would be required
or deemed under such Act to be a part of and govern this Indenture if this
Indenture were subject thereto, 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.
SECTION 108. 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 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and
the Trustee shall bind each of their respective successors and assigns, whether
so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities 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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the Holders of Securities and, with respect to Article Twelve, the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and, except as may otherwise be required by mandatory
provisions of law, the Securities shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to the
principles of conflicts of laws thereof.
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<PAGE> 22
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security or the last date on which a Holder has the right
to convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal and premium if any, or conversion of the Securities need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, or on such last day for conversion; provided, that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to the next succeeding
Business Day.
SECTION 114. No Security Interest Created.
Nothing in this Indenture or in the Securities, express or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.
SECTION 115. Limitation on Individual Liability.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Company or any successor Person, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any Security or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, shareholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Security.
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<PAGE> 23
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificate of authentication 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 any organizational document, any applicable law or with
the rules of any securities exchange on which the Securities are listed or as
may, consistently herewith, be determined by the Company officers executing such
Securities, as evidenced by their execution of the Securities.
The Securities issued in definitive form shall be substantially in
the form set forth in Section 202 hereof.
Unless issued in definitive form, Securities issued and sold in
reliance on Rule 144A shall be issued in the form of one or more global
securities (the "144A Global Security"), the face of which shall be
substantially in the form set forth in Section 202 hereof and the reverse of
which shall be substantially in the form set forth in Section 203 hereof, which
144A Global Security shall be deposited on behalf of the holders of the
Securities represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the nominee of the Depositary, duly
executed by the Company and authenticated as provided for herein.
Securities offered and sold outside the United States in reliance on
Regulation S shall be issued in the form of one or more global securities (the
"Regulation S Global Security"), the face of which shall be substantially in the
form set forth in Section 202 hereof and the reverse of which shall be
substantially in the form set forth in Section 203 hereof, which Regulation S
Global Security shall be deposited on behalf of the holders of the Securities
represented thereby with the Trustee, as custodian for the Depositary, and
registered in the name of a nominee of the Depositary, duly executed by the
Company and authenticated as provided herein, for credit to the accounts of the
respective depositaries for Euroclear and Cedel (or such other accounts as they
may direct). Prior to or on the 40th day after the later of the commencement of
the offering of the Securities and the Closing Date (the "Restricted Period"),
beneficial interests in the Regulation S Global Security may only be held
through Morgan Guaranty Trust Company of New York, Brussels office, as operator
of Euroclear or Cedel or another agent member of the Euroclear System and Cedel
acting for and on behalf of them, unless delivery is made though the 144A Global
Security in accordance with the certification requirements hereof. During the
Restricted Period, interests in the Regulation S Global Security may be
exchanged for interests in the 144A Global Security
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<PAGE> 24
or for Definitive Securities only in accordance with the certification
requirements described in Section 305 below.
Each Global Security shall represent such of the outstanding
Securities as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented thereby shall be made by the Trustee or the
Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof.
The Definitive Securities 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, as evidenced by their execution of such
Securities.
SECTION 202. Form of Face of Security.
LEGENDS FOR GLOBAL SECURITY:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN DEFINITIVE FORM, THIS 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. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR 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.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY
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<PAGE> 25
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO IS OR WHO THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) TO AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT IS AN INSTITUTIONAL INVESTOR AND THAT
PRIOR TO SUCH TRANSFER FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (WHICH FORM OF LETTER CAN BE OBTAINED FROM THE
TRUSTEE), (E) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES PROVIDED THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND SUBJECT TO ANY APPLICABLE STATE
SECURITIES LAWS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN HOLDER
OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
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<PAGE> 26
LEGENDS FOR DEFINITIVE SECURITY:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO IS OR WHO THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) TO AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT IS AN INSTITUTIONAL INVESTOR AND THAT
PRIOR TO SUCH TRANSFER FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (WHICH FORM OF LETTER CAN BE OBTAINED FROM THE
TRUSTEE), (E) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES PROVIDED THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
17
<PAGE> 27
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND SUBJECT TO ANY APPLICABLE
STATE SECURITIES LAWS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN
HOLDER OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
FPA MEDICAL MANAGEMENT, INC.
6 1/2% Convertible Subordinated Debentures due 2001
No. ________ $___________
FPA Medical Management, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
__________________________, or its registered assigns, the principal sum of
________________ Dollars [OR SUCH GREATER OR LESSER AMOUNT AS INDICATED ON THE
SCHEDULE OF EXCHANGES OF SECURITIES ON THE REVERSE HEREOF](1) on December 15,
2001 upon surrender hereof to the Paying Agent, and to pay interest thereon from
the date of original issuance of Securities pursuant to the Indenture or from
and including the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on June 15 and December 15 in each
year, commencing June 15, 1997, at the rate of 6 1/2% per annum, until the
principal hereof is paid or made available for payment and promises to pay any
liquidated damages which may be payable pursuant to Section 4 of the
Registration Rights Agreement on the Interest Payment Dates. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such 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 June 1
or December 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. 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 Trustee or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Notice of a Special
Record Date shall be given to Holders of Securities not less than 10 days prior
to such Special Record Date. Payment of the principal of and premium, if any,
and interest on this Security will be made (i) in respect of Securities held of
record by the Depositary or its nominee in same day funds on or prior to the
respective payment dates and (ii) in respect of Securities held of record by
Holders other than the Depositary or its nominee in same day funds at the office
or agency of the Company maintained for that purpose
- ---------------
(1) This phrase should be included only if the Security is issued in global
form.
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<PAGE> 28
pursuant to Section 1002 of the Indenture, in each case in such coin or currency
of the United States of America as of the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest in respect of Securities held of record by
Holders other than the Depositary or its nominee may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.
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 by manual signature, 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 instrument to be
duly executed under its corporate seal.
Dated: _________________ FPA MEDICAL MANAGEMENT, INC.
By _________________________
Attest:
__________________________
SECTION 203. Form of Reverse of Global Securities and Definitive Securities.
This Security is one of a duly authorized issue of Securities of the
Company designated as its 6 1/2% Convertible Subordinated Debentures due 2001
(herein called the "Securities"), limited in aggregate principal amount to
$86,250,000 (including Securities issuable pursuant to the Initial Purchasers'
over-allotment option, as provided for in the Purchase Agreement dated December
13, 1996 between the Company and the Initial Purchasers), issued and to be
issued under an Indenture, dated as of December 18, 1996 (herein called the
"Indenture"), between the Company and First Union National 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 of the
terms upon which the Securities are, and are to be, authenticated and delivered.
19
<PAGE> 29
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time after the
60th day following the date of original issuance of Securities pursuant to the
Indenture and on or before the close of business on December 15, 2001, or in
case this Security or a portion hereof is called for redemption, then in respect
of this Security or such portion hereof until and including, but (unless the
Company defaults in making the payment due upon redemption) not after, the close
of business on the second business day preceding the Redemption Date, to convert
this Security (or any portion of the principal amount hereof which is $1,000 or
an integral multiple thereof), at the principal amount hereof, or of such
portion, into fully paid and non-assessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of Common Stock at a conversion
price equal to $25.95 principal amount for each share of Common Stock (or at the
current adjusted conversion price 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, to the Company at its office or agency maintained for that
purpose pursuant to Section 1002 of the Indenture, accompanied by written notice
to the Company in the form provided in this Security (or such other notice as is
acceptable to the Company) that the Holder hereof elects to convert this
Security, or if less than the entire principal amount hereof is to be converted,
the portion hereof to be converted, and, in case such surrender shall be made
during the period from the opening of business on any Regular Record Date next
preceding any Interest Payment Date to the close of business on such Interest
Payment Date (unless this Security or the portion thereof being converted has
been called for redemption), also accompanied by payment in 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. Subject to
the aforesaid requirement for payment and, in the case of a conversion after the
Regular Record Date next preceding any Interest Payment Date and on or before
such Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
instalment of interest (with certain exceptions provided in the Indenture), no
payment or adjustment is to be made upon conversion on account of any interest
accrued hereon or on account of any dividends on the Common Stock issued upon
conversion. No fractional shares or scrip representing fractions of shares will
be issued on conversion, but instead of any fractional share the Company shall
pay a cash adjustment as provided in the Indenture. The conversion price is
subject to adjustment as provided in the Indenture. In addition, the Indenture
provides that in case of certain consolidations or mergers to which the Company
is a party or the sale or transfer of all or substantially all of the assets of
the Company, the Indenture shall be amended, without the consent of any Holders
of Securities, so that this Security, if then outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon the consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock into which this Security might have been
converted immediately prior to such consolidation, merger, sale or transfer
(assuming such holder of Common Stock 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).
20
<PAGE> 30
The Securities are subject to redemption upon not less than 15 and
not more than 60 days' notice by mail, at any time on or after December 20,
1999, as a whole or in part, at the election of the Company, at the Redemption
Prices set forth below (expressed as percentages of the principal amount), plus
accrued interest to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date).
If redeemed during the 12-month period beginning December 15, in the
year indicated (December 20, in the case of 1999), the redemption price shall
be:
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
<C> <C> <C> <C>
1999. . . 102.6% 2000.......... 101.3%
</TABLE>
In certain circumstances involving the occurrence of a Repurchase
Event (as defined in the Indenture), the Holder hereof shall have the right to
require the Company to repurchase this Security at 100% of the principal amount
hereof, together with accrued interest to the Repurchase Date, but interest
installments whose Stated Maturity is on or prior to such Repurchase 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.
In the event of redemption or conversion of this Security in part
only, a new Security or Securities for the unredeemed or unconverted portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
The indebtedness evidenced by this Security is, in all respects,
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness, and this Security is issued subject to the 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 may be declared due and payable in the manner and with the
effect provided in the Indenture.
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 under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding, and, under certain limited circumstances, by the Company and the
Trustee without the consent of the Holders. The Indenture also contains
provisions permitting the Holders of specified
21
<PAGE> 31
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, 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 upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
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 and
premium, if any, and interest on this Security at the times, place 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 this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, 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 hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in fully registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange except as provided in the Indenture, and the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to due presentment of this 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 this Security is registered as the owner
hereof for all purposes, except as provided in this Security, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture. The Company will
furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement.
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<PAGE> 32
[FORM OF CONVERSION NOTICE]
TO FPA MEDICAL MANAGEMENT, INC.
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 or a multiple thereof) designated below, into shares of Common Stock in
accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon the conversion, together
with any check in payment for a fractional share and any Security representing
any unconverted principal amount hereof, be issued and delivered to the
registered owner hereof unless a different name has been provided below. If this
Notice is being delivered on a date after the close of business on a Regular
Record Date and prior to the close of business on the related Interest Payment
Date, this Notice is accompanied by payment in funds acceptable to the Company,
of an amount equal to the interest payable on such Interest Payment Date on the
principal of this Security to be converted (unless this Security has been called
for redemption). If shares or any portion of this Security not converted are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest accompanies this Security.
Dated: _________________________
_________________________
Signature(s)
Signature(s) must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to S.E.C. Rule 17Ad-
15, if shares of Common Stock are to be delivered, or Securities to be issued,
other than to and in the name of the registered owner.
______________________________
Signature Guarantee
Fill in for registration of shares of Common Stock if they are to be delivered,
or Securities if they are to be issued, other than to and in the name of the
registered owner:
______________________________
(Name)
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<PAGE> 33
______________________________
(Street Address)
______________________________
(City, State and zip code)
(Please print name and address)
Register: _____ Common Stock
_____ Securities
(Check appropriate line(s)).
Principal amount to be converted (if less
than all):
$__________,000
_____________________________
Social Security or other Taxpayer
Identification Number of owner
24
<PAGE> 34
[ASSIGNMENT FORM]
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________________________________
Date:________________________ Your signature:__________________________________
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee:___________________________________________________________
The signature to this assignment should be guaranteed by an
eligible guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with membership in an
approved signature guarantee medallion program) pursuant to
S.E.C. Rule 17Ad-15.
25
<PAGE> 35
[FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF SECURITIES]
CERTIFICATE FOR EXCHANGE OR TRANSFER
Re: 6 1/2% Convertible Subordinated Debentures due 2001
This Certificate relates to $_________ principal amount of
Securities held in *____________ book-entry or *____________ definitive form
by _________ (the "Transferor").
The Transferor*:
/ / has requested the Trustee by written order to deliver in exchange
for its beneficial interest in a Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
/ / has requested the Trustee by written order to deliver in exchange
for its Security or Securities a beneficial interest in a Global Security held
by the Depositary in a principal amount equal to the aggregate principal amount
of such Security or Securities; or
/ / has requested the Trustee by written order to exchange or register
the transfer of a Security or Securities.
In connection with such request and in respect of each such
security, the Transferor does hereby certify to the Company and the Trustee that
Transferor is familiar with the Indenture relating to the above captioned
Debentures and, as provided in Section 305 of such Indenture, the transfer of
this Security does not require registration under the Securities Act (as defined
below) because*:
/ / Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 305(b)(ii)(A) or Section
305(f)(i)(A) of the Indenture).
/ / Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A or pursuant to an exemption
from registration in accordance with Regulation S under the Securities Act (in
satisfaction of Section 305(b)(ii)(B), Section 305(c)(i), Section 305(d)(i),
Section 305(f)(i)(B), Section 305(g)(iii) or Section 305(h)(iii) of the
Indenture). An opinion of counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this Certificate
- --------
* Check applicable box.
26
<PAGE> 36
(in satisfaction of Section 305(b)(ii)(B), Section 305(c)(i), Section 305(d)(i),
Section 305(f)(i)(B), Section 305(g)(iii) or Section 305(h)(iii) of the
Indenture).
/ / Such Security is being transferred in accordance with Rule 144 under
the Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 305(b)(ii)(B), Section 305(f)(i)(B)
or Section 305(k)(ii) of the Indenture). If such Security is being transferred
in accordance with Rule 144 under the Securities Act, an opinion of counsel to
the effect that such transfer does not require registration under the Securities
Act accompanies this Certificate (in satisfaction of Section 305(b)(ii)(B),
Section 305(f)(i)(B) or Section 305(k)(ii) of the Indenture).
/ / Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A, 144 or Regulation S under the Securities Act. An opinion
of counsel to the effect that such transfer does not require registration under
the Securities Act accompanies this Certificate (in satisfaction of Section
305(b)(ii)(C) or Section 305(f)(i)(C) of the Indenture).
You are entitled to rely upon this certificate and you are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
___________________________________
[INSERT NAME OF TRANSFEROR]
By:________________________________
Date:___________________________
27
<PAGE> 37
[OPTION OF HOLDER TO ELECT PURCHASE]
If you wish to have this Security purchased by the Company pursuant
to Section 1401 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Security (which is $1,000 or
an integral multiple thereof) purchased by the Company pursuant to Section 1401
of the Indenture, state the amount you wish to have purchased:
$_____________________
Date: ___________________ Your Signature(s): ______________________
Tax Identification No.:______________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:_______________________________________________________
The signature to this option of holder to elect purchase
should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and
credit unions with membership in an approved signature
guarantee medallion program) pursuant to S.E.C. Rule 17Ad-15.
28
<PAGE> 38
[FORM OF SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES**]
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Signature of
decrease in increase in Amount of this authorized
Principal Principal Global Security signatory of
Amount of this Amount of this following such Trustee or
Date of Global Global decrease (or Securities
Exchange Security Security increase) Custodian
-------- -------- -------- --------- ---------
<S> <C>
1.
2.
3.
4.
5.
</TABLE>
SECTION 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By ____________________________
Authorized Signatory
- --------
** This Schedule should be included only if the Security is issued in global
form.
29
<PAGE> 39
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $86,250,000
(including $11,250,000 aggregate principal amount of Securities that may be sold
to the Initial Purchasers by the Company upon exercise of the over-allotment
option granted pursuant to the Purchase Agreement), except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities pursuant to Section 304, 305, 306, 906,
1108, 1302 or 1405.
The Securities shall be known and designated as the "6 1/2%
Convertible Subordinated Debentures due 2001" of the Company. Their Stated
Maturity shall be December 15, 2001 and they shall bear interest at the rate of
6 1/2% per annum, from the date of original issuance of Securities pursuant to
this Indenture or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, as the case may be, payable semi-annually on
June 15 and December 15 commencing June 15, 1997, until the principal thereof is
paid or made available for payment.
The principal of and premium, if any, and interest on the Securities
shall be payable (i) in respect of Securities held of record by the Depositary
or its nominee in same day funds on or prior to the respective payment dates and
(ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee in same day funds at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
that at the option of the Company payment of interest to Holders of record other
than the Depositary may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
The Securities shall be subject to the transfer restrictions set
forth in Section 305.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve.
The Securities shall be convertible as provided in Article Thirteen.
The Securities shall be subject to repurchase at the option of the
Holder as provided in Article Fourteen.
30
<PAGE> 40
SECTION 302. Denominations.
The Securities shall be issuable only in fully registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President or one of its
Vice Presidents, under its corporate seal or a facsimile thereof reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures 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 for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall either at one time or from time to time pursuant
to such instructions as may be described therein authenticate and deliver such
Securities as in this Indenture provided and not otherwise. Such Company Order
shall specify the amount of Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated, and shall certify that
all conditions precedent to the issuance of such Securities contained in this
Indenture have been complied with. The aggregate principal amount of Securities
Outstanding at any time may not exceed the amount set forth above except as
provided in Section 306.
Each Security shall be dated the date of its authentication.
No Security 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 duly
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of the Indenture. The Trustee may appoint an Authenticating Agent
pursuant to the terms of Section 614.
SECTION 304. Temporary Securities.
Pending the preparation of Definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise
31
<PAGE> 41
produced, in any authorized denomination, substantially of the tenor of the
Definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities. Every such temporary Security shall be executed by the Company and
shall be authenticated and delivered by the Trustee upon the same conditions and
in substantially the same manner, and with the same effect, as the Definitive
Security or Securities in lieu of which it is issued.
Not including Global Securities, if temporary Securities are issued,
the Company will cause Definitive Securities to be prepared without unreasonable
delay. After the preparation of Definitive Securities, the temporary Securities
shall be exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more Definitive Securities
of a like principal amount of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as Definitive Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
(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 designated pursuant to Section 1002 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 Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided. At all reasonable
times the Security Register shall be open for inspection by the Company.
The Company initially appoints The Depository Trust Company ("DTC")
to act as depositary (the "Depositary") with respect to the Global
Security(ies).
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Security(ies).
(b) With respect to the transfer and exchange of Definitive
Securities, when Definitive Securities are presented to the Security Registrar
with the request (x) to register the transfer of the Definitive Securities or
(y) to exchange such Definitive Securities for an equal principal amount of
Definitive Securities of other authorized denominations, the Security Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transactions are met; provided, however, that the
Definitive Securities presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Security
Registrar duly
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<PAGE> 42
executed by the Holder thereof or by its attorney, duly authorized
in writing; and
(ii) shall, in the case of Transfer Restricted Securities
that are Definitive Securities, be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Security Registrar by a Holder for
registration in the name of such Holder, without transfer, a
certification from such Holder to that effect (in
substantially the form of Exhibit A hereto); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in reliance on Rule
144A under the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or Regulation S under
the Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that
effect (in substantially the form of Exhibit A hereto) and, in
the case of a transfer in accordance with Rule 144A, Rule 144
or Regulation S under the Securities Act, an Opinion of
Counsel reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act;
or
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect (in substantially the form of
Exhibit A hereto) and an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer is
in compliance with the Securities Act.
(c) The following restrictions apply to any transfer of a Definitive
Security for a beneficial interest in a 144A Global Security. A Definitive
Security may not be exchanged for a beneficial interest in a 144A Global
Security except until and upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Definitive Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form of Exhibit A
hereto, that such Definitive Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A and an Opinion of
Counsel reasonably acceptable to the
33
<PAGE> 43
Company to the effect that such transfer is in compliance with the
Securities Act; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing the Trustee to
make, or to direct the Securities Custodian to make, an endorsement
on the 144A Global Security to reflect an increase in the aggregate
principal amount of the Securities represented by the 144A Global
Security,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the 144A Global Security
to be increased accordingly. If no 144A Global Securities are then outstanding,
the Company shall execute and, upon receipt of an authentication order in the
form of a Company Order in accordance with Section 303, the Trustee shall
authenticate a new 144A Global Security in the appropriate principal amount.
(d) The following restrictions apply to any transfer of a Definitive
Security for a beneficial interest in a Regulation S Global Security. A
Definitive Security may not be exchanged for a beneficial interest in a
Regulation S Global Security except until and upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form of Exhibit A
hereto, that such Definitive Security is being transferred in
accordance with Regulation S and an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing the Trustee to
make, or to direct the Securities Custodian to make, an endorsement
on the Regulation S Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the
Regulation S Global Security,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Regulation S Global
Security to be increased accordingly. If no Regulation S Global Securities are
then outstanding, the Company shall execute and, upon receipt of an
authentication order in the form of a Company Order in
34
<PAGE> 44
accordance with Section 303, the Trustee shall authenticate a new Regulation S
Global Security in the appropriate principal amount.
(e) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depositary, in accordance with
this Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor.
(f) With respect to the transfer of a beneficial interest in a 144A
Global Security or a Regulation S Global Security for a Definitive Security:
(i) Any person having a beneficial interest in a 144A
Global Security or a Regulation S Global Security may upon request
exchange such beneficial interest for a Definitive Security. Upon
receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary or its nominee on
behalf of any person having a beneficial interest in a 144A Global
Security or a Regulation S Global Security constituting a Transfer
Restricted Security only, and receipt by the Trustee of the
following additional information and documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest is being transferred to
the person designated by the Depositary as being the
beneficial owner, a certification from such person to that
effect (in substantially the form of Exhibit A hereto); or
(B) if such beneficial interest is being transferred to
a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under
the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or Regulation S under
the Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that
effect from the transferor (in substantially the form of
Exhibit A hereto) and, in the case of a transfer in accordance
with Rule 144A, Rule 144 or Regulation S under the Securities
Act, an Opinion of Counsel reasonably acceptable to the
Company to the effect that such transfer is in compliance with
the Securities Act; or
(C) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect from the transferee or transferor (in substantially the
form of Exhibit A hereto) and an Opinion of Counsel from the
transferee or transferor reasonably acceptable to the Company
to the effect that such transfer is in compliance with the
Securities Act,
35
<PAGE> 45
then the Trustee or the Securities Custodian, at the direction of
the Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of the Global
Security to be reduced and, following such reduction, the Company
will execute and, upon receipt of an authentication order in the
form of a Company Order in accordance with Section 303, the Trustee
will authenticate and deliver to the transferee a Definitive
Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a 144A Global Security or a Regulation S
Global Security pursuant to this Section 305 shall be registered in
such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver
such Definitive Securities to the persons in whose names such
Securities are so registered.
(g) With respect to the transfer of a beneficial interest in a
Regulation S Global Security for a beneficial interest in a 144A Global
Security, any person having a beneficial interest in a Regulation S Global
Security may upon request exchange such beneficial interest for an interest in a
144A Global Security. Upon receipt by the Trustee of written instructions or
such other form of instructions as is customary for the Depositary or its
nominee on behalf of any person having a beneficial interest in a Regulation S
Global Security constituting a Transfer Restricted Security only, and receipt by
the Trustee of the following additional information and documents (all of which
may be submitted by facsimile):
(i) instructions given in accordance with the procedures of
Euroclear or Cedel, the Depositary and the Securities Custodian, as
the case may be, from or on behalf of a beneficial owner of an
interest in the Regulations S Global Security directing the Trustee,
as transfer agent, to credit or cause to be credited a beneficial
interest in the 144A Global Security in an amount equal to the
beneficial interest in the Regulation S Global Security to be
exchanged or transferred,
(ii) a written order given in accordance with the procedures
of Euroclear or Cedel, the Depositary and the Securities Custodian,
as the case may be, containing information regarding the account
with the Depositary to be credited with such increase and the name
of such account, and
(iii) a certification from the transferor (in substantially
the form of Exhibit A hereto) to the effect that such beneficial
interest is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act and an Opinion of Counsel
reasonably acceptable to the
36
<PAGE> 46
Company to the effect that such transfer is in compliance with the
Securities Act,
then the Trustee, as transfer agent, shall promptly deliver appropriate
instructions to the Depositary, its nominee, or the custodian for the
Depositary, as the case may be, to reduce or reflect on its records a reduction
of the Regulation S Global Security by the aggregate principal amount of the
beneficial interest in such Regulation S Global Security to be exchanged or
transferred, and the Trustee, as transfer agent, shall promptly deliver
appropriate instructions to the Depositary, its nominee, or the custodian for
the Depositary, as the case may be, concurrently with such reduction, increase
or reflect on its records an increase of the principal amount of the 144A Global
Security by the aggregate principal amount of the beneficial interest in the
Regulation S Global Security to be so exchanged or transferred, and to credit or
cause to be credited to the account of the person specified in such instructions
a beneficial interest in the 144A Global Security equal to the reduction in the
principal amount of the Regulation S Global Security.
(h) With respect to the transfer of a beneficial interest in a 144A
Global Security for a beneficial interest in a Regulation S Global Security, any
person having a beneficial interest in a 144A Global Security may upon request
exchange such beneficial interest for an interest in a Regulation S Global
Security. Upon receipt by the Trustee of written instructions or such other form
of instructions as is customary for the Depositary or its nominee on behalf of
any person having a beneficial interest in a 144A Global Security constituting a
Transfer Restricted Security only, and receipt by the Trustee of the following
additional information and documents (all of which may be submitted by
facsimile):
(i) instructions given in accordance with the procedures of
the Depositary and the Securities Custodian, as the case may be,
from or on behalf of a holder of a beneficial interest in the 144A
Global Security, directing the Trustee, as transfer agent, to credit
or cause to be credited a beneficial interest in the Regulation S
Global Security in an amount equal to the beneficial interest in the
144A Global Security to be exchanged or transferred,
(ii) a written order given in accordance with the procedures
of the Depositary and the Securities Custodian, as the case may be,
containing information regarding the Euroclear or Cedel account to
be credited with such increase and the name of such account, and
(iii) a certification from the transferor (in substantially
the form of Exhibit A hereto) to the effect that such beneficial
interest is being transferred in accordance with Regulation S and an
Opinion of Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities Act,
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<PAGE> 47
then the Trustee, as transfer agent, shall promptly deliver appropriate
instructions to the Depositary, its nominee, or the custodian for the
Depositary, as the case may be, to reduce or reflect on its records a reduction
of the 144A Global Security by the aggregate principal amount of the beneficial
interest in such 144A Global Security to be so exchanged or transferred from the
relevant participant, and the Trustee, as transfer agent, shall promptly deliver
appropriate instructions to the Depositary, its nominee, or the custodian for
the Depositary, as the case may be, concurrently with such reduction, to
increase or reflect on its records an increase of the principal amount of such
Regulation S Global Security by the aggregate principal amount of the beneficial
interest in such 144A Global Security to be so exchanged or transferred, and to
credit or cause to be credited to the account of the person specified in such
instructions (who shall be Morgan Guaranty Trust Company of New York, Brussels
office, as operator of Euroclear or Cedel or another agent member of Euroclear
or Cedel, or both, as the case may be, acting for and on behalf of them) a
beneficial interest in such Regulation S Global Security equal to the reduction
in the principal amount of such 144A Global Security.
(i) Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in subsection (j) of this Section 305), a Global
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(j) The following relates to the authentication of Definitive
Securities in absence of the Depositary. If at any time: (i) the Depositary for
the Securities notifies the Company that the Depositary is unwilling or unable
to continue as Depositary for the Global Securities and a successor Depositary
for the Global Securities is not appointed by the Company within 90 days after
delivery of such notice; or (ii) the Company, at its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of Definitive
Securities under this Indenture, then the Company will execute, and the Trustee,
upon receipt of a Company Order in accordance with Section 303 requesting the
authentication and delivery of Definitive Securities, will authenticate and
deliver Definitive Securities in an aggregate principal amount equal to the
principal amount of the Global Securities, in exchange for such Global
Securities.
(k) (i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH
38
<PAGE> 48
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS
(A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON WHO IS OR WHO THE HOLDER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) THAT IS AN INSTITUTIONAL INVESTOR AND THAT PRIOR TO SUCH
TRANSFER FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THE SECURITY EVIDENCED HEREBY (WHICH FORM OF LETTER CAN BE OBTAINED FROM
THE TRUSTEE), (E) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (C), (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND IN EACH OF THE FOREGOING CASES PROVIDED THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE AND SUBJECT TO ANY APPLICABLE STATE
SECURITIES LAWS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN
HOLDER OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
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(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by
a Global Security) pursuant to Rule 144 under the Securities Act or
an effective registration statement under the Securities Act
(including the Shelf Registration Statement) or on or after the
Resale Restriction Termination Date:
(A) in the case of any Transfer Restricted Security that
is a Definitive Security, the Security Registrar shall permit
the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Security that does not bear the
legend set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security; provided,
however, that with respect to a transfer made in reliance upon
Rule 144 or an effective registration statement, the Holders
thereof shall certify in writing to the Security Registrar
that such request is being made pursuant to Rule 144 or an
effective registration statement (such Certification to be
substantially in the form of Exhibit A hereto) and, in the
case of a transfer made in reliance upon Rule 144, shall be
accompanied by an Opinion of Counsel reasonably acceptable to
the Company to the effect that such transfer is in compliance
with the Securities Act; and
(B) any such Transfer Restricted Security represented by
a Global Security shall not be subject to the provisions set
forth in (i) above (such sales or transfers being subject only
to the provisions of Section 305(e) hereof); provided,
however, that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Global
Security for a Definitive Security that does not bear a
legend, which request is made in reliance upon Rule 144 or an
effective registration statement, the Holder thereof shall
certify in writing to the Security Registrar that such request
is being made pursuant to Rule 144 or an effective
registration statement (such certification to be substantially
in the form of Exhibit A hereto) and, in the case of a
transfer made in reliance upon Rule 144, shall be accompanied
by an Opinion of Counsel reasonably acceptable to the Company
to the effect that such transfer is in compliance with the
Securities Act.
(l) At such time as all beneficial interests in a Global Security
have either been exchanged for Definitive Securities, redeemed, repurchased or
cancelled, such Global Security shall be returned to or retained and cancelled
by the Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for Definitive Securities, redeemed,
repurchased or cancelled, the principal amount of Securities represented by such
Global Security shall be reduced and an
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endorsement shall be made on such Global Security, by the Trustee or the
Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(m) All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.
(n) To the extent requested by the Trustee, all Securities the
transfer, exchange and/or registration of which is effectuated pursuant to this
Section 305 shall be accompanied by an Officers' Certificate of the Company,
certifying that such transfer, exchange and/or registration is authorized by the
Company and permitted hereunder.
To permit registrations of transfer and exchanges, the Company shall
execute and the Trustee shall authenticate Definitive Securities and Global
Securities at the Security Registrar's request.
No service charge to a Holder shall be made for any registration of
transfer or exchange of Securities except as provided in Section 306. 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
304, 906, 1108 or 1302 not involving any transfer.
The Company or the Security Registrar shall not be required (i) to
issue, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities selected for redemption under Section 1104
and ending at the close of business on the day of such mailing, (ii) to register
the transfer of or exchange any Definitive Security or beneficial interest in
any Global Security so selected for redemption in whole or in part, except the
unredeemed portion of any Definitive Security being redeemed in part or (iii) to
register the transfer of or exchange of any Definitive Security or beneficial
interest in any Global Security surrendered for conversion pursuant to Article
Thirteen or repurchase pursuant to Article Fourteen.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of
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them harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a bona fide purchaser, the Company shall
execute and the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount and bearing a number not contemporaneously outstanding. The Trustee may
charge the Company for the Trustee's expenses in replacing such Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any 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. Payment
of interest will be made (i) in respect of Securities held by the Depositary or
its nominee, in same day funds on or prior to the respective Interest Payment
Dates and (ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee, in same day funds at the office of the Trustee in New
York, New York or at such other office or agency of the Company as it shall
maintain for that purpose pursuant to Section 1002, provided, however, that, at
the option of the Company, interest on any Security held of record by Holders
other than the Depositary or its nominee may be paid by mailing checks to the
addresses of the Holders thereof as such addresses appear in the Securities
Register.
Any interest on any 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
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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 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
Security and the date of the proposed payment, 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. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 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 shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his 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 Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(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, 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 Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any 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
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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
that Security (or one or more Predecessor Securities) is registered at the close
of business on such Regular Record Date provided, however, that Securities so
surrendered for conversion shall (except in the case of Securities or portions
thereof called for redemption) be accompanied by payment in funds acceptable to
the Company of an amount equal to the interest payable on such Interest Payment
Date on the principal amount being surrendered for conversion. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a 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 Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and premium, if
any, and (subject to Section 307) 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 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer, exchange or conversion shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section , except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be destroyed by the Trustee, unless
otherwise directed by a Company Order.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
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ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as expressly provided for in this Article Four), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities 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 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense,
of the Company, or
(iv) are delivered to the Trustee for Conversion in
accordance with Article Thirteen,
and the Company, in the case of (i), (ii), (iii) or (iv) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in cash sufficient
(without consideration of any investment of such cash) to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation for principal and premium,
if any, and interest 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
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may be; provided that the Trustee shall have been irrevocably
instructed to apply such amount to said payments with respect to the
Securities;
(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 following rights or obligations under the Securities and this Indenture
shall survive until otherwise terminated or discharged hereunder: (a) Article
Thirteen, Article Fourteen and the Company's obligations under Sections 304,
305, 306, 1002 and 1003, in each case with respect to any Securities described
in subclause (B) of Clause (1) of this Section , (b) this Article Four, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder,
including the obligations of the Company to the Trustee under Section 607, and
the obligations of the Trustee to any Authenticating Agent under Section 614 and
(d) if money shall have been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section , the rights of Holders of any Securities
described in subclause (B) of Clause (1) of this Section to receive, solely from
the trust fund described in such subclause (B), payments in respect of the
principal of, and premium (if any) and interest on, such Securities when such
payment are due.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003 and
Section 506, all money deposited with the Trustee pursuant to Section 401 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
premium, if any, and interest for whose payment such money has been deposited
with the Trustee. All moneys deposited with the Trustee pursuant to Section 401
(and held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
SECTION 403. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Four by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Four until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust with
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respect to the Securities; provided, however, that if the Company makes any
payment of principal of or any premium or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of the Securities to receive such payment from the money so held
in trust.
ARTICLE FIVE
Remedies
SECTION 501. 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 Twelve 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, whether or not such payment is prohibited
by the provisions of Article Twelve; or
(2) default in the payment of any interest upon any Security when it
becomes due and payable, whether or not such payment is prohibited by the
provisions of Article Twelve, and continuance of such default for a period
of 30 days; or
(3) failure to provide timely notice of a Repurchase Event as
required in accordance with the provisions of Article Fourteen; or
(4) default in the payment of the Repurchase Price in respect of any
Security on the Repurchase Date therefor in accordance with the provisions
of Article Fourteen, whether or not such payment is prohibited by the
provisions of Article Twelve; or
(5) 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
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(6) default under one or more bonds, debentures, notes or other
evidences of indebtedness for money borrowed by the Company or any
Subsidiary or under one or more mortgages, indentures or instruments under
which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company or any Subsidiary,
whether such indebtedness now exists or shall hereafter be created, which
default individually or in the aggregate shall constitute a failure to pay
the principal of indebtedness in excess of $15,000,000 when due and
payable after the expiration of any applicable grace period with respect
thereto or shall have resulted in indebtedness in excess of $15,000,000
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or
annulled, within a period of 30 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 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 acceleration to be rescinded or annulled and stating that such notice
is a "Notice of Default" hereunder; or
(7) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company or any Subsidiary
in an involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company or any Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Subsidiary under any applicable Federal or State law,
or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Subsidiary 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 90 consecutive days; or
(8) the commencement by the Company or any Subsidiary of a voluntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it
to the entry of a decree or order for relief in respect of the Company or
any Subsidiary 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 relief under any applicable Federal or
State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company
or any Subsidiary
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or of any substantial part of its property, or the making by it of a
general 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 or any Subsidiary in
furtherance of any such action.
Upon receipt by the Trustee of any Notice of Default pursuant to
this Section 501, a record date shall automatically and without any other action
by any Person be set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such Notice of Default, which record date shall
be the close of business on the day the Trustee receives such Notice of Default.
The Holders of Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
Notice of Default, whether or not such Holders remain Holders after such record
date: provided, that unless such Notice of Default shall have become effective
by virtue of the Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such Notice of
Default shall automatically and without any action by any Person be canceled and
of no further force or effect.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than as specified in subparagraph (7)
or (8) of Section 501) occurs and is continuing, then and 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 Holders), and upon any such declaration such principal plus
any interest accrued on the securities to the date of declaration shall become
immediately due and payable. If an Event of Default specified in subparagraph
(7) or (8) of Section 501 occurs and is continuing, then the principal of,
premium, if any, and accrued and unpaid interest, if any, on all of the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder of
Securities.
At any time after such a 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 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 interest thereon at the rate borne by the
Securities,
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(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
and
(D) all sums paid or advanced by the Trustee and each
predecessor Trustee, their respective agents and counsel hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee and each predecessor Trustee, their
respective agents and counsel;
and
(2) all Events of Default, other than the nonpayment of the
principal of, premium, if any, and interest on the Securities that has
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or
any rescission and annulment of any such declaration, pursuant to this Section
502, a record date shall automatically and without any other action by any
Person be set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such declaration, or rescission and annulment, as
the case may be, which record date shall be the close of business on the day the
Trustee receives such declaration, or rescission and annulment, as the case may
be. The Holders of Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
declaration, or rescission and annulment, as the case may be, whether or not
such Holders remain Holders after such record date; provided, that unless such
declaration, or rescission and annulment, as the case may be, shall have become
effective by virtue of Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such declaration, or
rescission and annulment, as the case may be, shall automatically and without
any action by any Person be canceled and of no further force or effect.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest 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,
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the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium, if any, and on any overdue interest, at the rate
borne by the Securities, 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 and
each predecessor Trustee, their respective agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 607.
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 and may
prosecute any 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 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 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have the claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
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 to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it and
each predecessor Trustee for the reasonable compensation, expenses,
disbursements and advances of the Trustee and each predecessor Trustee and their
respective agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim
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of any Holder in any such proceeding; provided, however, that the Trustee may,
on behalf of the Holders, vote for the election of a trustee in bankruptcy or
similar official and may be a member of the Creditors' Committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities 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 and each predecessor Trustee and their
respective agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article 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 or premium, if
any, or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To payment of all amounts due the Trustee under Section 607;
SECOND: Subject to Article Twelve, to the holders of Senior
Indebtedness;
THIRD: To the payment of the amounts then due and unpaid for
principal of and premium, if any, and interest on the Securities 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 for principal and
premium, if any, and interest, respectively; and
FOURTH: The balance, if any, to the Company or any other Person or
Persons determined to be entitled thereto upon provision of an Officer's
Certificate or other evidence reasonably satisfactory to the Trustee by
the Company or such other person verifying such entitlement.
SECTION 507. Limitation on Suits.
No Holder of any Security 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
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(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 satisfactory to it 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
(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 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 Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. 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 shall have the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and (subject to Section
307) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date or, in the
case of a repurchase pursuant to Article Fourteen, on the Repurchase Date) and
to convert such Security in accordance with Article Thirteen 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 509. Restoration of Rights and Remedies.
If the Trustee or any Holder 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 shall
be restored severally and respectively
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to their former positions hereunder and thereafter all rights and remedies of
the Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
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
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
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; and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall determine that the action so directed would involve the
Trustee in personal liability or would be unduly prejudicial to Holders
not joining in such direction.
Upon receipt by the Trustee of any such direction, a record date
shall automatically and without any other action by any Person be set for the
purpose of determining the Holders of Outstanding Securities entitled to join in
such direction, which record date shall be the close of business on the day the
Trustee receives such direction. The Holders of Outstanding Securities on such
record date (or their duly appointed
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agents), and only such Persons, shall be entitled to join in such direction,
whether or not such Holders remain Holders after such record date; provided,
that unless such direction shall have become effective by virtue of Holders of
the requisite principal amount of Outstanding Securities on such record date (or
their duly appointed agents) having joined therein on or prior to the 90th day
after such record date, such direction shall automatically and without any
action by any Person be canceled and of no further force or effect.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of or premium, if any, or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company, in any suit instituted
by the Trustee, a suit by a Holder pursuant to Section 508, or a suit by a
Holder or Holders of more than 10% in principal amount of the outstanding
Securities.
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ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided
by this Indenture and the Trust Indenture Act for securities issued pursuant to
indentures qualified thereunder. Except as otherwise provided herein,
notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability or risk in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity satisfactory to it
against such risk or liability is not reasonably assured to it. 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 . The Trustee shall not be
liable (x) for any error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts or (y) with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the holders of not less than a majority in aggregate principal
amount of the Securities at the time Outstanding relating to the time, method
and place of conducting any proceeding or any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture. Prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred: (i) the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Indenture and in the Trust Indenture Act, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture and in the Trust Indenture Act, and no
implied covenants or obligations shall be read in to this Indenture against the
Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture and believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties; but in the case of any such
statements, certificates or options which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform on their
face to the requirements of this Indenture. If a default or an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise thereof as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
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SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder
of which it has actual knowledge as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
character specified in Section 501(5), no such notice to Holders 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 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, 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;
(b) 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 may be sufficiently evidenced by a
Board Resolution;
(c) 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 conclusively upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written 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;
(e) 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 pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
satisfactory to it against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(f) before the Trustee acts or refrains from acting with respect to
any matter contemplated by this Indenture, it may require an Officers'
Certificate or an Opinion of Counsel, which shall conform to the
provisions of Section 102, and the Trustee shall be protected and shall
not be liable for any action it takes or
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omits to take in good faith and without gross negligence in reliance on
such certificate or opinion;
(g) the Trustee shall not be required to give any bond or surety in
respect of the performance of its power and duties hereunder;
(h) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(i) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys 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.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee and any Authenticating Agent assume no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee and any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust hereunder
need not be segregated from other funds except to the extent required by law.
The Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
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SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (including its services as
Security Registrar or Paying Agent, if so appointed by the Company) as may
be mutually agreed upon in writing by the Company and the Trustee (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 and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of
it in connection with the performance of its duties under any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel and all other persons not
regularly in its employ) except to the extent any such expense,
disbursement or advance may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee and each predecessor Trustee (each an
"indemnitee") 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
Indenture or the trusts hereunder and its duties hereunder (including its
services as Security Registrar or Paying Agent, if so appointed by the
Company), including enforcement of this Section 607 and including the
costs and expenses of defending itself against or investigating any claim
or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Company shall defend any claim or
threatened claim asserted against an indemnitee for which it may seek
indemnity, and the indemnitee shall cooperate in the defense unless, in
the reasonable opinion of the indemnitee's counsel, the indemnitee has an
interest adverse to the Issuer or a potential conflict of interest exists
between the indemnitee and the Company, in which case the indemnitee may
have separate counsel and the Company shall pay the reasonable fees and
expenses of such counsel; provided that the Company shall only be
responsible for the reasonable fees and expenses of one law firm (in
addition to local counsel) in any one action or separate substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, such law firm to be designated by the
indemnitee.
As security for the performance of the obligations of the Company
under this Section 607, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the Holders of particular Securities, and
the Securities are hereby subordinated to such prior lien. The obligations of
the Company under this Section to compensate and
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indemnify the Trustee and any predecessor Trustee and to pay or reimburse the
Trustee and any predecessor Trustee for expenses, disbursements and advances,
and any other amounts due the Trustee or any predecessor Trustee under Section
607, shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture.
When the Trustee or any predecessor Trustee incurs expenses or
renders services in connection with the performance of its obligations hereunder
(including its services as Security Registrar or Paying Agent, if so appointed
by the Company) after an Event of Default specified in Section 501(7) or (8)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any applicable bankruptcy,
insolvency or other similar federal or state law to the extent provided in
Section 503(b)(5) of Title 11 of the United States Code, as now or hereafter in
effect.
SECTION 608. 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 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that (i) is eligible pursuant to the Trust Indenture Act to act as such,
(ii) has (or, in the case of a corporation included in a bank holding company
system, whose related bank holding company has) a combined capital and surplus
of at least $50,000,000 and (iii) has an office where it provides corporate
trust services, or at which it is authorized to receive notices hereunder, in
the Borough of Manhattan, The City of New York, or a designated agent. If such
Person publishes reports of conditions at least annually, pursuant to law or to
the requirements of a Federal or state supervising or examining authority, then
for the purposes of this Section , the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section ,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 610. 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 611.
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(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the resigning 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 an Act of the Holders
of a majority in principal amount of the Outstanding Securities delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for the last six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the
Company or by 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 514, any Holder 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
such successor Trustee shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611 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 and accepted
appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of himself
and
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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 in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. 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 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 qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with 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 the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. 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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SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents acceptable
to and at the expense of the Company which shall be authorized to act on behalf
of the Trustee to authenticate Securities issued upon original issue and upon
exchange, registration of transfer, partial conversion or partial redemption or
pursuant to Section 306, and Securities so authenticated 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. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference 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
acceptable to the Company and shall at all times be a Person organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent 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
Authenticating Agent 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 an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person succeeding to the corporate agency or corporate trust
business of an Authenticating Agent, shall continue to be an Authenticating
Agent, provided such Person shall be otherwise eligible under this Section ,
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, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail notice of such
appointment by first-class mail, postage prepaid, to all Holders as their names
and addresses appear in the Security Register. Any successor Authenticating
Agent upon acceptance of its appointment under this Section shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named
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as an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible to act as such under the provisions of this Section.
Any Authenticating Agent by the acceptance of its appointment shall
be deemed to have represented to the Trustee that it is eligible for appointment
as Authenticating Agent under this Section and to have agreed with the Trustee
that: it will perform and carry out the duties of an Authenticating Agent as
herein set forth, including among other things the duties to authenticate
Securities when presented to it in connection with the original issuance and
with exchanges, registrations of transfer or redemptions or conversions thereof
or pursuant to Section 306; it will keep and maintain, and furnish to the
Trustee from time to time as requested by the Trustee, appropriate records of
all transactions carried out by it as Authenticating Agent and will furnish the
Trustee such other information and reports as the Trustee may reasonably
require; and it will notify the Trustee promptly if it shall cease to be
eligible to act as Authenticating Agent in accordance with the provisions of
this Section . Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have agreed with the Trustee to indemnify the Trustee against
any loss, liability or expense incurred by the Trustee and to defend any claim
asserted against the Trustee by reason of any acts or failures to act of such
Authenticating Agent, but such Authenticating Agent shall have no liability for
any action taken by it in accordance with the specific written direction of the
Trustee.
The Trustee shall not be liable for any act or any failure of the
Authenticating Agent to perform any duty either required herein or authorized
herein to be performed by such person in accordance with this Indenture.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
FIRST UNION NATIONAL BANK,
As Trustee
By ________________________________
As Authenticating Agent
By _____________________________
Authorized Officer
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. 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 each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may 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.
Notwithstanding the foregoing, so long as the Trustee is the Security Registrar,
no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communication 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 701
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 701 upon receipt of a new list so furnished.
(b) 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 or otherwise in
accordance with this Indenture.
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SECTION 703. Reports by Trustee.
(a) Not later than 60 days following each May 15, the Trustee shall
transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(b) A copy of 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 704. Reports by Company.
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 Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
SECTION 705. Rule 144A Information Requirement.
If at any time prior to the Resale Restriction Termination Date the
Company is no longer subject to Section 13 or 15(d) of the Exchange Act, the
Company will furnish to the Holders or beneficial holders of the Securities and
prospective purchasers of the Securities designated by the Holders of the
Securities, upon their request, information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act until the earlier of (i) the date on
which the Securities and the underlying Common Stock are registered under the
Securities Act or (ii) the Resale Restriction Termination Date.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease 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, unless:
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(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease all or substantially all of its
properties and assets to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, all or substantially
all of the properties and assets of the Company shall be a corporation,
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 and premium, if
any, and interest on all the Securities 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 Section 1311;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) such consolidation, merger, conveyance, transfer or lease does
not adversely affect the validity or enforceability of the Securities; and
(4) the Company or the successor Person 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.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all of the properties and assets of the Company in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a transfer by lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution and the provisions hereunder, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cause this Indenture to be qualified under the Trust
Indenture Act; or
(2) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(3) to add to the covenants of the Company for the benefit of the
Holders or an additional Event of Default, or to surrender any right or
power conferred herein or in the Securities upon the Company; or
(4) to secure the Securities; or
(5) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Section 1311; or
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(7) to cure any ambiguity, to correct or supplement any provision
herein or in the Securities which may be defective or inconsistent with
any other provision herein or in the Securities, or to make any other
provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this
Indenture; provided, that such action pursuant to this Clause (7) shall
not adversely affect the interests of the Holders in any material respect
and the Trustee may rely upon an opinion of counsel to that effect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, 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 under this Indenture;
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provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or adversely affect the
right to convert any Security as provided in Article Thirteen (except as
permitted by Section 901(5)), or modify the provisions of Article
Fourteen, or the provisions of this Indenture with respect to the
subordination of the Securities, in a manner adverse to the Holders, or
(2) 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 any of the provisions of this Section , Section 513 or
Section 1006, except to increase any such percentage 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; provided, however, that this Clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1006, or the deletion of this proviso, in accordance with the
requirements of Section 901(6).
It shall not be necessary for any Act of Holders 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 903. 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 Section 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which adversely affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
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SECTION 904. 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
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. 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 Company, bear a notation in form approved by the Company 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, to any
such supplemental indenture may be prepared and executed by the Company and (at
the specific direction of the Company) authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 902, the Company shall transmit to
the Holders a notice setting forth the substance of such supplemental indenture.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company 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 and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in New York, New York an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer, where Securities may be
surrendered for exchange or conversion and where notices and demands to or upon
the Company in
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respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of 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, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in New
York, New York for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of and 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 and
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 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,
on or prior to 11:00 a.m. (New York City time) on each due date of the principal
of and premium, if any, or interest on any Securities, deposit with a Paying
Agent a sum in same day funds sufficient to pay the principal and any premium
and interest so becoming due, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee or
the Company 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 (i) comply with the provisions of the
Trust Indenture Act and this Indenture applicable to it as a Paying Agent and
hold all sums held by it for the payment of principal of or any premium or
interest on the Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided; (ii) give the Trustee written notice of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
in respect of the Securities; and (iii) at any time during the continuance of
any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request of
the Trustee, forthwith pay to the
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Trustee all sums held in trust by such Paying Agent for payment in respect of
the Securities, and account for any funds disbursed.
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.
The Trustee shall not be liable for any act or failure to act of any
Paying Agent (other than the Trustee acting in such capacity) to perform any
duty either required herein or authorized herein to be performed by such person
in accordance with this Indenture.
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 and premium,
if any, or interest on any Security and remaining unclaimed for two years after
such principal and 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 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 a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, New York, 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 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, 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
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and statutory) and franchises and the existence, rights (charter and statutory)
and franchises of each Subsidiary; 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 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 1005, if before the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities shall, by Act of such Holders, 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
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
The Securities may be redeemed at the election of the Company, in
whole or from time to time in part, at any time on or after December 20, 1999,
at the Redemption Prices specified in the form of Security hereinbefore set
forth, together with accrued interest, to the Redemption Date.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company as permitted
by any provision of this Indenture shall be made in accordance with such
provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company of less than all the Securities, the Company
shall, at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter period shall be satisfactory to the Trustee), notify the
Trustee in writing of such Redemption Date and of the principal amount of
Securities to be redeemed. In case of any redemption at the election of the
Company of all of the Securities, the Company shall, at least 45 days prior to
the Redemption Date fixed by the Company (unless a shorter period shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date.
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SECTION 1104. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by lot.
If any 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 shall be treated
by the Trustee as Outstanding for the purpose of such selection. In any case
where more than one Security is registered in the same name, the Trustee in its
discretion may treat the aggregate principal amount so registered as if it were
represented by one Security.
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 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 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 15 nor more than 60 days prior to the Redemption
Date, to the Trustee and to each Holder of Securities to be redeemed, at his
address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption of any
Securities, the principal amounts) of the particular Securities to be
redeemed,
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that (unless the
Company shall default in payment of the Redemption Price) interest thereon
will cease to accrue on and after said date,
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(e) the conversion price, the date on which the right to convert the
Securities to be redeemed will terminate and the place or places where
such Securities may be surrendered for conversion, and
(f) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request received
by the Trustee at least 30 days prior to the Redemption Date, by the Trustee in
the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
At or prior to 9:00 a.m. (New York City time) on any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in same day funds 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 or portions thereof 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 any 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 or any Predecessor Security to receive interest as
provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 1107. 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 and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
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 at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company maintained for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new 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 Security so surrendered.
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, at all times and in
all respects, 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.
SECTION 1202. 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, relative to the Company or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any general
assignment for the benefits 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; or provision shall be
made for such payment in money or money's worth, before the Holders of the
Securities are entitled to receive any payment or distribution of any kind or
character, whether in cash, property or securities, on account of principal of
or premium, if any, or interest on the 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
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character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
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, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Securities, before all Senior Indebtedness is paid in full or payment thereof
provided for, and if such fact shall, at or prior to the time of such payment or
distribution, have been made known to the Trustee or such Holder, as the case
may be, 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, property or
securities" shall not be deemed to include securities 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 are subordinated
in right of payment to all Senior Indebtedness which may at the time be
outstanding 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 Eight shall not be
deemed a dissolution, winding up, liquidation, reorganization, general
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 Eight.
SECTION 1203. Prior Payment to Senior Indebtedness upon Acceleration of
Securities.
In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Indebtedness, or provision shall be made for such payment in money or
money's worth, before the
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Holders of the Securities are entitled to receive any payment (including any
payment which may be payable by reason of the payment of any other indebtedness
of the Company being subordinated to the payment of the Securities) by the
Company on account of the principal of or premium, if any, or interest on the
Securities or on account of the purchase or other acquisition of Securities.
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 such Holder, as
the case may be, then and in such event such payment shall be paid over the
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
SECTION 1204. 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 any Senior
Indebtedness beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in such Senior
Indebtedness becoming or being declared 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
and such acceleration shall have been rescinded or annulled, 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 (including any payment which may be
payable by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities) shall be made by the Company on
account of the principal of or premium, if any, or interest on the Securities or
on account of the purchase or other acquisition of Securities.
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 such Holder, as
the case may be, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
SECTION 1205. 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, general assignment
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for the benefit of creditors or other marshalling of assets and liabilities of
the Company referred to in Section 1202 or under the conditions described in
Section 1203 or 1204, 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 1206. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due on or in respect
of 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 (equally and ratably
with the holders of all indebtedness of the Company which by its express terms
is subordinated to other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and is entitled to like rights of
subrogation) 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 otherwise 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.
SECTION 1207. 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.
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SECTION 1208. 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 1209. 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, or by any
noncompliance 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 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 1210. 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 601, 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 four 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
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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 four
Business Days prior to such date.
Subject to the provisions of Section 601, 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.
SECTION 1211. 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 601, 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 1212. 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
holders of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise. With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Article against the Trustee.
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SECTION 1213. 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 607.
SECTION 1214. 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 1213 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1215. Certain Conversions 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
Thirteen 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 class of capital stock of the Company 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 Thirteen.
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SECTION 1216. No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the
Trustee or the Holders of the Securities to take any action to accelerate the
maturity of the Securities pursuant to the provisions described under Article
Five and as set forth in this Indenture or to pursue any rights or remedies
hereunder or under applicable law, subject to the rights, if any, under this
Article of the holders, from time to time, of Senior Indebtedness to receive the
cash, property or securities receivable upon the exercise of such rights or
remedies.
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article,
at the option of the Holder thereof, any Security or any portion of the
principal amount thereof which equals $1,000 or any integral multiple thereof
may be converted at any time after the 60th day following the date of original
issuance of Securities under this Indenture at the principal amount thereof, or
of such portion thereof, into fully paid and nonassessable shares (calculated as
to each conversion to the nearest 1/100 of a share) of Common Stock, at the
conversion price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on
December 15, 2001. In case a Security or portion thereof is called for
redemption, such conversion right in respect of the Security or portion so
called shall expire at the close of business on the second business day
preceding the applicable Redemption Date, unless the Company defaults in making
the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially $25.95 per
share of Common Stock. The conversion price shall be adjusted in certain
instances as provided in paragraphs (a), (b), (c), (d), (e), (f) and (i) of
Section 1304.
SECTION 1302. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security shall surrender such Security, duly endorsed or assigned to the Company
or in blank, at any office or agency of the Company maintained pursuant to
Section 1002, accompanied by written notice to the Company in the form provided
in the Security (or such other notice as is acceptable to the Company) at such
office or agency that the Holder elects to convert such Security or, if less
than the entire principal amount thereof is to be converted, the portion thereof
to be converted. Securities surrendered for conversion during the period from
the opening of business on any Regular Record Date next preceding any Interest
Payment Date to the close of business on such Interest Payment
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Date shall (except in the case of Securities or portions thereof which have been
called for redemption) be accompanied by payment in funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment Date
on the principal amount being surrendered for conversion. Except as provided in
the immediately preceding sentence and subject to the fourth paragraph of
Section 307, no payment or adjustment shall be made upon any conversion on
account of any interest accrued on the Securities surrendered for conversion or
on account of any dividends on the Common Stock issued upon conversion.
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 of the record holder or holders of such Common Stock
as and after such time. As promptly as practicable on or after the conversion
date, the Company shall issue and shall deliver at such office or agency 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 1303.
In the case of any 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 Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
SECTION 1303. Fractions of Shares.
No fractional share of Common Stock shall be issued upon conversion
of Securities. If more than one 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 Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the Closing Price
(as hereinafter defined) at the close of business on the day of conversion (or,
if such day is not a Trading Day (as hereafter defined), on the Trading Day
immediately preceding such day).
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SECTION 1304. Adjustment of Conversion Price.
(a) In case the Company shall pay or make a dividend or other
distribution on the Common Stock exclusively in Common Stock or shall pay or
make a dividend or other distribution on any other class of capital stock of the
Company which dividend or distribution includes Common Stock, the conversion
price in effect at the opening of business on the day following the date fixed
for the determination of shareholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such conversion price by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day following
the date fixed for such determination. For the purpose of this paragraph (a),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company.
(b) Subject to paragraph (g) of this Section, in case the Company
shall pay or make a dividend or other distribution on the Common Stock
consisting exclusively of, or shall otherwise issue to all holders of the Common
Stock, rights or warrants entitling the holders thereof to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (determined as provided in paragraph (h) of this Section) on the
date fixed for the determination of shareholders entitled to receive such rights
or warrants, the conversion price in effect at the opening of business on the
day following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (b), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company shall not issue any rights or warrants in
respect of shares of Common Stock held in the treasury of the Company.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and, conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the conversion price in effect at the opening
of business on the day following the day
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upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which subdivision or combination becomes effective.
(d) Subject to the last sentence of this paragraph (d) and to
paragraph (g) of this Section, in case the Company shall, by dividend or
otherwise, distribute to all holders of the Common Stock evidences of its
indebtedness, shares of any class of its capital stock, cash or other assets
(including securities, but excluding any rights or warrants referred to in
paragraph (b) of this Section, excluding any dividend or distribution paid
exclusively in cash and excluding any dividend or distribution referred to in
paragraph (a) of this Section), the conversion price shall be reduced by
multiplying the conversion price in effect immediately prior to the close of
business on the date fixed for the determination of shareholders entitled to
such distribution by a fraction of which the numerator shall be the Current
Market Price (determined as provided in paragraph (h) of this Section) on such
date less the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) on such
date of the portion of the evidences of indebtedness, shares of capital stock,
cash and other assets to be distributed applicable to one share of Common Stock
and the denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day following such
date. If the Board of Directors determines the fair market value of any
distribution for purposes of this paragraph (d) by reference to the actual or
when-issued trading market for any securities comprising part or all of such
distribution, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price pursuant to paragraph (h)
of this Section, to the extent possible. For purposes of this paragraph (d),
any dividend or distribution that includes shares of Common Stock, rights or
warrants to subscribe for or purchase shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock shall be deemed to
be (x) a dividend or distribution of the evidences of indebtedness, cash, assets
or shares of capital stock other than such shares of Common Stock, such rights
or warrants or such convertible or exchangeable securities (making any
conversion price reduction required by this paragraph (d)) immediately followed
by (y) in the case of such shares of Common Stock or such rights or warrants, a
dividend or distribution thereof (making any further conversion price reduction
required by paragraph (a) and (b) of this Section, except any shares of Common
Stock included in such dividend or distribution shall not be deemed "outstanding
at the close of business on the date fixed for such determination" within the
meaning of paragraph (a) of this Section), or (z) in the case of such
convertible or exchangeable securities, a dividend or distribution of the number
of shares of Common Stock as would then be issuable upon the conversion or
exchange thereof, whether or not the conversion or exchange of such securities
is subject to any conditions (making any further conversion price reduction
required by paragraph (a) of this Section, except the shares deemed to
constitute such dividend or distribution shall not be deemed "outstanding at the
close of business on the date fixed for such determination" within the meaning
of paragraph (a) of this Section).
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(e) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Common Stock cash (excluding any cash that is
distributed as part of a distribution referred to in paragraph (d) of this
Section or in connection with a transaction to which Section 1311 applies) in an
aggregate amount that, together with (A) the aggregate amount of any other
distributions to all holders of the Common Stock made exclusively in cash within
the 12 months preceding the date fixed for the determination of shareholders
entitled to such distribution and in respect of which no conversion price
adjustment pursuant to this paragraph (e) has been made previously and (B) 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) as of such date of determination of consideration payable in respect
of any tender offer by the Company or a Subsidiary for all or any portion of the
Common Stock consummated within the 12 months preceding such date of
determination and in respect of which no conversion price adjustment pursuant to
paragraph (f) of this Section has been made previously, exceeds the greater of
(I) 12.5% of the product of the Current Market Price (determined as provided in
paragraph (h) of this Section) on such date of determination times the number
of shares of Common Stock outstanding on such date or (II) the Company's
retained earnings on the date fixed for determining the stockholders entitled to
such distribution the conversion price shall be reduced by multiplying the
conversion price in effect immediately prior to the close of business on such
date of determination by a fraction of which the numerator shall be the Current
Market Price (determined as provided in paragraph (h) of this Section) on such
date less the amount of cash to be distributed at such time applicable to one
share of Common Stock and the denominator shall be such Current Market Price,
such reduction to become effective immediately prior to the opening of business
on the day after such date.
(f) In case a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall be consummated and such tender
offer shall involve 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) as of the last time (the "Expiration Time")
that tenders may be made pursuant to such tender offer (as it shall have been
amended) that, together with (A) 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 Time of the
other consideration paid in respect of any other tender offer by the Company or
a Subsidiary for all or any portion of the Common Stock consummated within the
12 months preceding the Expiration Time and in respect of which no conversion
price adjustment pursuant to this paragraph (f) has been made previously and (B)
the aggregate amount of any distributions to all holders of the Common Stock
made exclusively in cash within the 12 months preceding the Expiration Time and
in respect of which no conversion price adjustment pursuant to paragraph (e) of
this Section has been made previously, exceeds the greater of (I) 12.5% of the
product of the Current Market Price (determined as provided in paragraph (h) of
this Section) immediately prior to the Expiration Time times the number of
shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time or (II) the Company's retained earnings as of the Expiration
Time, the conversion price shall be reduced by
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multiplying the conversion price in effect immediately prior to the Expiration
Time by a fraction of which the numerator shall be (x) the product of the
Current Market Price (determined as provided in paragraph (h) of this Section)
immediately prior to the Expiration Time times the number of shares of Common
Stock outstanding (including any tendered shares at the Expiration Time minus
(y) the fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders upon consummation of such tender offer and
the denominator shall be the product of (A) such Current Market Price times (B)
such number of outstanding shares at the Expiration Time minus the number of
shares accepted for payment in such tender offer (the "Purchased Shares"), such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time; provided, that if the number of Purchased
Shares or the aggregate consideration payable therefor have not been finally
determined by such opening of business, the adjustment required by this
paragraph (f) shall, pending such final determination, be made based upon the
preliminarily announced results of such tender offer, and, after such final
determination shall have been made, the adjustment required by this paragraph
(f) shall be made based upon the number of Purchased Shares and the aggregate
consideration payable therefor as so finally determined.
(g) The reclassification of Common Stock into securities which
include securities other than Common Stock (other than any reclassification upon
a consolidation or merger to which Section 1311 applies) shall be deemed to
involve (i) 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 such distribution" within the meaning of paragraph (d) of this Section), and
(ii) 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
(c) of this Section).
Rights or warrants issued by the Company to all holders of the
Common Stock entitling the holders thereof to subscribe for or purchase shares
of Common Stock (either initially or under certain circumstances), which rights
or warrants (i) are deemed to be transferred with such shares of Common Stock,
(ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Event"), shall for purposes
of this Section 1304 not be deemed issued until the occurrence of the earliest
Trigger Event. If any such rights or warrants, including any such existing
rights or warrants distributed prior to the date of this Indenture are subject
to subsequent events, upon the occurrence of each of which such rights or
warrants shall become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the occurrence of each such event shall be
deemed to be such date of issuance and record date with respect to new rights or
warrants (and a termination or expiration of the
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existing rights or warrants without exercise by the holder thereof). In
addition, in the event of any distribution (or deemed distribution) of rights or
warrants, or any Trigger Event with respect thereto, that was counted for
purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 1304 was made, (1) in the case of any such
rights or warrant which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants which shall have expired or been terminated without exercise by any
holders thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
Notwithstanding any other provision of this Section 1304 to the
contrary, rights, warrants, evidences of indebtedness, other securities, cash or
other assets (including, without limitation, any rights distributed pursuant to
any stockholder rights plan) shall be deemed not to have been distributed for
purposes of this Section 1304 if the Company makes proper provision so that each
holder of Securities who converts a Security (or any portion thereof) after the
date fixed for determination of stockholders entitled to receive such
distribution shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable upon such conversions, the amount and kind
of such distributions that such holder would have been entitled to receive if
such holder had, immediately prior to such determination date, converted such
Security into Common Stock.
(h) For the purpose of any computation under this paragraph and
paragraphs (b), (d) and (e) of this Section, the current market price per share
of Common Stock (the "Current Market Price") on any date shall be deemed to be
the average of the daily Closing Prices for the 5 consecutive Trading Days
selected by the Company commencing not more than 20 Trading Days before, and
ending not later than, the date in question; provided, however, that (i) if the
"ex" date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price pursuant to
paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the 20th
Trading Day prior to the date in question and prior to the "ex" date for the
issuance or distribution requiring such computation, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the conversion
price is so required to be adjusted as a result of such other event, (ii) if the
"ex" date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price pursuant to
paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the "ex" date
for the issuance or distribution requiring such computation and on or prior to
the date in question, the Closing Price for each Trading Day on and after the
"ex" date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the conversion price is so
required to be adjusted as
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a result of such other event, and (iii) if the "ex" date for the issuance or
distribution requiring such computation is on or prior to the date in question,
after taking into account any adjustment required pursuant to clause (ii) of
this proviso, the Closing Price for each Trading Day on or after such "ex" date
shall be adjusted by adding thereto the amount of any cash and the fair market
value on the date in question (as determined by the Board of Directors in a
manner consistent with any determination of such value for purposes of paragraph
(d) or (e) of this Section , whose determination shall be conclusive and
described in a Board Resolution) of the evidences of indebtedness, shares of
capital stock or assets being distributed applicable to one share of Common
Stock as of the close of business on the day before such "ex" date. For the
purpose of any computation under paragraph (f) of this Section , the Current
Market Price on any date shall be deemed to be the average of the daily Closing
Prices for the 5 consecutive Trading Days selected by the Company commencing on
or after the latest (the "Commencement Date") of (i) the date 20 Trading Days
before the date in question, (ii) the date of commencement of the tender offer
requiring such computation and (iii) the date of the last amendment, if any, of
such tender offer involving a change in the maximum number of shares for which
tenders are sought or a change in the consideration offered, and ending not
later than the Expiration Time of such tender offer; provided, however, that if
the "ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the conversion price pursuant to
paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the
Commencement Date and prior to the Expiration Time for the tender offer
requiring such computation, the Closing Price for each Trading Day prior to the
"ex" date for such other event shall be adjusted by multiplying such Closing
Price by the same fraction by which the conversion price is so required to be
adjusted as a result of such other event. The closing price for any Trading Day
(the "Closing Price") shall be the last reported sales price regular way 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 on the New York Stock
Exchange or, if the Common Stock is not listed or admitted to trading on such
exchange, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the Nasdaq Stock Market's National
Market or, if the Common Stock is not listed or admitted to trading on any
national securities exchange or quoted on such National Market, 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. For purposes of this paragraph, the term "Trading Day"
means each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day
on which securities are generally not traded on the applicable securities
exchange or in the applicable securities market and the term "'ex' date," (i)
when used with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Prices were obtained without the right to
receive such issuance or distribution, (ii) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective, and
(iii) when used with respect to any tender offer means the first date on which
the Common Stock trades regular way on such exchange
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or in such market after the last time that tenders may be made pursuant to such
tender offer (as it shall have been amended).
(i) The Company may make such reductions in the conversion price, in
addition to those required by paragraphs (a), (b), (c), (d), (e) and (f) of this
Section, as it considers to be advisable (as evidenced by a Board Resolution)
in order that any event treated for federal income tax purposes as a dividend of
stock or stock rights shall not be taxable to the recipients or, if that is not
possible, to diminish any income taxes that are otherwise payable because of
such event.
(j) No adjustment in the conversion price shall be required unless
such adjustment (plus any other adjustments not previously made by reason of
this paragraph (j)) would require an increase or decrease of at least 1% in the
conversion price; provided, however, that any adjustments which by reason of
this paragraph (j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
(k) Notwithstanding any other provision of this Section 1304, no
adjustment to the conversion price shall reduce the conversion price below the
then par value per share of the Common Stock, and any such purported adjustment
shall instead reduce the conversion price to such par value. The Company hereby
covenants not to take any action to increase the par value per share of the
Common Stock.
SECTION 1305. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 1304 and shall prepare an Officers' Certificate
signed by the Treasurer of the Company setting forth the adjusted
conversion price and showing in reasonable detail the facts upon which
such adjustment is based, and such certificate shall forthwith be filed
(with a copy to the Trustee) at each office or agency maintained for the
purpose of conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall forthwith be prepared,
and as soon as practicable after it is prepared, such notice shall be
mailed by the Company to all Holders at their last addresses as they shall
appear in the Security Register.
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SECTION 1306. 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 a conversion price
adjustment pursuant to paragraph (e) of Section 1304; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any other rights (excluding shares of
capital stock or option for capital stock issued pursuant to a benefit
plan for employees, officers or directors of the Company); or
(c) of any reclassification of the Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer for
all or a portion of the outstanding shares of Common Stock (or shall amend
any such tender offer to change the maximum number of shares being sought
or the amount or type of consideration being offered therefor);
then the Company shall cause to be filed (with a copy to the Trustee) at each
office or agency maintained pursuant to Section 1002, and shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 21 days (or 11 days in any case specified in clause
(a), (b) or (e) above) prior to the applicable record, effective or expiration
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or granting of rights
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record who will be entitled to such dividend,
distribution, rights or warrants are to be determined, (y) the date on which
such reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the
date on which such tender offer commenced, the date on which such tender offer
is scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto). Neither
the
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failure to give any such notice nor any defect therein shall affect the legality
or validity of any action described in clauses (a) through (e) of this Section
1306.
SECTION 1307. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the authorized but unissued Common Stock or out of the
Common Stock held in treasury, 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. Shares of Common Stock issuable upon
conversion of outstanding Securities shall be issued out of the Common Stock
held in Treasury to the extent available.
SECTION 1308. Taxes on Conversions.
The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
SECTION 1309. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 1308, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
SECTION 1310. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
SECTION 1311. Provisions of Consolidation, Merger or Sale of Assets.
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock) or any sale or
transfer of all or substantially all of the assets of the Company, the Person
formed by such consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of
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each Security then Outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 1301, to
convert such Security only into the kind and amount of securities, cash and
other property, if any, receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock into which such
Security might have been converted immediately prior to such consolidation,
merger, sale or transfer, assuming such holder of Common Stock (i) is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be (a "Constituent Person"), or an Affiliate of a Constituent Person
and (ii) failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer is not the same for each share of Common Stock held immediately
prior to such consolidation, merger, sale or transfer by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("nonelecting share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares). 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 shall similarly apply to successive consolidations,
mergers, sales or transfers.
SECTION 1312. Trustee's Disclaimer.
The Trustee and any other conversion agent shall not at any time be
under any duty or responsibility to any holder of Securities to determine
whether any facts exist that may require any adjustment of the conversion price
or notice thereof, or with respect to the nature or extent or calculation of any
such adjustment when made, or with respect to the method employed, or herein or
in any supplemental indenture provided to be employed, in making the same and
shall be protected in relying upon the Officers' Certificate with respect
thereto which the Company is required to file with the Trustee pursuant to
Section 1305. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, that may at any time
be issued or delivered upon the conversion of any Security; and the Trustee and
any other conversion agent make no representations with respect thereto or any
actions or omission by the Company in such regard. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any debenture for the
purpose of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article Thirteen.
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The Trustee shall not be under any responsibility to determine or
verify the correctness of any provisions contained in any supplemental indenture
executed pursuant to Section 1311, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 1311.
ARTICLE FOURTEEN
Right to Require Repurchase
SECTION 1401. Right to Require Repurchase.
In the event that there shall occur a Repurchase Event (as defined
in Section 1406), then each Holder shall have the right, at such Holder's
option, to require the Company to purchase, and upon the exercise of such right,
the Company shall, subject to the provisions of Section 1203, purchase, all or
any part of such Holder's Securities on the date (the "Repurchase Date") that is
30 days after the date the Company gives notice of the Repurchase Event as
contemplated in Section 1402(a) at a price (the "Repurchase Price") equal to
100% of the principal amount thereof, together with accrued and unpaid interest
to the Repurchase Date.
SECTION 1402. Notice; Method of Exercising Repurchase Right.
(a) On or before the 15th day after the occurrence of a Repurchase
Event, the Company, or at the written request of the Company received by the
Trustee at least 40 days prior to the Repurchase Date, the Trustee (in the name
and at the expense of the Company), in its capacity as tender agent (for which
services it shall be reasonably compensated), shall give notice of the
occurrence of the Repurchase Event and of the repurchase right set forth herein
arising as a result thereof by first-class mail, postage prepaid, to the Trustee
and to each Holder of the Securities at such Holder's address appearing in the
Security Register. 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 event constituting the Repurchase Event and the date
thereof,
(2) the Repurchase Date,
(3) the date by which the repurchase right must be exercised,
(4) the Repurchase Price, and
(5) the instructions a Holder must follow to exercise a repurchase
right.
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No failure of the Company to give the foregoing notice shall limit
any Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Repurchase
Event.
(b) To exercise a repurchase right, a Holder shall deliver to the
Company (or an agent designated by the Company for such purpose in the notice
referred to in (a) above) and to the Trustee on or before the close of business
on the Repurchase Date (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 Security or Securities (or portion of a Security) to be repurchased, and
a statement that an election to exercise the repurchased right is being made
thereby, and (ii) the Security or Securities with respect to which the
repurchase right is being exercised, duly endorsed for transfer to the Company.
Such written notice shall be irrevocable. If the Repurchase Date falls between
any Regular Record Date and the next succeeding Interest Payment Date,
Securities to be repurchased must be accompanied by payment from the Holder of
an amount equal to the interest thereon which the registered Holder thereof is
to receive on such Interest Payment Date.
In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall on the Repurchase Date pay
or cause to be paid in cash to the Holder thereof the Repurchase Price of the
Security or Securities as to which the repurchase right had been exercised. In
the event that a repurchase right is exercised with respect to less than the
entire principal amount of a surrendered Security, the Company shall execute and
deliver to the Trustee and the Trustee shall authenticate for issuance in the
name of the Holder a new Security or Securities in the aggregate principal
amount of the unrepurchased portion of such surrendered security.
SECTION 1403. Deposit of Repurchase Price.
On or prior to the Repurchase Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money in same day funds sufficient to pay the Repurchase Price of the
Securities which are to be repaid on the Repurchase Date.
SECTION 1404. Securities Not Repurchased on Repurchase Date.
If any Security surrendered for repurchase shall not be so paid on
the Repurchase Date, the principal shall, until paid, bear interest to the
extent permitted by applicable law from the Repurchase Date at the rate per
annum borne by such Security.
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SECTION 1405. Securities Repurchased in Part.
Any Security which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
SECTION 1406. Certain Definitions.
For purposes of this Article:
(a) A "Repurchase Event" shall have occurred upon the occurrence of a
Change in Control or Termination of Trading after the date of this Indenture and
on or prior to December 15, 2001.
(b) A "Change in Control" shall occur when :
(i) all or substantially all of the Company's assets are sold as
an entirety to any person or related group of persons (other than a
Permitted Holder);
(ii) there shall be consummated any consolidation or merger of
the Company (A) in which the Company is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly owned
subsidiary of the Company in which all shares of Common Stock outstanding
immediately prior to the effectiveness thereof are changed into or
exchanged for the same consideration) or (B) pursuant to which the Common
Stock would be converted into cash, securities or other property, in each
case, other than a consolidation or merger of the Company in which the
holders of the Common Stock immediately prior to the consolidation or
merger have, directly or indirectly, at least a majority of the total
voting power of all classes of capital stock entitled to vote generally in
the election of directors of the continuing or surviving corporation
immediately after such consolidation or merger in substantially the same
proportion as their ownership of Common Stock immediately before such
transaction;
(iii) any person, or any persons acting together which would
constitute a "group" for purposes of Section 13(d) of the Exchange Act (a
"Group"), together with any Affiliates thereof, shall beneficially own (as
defined in Rule 13d-3 under the Exchange Act) at least 50% of the total
voting power of
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all classes of capital stock of the Company entitled to vote generally in
the election of directors of the Company; or
(iv) at any time during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election
by such Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of 66 2/3% of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or
(v) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution.
(c) A "Termination of Trading" shall occur if the Common Stock (or other
common stock into which the Securities are then convertible) is neither listed
for trading on a U.S. national securities exchange nor approved for trading on
an established automated over-the-counter trading market in the United States.
-----------------------------
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This instrument may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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.
FPA MEDICAL MANAGEMENT, INC.
By /s/ SETH FLAM
_______________________________
Name:
Title:
Attest:
/s/ JAMES A. LEBOVITZ
_______________________________
FIRST UNION NATIONAL BANK,
as Trustee
By /s/ GEORGE J. RAYZIS
_______________________________
Name: GEORGE J. RAYZIS
Title: Vice President
Attest:
/s/
_______________________________
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State of California )
County of San Diego ) ss.
)
On the 16th day of December, 1996, before me personally came Seth
Flam, to me known, who, being by me duly sworn, did depose and say that he is an
officer of FPA Medical Management, Inc., 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 Seal] /s/ ANGELA RIVERA
--------------------------------
)
) ss.:
)
On the 18th day of December, 1996, before me personally came George
Rayzis, to me known, who, being by me duly sworn, did depose and say that he is
V.P. of First Union National Bank, a national banking corporation 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 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 Seal] /s/ JOANN FANTINI
-----------------------------
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EXHIBIT A
[FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
OF SECURITIES]
CERTIFICATE FOR EXCHANGE OR TRANSFER
Re: 6 1/2% Convertible Subordinated Debentures due 2001
This Certificate relates to $_________ principal amount of
Securities held in *____________ book-entry or *____________ definitive form by
_________ (the "Transferor").
The Transferor*:
/ / has requested the Trustee by written order to deliver in exchange
for its beneficial interest in a Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
/ / has requested the Trustee by written order to deliver in exchange
for its Security or Securities a beneficial interest in a Global Security held
by the Depositary in a principal amount equal to the aggregate principal amount
of such Security or Securities; or
/ / has requested the Trustee by written order to exchange or register
the transfer of a Security or Securities.
In connection with such request and in respect of each such
security, the Transferor does hereby certify to the Company and the Trustee that
Transferor is familiar with the Indenture relating to the above captioned
Debentures and, as provided in Section 305 of such Indenture, the transfer of
this Security does not require registration under the Securities Act (as defined
below) because*:
/ / Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 305(b)(ii)(A) or Section
305(f)(i)(A) of the Indenture).
/ / Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A or pursuant to an exemption
from registration in accordance with Regulation S under the Securities Act (in
satisfaction of Section 305(b)(ii)(B), Section 305(c)(i), Section 305(d)(i),
Section 305(f)(i)(B), Section 305(g)(iii)
--------
* Check applicable box.
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or Section 305(h)(iii) of the Indenture). An opinion of counsel to the effect
that such transfer does not require registration under the Securities Act
accompanies this Certificate (in satisfaction of Section 305(b)(ii)(B), Section
305(c)(i), Section 305(d)(i), Section 305(f)(i)(B), Section 305(g)(iii) or
Section 305(h)(iii) of the Indenture).
/ / Such Security is being transferred in accordance with Rule 144 under
the Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 305(b)(ii)(B), Section 305(f)(i)(B)
or Section 305(k)(ii) of the Indenture). If such Security is being transferred
in accordance with Rule 144 under the Securities Act, an opinion of counsel to
the effect that such transfer does not require registration under the Securities
Act accompanies this Certificate (in satisfaction of Section 305(b)(ii)(B),
Section 305(f)(i)(B) or Section 305(k)(ii) of the Indenture).
/ / Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A, 144 or Regulation S under the Securities Act. An opinion
of counsel to the effect that such transfer does not require registration under
the Securities Act accompanies this Certificate (in satisfaction of Section
305(b)(ii)(C) or Section 305(f)(i)(C) of the Indenture).
You are entitled to rely upon this certificate and you are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
_____________________________________
[INSERT NAME OF TRANSFEROR]
By:__________________________________
Date:_______________
A-2
<PAGE> 1
Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
Dated as of December 13, 1996
relating to
$75,000,000 in Aggregate Principal Amount
of 6 1/2% Convertible Senior Subordinated
Debentures due 2001
by and between
FPA Medical Management, Inc.
and
Smith Barney Inc.,
Bear, Stearns & Co. Inc.,
Lehman Brothers Inc.
Oppenheimer & Co., Inc.,
and
Needham & Company, Inc.,
as Initial Purchasers
<PAGE> 2
This Registration Rights Agreement (the "Agreement") is made and
entered into as of December 13, 1996, by and between FPA Medical Management,
Inc., a Delaware corporation (the "Company") and Smith Barney Inc., Bear,
Stearns & Co. Inc., Lehman Brothers Inc., Oppenheimer & Co., Inc. and Needham &
Company, Inc. (the "Initial Purchasers"), who will purchase $75,00,000 in
aggregate principal amount of 6 1/2% Convertible Subordinated Debentures due
2001 (the "Debentures") of the Company (excluding up to an additional
$11,250,000 aggregate principal amount that may be purchased by the Initial
Purchasers pursuant to their over-allotment option) pursuant to the Purchase
Agreement dated December 13, 1996 (the "Purchase Agreement"), between the
Company and the Initial Purchasers. In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in the Purchase Agreement. All defined terms used but not defined herein
shall have the meanings ascribed to them in the Indenture (as defined herein).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended.
Closing Date: The date on which all the Debentures are first sold by
the Company to the Initial Purchasers pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Common Stock: The Common Stock, par value $.002 per share, of the
Company.
Damages Payment Date: With respect to the Debentures or the Common
Stock, as applicable, each Interest Payment Date as defined in the Indenture.
Effectiveness Target Date: As defined in Section 4.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Debentures to (i) certain "qualified institutional buyers"
(as such term is defined in Rule 144A under the Act), (ii) to certain persons in
offshore transactions in reliance on Regulation S under the Act and (iii) to a
limited number of "accredited investors" as defined in Rule 501(a)(1), (2), (3)
or (7).
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, to be dated as of December 18, 1996, among
the Company and First Union National Bank, as trustee (the "Trustee"), pursuant
to which the Debentures are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture.
NASD: National Association of Securities Dealers, Inc.
<PAGE> 3
Offering Memorandum: The Offering Memorandum, dated December 13,
1996, and all amendments and supplements thereto, relating to the Debentures and
prepared by the Company pursuant to the Purchase Agreement.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Preliminary Prospectus: As defined in Section 3(g).
Prospectus: The prospectus included in the Shelf Registration
Statement, as amended or supplemented by any Prospectus Supplement with respect
to the terms of the offering of any portion of the Transfer Restricted
Securities (as defined herein) covered by the Shelf Registration Statement and
by all other amendments and supplements to the prospectus, including
post-effective amendments, and all material which may be incorporated by
reference into such prospectus.
Prospectus Supplement: As defined in Section 5(b).
Record Holder: (i) With respect to any Damages Payment Date relating
to the Debentures, each Person who is registered on the books of the Registrar
as the holder of Debentures on the record date with respect to the Interest
Payment Date on which such Damages Payment Date shall occur and (ii) with
respect to any Damages Payment Date relating to the Common Stock, each Person
who is a holder of record of such Common Stock fifteen days prior to the Damages
Payment Date.
Registration Expenses: As defined in Section 6(a).
Shelf Registration Statement: As defined in Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Debenture and share of Common
Stock of the Company issuable upon conversion of a Debenture, until each such
Debenture or share (i) has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement covering it,
(ii) is distributed to the public pursuant to Rule 144 or (iii) may be sold or
transferred pursuant to Rule 144(k) (or any similar provisions then in force)
under the Securities Act or otherwise.
Underwriter: Any underwriter, placement agent, selling broker,
dealer manager, qualified independent underwriter or similar securities industry
professional.
Underwritten Registration or Underwritten Offering: An offering in
which securities of the Company are sold to an Underwriter or with the
assistance of such Underwriter for reoffering to the public on a firm commitment
or best efforts basis.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
2
<PAGE> 4
SECTION 3. SHELF REGISTRATION
(a) The Company shall use its best efforts to file or cause to be
filed with the Commission on or prior to 30 days after the Closing Date, a shelf
registration statement pursuant to Rule 415 (as may then be amended) under the
Act (the "Shelf Registration Statement") on Form S-1 or Form S-3, if the use of
such form is then available and as determined by the Company, to cover resales
of Transfer Restricted Securities by the Holders thereof who satisfy certain
conditions relating to the provision of information in connection with the Shelf
Registration Statement. The Holders of such Transfer Restricted Securities shall
have provided the information required pursuant to Section 3(g) hereof. The
Company shall use its reasonable best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or prior to 90 days
after the Closing Date. The Company shall use its reasonable best efforts to
keep such Shelf Registration Statement continuously effective for a period
ending three years from the effective date thereof or such shorter period that
will terminate when each of the Transfer Restricted Securities covered by the
Shelf Registration Statement shall cease to be a Transfer Restricted Security;
provided that the Company shall not be obligated to keep the Shelf Registration
Statement effective as to any period with respect to which the Company has
received a written opinion, which has been furnished to and is reasonably
acceptable to the Initial Purchasers, from the Company's counsel, Ballard Spahr
Andrews & Ingersoll, or other counsel designated by the Company and reasonably
acceptable to the Initial Purchasers ("Company Counsel"), to the effect that the
Transfer Restricted Securities can be freely offered and sold in the public
markets without the continued effectiveness of the Shelf Registration Statement.
The Company further agrees to use its reasonable best efforts to prevent the
happening of any event that would cause the Shelf Registration Statement to
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or to be not effective and usable for resale of the Transfer
Restricted Securities during the period that such Shelf Registration Statement
is required to be effective and usable.
Upon the occurrence of any event that would cause the Shelf
Registration Statement (i) to contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) to be not effective and usable for
resale of Transfer Restricted Securities during the period that such Shelf
Registration Statement is required to be effective and usable, the Company upon
knowledge of such an event, shall as promptly as practicable file an amendment
to the Shelf Registration Statement, in the case of clause (i), correcting any
such misstatement or omission, and in the case of either clause (i) or (ii), use
its best efforts to cause such amendment to be declared effective and such Shelf
Registration Statement to become usable as soon as practicable thereafter.
Notwithstanding anything to the contrary in this Section 3, subject
to compliance with Sections 4 and 5(b), if applicable, the Company may prohibit
offers and sales of Transfer Restricted Securities pursuant to the Shelf
Registration Statement at any time if (A) (i) it is in possession of material
non-public information, (ii) the Board of Directors of the Company determines
(based on advice of counsel) that such prohibition is necessary in order to
avoid a requirement to disclose such material non-public information and (iii)
the Board of Directors of the Company determines in good faith that disclosure
of such material non-public information would not be in the best interests of
the Company and its stockholders or (B) the Company has made a public
announcement relating to an acquisition or business combination transaction
including the Company and/or one or more of its subsidiaries (i) that is
material to the Company and its subsidiaries taken as a whole and (ii) the Board
of Directors of the Company determines in good faith that offers and sales of
Transfer Restricted Securities pursuant to the Shelf Registration Statement
prior to the consummation of such transaction (or such earlier date as the Board
of Directors shall determine) is not in the best interests of the Company and
its stockholders (the period during which any such prohibition of offers and
sales of Transfer Restricted Securities pursuant to the Shelf Registration
Statement is in effect pursuant to clause (A) or (B) of this subparagraph (a) is
referred to herein as a "Suspension Period"). A Suspension Period shall commence
on and include the date on which the
3
<PAGE> 5
Company provides written notice to Holders of Transfer Restricted Securities
covered by the Shelf Registration Statement that offers and sales of Transfer
Restricted Securities cannot be made thereunder in accordance with this Section
3 and shall end on the date on which each Holder of Transfer Restricted
Securities covered by the Shelf Registration Statement either receives copies of
a Prospectus Supplement contemplated by Section 5(b) or is advised in writing by
the Company that offers and sales of Transfer Restricted Securities pursuant to
the Shelf Registration Statement and use of the Prospectus may be resumed.
(b) None of the Company nor any of its security holders (other than
the Holders of Transfer Restricted Securities in such capacity and other
shareholders having registration rights permitting them to participate therein,
as disclosed in the Offering Memorandum) shall have the right to include any of
the Company's securities in the Shelf Registration Statement.
(c) If the Holders of a majority of the outstanding Transfer
Restricted Securities so elect (with holders of Common Stock constituting
Transfer Restricted Securities being deemed to be Holders of the aggregate
principal amount of Debentures converted into such Common Stock for purposes of
such calculation), an offering of Transfer Restricted Securities pursuant to the
Shelf Registration Statement may be effected in the form of an Underwritten
Offering. Such election shall be evidenced by a written notice (the
"Underwriting Notice") delivered to the Company. The Holders of the Transfer
Restricted Securities to be registered shall pay all underwriting discounts and
commissions of such Underwriters, and the Company shall not be obligated to pay
any of the expenses of such Underwriters.
(d) If any of the Transfer Restricted Securities covered by the
Shelf Registration Statement are to be sold in an Underwritten Offering, the
Underwriter(s) that will administer the offering will be selected by the Holders
of a majority of the outstanding Transfer Restricted Securities (with holders of
Common Stock constituting Transfer Restricted Securities being deemed to be
Holders of the aggregate principal amount of Debentures converted into such
Common Stock for purposes of such calculation); provided, however, that such
Underwriter(s) shall be reasonably satisfactory to the Company.
(e) Each Holder whose Transfer Restricted Securities are covered by
a Shelf Registration Statement filed pursuant to this Section 3 agrees, upon the
request of the Underwriter(s) in any Underwritten Offering, not to effect any
sale or distribution of securities of the Company of the same class as the
securities included in such Shelf Registration Statement, for a period of up to
90 days beginning on the date any such Underwritten Offering made pursuant to
such Shelf Registration Statement commences, to the extent timely notified in
writing by such Underwriter(s).
(f) The Company agrees not to effect any public or private offer,
sale or distribution of securities of the same quality and nature as the
Transfer Restricted Securities to be registered in an Underwritten Offering
during the 90-day period (the "Lock-up Period") beginning on the date any such
Underwritten Offering made pursuant to the Shelf Registration Statement
commences, to the extent timely notified in writing by the Underwriter(s)
(except as part of such registration, if permitted, pursuant to registrations on
Forms S-4 or S-8 or any successor form to such Forms or to comply with the
Company's obligations under The Registration Rights Agreement dated as of
November 29, 1996 between the Company and Foundation Health Corporation), unless
the Underwriter(s) shall consent in writing to a shorter period of time;
provided, however, that any such agreement shall permit (A) the issuance by the
Company of any shares of Common Stock issued to employees of the Company or to
any other eligible person pursuant to any employee stock option plan, stock
ownership plan, stock bonus plan or stock compensation plan of the Company in
effect on the date of such Underwritten Offering, (B) the issuance by the
Company of Common Stock upon the conversion of securities, or the exercise of
options or warrants, outstanding at the date of such Underwritten Offering and
(C) the issuance by the Company of any such securities in connection with an
acquisition transaction if the transferee or transferees of such securities
agree during the Lock-up Period not to publicly offer or sell such securities
without the prior written consent of such Underwriter(s). Notwithstanding the
foregoing, the Company shall be entitled to suspend its lock-up
4
<PAGE> 6
obligations under this Section 3(f) for a period not to exceed 180 days after
the delivery of the Underwriting Notice in order to complete an issuance and
sale of securities provided that it notifies the sender of the Underwriting
Notice within five business days of its receipt of such notice.
(g) No Holder of Transfer Restricted Securities may include any of
its Transfer Restricted Securities in any Shelf Registration Statement pursuant
to this Agreement unless such Holder (a "Selling Holder" or collectively, the
"Selling Holders") furnishes to the Company in writing, within 10 business days
after receipt of a request therefor, such information as the Company may
reasonably request for use in connection with any Shelf Registration Statement
or Prospectus or preliminary Prospectus (a "Preliminary Prospectus") included
therein. After the first such request for information by the Company, it shall
be the sole responsibility of each Holder to notify the Company of any change of
address or change of ownership of the Transfer Restricted Securities of such
Holder.
SECTION 4. LIQUIDATED DAMAGES
(a) If (i) the Shelf Registration Statement is not filed with the
Commission on or prior to 30 days after the Closing Date, (ii) the Shelf
Registration Statement has not been declared effective by the Commission within
90 days after the Closing Date (the "Effectiveness Target Date"), or (iii) the
Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by an
additional registration statement filed and declared effective) or useable for
resale for a period of time (including any Suspension Period) which shall exceed
60 days in the aggregate in any of the one-year periods ending on the first,
second or third anniversaries of the Closing Date (30 days in the case of the
one-year period ending on the first anniversary of the Closing Date), or which
shall exceed 30 days in any calendar quarter within any of such one-year periods
(each such event referred to in clauses (i) through (iii), a "Registration
Default"), the Company will pay liquidated damages to each Holder of Transfer
Restricted Securities who has complied with such Holder's obligations under this
Agreement; provided, however, that the Company shall have no obligation to pay
liquidated damages as provided in this Section 4(a) as to any period with
respect to which the Company has received a written opinion from Company
Counsel, a copy of which shall have been furnished to the Initial Purchasers and
shall be reasonably acceptable thereto, to the effect that Transfer Restricted
Securities can be freely offered and sold in the public markets without the
continued effectiveness of the Shelf Registration Statement. The amount of
liquidated damages payable during any period during which a Registration Default
shall have occurred and be continuing is that amount which is equal to
one-quarter of one percent (25 basis points) per annum per $1,000 principal
amount of Debentures or $0.01 per week per share of Common Stock (subject to
adjustment in the event of stock splits, stock recombinations, stock dividends
and the like) constituting Transfer Restricted Securities for each subsequent
90-day period until the applicable registration statement is filed and the
applicable registration statement is declared effective, or the Shelf
Registration Statement again becomes effective or usable, as the case may be, up
to a maximum amount of liquidated damages of $0.25 per week per $1,000 principal
amount of Debentures or $0.05 per week per share (subject to adjustment as set
forth above) of Common Stock constituting Transfer Restricted Securities. The
Company shall notify the Trustee and the Initial Purchasers within one business
day after each and every date on which a Registration Default occurs. All
accrued liquidated damages shall be paid to Record Holders by wire transfer of
immediately available funds or by federal funds check by the Company on each
Damages Payment Date. Following the cure of all Registration Defaults,
liquidated damages will cease to accrue with respect to such Registration
Default.
All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
5
<PAGE> 7
The parties hereto agree that the liquidated damages provided in
this Section 4 constitute a reasonable estimate of the damages that will be
incurred by Holders of Transfer Restricted Securities by reason of the failure
of the Shelf Registration Statement to be filed, declared effective or to remain
effective, as the case may be.
SECTION 5. REGISTRATION PROCEDURES
In connection with the Shelf Registration Statement, the Company
will use its best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution or disposition thereof, and pursuant thereto the
Company will as expeditiously as possible after the Closing Date:
(a) on or prior to the date 30 days after the Closing Date, prepare
and file with the Commission a Shelf Registration Statement relating to the
registration on Form S-1 or Form S-3, if the use of such form is then available
and as determined by the Company, for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of distribution
thereof and shall include all financial statements required to be included or
incorporated by reference therein; cooperate and assist in any filings required
to be made with the NASD and use its reasonable best efforts to cause such Shelf
Registration Statement to become effective and approved by such governmental
agencies or authorities as may be necessary to enable the Selling Holders to
consummate the disposition of such Transfer Restricted Securities; provided,
however, that before filing a Shelf Registration Statement or any Prospectus, or
any amendments or supplements thereto, the Company will furnish to the Initial
Purchasers, each Selling Holder who may have requested the same in writing and
the Underwriter(s), if any, copies of all such documents proposed to be filed
(except that the Company shall not be required to furnish any exhibits to such
documents, including those incorporated by reference, unless so requested by an
Initial Purchaser, Selling Holder or Underwriter in writing), and the Company
will not file any Shelf Registration Statement or amendment thereto or any
Prospectus or any supplement thereto to which (i) the Initial Purchasers or the
Underwriter(s), if any, shall reasonably object or (ii) if there are no
Underwriters, the Initial Purchasers or the Holders of a majority of the
outstanding Transfer Restricted Securities shall reasonably object (with holders
of Common Stock constituting Transfer Restricted Securities being deemed to be
Holders of the aggregate principal amount of Debentures converted into such
Common Stock for purposes of such calculation), in each such case within five
business days after the receipt thereof. An Initial Purchaser, Holder or
Underwriter, if any, shall be deemed to have reasonably objected to such filing
if the Shelf Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading which misstatement or
omission is specifically identified to the Company in writing within such five
business days;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective for the applicable
period set forth in Section 3(a) hereof; cause the Prospectus to be supplemented
by any required supplement thereto (a "Prospectus Supplement"), and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply with
the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Shelf Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Shelf Registration
Statement, Prospectus or Prospectus Supplement;
(c) if requested in writing by the Selling Holders of Transfer
Restricted Securities, or if the Transfer Restricted Securities are being sold
in an Underwritten Offering, the Underwriter(s) of such Underwritten Offering,
promptly incorporate in the Prospectus, any Prospectus Supplement or
post-effective amendment to the Shelf Registration Statement such information as
the Underwriters and/or the Selling Holders of Transfer Restricted Securities
agree should be included therein relating to the plan
6
<PAGE> 8
of distribution of the Transfer Restricted Securities, including, without
limitation, information with respect to the principal amount of Debentures
and/or the number of shares of Common Stock being sold to such Underwriter(s),
the purchase price being paid therefor and any other terms with respect to the
offering of the Transfer Restricted Securities to be sold in such offering; and
make all required filings of such Prospectus, Prospectus Supplement or
post-effective amendment as soon as practicable after the Company is notified of
the matters to be incorporated in such Prospectus, Prospectus Supplement or
post-effective amendment;
(d) advise the Initial Purchasers, the Underwriter(s), if any, and
Selling Holders promptly and, if requested by such Persons, to confirm such
advice in writing, (i) when the Prospectus or any Prospectus Supplement or
post-effective amendment to the Shelf Registration Statement has been filed,
and, with respect to the Shelf Registration Statement or any post-effective
amendment thereto, when the same has become effective, (ii) of any request by
the Commission for amendments to the Shelf Registration Statement or amendments
or supplements to the Prospectus or for additional information relating thereto,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (iv) if at any
time the representations and warranties of the Company contemplated by paragraph
(m)(i) below cease to be true and correct, and (v) of the existence of any fact
and the happening of any event that makes any statement of a material fact made
in the Shelf Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Shelf Registration
Statement or the Prospectus in order to make the statements therein not
misleading. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer Restricted
Securities under state securities or Blue Sky laws, the Company shall use its
reasonable best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(e) promptly following the filing of any document that is to be
incorporated by reference into the Shelf Registration Statement or the
Prospectus subsequent to the initial filing of the Shelf Registration Statement,
provide copies of such document (excluding exhibits, unless requested by an
Initial Purchaser or a Selling Holder in writing) to the Initial Purchasers and
each Selling Holder who may have requested the same in writing;
(f) furnish to each Initial Purchaser, each Selling Holder and each
of the Underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein and
all exhibits (excluding exhibits to documents incorporated by reference therein
unless requested by such Initial Purchaser, Selling Holder or Underwriter);
(g) deliver to each Initial Purchaser, each Selling Holder and each
of the Underwriter(s), if any, without charge, as many copies of any Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto as such
Persons may reasonably request; the Company consents to the use of any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto by each of the Selling Holders and each of the Underwriter(s), if any,
in connection with the public offering and the sale of the Transfer Restricted
Securities covered by any Preliminary Prospectus and the Prospectus or any
amendments or supplements thereto; provided that such use of the Preliminary
Prospectus or Prospectus, and such offering and sale, conforms to the Plan of
Distribution set forth in the Prospectus and complies with all applicable laws;
(h) prior to any public offering of Transfer Restricted Securities,
cooperate with the Selling Holders, the Underwriter(s), if any, and their
respective counsel in connection with the registration
7
<PAGE> 9
and qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the Selling Holders or Underwriter(s) may
request and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdiction of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided, however, that the Company
shall not be required (i) to register or qualify as a foreign corporation where
it is not now so qualified or (ii) to take any action that would subject it to
the service of process in suits, other than as to matters and transactions
relating to the Shelf Registration Statement, in any jurisdiction where it is
not now so subject;
(i) cooperate with the Selling Holders and the Underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Selling Holders or the
Underwriter(s), if any, may request at least two business days prior to any sale
of Transfer Restricted Securities;
(j) use its best efforts to cause the Transfer Restricted Securities
covered by the Shelf Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the Underwriter(s), if any, to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in clause (h) above;
(k) if any fact or event contemplated by clause (d)(v) above shall
exist or have occurred, prepare a post-effective amendment or supplement to the
Shelf Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted 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 not misleading;
(l) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Shelf Registration Statement and
provide the Trustee under the Indenture and/or the transfer agent for the Common
Stock with certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with the Depository Trust Company;
(m) enter into such agreements (including an underwriting agreement)
and take all such other actions in connection therewith as may reasonably be
required in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to the Shelf Registration Agreement, in
connection with an Underwritten Registration, and (i) make such representations
and warranties to the Selling Holders and the Underwriter(s), in form, substance
and scope as they may reasonably request and as are customarily made by issuers
to Underwriters in Underwritten Offerings and covering matters, including, but
not limited to, those set forth in the Purchase Agreement; (ii) obtain opinions
of counsel for the Company and updates thereof in customary form and covering
matters reasonably requested by the Underwriter(s) of the type customarily
covered in legal opinions to Underwriters in connection with Underwritten
Offerings addressed to each Selling Holder and the Underwriter requesting the
same and covering the matters as may be reasonably requested by such Selling
Holders and Underwriters; (iii) obtain "cold comfort" letters and updates
thereof from the Company's independent certified public accountants addressed to
the Selling Holders of Transfer Restricted Securities and the Underwriters
requesting the same, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters to Underwriters in
connection with Underwritten Offerings; (iv) set forth in full or incorporate by
reference in the underwriting agreement the indemnification provisions and
procedures of Section 7 hereof with respect to all parties to be indemnified
pursuant to said Section ; and (v) deliver such documents and certificates as
may be reasonably requested by the Selling Holders of the Transfer Restricted
Securities being sold or the Underwriter(s) of such Underwritten Offering to
evidence compliance with clause (i) above and with any customary conditions
contained in the underwriting agreement entered into
8
<PAGE> 10
by the Company pursuant to this clause (m). The above shall be done at or prior
to each closing under such underwriting agreement, as and to the extent required
thereunder;
(n) make available at reasonable times and in a reasonable manner to
a representative of the Holders of the Transfer Restricted Securities, any
Underwriter participating in any disposition pursuant to such Shelf Registration
Statement and any attorney or accountant retained by such Selling Holders or any
of the Underwriters representatives of the Company for discussion of customary
due diligence matters, and furnish such documents and financial and other
information as may be reasonably requested by such persons in connection with
such due diligence; provided, however, that such representatives, attorneys or
accountants shall agree to keep confidential (which agreement shall be confirmed
in writing in advance to the Company if the Company shall so request) all
information, records or documents made available to such persons which are not
otherwise available to the general public unless disclosure of such records,
information or documents is required by court or administrative order (of which
the Company shall have been given prior notice and an opportunity to defend)
after the exhaustion of all appeals therefrom, and to use such information
obtained pursuant to this provision only in connection with the transaction for
which such information was obtained, and not for any other purpose;
(o) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders, as soon as practicable, in a regular filing on Form
10-Q or Form 10-K, a consolidated earnings statement, which consolidated
earnings statement shall satisfy the provisions of Section 11(a) of the Act, for
the twelve-month period (i) commencing at the end of any fiscal quarter in which
Transfer Restricted Securities are sold to Underwriters in a firm commitment or
best efforts Underwritten Offering or (ii) if not sold to Underwriters in such
an offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Shelf Registration Statement;
(p) cause the Indenture to be qualified under the TIA, and, in
connection therewith, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents as may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner;
(q) cause all Transfer Restricted Securities covered by the Shelf
Registration Statement to be listed on each securities exchange or quotation
system on which similar securities issued by the Company are then listed if
requested by the Holders of a majority of the outstanding Transfer Restricted
Securities (with holders of Common Stock constituting Transfer Restricted
Securities being deemed to be Holders of the aggregate principal amount of
Debentures converted into such Common Stock for purposes of such calculation) or
the Underwriters, if any; cause the Debentures covered by the Shelf Registration
Statement to be rated with the appropriate rating agencies, if so requested by
the Holders of a majority in aggregate principal amount of such Debentures or
the Underwriters; and
(r) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
Underwriter (including any "qualified independent Underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD).
Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading or necessary to cause such
Shelf Registration Statement not to omit a material fact with respect to such
Holder necessary in order to make the statements therein not misleading.
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<PAGE> 11
Each Holder agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 5(d)(v) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings with respect to the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities current at the time of receipt of such notice. In the
event Company shall give any such notice, the time period regarding the
effectiveness of the Shelf Registration Statement set forth in Section 3(a)
hereof shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 5(d)(v)
hereof to and including the date when each Selling Holder covered by such Shelf
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof or shall have received
the Advice.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement (the "Registration Expenses") will be borne by
the Company, regardless of whether a Shelf Registration Statement becomes
effective, including without limitation:
(i) all registration and filing fees and expenses (including filings
made with the NASD);
(ii) fees and expenses of compliance with federal securities or
state blue sky laws;
(iii) expenses of printing (including, without limitation, expenses
of printing or engraving certificates for the Transfer Restricted
Securities in a form eligible for deposit with Depository Trust Company
and of printing the Prospectus and any Preliminary Prospectus), messenger
and delivery services and telephone;
(iv) fees and disbursements of counsel for the Company and for the
Holders of the Transfer Restricted Securities (subject to the provisions
of Section 6(b) hereof);
(v) fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit
and "cold comfort" letters required by or incidental to the preparation
and filing of a Shelf Registration Statement and Prospectus and the
disposition of Transfer Restricted Securities);
(vi) fees and expenses associated with any NASD filing required to
be made in connection with the Shelf Registration Statement; and
(vii) fees and expenses of listing the Transfer Restricted
Securities on any securities exchange or quotation system in accordance
with Section 5(r) hereof.
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, rating agency fees and the fees and expenses of any Person, including
special experts, retained by the Company. The Company shall not be responsible
for any other expenses and costs, including, but not limited to, commissions,
fees and discounts of brokers, dealers and agents. The Holders of Transfer
Restricted Securities shall bear the expense of any broker's commission or
Underwriter's discount or commission.
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<PAGE> 12
(b) In connection with the Shelf Registration Statement, the Company
will reimburse the Holders of Transfer Restricted Securities being registered
pursuant to such Shelf Registration Statement for the reasonable fees and
disbursements of not more than one counsel chosen by the Holders of a majority
of the outstanding Transfer Restricted Securities (with holders of Common Stock
constituting Transfer Restricted Securities being deemed to be Holders of the
aggregate principal amount of Debentures converted into such Common Stock for
purposes of such calculation).
Notwithstanding the provisions of this Section 6(b), each Holder of
Transfer Restricted Securities shall pay all Registration Expenses to the extent
required by applicable law, and if the Shelf Registration Statement is to be
effected in the form of an Underwritten Offering, the discounts and commissions
of the Underwriters, it being understood that the Company shall not be liable
for any of the expenses of the Underwriters.
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each of
the Initial Purchasers, (ii) each Holder, (iii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any of the Initial Purchasers or any Holder (any of the persons
referred to in this clause (iii) being hereinafter referred to as a "controlling
person") and (iv) the respective officers, directors, partners, employees,
representatives and agents of any of the Initial Purchasers or any Holder or any
controlling person (any person referred to in clause (i), (ii), (iii) or (iv)
may hereinafter be referred to as a "Non-Company Indemnitee"), to the fullest
extent lawful, from and against any and all losses, claims, damages, liabilities
and judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement, Prospectus or
Preliminary Prospectus (or any amendments or supplements thereto), including any
document incorporated by reference therein, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except, with respect to
any Non-Company Indemnitee, insofar as such losses, claims, damages, liabilities
or judgments (1) are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Company by such Non-Company Indemnitee expressly for use therein or (2) with
respect to any Preliminary Prospectus, result from the fact that such
Non-Company Indemnitee sold Transfer Restricted Securities to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the final Prospectus, as amended or supplemented, if the Company
shall have previously furnished copies thereof to such Non-Company Indemnitee in
accordance with this Agreement and the final Prospectus, as amended or
supplemented, would have corrected such untrue statement or omission.
(b) In case any action shall be brought against any Non-Company
Indemnitee, based upon the Shelf Registration Statement, Prospectus, or
Preliminary Prospectus (or any amendments or supplements thereto), and with
respect to which indemnity may be sought against the Company, such Non-Company
Indemnitee shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses; provided, however, that the omission so to notify the
Company shall not relieve the Company from any liability that it may have to any
Non-Company Indemnitee (except to the extent that the Company is materially
prejudiced or otherwise forfeits substantive rights or defenses by reason of
such failure). Such Non-Company Indemnitee shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of counsel shall be paid by such Non-Company Indemnitee,
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the Company, (ii) the Company shall have failed to
assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both such Non-Company
Indemnitee and the Company and it would be inappropriate for the same counsel to
represent such Non-Company Indemnitee and the Company (in which case the Company
shall not have the right to assume the defense of such action on behalf of such
Non-Company Indemnitee, it being understood, however, that the Company shall
not, in connection with any
11
<PAGE> 13
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for the Non-Company Indemnitees, which firm
shall be designated in writing by the Non-Company Indemnitees and shall be
subject to the Company's approval, not to be unreasonably withheld, and whose
fees and expenses reasonably incurred shall be reimbursed as they are incurred).
The Company shall not be liable for any settlement of any such action effected
without the written consent of the Company, which consent shall not be
unreasonably withheld or delayed, and if settled with the written consent of the
Company, the Company agrees to indemnify and hold harmless any Non-Company
Indemnitee from and against any amounts payable pursuant to such written consent
in connection with such settlement. The Company shall not, without the prior
written consent of such Non-Company Indemnitee, effect any settlement of any
pending or threatened proceeding in respect of which such Non-Company Indemnitee
is or could have been a party and indemnity could have been sought hereunder by
such Non-Company Indemnitee, unless such settlement includes an unconditional
release of such Non-Company Indemnitee from all liability on claims that are the
subject matter of such proceeding.
(c) Each Holder of Transfer Restricted Securities agrees to
indemnify and hold harmless (i) the Company, (ii) each of the Initial
Purchasers, (iii) each other Holder, (iv) any person controlling (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company,
any of the Initial Purchasers and each other Holder and (v) the respective
officers, directors, partners, employees, representatives and agents of each of
the parties referred to in clauses (i), (ii), (iii) and (iv), to the same extent
as the foregoing indemnity from the Company to each of the Non-Company
Indemnitees, but only with respect to information relating to such Holder that
was furnished in writing by such Holder expressly for use in the Shelf
Registration Statement or Prospectus (or any amendment or supplement thereto).
In no event shall the liability of any Holder hereunder be greater in amount
than the dollar amount of the proceeds received by such Holder upon the sales of
the Transfer Restricted Securities giving rise to such indemnification
obligation.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments in such proportion as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party, on the one hand, and the indemnified party, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
indemnifying party, on the one hand, or the indemnified party, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The indemnity and
contribution obligations of each indemnifying party set forth herein shall be in
addition to any liability or obligation such indemnifying party may otherwise
have to any Indemnified Party, including under this Agreement.
The Company, each of the Initial Purchasers and each Holder of
Transfer Restricted Securities agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The losses, claims, damages, liabilities or judgments of an indemnified party
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim prior to the indemnifying party's
assumption of the defense thereof or subsequent thereto to the extent permitted
by the second sentence of Section 7(b) hereof. Notwithstanding the provisions of
this Section
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<PAGE> 14
7, none of the Holders shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total amount received by such Holder
with respect to the sale of Transfer Restricted Securities exceeds the amount of
any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective principal amount of Notes held by each of the Holders hereunder and
not joint.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any of
the Debentures or shares of Common Stock that are Transfer Restricted Securities
remain outstanding and during any such period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, to make available to any
Initial Purchaser or any beneficial owner of the Debentures or shares of such
Common Stock in connection with any sale thereof and any prospective purchaser
of such Debentures or Common Stock from such Initial Purchaser or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements, (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements and (c) furnishes the Company in writing information in accordance
with Section 3(g) and agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and any person
controlling the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the extent contemplated by Section 7(c).
SECTION 10. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
Underwriter(s) that will administer the offering will be selected by the Holders
of the Transfer Restricted Securities included in such offering in the manner
specified in Section 3(c); provided, however, that such Underwriters must be
reasonably satisfactory to the Company.
SECTION 11. MISCELLANEOUS
(a) Remedies. Each party agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders of Transfer
Restricted Securities in this Agreement or otherwise conflicts with the
provisions
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<PAGE> 15
hereof. The rights granted to the Holders of Transfer Restricted Securities
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under any other
agreements in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of a majority of the outstanding Transfer Restricted Securities (with holders of
Common Stock constituting Transfer Restricted Securities being deemed to be
Holders of the aggregate principal amount of Debentures converted into such
Common Stock for purposes of such calculation). Notwithstanding the foregoing, a
waiver or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders of Transfer Restricted Securities whose
securities are being sold pursuant to such Shelf Registration Statement and that
does not directly or indirectly affect the rights of other Holders of Transfer
Restricted Securities shall be valid only with the written consent of Holders of
at least 66-2/3% of the Transfer Restricted Securities being sold, in each case
calculated in accordance with the provisions of Section 3(c).
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder of Transfer Restricted Securities, at the address
set forth on the records of the Registrar under the Indenture, with a copy
to the Registrar; and
(ii) if to the Company or an Initial Purchaser, initially at its
address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of
this Section .
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder of Transfer Restricted Securities unless
and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder; and provided further that nothing herein shall be
deemed to permit any assignment, transfer or any disposition of Transfer
Restricted Securities in violation of the terms of the Purchase Agreement. If
any transferee of any Holder shall acquire Transfer Restricted Securities, in
any manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement and by
taking and holding such Transfer Restricted Securities such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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<PAGE> 16
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICTS OF LAW RULES THEREOF.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the securities sold pursuant to the Purchase Agreement. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
15
<PAGE> 17
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
FPA MEDICAL MANAGEMENT, INC.
By: /s/ JAMES A. LEBOVITZ
__________________________________
Name: JAMES A. LEVOVITZ
Title: SENIOR VICE PRESIDENT
SMITH BARNEY INC.
BEAR, STEARNS & CO., INC.
LEHMAN BROTHERS INC.
OPPENHEIMER & CO., INC.
NEEDHAM & CO., INC.
BY: SMITH BARNEY INC.
By: /s/ BENJAMIN D. LORELLO
___________________________________
Name: BEN LORELLO
Title: MANAGING DIRECTOR
16
<PAGE> 1
EXHIBIT 4.4
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS 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. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR 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.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO IS OR WHO THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) TO AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT IS AN INSTITUTIONAL INVESTOR AND THAT
PRIOR TO SUCH TRANSFER FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (WHICH FORM OF LETTER CAN BE OBTAINED FROM THE
TRUSTEE), (E) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES PROVIDED THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND SUBJECT TO ANY APPLICABLE STATE
<PAGE> 2
SECURITIES LAWS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN
HOLDER OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
FPA MEDICAL MANAGEMENT, INC.
6 1/2% Convertible Subordinated Debentures due 2001
No. S-1 $74,500,000
CUSIP 302543AB9
FPA Medical Management, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of Seventy-Four Million Five Hundred
Thousand Dollars or such greater or lesser amount as indicated on the Schedule
of Exchanges of Securities on the reverse side hereof on December 15, 2001 upon
surrender hereof to the Paying Agent, and to pay interest thereon from the date
of original issuance of Securities pursuant to the Indenture or from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for, semi-annually on June 15 and December 15 in each year,
commencing June 15, 1997, at the rate of 6 1/2% per annum, until the principal
hereof is paid or made available for payment and promises to pay any liquidated
damages which may be payable pursuant to Section 4 of the Registration Rights
Agreement on the Interest Payment Dates. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such 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 June 1 or December 1
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. 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
Trustee or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities may be
listed and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture. Notice of a Special Record Date shall be given
to Holders of Securities not less than 10 days prior to such Special Record
Date. Payment of the principal of and premium, if any, and interest on this
Security will be made (i) in respect of Securities held of record by the
Depositary or its nominee in same day funds on or prior to the respective
payment dates and (ii) in respect of Securities held of record by Holders other
than the Depositary or its nominee in same day funds at the office or agency of
the Company maintained for that purpose pursuant to Section 1002 of the
Indenture, in each case in such coin or currency of the United States of America
as of the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
in respect of Securities held of record by Holders other than the Depositary or
its nominee may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
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 by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: _________________ FPA MEDICAL MANAGEMENT, INC.
By __________________________________
Attest:
________________________________________
Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By __________________________________
Authorized Signatory
3
<PAGE> 4
Reverse of Security
This Security is one of a duly authorized issue of Securities
of the Company designated as its 6 1/2% Convertible Subordinated Debentures due
2001 (herein called the "Securities"), limited in aggregate principal amount to
$86,250,000 (including Securities issuable pursuant to the Initial Purchasers'
over-allotment option, as provided for in the Purchase Agreement dated December
13, 1996 between the Company and the Initial Purchasers), issued and to be
issued under an Indenture, dated as of December 18, 1996 (herein called the
"Indenture"), between the Company and First Union National 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 of the
terms upon which the Securities are, and are to be, authenticated and delivered.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled, at his option, at any time
after the 60th day following the date of original issuance of Securities
pursuant to the Indenture and on or before the close of business on December 15,
2001, or in case this Security or a portion hereof is called for redemption,
then in respect of this Security or such portion hereof until and including, but
(unless the Company defaults in making the payment due upon redemption) not
after, the close of business on the second business day preceding the Redemption
Date, to convert this Security (or any portion of the principal amount hereof
which is $1,000 or an integral multiple thereof), at the principal amount
hereof, or of such portion, into fully paid and non-assessable shares
(calculated as to each conversion to the nearest 1/100th of a share) of Common
Stock at a conversion price equal to $25.95 principal amount for each share of
Common Stock (or at the current adjusted conversion price 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, to the Company at its office or
agency maintained for that purpose pursuant to Section 1002 of the Indenture,
accompanied by written notice to the Company in the form provided in this
Security (or such other notice as is acceptable to the Company) that the Holder
hereof elects to convert this Security, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted, and, in
case such surrender shall be made during the period from the opening of business
on any Regular Record Date next preceding any Interest Payment Date to the close
of business on such Interest Payment Date (unless this Security or the portion
thereof being converted has been called for redemption), also accompanied by
payment in 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. Subject to the aforesaid requirement for payment and, in
the case of a conversion after the Regular Record Date next preceding any
Interest Payment Date and on or before such Interest Payment Date, to the right
of the Holder of this Security (or any Predecessor Security) of record at such
Regular Record Date to receive an instalment of interest (with certain
exceptions provided in the Indenture), no payment or adjustment is to be made
upon conversion on account of any interest accrued hereon or on account of any
dividends on the Common Stock issued upon conversion. No fractional shares or
scrip representing fractions of shares will be issued on conversion, but instead
of any fractional share the Company shall pay a cash adjustment as provided in
the Indenture. The conversion price is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the sale or
transfer of all or substantially all of the assets of the Company, the Indenture
shall be amended, without the consent of any Holders of Securities, so that this
Security, if then outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon the consolidation,
merger, sale or transfer by a holder of the number of shares of Common Stock
into which this Security might have been converted immediately prior to such
consolidation, merger, sale or transfer (assuming such holder of Common Stock
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).
4
<PAGE> 5
The Securities are subject to redemption upon not less than 15
and not more than 60 days' notice by mail, at any time on or after December 20,
1999, as a whole or in part, at the election of the Company, at the Redemption
Prices set forth below (expressed as percentages of the principal amount), plus
accrued interest to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date).
If redeemed during the 12-month period beginning December 15,
in the year indicated (December 20, in the case of 1999), the redemption price
shall be:
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
<S> <C> <C> <C>
1999. . . 102.6% 2000. . . 101.3%
</TABLE>
In certain circumstances involving the occurrence of a
Repurchase Event (as defined in the Indenture), the Holder hereof shall have the
right to require the Company to repurchase this Security at 100% of the
principal amount hereof, together with accrued interest to the Repurchase Date,
but interest installments whose Stated Maturity is on or prior to such
Repurchase 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.
In the event of redemption or conversion of this Security in
part only, a new Security or Securities for the unredeemed or unconverted
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The indebtedness evidenced by this Security is, in all
respects, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness, and this Security is issued subject to the
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 may be declared due and payable in the manner
and with the effect provided in the Indenture.
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 under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding, and, under certain limited circumstances, by
the Company and the Trustee without the consent of the Holders. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities at the time Outstanding, on behalf
of the Holders of all the Securities, 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 upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
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 and
premium, if any, and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.
5
<PAGE> 6
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, 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 hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in fully registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange except as provided in the Indenture, and the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to due presentment of this 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 this Security is registered as the owner
hereof for all purposes, except as provided in this Security, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture. The Company
will furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement.
6
<PAGE> 7
CONVERSION NOTICE
TO FPA MEDICAL MANAGEMENT, INC.
The undersigned registered owner of this Security hereby
irrevocably exercises the option to convert this Security, or the portion hereof
(which is $1,000 or a multiple thereof) designated below, into shares of Common
Stock in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for a fractional share and any
Security representing any unconverted principal amount hereof, be issued and
delivered to the registered owner hereof unless a different name has been
provided below. If this Notice is being delivered on a date after the close of
business on a Regular Record Date and prior to the close of business on the
related Interest Payment Date, this Notice is accompanied by payment in funds
acceptable to the Company, of an amount equal to the interest payable on such
Interest Payment Date on the principal of this Security to be converted (unless
this Security has been called for redemption). If shares or any portion of this
Security not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated: -------------------------
-------------------------
Signature(s)
Signature(s) must be guaranteed by an
eligible guarantor institution (banks,
stockbrokers, savings and loan associations
and credit unions with membership in an
approved signature guarantee medallion
program) pursuant to S.E.C. Rule 17Ad-15,
if shares of Common Stock are to be
delivered, or Securities to be issued,
other than to and in the name of the
registered owner.
- --------------------------------------
Signature Guarantee
Fill in for registration of shares of
Common Stock if they are to be delivered,
or Securities if they are to be issued,
other than to and in the name of the
registered owner:
- --------------------------------------
(Name)
- --------------------------------------
(Street Address)
- --------------------------------------
(City, State and zip code)
(Please print name and address)
Register: _____ Common Stock
_____ Securities
(Check appropriate line(s)).
Principal amount to be converted
(if less than all):
$__________,000
--------------------------------
Social Security or other
Taxpayer Identification Number
of owner
7
<PAGE> 8
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________________________________
Date: _________________ Your signature:_________________________________________
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee:____________________________________________________________
The signature to this assignment should be
guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations
and credit unions with membership in an approved
signature guarantee medallion program) pursuant to
S.E.C. Rule 17Ad-15.
8
<PAGE> 9
CERTIFICATE FOR EXCHANGE OR TRANSFER
Re: 6 1/2% Convertible Subordinated Debentures due 2001
This Certificate relates to $_________ principal amount of
Securities held in *____________ book-entry or *____________ definitive form by
_________ (the "Transferor").
The Transferor*:
- has requested the Trustee by written order to deliver in
exchange for its beneficial interest in a Global Security held by the Depositary
a Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
- has requested the Trustee by written order to deliver in
exchange for its Security or Securities a beneficial interest in a Global
Security held by the Depositary in a principal amount equal to the aggregate
principal amount of such Security or Securities; or
- has requested the Trustee by written order to exchange or
register the transfer of a Security or Securities.
In connection with such request and in respect of each such
security, the Transferor does hereby certify to the Company and the Trustee that
Transferor is familiar with the Indenture relating to the above captioned
Debentures and, as provided in Section 305 of such Indenture, the transfer of
this Security does not require registration under the Securities Act (as defined
below) because*:
- Such Security is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 305(b)(ii)(A) or Section
305(f)(i)(A) of the Indenture).
- Such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")) in reliance on Rule 144A or pursuant to an
exemption from registration in accordance with Regulation S under the Securities
Act (in satisfaction of Section 305(b)(ii)(B), Section 305(c)(i), Section
305(d)(i), Section 305(f)(i)(B), Section 305(g)(iii) or Section 305(h)(iii) of
the Indenture). An opinion of counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 305(b)(ii)(B), Section 305(c)(i), Section 305(d)(i),
Section 305(f)(i)(B), Section 305(g)(iii) or Section 305(h)(iii) of the
Indenture).
- Such Security is being transferred in accordance with Rule
144 under the Securities Act, or pursuant to an effective registration statement
under the Securities Act (in satisfaction of Section 305(b)(ii)(B), Section
305(f)(i)(B) or Section 305(k)(ii) of the Indenture). If such Security is being
transferred in accordance with Rule 144 under the Securities Act, an opinion of
counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section
305(b)(ii)(B), Section 305(f)(i)(B) or Section 305(k)(ii) of the Indenture).
- Such Security is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A, 144 or Regulation S under the Securities
Act. An opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 305(b)(ii)(C) or Section 305(f)(i)(C) of the Indenture).
- ---------------
* (Check applicable box).
9
<PAGE> 10
You are entitled to rely upon this certificate and you are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
__________________________
[INSERT NAME OF TRANSFEROR]
By:_______________________
Date:_________________
10
<PAGE> 11
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company
pursuant to Section 1401 of the Indenture, check the Box: / /
If you wish to have a portion of this Security (which is
$1,000 or an integral multiple thereof) purchased by the Company pursuant to
Section 1401 of the Indenture, state the amount you wish to have purchased:
$_________________
Date: ___________________ Your Signature(s):_________________________
Tax Identification No.:____________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:___________________________________________________________
The signature to this option of holder to elect
purchase should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with
membership in an approved signature guarantee
medallion program) pursuant to S.E.C. Rule 17Ad-15.
11
<PAGE> 12
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
Signature of
Amount of Amount of increase Principal Amount authorized
decrease in in Principal of this Global signatory of
Principal Amount Amount of this Security following Trustee or
Date of of this Global Global such decrease (or Securities
Exchange Security Security increase) Custodian
-------- ---------------- ------------------ ------------------ ------------
<S> <C> <C> <C> <C>
1.
2.
3.
4.
5.
</TABLE>
12
<PAGE> 1
EXHIBIT 4.5
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS 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. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR 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.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO IS OR WHO THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) TO AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT IS AN INSTITUTIONAL INVESTOR AND THAT
PRIOR TO SUCH TRANSFER FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (WHICH FORM OF LETTER CAN BE OBTAINED FROM THE
TRUSTEE), (E) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES PROVIDED THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND SUBJECT TO ANY APPLICABLE STATE
<PAGE> 2
SECURITIES LAWS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN
HOLDER OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
FPA MEDICAL MANAGEMENT, INC.
6 1/2% Convertible Subordinated Debentures due 2001
No. R-1 $500,000
CUSIP U34627AA4
FPA Medical Management, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of Five Hundred Thousand Dollars or such
greater or lesser amount as indicated on the Schedule of Exchanges of Securities
on the reverse side hereof on December 15, 2001 upon surrender hereof to the
Paying Agent, and to pay interest thereon from the date of original issuance of
Securities pursuant to the Indenture or from and including the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on June 15 and December 15 in each year, commencing June 15, 1997,
at the rate of 6 1/2% per annum, until the principal hereof is paid or made
available for payment and promises to pay any liquidated damages which may be
payable pursuant to Section 4 of the Registration Rights Agreement on the
Interest Payment Dates. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such 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 June 1 or December 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
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 Trustee or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture. Notice of a Special Record Date shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date. Payment of
the principal of and premium, if any, and interest on this Security will be made
(i) in respect of Securities held of record by the Depositary or its nominee in
same day funds on or prior to the respective payment dates and (ii) in respect
of Securities held of record by Holders other than the Depositary or its nominee
in same day funds at the office or agency of the Company maintained for that
purpose pursuant to Section 1002 of the Indenture, in each case in such coin or
currency of the United States of America as of the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest in respect of Securities held of
record by Holders other than the Depositary or its nominee may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
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 by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: _________________ FPA MEDICAL MANAGEMENT, INC.
By _________________________
Attest:
- ------------------------
Trustee's Certificate of Authentication.
This is one of the Securities referred to in the
within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By ____________________________
Authorized Signatory
3
<PAGE> 4
Reverse of Security
This Security is one of a duly authorized issue of Securities
of the Company designated as its 6 1/2% Convertible Subordinated Debentures due
2001 (herein called the "Securities"), limited in aggregate principal amount to
$86,250,000 (including Securities issuable pursuant to the Initial Purchasers'
over-allotment option, as provided for in the Purchase Agreement dated December
13, 1996 between the Company and the Initial Purchasers), issued and to be
issued under an Indenture, dated as of December 18, 1996 (herein called the
"Indenture"), between the Company and First Union National 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 of the
terms upon which the Securities are, and are to be, authenticated and delivered.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled, at his option, at any time
after the 60th day following the date of original issuance of Securities
pursuant to the Indenture and on or before the close of business on December 15,
2001, or in case this Security or a portion hereof is called for redemption,
then in respect of this Security or such portion hereof until and including, but
(unless the Company defaults in making the payment due upon redemption) not
after, the close of business on the second business day preceding the Redemption
Date, to convert this Security (or any portion of the principal amount hereof
which is $1,000 or an integral multiple thereof), at the principal amount
hereof, or of such portion, into fully paid and non-assessable shares
(calculated as to each conversion to the nearest 1/100th of a share) of Common
Stock at a conversion price equal to $25.95 principal amount for each share of
Common Stock (or at the current adjusted conversion price 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, to the Company at its office or
agency maintained for that purpose pursuant to Section 1002 of the Indenture,
accompanied by written notice to the Company in the form provided in this
Security (or such other notice as is acceptable to the Company) that the Holder
hereof elects to convert this Security, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted, and, in
case such surrender shall be made during the period from the opening of business
on any Regular Record Date next preceding any Interest Payment Date to the close
of business on such Interest Payment Date (unless this Security or the portion
thereof being converted has been called for redemption), also accompanied by
payment in 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. Subject to the aforesaid requirement for payment and, in
the case of a conversion after the Regular Record Date next preceding any
Interest Payment Date and on or before such Interest Payment Date, to the right
of the Holder of this Security (or any Predecessor Security) of record at such
Regular Record Date to receive an instalment of interest (with certain
exceptions provided in the Indenture), no payment or adjustment is to be made
upon conversion on account of any interest accrued hereon or on account of any
dividends on the Common Stock issued upon conversion. No fractional shares or
scrip representing fractions of shares will be issued on conversion, but instead
of any fractional share the Company shall pay a cash adjustment as provided in
the Indenture. The conversion price is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the sale or
transfer of all or substantially all of the assets of the Company, the Indenture
shall be amended, without the consent of any Holders of Securities, so that this
Security, if then outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon the consolidation,
merger, sale or transfer by a holder of the number of shares of Common Stock
into which this Security might have been converted immediately prior to such
consolidation, merger, sale or transfer (assuming such holder of Common Stock
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).
4
<PAGE> 5
The Securities are subject to redemption upon not less than 15
and not more than 60 days' notice by mail, at any time on or after December 20,
1999, as a whole or in part, at the election of the Company, at the Redemption
Prices set forth below (expressed as percentages of the principal amount), plus
accrued interest to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date).
If redeemed during the 12-month period beginning December 15,
in the year indicated (December 20, in the case of 1999), the redemption price
shall be:
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
<S> <C> <C> <C>
1999. . . 102.6% 2000. . . 101.3%
</TABLE>
In certain circumstances involving the occurrence of a
Repurchase Event (as defined in the Indenture), the Holder hereof shall have the
right to require the Company to repurchase this Security at 100% of the
principal amount hereof, together with accrued interest to the Repurchase Date,
but interest installments whose Stated Maturity is on or prior to such
Repurchase 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.
In the event of redemption or conversion of this Security in
part only, a new Security or Securities for the unredeemed or unconverted
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The indebtedness evidenced by this Security is, in all
respects, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness, and this Security is issued subject to the
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 may be declared due and payable in the manner
and with the effect provided in the Indenture.
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 under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding, and, under certain limited circumstances, by
the Company and the Trustee without the consent of the Holders. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities at the time Outstanding, on behalf
of the Holders of all the Securities, 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 upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
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 and
premium, if any, and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.
5
<PAGE> 6
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, 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 hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in fully registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange except as provided in the Indenture, and the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to due presentment of this 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 this Security is registered as the owner
hereof for all purposes, except as provided in this Security, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture. The Company
will furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement.
6
<PAGE> 7
CONVERSION NOTICE
TO FPA MEDICAL MANAGEMENT, INC.
The undersigned registered owner of this Security hereby
irrevocably exercises the option to convert this Security, or the portion hereof
(which is $1,000 or a multiple thereof) designated below, into shares of Common
Stock in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for a fractional share and any
Security representing any unconverted principal amount hereof, be issued and
delivered to the registered owner hereof unless a different name has been
provided below. If this Notice is being delivered on a date after the close of
business on a Regular Record Date and prior to the close of business on the
related Interest Payment Date, this Notice is accompanied by payment in funds
acceptable to the Company, of an amount equal to the interest payable on such
Interest Payment Date on the principal of this Security to be converted (unless
this Security has been called for redemption). If shares or any portion of this
Security not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated: -----------------------------
-----------------------------
Signature(s)
Signature(s) must be guaranteed by an
eligible guarantor institution (banks,
stockbrokers, savings and loan
associations and credit unions with
membership in an approved signature
guarantee medallion program) pursuant to
S.E.C. Rule 17Ad-15, if shares of Common
Stock are to be delivered, or Securities
to be issued, other than to and in the
name of the registered owner.
- ------------------------------
Signature Guarantee
Fill in for registration of shares of
Common Stock if they are to be
delivered, or Securities if they are to
be issued, other than to and in the name
of the registered owner:
- ------------------------------
(Name)
- ------------------------------
(Street Address)
- ------------------------------
(City, State and zip code)
(Please print name and address)
Register: _____ Common Stock
_____ Securities
(Check appropriate line(s)).
Principal amount to be converted (if
less than all):
$__________,000
-----------------------------------
Social Security or other Taxpayer
Identification Number of owner
7
<PAGE> 8
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
_______________________________________________________________________________
(Insert assignee's social security or tax ID number)___________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
_______________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
_______________________________________________________________________________
Date:_______________ Your signature:___________________________________________
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee:___________________________________________________________
The signature to this assignment should be
guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations
and credit unions with membership in an approved
signature guarantee medallion program) pursuant to
S.E.C. Rule 17Ad-15.
8
<PAGE> 9
CERTIFICATE FOR EXCHANGE OR TRANSFER
Re: 6 1/2% Convertible Subordinated Debentures due 2001
This Certificate relates to $_________ principal amount of
Securities held in *____________ book-entry or *____________ definitive form by
_________ (the "Transferor").
The Transferor*:
- has requested the Trustee by written order to deliver in
exchange for its beneficial interest in a Global Security held by the Depositary
a Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
- has requested the Trustee by written order to deliver in
exchange for its Security or Securities a beneficial interest in a Global
Security held by the Depositary in a principal amount equal to the aggregate
principal amount of such Security or Securities; or
- has requested the Trustee by written order to exchange or
register the transfer of a Security or Securities.
In connection with such request and in respect of each such
security, the Transferor does hereby certify to the Company and the Trustee that
Transferor is familiar with the Indenture relating to the above captioned
Debentures and, as provided in Section 305 of such Indenture, the transfer of
this Security does not require registration under the Securities Act (as defined
below) because*:
- Such Security is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 305(b)(ii)(A) or Section
305(f)(i)(A) of the Indenture).
- Such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")) in reliance on Rule 144A or pursuant to an
exemption from registration in accordance with Regulation S under the Securities
Act (in satisfaction of Section 305(b)(ii)(B), Section 305(c)(i), Section
305(d)(i), Section 305(f)(i)(B), Section 305(g)(iii) or Section 305(h)(iii) of
the Indenture). An opinion of counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 305(b)(ii)(B), Section 305(c)(i), Section 305(d)(i),
Section 305(f)(i)(B), Section 305(g)(iii) or Section 305(h)(iii) of the
Indenture).
- Such Security is being transferred in accordance with Rule
144 under the Securities Act, or pursuant to an effective registration statement
under the Securities Act (in satisfaction of Section 305(b)(ii)(B), Section
305(f)(i)(B) or Section 305(k)(ii) of the Indenture). If such Security is being
transferred in accordance with Rule 144 under the Securities Act, an opinion of
counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section
305(b)(ii)(B), Section 305(f)(i)(B) or Section 305(k)(ii) of the Indenture).
- Such Security is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A, 144 or Regulation S under the Securities
Act. An opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 305(b)(ii)(C) or Section 305(f)(i)(C) of the Indenture).
- ------------------------
*(Check applicable box).
9
<PAGE> 10
You are entitled to rely upon this certificate and you are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
_____________________________________
[INSERT NAME OF TRANSFEROR]
By:__________________________________
Date:________________________
10
<PAGE> 11
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company
pursuant to Section 1401 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Security (which is
$1,000 or an integral multiple thereof) purchased by the Company pursuant to
Section 1401 of the Indenture, state the amount you wish to have purchased:
$____________________
Date: ___________________ Your Signature(s): _________________________
Tax Identification No.:______________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:___________________________________________________________
The signature to this option of holder to elect
purchase should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with
membership in an approved signature guarantee
medallion program) pursuant to S.E.C. Rule 17Ad-15.
11
<PAGE> 12
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
Signature of
Amount of Amount of increase Principal Amount authorized
decrease in in Principal of this Global signatory of
Principal Amount Amount of this Security following Trustee or
Date of of this Global Global such decrease (or Securities
Exchange Security Security increase) Custodian
-------- -------- -------- --------- ---------
<S> <C> <C> <C> <C>
1.
2.
3.
4.
5.
</TABLE>
12
