<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 31, 1997
Registration No. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________
OCCUSYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 75-2543036
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
3010 LBJ FREEWAY, SUITE 400
DALLAS, TEXAS 75234
(972) 484-2700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JOHN K. CARLYLE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OCCUSYSTEMS, INC.
3010 LBJ FREEWAY, SUITE 400
DALLAS, TEXAS 75234
(972) 484-2700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications
to the agent for service, should be sent to:
RICHARD A. PARR II JEFFREY A. CHAPMAN
EXECUTIVE VICE PRESIDENT VINSON & ELKINS L.L.P.
AND GENERAL COUNSEL 3700 TRAMMELL CROW CENTER
OCCUSYSTEMS, INC. 2001 ROSS AVENUE
3010 LBJ FREEWAY, SUITE 400 DALLAS, TEXAS 75201
DALLAS, TEXAS 75234
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
______________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED AMOUNT MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED PRICE PER NOTE(1) OFFERING PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6% Convertible Subordinated Notes due 2001 $97,750,000 100% $97,750,000 $29,622
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per share (2) (2) (2) None
====================================================================================================================================
</TABLE>
(1)Estimated solely for the purpose of calculating the registration fee.
(2)Such indeterminate number of shares of Common Stock as shall be issuable upon
conversion of the Notes being registered hereunder. No additional
consideration will be received for the Common Stock and therefore no
registration fee is required pursuant to Rule 457(i).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
********************************************************************************
* Information contained herein is subject to completion or amendment. A *
* Registration Statement relating to these securities has been filed with the *
* Securities and Exchange Commission. These securities may not be sold nor *
* may offers to buy be accepted prior to the time the Registration Statement *
* becomes effective. This Prospectus shall not constitute an offer to sell or *
* the solicitation of an offer to buy nor shall there be any sale of these *
* securities in any State in which such offer, solicitation or sale would be *
* unlawful prior to registration or qualification under the securities laws of *
* any such State. *
********************************************************************************
Subject to Completion, dated January 31, 1997
PROSPECTUS
$97,750,000
OCCUSYSTEMS, INC.
6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
This Prospectus relates to the offering by the Selling Securityholders
(the "Selling Securityholders") of up to an aggregate of $97,750,000 of 6%
Convertible Subordinated Notes due 2001 (the "Notes") of OccuSystems, Inc., a
Delaware corporation ("OccuSystems" or the "Company"), and the 3,291,243 shares
of Common Stock, par value $.01 per share (the "Common Stock"), that are
issuable upon conversion of the Notes at the initial conversion price (the
"Conversion Price") of $29.70 per share (equivalent to a conversion rate of
33.67 shares per $1,000 principal amount of Notes), subject to adjustment in
certain events. The Notes will be convertible at the option of the holder into
shares of Common Stock at any time on or after the 90th day following the latest
date of initial issuance of the Notes and prior to the close of business on the
Stated Maturity of the Notes, unless previously redeemed or repurchased. See
"Description of Notes--Conversion Rights." The Notes offered hereby were
originally offered by the Company in an underwritten private placement.
Interest on the Notes is payable semi-annually on June 15 and December 15
of each year, commencing on June 15, 1997. The Notes are redeemable, in whole or
in part, at the option of the Company, at any time on or after December 15,
1999, at the redemption prices set forth herein, plus accrued and unpaid
interest and liquidated damages, if any, to the date of redemption. The Company
will be required to offer to purchase the Notes upon a Change of Control (as
defined) at 100% of the principal amount thereof, plus accrued and unpaid
interest and liquidated damages, if any, to the date of purchase. There can be
no assurance that the Company will have available financial resources necessary
to repurchase the Notes in such circumstances.
The Notes are unsecured, general obligations of the Company, subordinated
in right of payment to all existing and future Senior Indebtedness (as defined)
of the Company. The Indenture (as defined) will not restrict the incurrence of
Senior Indebtedness or other indebtedness by the Company and its subsidiaries.
At December 31, 1996, the Company had no Senior Indebtedness outstanding. See
"Description of Notes."
The Notes may be sold from time to time pursuant to this Prospectus by
the Selling Securityholders. The Notes may be sold by the Selling
Securityholders in ordinary brokerage transactions, in transactions in which
brokers solicit purchases, in negotiated transactions, or in a combination of
such methods of sale, at market prices prevailing at the time of sale, at prices
relating to such prevailing market prices or at negotiated prices. See "Plan of
Distribution." The distribution of the Notes is not subject to any underwriting
agreement. The Company will receive no part of the proceeds of sales from the
offering by the Selling Securityholders. All expenses of registration incurred
in connection with this offering are being borne by the Company, but all selling
and other expenses incurred by the Selling Securityholders will be borne by such
Selling Securityholders. None of the securities offered pursuant to this
Prospectus have been registered prior to the filing of the Registration
Statement of which this Prospectus is a part.
On January 30, 1997, the last reported sale price for the Company's
Common Stock on the Nasdaq National Market (where it trades under the symbol
"OSYS") was $22 per share.
SEE "RISK FACTORS" ON PAGE 3 FOR CERTAIN FACTORS RELEVANT TO AN
INVESTMENT IN THE NOTES.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________________
, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC" or the "Commission"). Reports,
proxy statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, NW, Washington, D.C. 20549, and at the Commission's Regional
Offices at Seven World Trade Center, 13th Floor, New York, New York 10048 and
CitiCorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511. Copies of such material can be obtained by mail from the Public Reference
Section of the Commission at 450 West Fifth Street, NW, Washington, D.C. 20549,
at prescribed rates. The reports, proxy statements and other information may
also be obtained from the Web site that the Commission maintains at
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the securities offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which were omitted in accordance with the rules and regulations
of the Commission. For further information, reference is hereby made to the
Registration Statement. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission are not necessarily complete, and in each
instance reference is made to the copy of such document so filed. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
2. The Company's Current Report on Form 8-K dated January 2, 1996;
3. The Company's Current Report on Form 8-K/A dated March 14, 1996;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
5. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
6. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996;
7. The Company's Current Report on Form 8-K dated November 1, 1996;
8. The Company's Current Report on Form 8-K dated December 4, 1996;
9. The Company's Current Report on Form 8-K/A dated December 5, 1996;
10. The Company's Current Report on Form 8-K dated December 23, 1996; and
11. The description of the Company's Common Stock contained in Item 1 of
the Registration Statement on Form 8-A (File No. 0-24440) filed with
the Commission on April 4, 1995, including any amendment or report
filed for the purpose of updating such description filed with the
Commission pursuant to Section 13 of the Exchange Act.
All other documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing such documents.
Any statement contained in this Prospectus or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
2
<PAGE>
RISK FACTORS
Prospective investors should consider carefully the following factors,
together with the other information set forth in this Prospectus, in evaluating
an investment in the Notes.
DEPENDENCE ON FUTURE ACQUISITIONS AND JOINT VENTURES
The Company's growth in new and existing markets is dependent upon an
aggressive acquisition and joint venture strategy. The Company is in various
stages of negotiations to acquire practices from a number of prospective selling
groups. There can be no assurance that further suitable acquisition candidates
can be found, that acquisitions can be financed or consummated on favorable
terms or that such acquisitions, if completed, will be successful. In addition,
the Company anticipates that the Emerging Issues Task Force of the Financial
Accounting Standards Board will be evaluating certain matters relating to the
physician practice management industry, which the Company expects to include a
review of accounting for business combinations. The Company is unable to predict
the impact, if any, that this review may have on the Company's acquisition
strategy.
The Company has also entered into, and is in various stages of negotiations
to form, joint ventures to own and operate occupational healthcare centers in
selected markets. The Company's strategy is to form these joint ventures with
competitively positioned hospital management companies, hospital systems and
other healthcare providers. There can be no assurances that the Company will
continue to utilize joint ventures as part of its growth strategy, that further
suitable joint ventures can be formed or that such ventures will be successful.
RAPID GROWTH OF THE COMPANY
Over the past five years, the Company has experienced rapid growth in its
business and in its staff, and the Company's future results could be affected by
its ability to manage growth and integrate acquisitions effectively.
UNCERTAINTIES RELATED TO CHANGING HEALTHCARE ENVIRONMENT
The healthcare industry has experienced substantial changes in recent
years. Although managed care has yet to become a major factor in occupational
healthcare, the Company anticipates that managed care programs, including case
rate and capitation plans, may play an increasing role in the delivery of
occupational healthcare services, and that competition in the occupational
healthcare industry may shift from individual practitioners to specialized
provider groups such as those managed by the Company, insurance companies,
health maintenance organizations ("HMOs") and other significant providers of
managed care products. To facilitate the Company's managed care strategy, the
Company is developing risk-sharing products for the workers' compensation
industry that will be marketed to employers, insurers and managed care
organizations. No assurance can be given that the Company will prosper in the
changing healthcare environment or that the Company's strategy to develop
managed care programs will succeed in meeting employers' and workers'
occupational healthcare needs.
There have been numerous initiatives at the federal and state levels for
comprehensive reforms affecting the payment for and availability of healthcare
services. The Company believes that such initiatives will continue during the
foreseeable future. Aspects of certain of these reforms as proposed in the past
could, if adopted, adversely affect the Company.
GOVERNMENT REGULATION
The provision of healthcare services is heavily regulated at both the state
and federal levels. State and federal workers' compensation laws control many
aspects of providing medical services to the individuals covered by such laws
(including, in many cases, the amounts that may be charged for those services).
Approximately 60% of the Company's revenues in the year ended December 31, 1996
were subject to state-mandated fee schedules prescribing maximum reimbursable
amounts for designated medical procedures. Although recent changes in such fee
schedules have not adversely affected the Company, there can be no assurances
that prospective changes will not have such an effect. State laws generally
prohibit anyone other than a licensed physician from engaging in acts that
constitute the practice of medicine and also prohibit physicians from
"splitting" their fees with other persons. The Company is also subject to
various other federal and state laws. Many of the applicable laws are enforced
by regulatory authorities with broad discretion to interpret the laws and
promulgate corresponding regulations, and violations of these laws and
regulations may result in substantial penalties. The Company
3
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believes that its operations are in material compliance with currently
applicable laws and regulations. There can be no assurance, however, that a
court or regulatory authority will not determine that the Company's operations
are not in compliance with any applicable law or regulation or that any such
determination will not have a material adverse effect on the Company.
SUBORDINATION
The Notes are subordinated in right of payment to all existing and future
Senior Indebtedness, including OccuSystems, Inc.'s guarantee of borrowings under
the loan agreement (the "Loan Agreement") among OccuCenters, Inc., a wholly-
owned subsidiary of OccuSystems, Inc., as borrower, OccuSystems, Inc., as
guarantor, and Creditanstalt--Bankverein ("Creditanstalt"), and will be
structurally subordinated to all liabilities (including trade payables) of the
Company's subsidiaries. The Indenture will not restrict the incurrence of Senior
Indebtedness or other indebtedness by the Company or its subsidiaries. By reason
of such subordination, in the event of the insolvency, bankruptcy, liquidation,
reorganization, dissolution or winding up of the business of the Company, the
assets of the Company will be available to pay the amounts due on the Notes only
after all Senior Indebtedness has been paid in full and, therefore, there may
not be sufficient assets remaining to pay amounts due on any or all of the Notes
then outstanding. As of December 31, 1996, the Company had no Senior
Indebtedness outstanding. See "Description of Notes--Subordination."
The Company's ability to meet its cash obligations in the future will be
dependent upon the ability of its subsidiaries to make cash distributions to the
Company. The ability of its subsidiaries to make distributions to the Company is
and will continue to be restricted by, among other limitations, applicable
provisions of state law and contractual provisions (including a guarantee by a
wholly-owned subsidiary of the Company of certain indebtedness issued by
Concentra Development Corp.). The Indenture will not limit the ability of the
Company's subsidiaries to incur such restrictions in the future. The right of
the Company to participate in the assets of any subsidiary (and thus the ability
of holders of the Notes to benefit indirectly from such assets) is generally
subject to the prior claims of creditors, including trade creditors, of that
subsidiary except to the extent that the Company is recognized as a creditor of
such subsidiary, in which case the Company's claims would still be subject to
any security interest of other creditors of such subsidiary. The Notes,
therefore, will be structurally subordinated to creditors, including trade
creditors, of subsidiaries of the Company with respect to the assets of the
subsidiaries against which such creditors have a claim.
RISKS INHERENT IN PROVISION OF MEDICAL SERVICES
The physician groups with which the Company is affiliated (the "Physician
Groups"), and certain employees of the Company, are involved in the delivery of
healthcare services to the public and, therefore, are exposed to the risk of
professional liability claims. Claims of this nature, if successful, could
result in substantial damage awards to the claimants which may exceed the limits
of any applicable insurance coverage. Insurance against losses related to claims
of this type can be expensive and varies widely from state to state. The Company
is indemnified under its management agreements with the Physician Groups for
claims against them, maintains liability insurance for itself and negotiates
liability insurance for the physicians in the Physician Groups. Successful
malpractice claims asserted against the Physician Groups or the Company,
however, could have a material adverse effect on the Company's financial
condition and profitability.
COMPETITION
The market to provide healthcare services within the workers' compensation
system is highly fragmented and competitive. The Company's primary competitors
have typically been independent physicians, hospital emergency departments and
hospital-owned or -affiliated medical facilities. The Company believes that, due
to the emergence of managed care, its competitors will increasingly consist of
specialized provider groups, insurance companies, HMOs and other significant
providers of managed care products. Many of the Company's current and potential
competitors are significantly larger and have greater financial and marketing
resources than the Company. There can be no assurance that the Company will be
able to compete effectively against those competitors in the future.
LIMITATIONS ON REPURCHASE OF NOTES UPON CHANGE OF CONTROL
Upon the occurrence of a Change of Control, unless waived by holders of in
excess of two-thirds in aggregate principal amount of the then outstanding
Notes, each holder of Notes may require the Company to repurchase all or a
portion of such holder's Notes. If a Change of Control were to occur, there can
be no assurance that the Company would have
4
<PAGE>
sufficient financial resources, or would be able to arrange financing, to pay
the repurchase price for all Notes tendered by holders thereof. In addition, the
Company's repurchase of the Notes as a result of a Change of Control may be
prohibited or limited by, or create an event of default under, the terms of
agreements related to borrowings which the Company may enter into from time to
time, including the Loan Agreement and other agreements relating to
indebtedness. Failure of the Company to purchase tendered Notes would constitute
an Event of Default under the Indenture. See "Description of Notes--Repurchase
of Notes at the Option of the Holder Upon a Change of Control."
DEPENDENCE UPON KEY PERSONNEL
The Company is dependent to a substantial extent upon the continuing
efforts and abilities of certain key management personnel. In addition, the
Company faces strong competition for experienced employees with technical
expertise in the workers' compensation and managed care areas. The Company has
obtained a "key man" life insurance policy on the life of John K. Carlyle, the
Company's Chief Executive Officer. This policy provides benefits of $1 million
upon the death of Mr. Carlyle and names the Company as sole beneficiary.
Nevertheless, the loss of, or the inability to attract, qualified employees
could have a material adverse effect on the Company's business.
VOLATILITY OF STOCK PRICE
The market price of the Company's Common Stock has been volatile and may be
volatile in the future. Future developments concerning the Company or its
competitors, including developments related to governmental regulations,
acquisitions, operating results and general market and economic conditions, may
have a significant impact on the market price of the Company's Common Stock.
DIVIDEND POLICY AND RESTRICTIONS
The Company does not intend to pay cash dividends on the Common Stock in
the foreseeable future and anticipates that future earnings will be retained to
finance future operations and expansion. The Loan Agreement prohibits the
Company from paying dividends and making other distributions on its Common
Stock.
ANTI-TAKEOVER PROVISIONS
Certain provisions of the Company's Certificate of Incorporation and
certain provisions of the Delaware General Corporation Law may make it difficult
to change control of the Company and replace incumbent management. For example,
the Company's Certificate of Incorporation provides for a staggered Board of
Directors and permits the Board of Directors, without stockholder approval, to
issue additional shares of Common Stock or establish one or more series of
Preferred Stock having such number of shares, designations, relative voting
rights, dividend rates, liquidation and other rights, preferences and
limitations as the Board of Directors may determine.
In addition, the terms of certain indebtedness of the Company (including
the Notes) may require prepayment upon a change of control of the Company and
therefore may have an anti-takeover effect. See "Description of Notes--Change
of Control."
ABSENCE OF EXISTING MARKET FOR NOTES
The Notes constitute a new issue of securities. The Company has listed the
notes on the Nasdaq National Market. Donaldson, Lufkin & Jenrette Securities
Corporation, Alex. Brown & Sons Incorporated and Piper Jaffray Inc., the initial
purchasers of the Notes (the "Initial Purchasers"), informed the Company at the
time of such purchase that they may make a market in the Notes and the
underlying Common Stock. However, the Initial Purchasers are not obligated to
make such a market and may discontinue any market-making activities at any time
without notice.
Prior to the effectiveness of the Registration Statement, the Notes were
designated for trading in the Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") market; however, the Notes sold hereunder will no
longer be eligible for trading through PORTAL, and no assurance can be given
that an active trading market for the Notes will develop on the Nasdaq National
Market or otherwise or, if such market develops, as to the liquidity or
sustainability of
5
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such market. If an active trading market does not develop or is not maintained,
holders of the Notes may experience difficulty in reselling, or an inability to
sell, the Notes. The Company may discontinue the listing of the Notes on the
Nasdaq National Market or otherwise at any time. If an active public trading
market develops for the Notes, future trading prices of the Notes will depend on
many factors, including, among other things, prevailing interest rates, the
Company's operating results and the market for similar securities. Depending on
such factors, the Notes may trade at a discount from their principal amount.
RECENT DEVELOPMENTS
1995 LONG TERM INCENTIVE PLAN
The Company intends to submit to its stockholders for approval at the
Company's 1997 annual meeting of stockholders a proposal to increase the number
of shares of Common Stock authorized for issuance under the Company's 1995 Long
Term Incentive Plan from 1,000,000 to 2,000,000.
DRCA MEDICAL CORPORATION ACQUISITION
Effective December 31, 1996, the Company agreed to acquire the occupational
medicine business of DRCA Medical Corporation ("DRCA") for $7.7 million in cash.
DRCA operates four occupational healthcare centers and a mobile testing service
in Houston, Texas, and three centers in Little Rock, Arkansas, a new market for
the Company.
6
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RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
PRO NINE MONTHS ENDED PRO
YEAR ENDED DECEMBER 31, FORMA SEPTEMBER 30, FORMA
---------------------------------------- -------------------
1993 1994 1995 1995(1) 1995 1996 1996(1)
---------- ---------- ----------- -------- -------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (2).................... (7.0)x 1.0x 2.7x 2.3x 2.8x 5.6x 3.0x
</TABLE>
- ---------------------
(1) The pro forma data give effect to the following pro forma adjustments as if
they had occurred on January 1, 1995: (a) consummation of the Company's
acquisitions (the "Recent Acquisitions") of Medical Plaza Industrial
Clinic, Corporate Health Services, Inc., Medical and Surgical Clinic
Association, P.A., Occupational Health Resources, Inc., Flagstaff Urgent
Care, Deer Park Clinic and Austin Regional Clinic; and (b) sale of the
Notes and use of proceeds therefrom. All of the Recent Acquisitions were
effective on or before July 1, 1996.
(2) Computed by dividing the sum of net earnings, before deducting provisions
for income taxes and fixed charges, by total fixed charges. Fixed charges
consist of interest on debt, including amortization of debt issuance costs,
and one-fourth of rent expense, estimated by management to be the interest
component of such rentals. The adjusted ratio of earnings to fixed charges
gives effect to the net change in interest expense resulting from the sale
of the principal amount of Notes and application of the estimated net
proceeds therefrom.
7
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DESCRIPTION OF NOTES
Set forth below is a summary of certain provisions of the Notes. The
Notes were issued pursuant to an indenture (the "Indenture") dated as of
December 24, 1996, by and between the Company and United States Trust Company of
New York, as trustee (the "Trustee"). The following summary of the Notes, the
Indenture and the Registration Rights Agreement (herein so called) among the
Company and the Initial Purchasers does not purport to be complete and is
subject to, and is qualified in its entirety by, reference to all of the
provisions of the Indenture and the Registration Rights Agreement, including the
definitions therein of certain terms. Copies of the Indenture and the
Registration Rights Agreement have been filed as exhibits to the Registration
Statement. Capitalized terms used herein without definition have the meanings
ascribed to them in the Indenture or the Registration Rights Agreement, as
appropriate. As used in this section, the "Company" refers to OccuSystems,
Inc., exclusive of its subsidiaries. Wherever particular provisions or defined
terms of the Indenture (or the form of Note which is part thereof) or the
Registration Rights Agreement are referred to in this summary, such provisions
or defined terms are incorporated by reference as a part of the statements made
and such statements are qualified in their entirety by such reference. Certain
definitions of terms used in the following summary are set forth under
"--Certain Definitions" below.
GENERAL
The Notes are unsecured, subordinated, general obligations of the
Company, limited in aggregate principal amount to $97,750,000. The Notes are
subordinated in right of payment to all Senior Indebtedness of the Company, as
described under "--Subordination" below. The Notes have been issued only in
fully registered form, without coupons, in denominations of $1,000 and integral
multiples thereof.
The Notes will mature on December 15, 2001. The Notes bear interest at
the rate per annum stated on the cover page of this Prospectus from December 24,
1996 or from the most recent Interest Payment Date to which interest has been
paid or provided for, payable semiannually on June 15 and December 15 of each
year, commencing June 15, 1997, to the persons in whose names such Notes are
registered at the close of business on the June 1 or December 1 immediately
preceding such Interest Payment Date. Principal of, premium, if any, and
interest on, and liquidated damages with respect to, the Notes will be payable,
the Notes will be convertible and the Notes may be presented for registration of
offer or exchange, at the office or agency of the Company maintained for such
purpose, which office or agency shall be maintained in the Borough of Manhattan,
The City of New York (which initially will be the office of the Trustee).
Interest will be calculated on the basis of a 360-day year consisting of twelve
30-day months.
At the option of the Company, payment of interest and liquidated damages
may be made by check mailed to the Holders of the Notes at the addresses set
forth upon the registry books of the Company. No service charge will be made for
any registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Indenture does not contain any financial covenants or any
restrictions on the payment of dividends, the repurchase of securities of the
Company or the incurrence of Senior Indebtedness. The Indenture contains no
covenants or other provisions to afford protection to holders of Notes in the
event of a highly-leveraged transaction or a change of control of the Company,
except to the limited extent described under "--Repurchase of Notes at the
Option of the Holder Upon a Change of Control" below.
CONVERSION RIGHTS
Each Holder of Notes will have the right at any time on or after the 90th
day following the latest date of initial issuance of the Notes and prior to the
close of business on the Stated Maturity of the Notes, unless previously
redeemed or repurchased, at the Holder's option, to convert any portion of the
principal amount thereof that is an integral multiple of $1,000 into shares of
Common Stock at any time at the Conversion Price set forth on the cover page of
this Offering Memorandum (subject to adjustment as described below). The right
to convert a Note called for redemption or delivered for repurchase and not
withdrawn will terminate at the close of business on the Business Day,
respectively, immediately prior to the Redemption Date or Repurchase Date for
such Note, unless the Company subsequently fails to pay the applicable
Redemption Price or Repurchase Price, as the case may be.
In the case of any Note that has been converted after any Record Date,
but on or before the next Interest Payment Date, interest, the stated due date
of which is on such Interest Payment Date, shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest shall be paid to
the Holder of such Note who is a Holder on such Record Date. Any Note converted
after any Record Date but before the next Interest Payment Date must be
accompanied by payment
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of an amount equal to the interest payable on such Interest Payment Date on the
principal amount of Notes being surrendered for conversion; provided no such
payment shall be required with respect to interest payable on December 15, 1999.
No fractional shares will be issued upon conversion but, in lieu thereof, an
appropriate amount will be paid in cash by the Company based on the market price
of Common Stock (determined in accordance with the Indenture) at the close of
business on the day of conversion. As a result of the foregoing provisions,
Holders that surrender Notes for conversion on a date that is not an Interest
Payment Date will not receive any interest for the period from the Interest
Payment Date next preceding the date of conversion to the date of conversion or
for any later period.
The Conversion Price will be subject to adjustment in certain events,
including (a) any payment of a dividend (or other distribution) payable in
Common Stock on any class of Capital Stock of the Company, (b) any issuance to
all holders of Common Stock of rights, options or warrants entitling them to
subscribe for or purchase Common Stock at less than the then current market
price of Common Stock (determined in accordance with the Indenture), provided,
however, that if such rights, options or warrants are only exercisable upon the
occurrence of certain triggering events, then the Conversion Price will not be
adjusted until such triggering events occur, (c) certain subdivisions,
combinations or reclassifications of Common Stock, (d) any distribution to all
holders of Common Stock of evidences of indebtedness, shares of Capital Stock
other than Common Stock, cash or other assets (including securities, but
excluding those dividends, rights, options, warrants and distributions referred
to above and excluding dividends and distributions paid exclusively in cash and
in mergers and consolidations to which the third succeeding paragraph applies),
(e) any distribution consisting exclusively of cash (excluding any cash portion
of distributions referred to in (d) above, or cash distributed upon a merger or
consolidation to which the third succeeding paragraph applies) to all holders of
Common Stock in an aggregate amount that, combined together with (i) all other
such all-cash distributions made within the then preceding 12 months in respect
of which no adjustment has been made and (ii) any cash and the fair market value
of other consideration paid or payable in respect of any tender or exchange
offer by the Company or any of its subsidiaries for Common Stock concluded
within the preceding 12 months in respect of which no adjustment has been made,
exceeds 15% of the Company's market capitalization (defined as being the product
of the then current market price of the Common Stock times the number of shares
of Common Stock then outstanding) on the record date of such distribution, and
(f) the completion of a tender or exchange offer made by the Company or any of
its subsidiaries for Common Stock that involves an aggregate consideration that,
together with (i) any cash and other consideration payable in a tender or
exchange offer by the Company or any of its subsidiaries for Common Stock
expiring within the 12 months preceding the expiration of such tender or
exchange offer in respect of which no adjustment has been made and (ii) the
aggregate amount of any such all-cash distributions referred to in (e) above to
all holders of Common Stock within the 12 months preceding the expiration of
such tender or exchange offer in respect of which no adjustments have been made,
exceeds 15% of the Company's market capitalization on the expiration of such
tender offer. No adjustment of the Conversion Price will be required to be made
until the cumulative adjustments amount to 1.0% or more of the Conversion Price
as last adjusted.
In the event of a taxable distribution to holders of Common Stock (or
other transaction) which results in any adjustment of the Conversion Price, the
Holders of Notes may, in certain circumstances, be deemed to have received a
distribution subject to United States federal income tax as a dividend; in
certain other circumstances, the absence of such an adjustment may result in a
taxable dividend to the holders of Common Stock.
The Company, from time to time and to the extent permitted by law, may
reduce the Conversion Price by any amount for any period of at least 20 Business
Days, in which case the Company shall give at least 15 days notice of such
reduction, if the Board of Directors has made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. The Company may, at its option, make such reductions in the
Conversion Price, in addition to those set forth above, as the Board of
Directors deems advisable to avoid or diminish any income tax to holders of
Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for United States federal
income tax purposes. See "Certain Federal Income Tax Consequences."
In case of any consolidation or merger of the Company with or into
another Person or any merger of another Person with or into the Company (with
certain exceptions), or in case of any sale, transfer or conveyance of all or
substantially all of the assets of the Company, each Note then outstanding will,
without the consent of any Holder of Notes, become convertible only into the
kind and amount of securities, cash and other property receivable upon such
consolidation, merger, sale, transfer or conveyance by a holder of the number of
shares of Common Stock into which such Note was convertible immediately prior
thereto, after giving effect to any adjustment event, who 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.
The Company will cause all registrations with, and will obtain any
approvals by, any governmental authority under any Federal or state law of the
United States that may be required in connection with the conversion of the
Notes into Common Stock.
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SUBORDINATION
The Notes are general, unsecured obligations of the Company, subordinated
in right of payment to all existing and future Senior Indebtedness of the
Company. The Notes are structurally subordinated in right of payment to all
liabilities (including trade payables) of the Company's subsidiaries. At
December 31, 1996, on a pro forma basis after giving effect to the sale of the
Notes and the use of the proceeds therefrom, the Company would have had no
Senior Indebtedness outstanding. The Indenture does not restrict the incurrence
of Senior Indebtedness or other indebtedness by the Company or its subsidiaries
or the ability of the Company to transfer assets or business operations to its
subsidiaries, subject to the provisions described under "--Repurchase of Notes
at the Option of the Holder Upon a Change of Control" and "--Limitation on
Merger, Sale or Consolidation" below.
The Indenture provides that no payment may be made by the Company on
account of the principal of, premium, if any, interest on, or liquidated damages
with respect to, the Notes, or to acquire any of the Notes (including
repurchases of Notes at the option of the Holder) for cash or property (other
than Junior Securities), or on account of the redemption provisions of the
Notes, (i) upon the maturity of any Senior Indebtedness of the Company by lapse
of time, acceleration (unless waived) or otherwise, unless and until all
principal of, premium, if any, and interest on such Senior Indebtedness are
first paid in full (or such payment is duly provided for), or (ii) in the event
of default in the payment of any principal of, premium, if any, or interest on
any Senior Indebtedness of the Company when it becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or otherwise (a
"Payment Default"), unless and until such Payment Default has been cured or
waived or otherwise has ceased to exist. The payment of cash, property or
securities (other than Junior Securities) upon conversion of a Note will
constitute payment on a Note and therefore will be subject to the subordination
provisions in the Indenture.
Upon (i) the happening of an event of default (other than a Payment
Default) that permits, or would permit with (a) the passage of time, (b) the
giving of notice, (c) the making of any payment of the Notes then required to be
made or (d) any combination thereof (collectively, a "Non-Payment Default"),
the holders of Senior Indebtedness having a principal amount then outstanding in
excess of $3 million (or with respect to which Senior Indebtedness the holders
are obligated to lend in excess of $3 million principal amount) or their
representative immediately to accelerate its maturity and (ii) written notice of
such Non-Payment Default given to the Company and the Trustee by the holders of
an aggregate of at least $3 million outstanding principal amount (or commitments
to lend up to $3 million in Senior Indebtedness) of such Senior Indebtedness or
their representative (a "Payment Notice"), then, unless and until such Non-
Payment Default has been cured or waived or otherwise has ceased to exist, no
payment (by setoff or otherwise) may be made by or on behalf of the Company on
account of the principal of, premium, if any, interest on, or liquidated damages
with respect to, the Notes, or to acquire or repurchase any of the Notes for
cash or property, or on account of the redemption provisions of the Notes, in
any such case other than payments made with Junior Securities. Notwithstanding
the foregoing, unless (i) the Senior Indebtedness in respect of which such Non-
Payment Default exists has been declared due and payable in its entirety within
179 days after the Payment Notice is delivered as set forth above (the "Payment
Blockage Period"), and (ii) such declaration has not been rescinded or waived,
at the end of the Payment Blockage Period, the Company shall be required to pay
all sums not paid to the Holders of the Notes during the Payment Blockage Period
due to the foregoing prohibitions and to resume all other payments as and when
due on the Notes. Not more than one Payment Notice may be given in any
consecutive 365-day period, irrespective of the number of defaults with respect
to Senior Indebtedness during such period. However, if any Payment Notice within
such 365-day period is given by or on behalf of any holders of Senior
Indebtedness other than under the Loan Agreement, the agent under the Loan
Agreement may give another Payment Notice within such period. In no event,
however, may the total number of days during which any Payment Blockage Period
or Payment Blockage Periods are in effect exceed 179 days in the aggregate
during any consecutive 365-day period.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the foregoing provisions, such payment or
distribution shall be held in trust for the benefit of the holders of Senior
Indebtedness of the Company, and shall be paid or delivered by the Trustee or
such Holders, as the case may be, to the holders of the Senior Indebtedness of
the Company remaining unpaid or unprovided for or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness of the Company
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness of the Company held or represented
by each, for application to the payment of all Senior Indebtedness of the
Company remaining unpaid, to the extent necessary to pay or to provide for the
payment of all such Senior Indebtedness in full after giving effect to any
concurrent payment or distribution, or provision therefor, to the holders of
such Senior Indebtedness.
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Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshaling of assets or liabilities (i) the holders of all Senior Indebtedness
of the Company will first be entitled to receive payment in full (or have such
payment duly provided for) before the Holders are entitled to receive any
payment on account of the principal of, premium, if any, interest on, and
liquidated damages with respect to, the Notes (other than Junior Securities) and
(ii) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Junior
Securities) to which the Holders or the Trustee on behalf of the Holders would
be entitled (by setoff or otherwise), except for the subordination provisions
contained in the Indenture, will be paid by the liquidating trustee or agent or
other person making such a payment or distribution directly to the holders of
Senior Indebtedness of the Company or their representative to the extent
necessary to make payment in full of all such Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
No provision contained in the Indenture or the Notes will affect the
obligation of the Company, which is absolute and unconditional, to pay, when
due, principal of, premium, if any, interest on, and liquidated damages with
respect, to the Notes. The subordination provisions of the Indenture and the
Notes will not prevent the occurrence of any Default or Event of Default under
the Indenture or limit the rights of the Trustee or any Holder, subject to the
preceding paragraphs, to pursue any other rights or remedies with respect to the
Notes.
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of the creditors of the Company or
any of its subsidiaries or a marshalling of assets or liabilities of the Company
and its subsidiaries, Holders of Notes may receive ratably less than other
creditors.
The Company's ability to meet its cash obligations in the future will be
dependent upon the ability of its subsidiaries to make cash distributions to the
Company. The ability of its subsidiaries to make distributions to the Company is
and will continue to be restricted by, among other limitations, applicable
provisions of state law and contractual provisions. The Indenture will not limit
the ability of the Company's subsidiaries to incur such restrictions in the
future. The right of the Company to participate in the assets of any subsidiary
(and thus the ability of holders of the Notes to benefit indirectly from such
assets) is generally subject to the prior claims of creditors, including trade
creditors, of that subsidiary except to the extent that the Company is
recognized as a creditor of such subsidiary, in which case the Company's claims
would still be subject to any security interest of other creditors of such
subsidiary. The Notes, therefore, will be structurally subordinated to
creditors, including trade creditors, of subsidiaries of the Company with
respect to the assets of the subsidiaries against which such creditors have a
claim.
REDEMPTION AT THE COMPANY'S OPTION
The Notes will not be subject to redemption prior to December 15, 1999
and will be redeemable thereafter at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days' notice to each Holder, at the
following redemption prices (expressed as percentages of the principal amount)
if redeemed during the 12-month period commencing December 15 of the years
indicated below, in each case (subject to the right of Holders of record on a
Record Date to receive interest due on an Interest Payment Date that is on or
prior to such Redemption Date) together with accrued and unpaid interest and
liquidated damages, if any, to, but excluding, the Redemption Date:
YEAR PERCENTAGE
------ -----------
1999................... 102.4%
2000................... 101.2
In the case of a partial redemption, the Trustee shall select the Notes
or portions thereof for redemption on a pro rata basis, by lot or in such other
manner it deems appropriate and fair. The Notes may be redeemed in part in
multiples of $1,000 only.
The Notes will not have the benefit of any sinking fund.
Notice of any redemption will be sent, by first-class mail, at least 30
days and not more than 60 days prior to the date fixed for redemption, to the
Holder of each Note to be redeemed to such Holder's last address as then shown
upon the registry books of the Registrar. The notice of redemption must state
the Redemption Date, the Redemption Price and the amount of
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<PAGE>
accrued interest and liquidated damages, if any, to be paid. Any notice that
relates to a Note to be redeemed in part only must state the portion of the
principal amount equal to the unredeemed portion thereof and must state that on
and after the Redemption Date, upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion thereof will be issued. On
and after the Redemption Date, interest will cease to accrue on the Notes or
portions thereof called for redemption, unless the Company defaults in its
obligations with respect thereto.
REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL
The Indenture provides that in the event that a Change of Control has
occurred, each Holder of Notes will have the right, at such Holder's option,
pursuant to an irrevocable and unconditional (except as set forth below) offer
by the Company (the "Repurchase Offer"), to require the Company to repurchase
all or any part of such Holder's Notes (provided that the principal amount of
such Notes must be $1,000 or an integral multiple thereof) on the date (the
"Repurchase Date") that is no later than 50 Business Days after the occurrence
of such Change of Control at a cash price (the "Repurchase Price") equal to
100% of the principal amount thereof, together with accrued and unpaid interest
and liquidated damages, if any, to (but excluding) the Repurchase Date. The
Repurchase Offer shall be made within 25 Business Days following a Change of
Control and shall remain open for 20 Business Days following its commencement
except to the extent that a longer period is required by applicable law (the
"Repurchase Offer Period"). Upon expiration of the Repurchase Offer Period,
the Company shall purchase all Notes tendered in response to the Repurchase
Offer. If required by applicable law, the Repurchase Date and the Repurchase
Offer Period may be extended as so required; however, if so extended, it shall
nevertheless constitute an Event of Default if the Repurchase Date does not
occur within 60 Business Days of the Change of Control.
On or before the Repurchase Date, the Company will (i) accept for payment
Notes or portions thereof properly tendered pursuant to the Repurchase Offer,
(ii) deposit with the Paying Agent cash sufficient to pay the Repurchase Price
(together with accrued and unpaid interest and liquidated damages, if any) of
all Notes so tendered and (iii) deliver to the Trustee the Notes so accepted,
together with an Officers' Certificate listing the Notes or portions thereof
being purchased by the Company. The Paying Agent will promptly mail to the
Holders of Notes so accepted payment in an amount equal to the Repurchase Price
(together with accrued and unpaid interest and liquidated damages, if any), and
the Trustee will promptly authenticate and mail or deliver to such Holders a new
Note or Notes equal in principal amount to any unpurchased portion of the Notes
surrendered. Any Notes not so accepted will be promptly mailed or delivered by
the Company to the Holder thereof. The Company will publicly announce the
results of the Repurchase Offer on or as soon as practicable after the
Repurchase Date.
The phrase "all or substantially all" of the assets of the Company, as
included in the definition of Change of Control, is likely to be interpreted by
reference to applicable state law at the relevant time, and will be dependent on
the facts and circumstances existing at such time. As a result, there may be a
degree of uncertainty in ascertaining whether a sale or transfer of "all or
substantially all" of the assets of the Company has occurred.
The Change of Control purchase feature of the Notes may make more
difficult or discourage a takeover of the Company, and, thus, the removal of
incumbent management. The Change of Control purchase feature resulted from
negotiations between the Company and the Initial Purchasers.
The provisions of the Indenture relating to a Change of Control may not
afford the Holders protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger, spin-off or similar transaction that may
adversely affect Holders, if such transaction does not constitute a Change of
Control. Moreover, certain events with respect to the Company which may involve
an actual change of control of the Company may not constitute a Change of
Control for purposes of the Indenture.
The Company may not have sufficient financial resources available to
fulfill its obligation to repurchase the Notes upon a Change of Control or to
repurchase other debt securities of the Company or its subsidiaries providing
similar rights to the holders thereof. The right to require the Company to
repurchase Notes as a result of the occurrence of a Change of Control could
create an event of default under Senior Indebtedness as a result of which any
repurchase could, absent a waiver, be blocked by the subordination provision of
the Notes. Failure of the Company to repurchase the Notes when required would
result in an Event of Default with respect to the Notes whether or not such
repurchase is permitted by the subordination provisions. Any such default may,
in turn, cause a default under Senior Indebtedness of the Company. Moreover, the
Change of Control may cause an event of default under Senior Indebtedness of the
Company. As a result, in each case, any repurchase of the Notes could, absent a
waiver, be blocked by the subordination provisions of the Notes. See
"--Subordination" above.
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Except as described herein, no modification of the Indenture regarding
the provisions on repurchase at the option of any Holder of a Note upon a Change
of Control is permissible without the consent of the Holder of the Note so
affected. In the event of a Change of Control, if Holders of in excess of two-
thirds of the outstanding aggregate principal amount of the Notes so determine
at any time following the occurrence of such Change of Control and before the
close of business on the Business Day immediately preceding the Repurchase Date,
such event shall not be treated as a Change of Control for purposes of the
Indenture. In such event, (i) the Company shall not be required to make the
Repurchase Offer, (ii) to the extent the Repurchase Offer has already been made,
such Repurchase Offer shall be deemed revoked, and (iii) to the extent any Notes
have been tendered in response to any such revoked Repurchase Offer, such tender
shall be rescinded and the Notes so tendered shall be promptly returned to the
Holders thereof. For purposes of any such determination by the Holders of the
outstanding Notes, Notes held by the Company or an Affiliate of the Company
(including any Person that would become an Affiliate of the Company (or its
successor) as a consequence of the event or series of events that otherwise
would be treated as a Change of Control for purposes of the Indenture) shall be
disregarded.
To the extent applicable, the Company will comply with the provisions of
Rule 13e-4 or any other tender offer rules, and will file a Schedule 13E-4 or
any other schedule required under such rules, in connection with any offer by
the Company to repurchase Notes at the option of the Holders upon a Change of
Control.
LIMITATION ON MERGER, SALE OR CONSOLIDATION
The Indenture provides that the Company may not, directly or indirectly,
consolidate with or merge with or into another person or sell, lease, convey or
transfer all or substantially all of its assets (other than to its wholly-owned
subsidiaries), whether in a single transaction or a series of related
transactions, to another Person or group of affiliated Persons, unless (i)
either (a) in the case of a merger or consolidation the Company is the surviving
entity or (b) the resulting, surviving or transferee entity is a corporation
organized under the laws of the United States, any state thereof or the District
of Columbia and expressly assumes by supplemental indenture all of the
obligations of the Company in connection with the Notes and the Indenture; and
(ii) no Default or Event of Default shall exist or shall occur immediately after
giving effect to such transaction.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Company in accordance with the foregoing, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such transfer is made, shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under the Indenture with the
same effect as if such successor corporation had been named therein as the
Company, and the Company will be released from its obligations under the
Indenture and the Notes, except as to any obligations that arise from or as a
result of such transaction.
REPORTS
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Company shall deliver to the Trustee, within 15 days after
it is or would have been required to file such with the SEC, annual and
quarterly consolidated financial statements substantially equivalent to
financial statements that would have been included in reports filed with the SEC
if the Company were subject to the requirements of Section 13 or 15 (d) of the
Exchange Act, including, with respect to annual information only, a report
thereon by the Company's certified independent public accountants as such would
be required in such reports to the SEC and, in each case, together with a
management's discussion and analysis of financial condition and results of
operations as such would be so required.
EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an Event of Default as (i) the failure by the
Company to pay any installment of interest on, or liquidated damages with
respect to, the Notes as and when due and payable and the continuance of any
such failure for 30 days, (ii) the failure by the Company to pay all or any part
of the principal of, or premium, if any on the Notes when and as the same become
due and payable at maturity, redemption, by acceleration or otherwise,
including, without limitation, pursuant to any Repurchase Offer or otherwise,
(iii) the failure of the Company to perform any conversion of Notes required
under the Indenture and the continuance of any such failure for 30 days, (iv)
the failure by the Company to observe or perform any other covenant or agreement
contained in the Notes or the Indenture and subject to certain exceptions, the
continuance of such failure for a period of 60 days after written notice is
given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes outstanding,
(v) certain events of bankruptcy,
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<PAGE>
insolvency or reorganization in respect of the Company or any of its Significant
Subsidiaries (as defined), (vi) failure of the Company or any Significant
Subsidiary to make any payment at maturity, including any applicable grace
period, in respect of Indebtedness (other than nonrecourse obligations) in an
amount in excess of $10 million and continuance of such failure for 30 days
after written notice is given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount of
Notes outstanding, (vii) default by the Company or any Significant Subsidiary
with respect to any Indebtedness (other than non-recourse obligations), which
default results in the acceleration of Indebtedness in an amount in excess of
$10 million without such Indebtedness having been discharged or such
acceleration having been rescinded or annulled for 30 days after written notice
is given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of Notes outstanding and
(vii) final unsatisfied judgments not covered by insurance aggregating in excess
of $10 million, at any one time rendered against the Company or any of its
Significant Subsidiaries and not stayed, bonded or discharged within 60 days.
The Indenture provides that if a default occurs and is continuing, the Trustee
must, within 90 days after the occurrence of such default, give to the Holders
notice of such default, but the Trustee shall be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the best interest of the Holders, except in the case of a default in the payment
of the principal of, premium, if any, or interest on or liquidated damages with
respect to, any of the Notes when due or in the payment of any redemption or
repurchase obligation.
The Indenture provides that if an Event of Default occurs and is
continuing (other than an Event of Default specified in clause (v) above with
respect to the Company), then in every such case, unless the principal of all of
the Notes shall have already become due and payable, either the Trustee or the
Holders of 25% in aggregate principal amount of the Notes then outstanding, by
notice in writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all principal and accrued interest and
liquidated damages, if any, thereon to be due and payable immediately. If an
Event of Default specified in clause (v) above with respect to the Company
occurs, all principal and accrued interest and liquidated damages, if any, will
be immediately due and payable on all outstanding Notes without any declaration
or other act on the part of the Trustee or the Holders. The Holders of no less
than a majority in aggregate principal amount of Notes generally are authorized
to rescind such acceleration if all existing Events of Default, other than the
non-payment of the principal of, premium, if any, and interest on, and
liquidated damages with respect to, the Notes that have become due solely by
such acceleration, have been cured or waived.
Prior to the declaration of acceleration of the maturity of the Notes,
the Holders of a majority in principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any default, except a default
in the payment of principal of or interest on, or liquidated damages with
respect to, any Note not yet cured, or a default with respect to any covenant or
provision that cannot be modified or amended without the consent of the Holder
of each outstanding Note affected. Subject to the provisions of the Indenture
relating to the duties of the Trustee, the Trustee will be under no obligation
to exercise any of its rights or powers under the Indenture at the request,
order or direction of any of the Holders, unless such Holders have offered to
the Trustee reasonable security or indemnity. Subject to all provisions of the
Indenture and applicable law, the Holders of a majority in aggregate principal
amount of the Notes at the time outstanding will 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.
The Indenture provides that no Holder may pursue any remedy under the
Indenture, except for a default in the payment of principal, premium, if any, or
interest or liquidated damages, if any, on the Notes, unless the Holder gives to
the Trustee written notice of a continuing Event of Default, the Holders of at
least 25% in principal amount of the outstanding Notes make a written request to
the Trustee to pursue the remedy, such Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense, the Trustee
does not comply with the request within 60 days after receipt of the request and
the offer of indemnity, and the Trustee shall not have received a contrary
direction from the Holders of a majority in principal amount of the outstanding
Notes.
AMENDMENTS AND SUPPLEMENTS
The Indenture contains provisions permitting the Company and the Trustee
to enter into a supplemental indenture for certain limited purposes without the
consent of the Holders. With the consent of the Holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding, the
Company and the Trustee are permitted to amend or supplement the Indenture or
any supplemental indenture or modify the rights of the Holders; provided, that
no such modification may, without the consent of each Holder affected thereby:
(i) change the Stated Maturity of any Note or reduce the principal amount
thereof or the rate (or extend the time for payment) 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 Note or any premium or the interest
thereon is payable, or impair the right to institute suit for the conversion of
any Note or the enforcement of any such
14
<PAGE>
payment on or after the due date thereof (including, in the case of redemption,
on or after the Redemption Date), or reduce the Repurchase Price, or alter the
Repurchase Offer (other than as set forth herein) or redemption provisions in a
manner adverse to the Holders, or (ii) reduce the percentage in principal amount
of the outstanding Notes, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in the Indenture, or
(iii) adversely affect the right of such Holder to convert Notes. A supplemental
indenture entered into in compliance with the "Limitation on Merger, Sale or
Consolidation" covenant would not require the consent of the Noteholders.
NO PERSONAL LIABILITY OF STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES
The Indenture provides that no stockholder, employee, officer or
director, as such, past, present or future of the Company or any successor
corporation shall have any personal liability in respect of the obligations of
the Company under the Indenture or the Notes by reason of his, her or its status
as such stockholder, employee, officer or director.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange the Notes in accordance with the
Indenture. The Company or Trustee may require a Holder, among other things, to
furnish appropriate endorsements, legal opinions and transfer documents, and to
pay any taxes and fees required by law or permitted by the Indenture. The
Company is not required to transfer or exchange any Notes selected for
redemption. Also, the Company is not required to transfer or exchange any Notes
for a period of 15 days before (i) the mailing of a notice of an offer to
repurchase as a result of a Change of Control or (ii) a selection of Notes to be
redeemed.
The registered holder of a Note may be treated as the owner of it for all
purposes.
BOOK-ENTRY, DELIVERY AND FORM
Notes initially held by "qualified institutional buyers," as defined in
Rule 144A under the Securities Act ("QIBs"), are evidenced by one or more
global Notes (the "144A Global Note") which were deposited on the date of the
closing of the sale of the Notes to the Initial Purchasers (the "Closing
Date") with, or on behalf of, The Depository Trust Company, New York, New York
(the "Depositary") and registered in the name of Cede & Co. ("Cede") as the
Depositary's nominee. Notes held by persons who acquired such Notes in
compliance with Regulation S under the Securities Act (a "Non-U.S. Person")
were initially evidenced by one or more global Notes (the "Regulation S Global
Note"), which was deposited on the Closing Date with, or on behalf of, the
Depositary and registered in the name of Cede as the Depositary's nominee, for
the accounts of the Euroclear System ("Euroclear") and Cedel, S.A. ("Cedel").
Beneficial interests in the Regulation S Global Note may only be held through
Euroclear or Cedel, and any resale or transfer of such interests to U.S. persons
shall only be permitted as described below. The 144A Global Note and the
Regulation S Global Note are hereinafter collectively referred to as the
"Global Note". Except as set forth below, the Global Note may be transferred,
in whole or in part, only to another nominee of the Depositary or to a successor
of the Depositary or its nominee.
QIBs may hold their interests in the 144A Global Note directly through
the Depositary if such holder is a participant in the Depositary, or indirectly
through organizations which are participants in the Depositary (the
"Participants"). Transfers between Participants will be effected in the ordinary
way in accordance with the Depositary's rules and will be settled in Federal
funds.
Non-U.S. Persons may hold their interest in the Regulation S Global Note
directly through Cedel or Euroclear, or indirectly through organizations that
are participants in Cedel or Euroclear. Cedel and Euroclear will hold interests
in the Regulation S Global Note on behalf of their participants through the
Depositary. Transfers between participants in Euroclear and Cedel will be
effected in the ordinary way in accordance with their respective rules and
operating procedures.
Notes that were originally issued to or transferred to institutional
"accredited investors," as defined in Rule 501(a) (1), (2), (3) or (7) under
the Securities Act, who were not QIBs or Non-U.S. Persons or to any other
persons who were not QIBs or Non-U.S. Persons were issued in the form of
registered definitive securities ("Certificated Notes"). Upon the transfer to
a QIB or Non-U.S. Person of Certificated Notes, such Certificated Notes will,
unless the Global Note has previously been exchanged for Certificated Notes, be
exchanged for an interest in the Global Note representing the principal amount
of Notes being transferred.
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<PAGE>
The Depositary has advised the Company that it is a limited-purpose trust
company that was created to hold securities for its participating
organizations (collectively, the "Participants") and to facilitate the
clearance and settlement of transactions in such securities between
Participants through electronic book-entry changes in accounts of its
Participants (including Euroclear and Cedel). The Depositary's Participants
include securities brokers and dealers (including the Initial Purchasers),
banks and trust companies, clearing corporations and certain other
organizations. Access to the Depositary's system is also available to other
entities such as banks, brokers, dealers and trust companies (collectively,
"Indirect Participants") that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly. QIBs may
elect to hold Notes purchased by them through the Depositary. QIBs who are
not Participants may beneficially own securities held by or on behalf of the
Depositary only through Participants or Indirect Participants. Persons that
are not QIBs or Non-U.S. Persons may not hold Notes through the Depositary.
Pursuant to procedures established by the Depositary, (i) upon deposit of
the Global Notes, the Depositary credited the accounts of Participants
designated by the Initial Purchasers with an interest in the Global Note and
(ii) ownership of the Notes evidenced by the Global Note are shown on, and the
transfer of ownership thereof will be effected only through, records
maintained by the Depositary (with respect to the interests of Participants),
the Participants and the Indirect Participants. The laws of some states
require that certain persons take physical delivery in definitive form of
securities that they own and that security interests in negotiable instruments
can only be perfected by delivery of certificates representing the
instruments. Consequently, the ability to transfer Notes evidenced by the
Global Note will be limited to such extent. For certain other restrictions on
the transferability of the Notes, see "Notice to Investors."
So long as the Depositary or its nominee is the registered owner of a
Note, the Depositary or such nominee, as the case may be, will be considered
the sole owner or holder of the Notes represented by the Global Note for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in a Global Note will not be entitled to have Notes represented by
such Global Note registered in their names, will not receive or be entitled to
receive physical delivery of Certificated Notes, and will not be considered
the owners or holders thereof under the Indenture for any purpose, including
with respect to the giving of any directions, instructions or approvals to the
Trustee thereunder. As a result, the ability of a person having a beneficial
interest in Notes represented by a Global Note to pledge such interest to
persons or entities that do not participate in the Depositary's system, or to
otherwise take actions with respect to such interest, may be affected by the
lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of Notes by the Depositary, or for maintaining, supervising or
reviewing any records of the Depositary relating to such Notes.
Payments with respect to the principal of, premium, if any, interest on,
and liquidated damages with respect to, any Note represented by a Global Note
registered in the name of the Depositary or its nominee on the applicable
record date will be payable by the Trustee to or at the direction of the
Depositary or its nominee in its capacity as the registered Holder of the
Global Note representing such Notes under the Indenture. Under the terms of
the Indenture, the Company and the Trustee may treat the persons in whose
names the Notes, including the Global Notes, are registered as the owners
thereof for the purpose of receiving such payments and for any and all other
purposes whatsoever. Consequently, neither the Company nor the Trustee has or
will have any responsibility or liability for the payment of such amounts to
beneficial owners of Notes (including, principal, premium, if any, interest,
or liquidated damages with respect thereto), or to immediately credit the
accounts of the relevant Participants with such payment, in amounts
proportionate to their respective holdings in principal amount of beneficial
interests in the Global Note as shown on the records of the Depositary.
Payments by the Participants and the Indirect Participants to the beneficial
owners of Notes will be governed by standing instructions and customary
practice and will be the responsibility of the Participants or the Indirect
Participants.
Holders who desire to convert their Notes into Common Stock pursuant to
the terms of the Notes should contact their brokers or other Participants or
Indirect Participants to obtain information on procedures, including proper
forms and cut-off times, for submitting such requests.
If (i) the Company notifies the Trustee in writing that the Depositary is
no longer willing or able to act as a depositary and the Company is unable to
locate a qualified successor within 90 days or (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance
of Notes in definitive form under the Indenture, then, upon surrender by the
Depositary of the Global Notes, Certificated Notes will be issued to each
person that the Depositary identifies as the beneficial owner of the Notes
represented by Global Notes. In addition, subject to certain conditions, any
person having a beneficial interest in a Global Note may, upon request to the
Trustee, exchange such beneficial interest for Notes in the form of
Certificated Notes. Upon any such issuance, the Trustee is required to
register such Certificated Notes in the name of such person or persons (or the
nominee of any thereof), and cause the same to be delivered thereto.
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<PAGE>
Neither the Company nor the Trustee shall be liable for any delay by the
Depositary or any Participant or Indirect Participant in identifying the
beneficial owners of the Notes, and the Company and the Trustee may
conclusively rely on, and shall be protected in relying on, instructions from
the Depositary for all purposes (including with respect to the registration
and delivery, and the respective principal amounts, of the Notes to be
issued).
CERTAIN DEFINITIONS
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, as to any Person, the obligation
of such Person to pay rent or other amounts under a lease to which such Person
is a party that is required to be classified and accounted for as a capital
lease obligation under GAAP.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Change of Control" means (i) an event or series of events as a result
of which any "person" or "group" (as such terms are used in Sections
13(d)(3) and 14(d) of the Exchange Act) (excluding the Company or any wholly-
owned subsidiary thereof) is or becomes, directly or indirectly, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, whether or not applicable) of more than 50% of the combined voting power
of the then outstanding securities entitled to vote generally in elections of
directors, managers or trustees, as applicable, of the Company or any
successor entity ("Voting Stock"), (ii) the completion of any consolidation
with or merger of the Company into any other Person, or conveyance, transfer
or lease by the Company of all or substantially all of its assets to any
Person, or any merger of any other Person into the Company in a single
transaction or series of related transactions, and, in the case of any such
transaction or series of related transactions, the outstanding Common Stock of
the Company is changed or exchanged as a result, unless the stockholders of
the Company immediately before such transaction own, directly or indirectly,
immediately following such transaction, at least a majority of the combined
voting power of the outstanding voting securities of the Person resulting from
such transaction in substantially the same proportion as their ownership of
the Voting Stock immediately before such transaction, or (iii) such time as
the Continuing Directors (as defined) do not constitute a majority of the
Board of Directors of the Company (or, if applicable, a successor corporation
to the Company); provided that a Change of Control shall not be deemed to have
occurred if either (x) the last sale price of the Common Stock for any five
trading days during the 10 trading days immediately preceding the Change of
Control is at least equal to 105% of the Conversion Price in effect on such
day, or (y) with respect to a merger or consolidation otherwise constituting a
Change of Control described in clause (ii) above, at least 90% of the
consideration in such transaction or transactions consists of common stock or
securities convertible into common stock that are, or upon issuance will be,
traded on a United States national securities exchange or approved for
quotation on the Nasdaq National Market.
"Continuing Director" means at any date a member of the Company's Board
of Directors (i) who was a member of such board on the date of initial
issuance of the Notes or (ii) who was nominated or elected by at least a
majority of the directors who were Continuing Directors at the time of such
nomination or election or whose election to the Company's Board of Directors
was recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election.
"Disqualified Capital Stock" means, with respect to the Company,
Capital Stock of the Company that, by its terms or by the terms of any
security into which it is convertible, exercisable or exchangeable, is, or
upon the happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by the
Company, in whole or in part, on or prior to the Stated Maturity of the Notes,
provided that only the portion of such Capital Stock which is so convertible,
exercisable, exchangeable or redeemable or subject to repurchase prior to such
Stated Maturity shall be deemed to be Disqualified Capital Stock.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such person, (i)
in respect of borrowed money (whether or not the lender has recourse to all or
any portion of the assets of such person), (ii) evidenced by credit or loan
agreements, bonds, notes, debentures or similar instruments (including,
without limitation, notes or similar instruments given in connection with the
acquisition or any business, properties or assets of any kind), (iii)
evidenced by bankers' acceptances or similar instruments issued or accepted by
banks, (iv) for the payment of money relating to a Capitalized Lease
Obligation, or (v) evidenced by a letter of credit or a reimbursement
obligation of
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<PAGE>
such person with respect to any letter of credit; (b) all obligations of such
person issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business); (c) all net obligations of such person
under Interest Swap and Hedging Obligations; (d) all liabilities of others of
the kind described in the preceding clauses (a), (b) or (c) that such person
has guaranteed or that is otherwise its legal liability, or which is secured
by a lien on property of such person, and all obligations to purchase, redeem
or acquire any Capital Stock; and (e) any and all deferrals, renewals,
extensions, modifications, replacements, restatements, refinancings and
refundings (whether direct or indirect) of, or any indebtedness or obligation
issued in exchange for, any liability of the kind described in any of the
preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties.
"Interest Swap and Hedging Obligations" means the obligations of any
Person under any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement or other interest rate hedge agreement, interest
rate collar agreement or other similar agreement or arrangement to which such
Person is a party or beneficiary.
"Junior Securities" means any Qualified Capital Stock (as defined) and
any Indebtedness of the Company that is fully subordinated in right of payment
to the Notes and has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of the
Notes.
"Loan Agreement" means the Amended and Restated Loan and Security
Agreement, dated as of January 3, 1995, among OccuCenters, Inc., the Company,
the lenders from time to time party thereto and Creditanstalt-Bankverein, as
agent for the lenders thereunder, as the same may from time to time be
amended, modified, supplemented, restated, renewed, refunded, restructured,
refinanced, replaced or extended, in whole or in part, whether with same or
different agents or lenders thereunder.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"Senior Indebtedness" means all obligations of the Company to pay the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is allowable as a claim in
any such proceeding) and rent payable on or in connection with, and all fees,
costs, expenses and other amounts accrued or due on or in connection with, any
Indebtedness of the Company, whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed, guaranteed or in effect guaranteed
by the Company, unless the instrument creating or evidencing such Indebtedness
provides that such Indebtedness is not senior or superior in right of payment
to the Notes or which is pari passu with, or subordinated to, the Notes;
provided that in no event shall Senior Indebtedness include (a) Indebtedness
of the Company owed or owing to any subsidiary of the Company or any officer,
director or employee of the Company or any subsidiary of the Company, (b)
Indebtedness representing or with respect to any account payable or other
accrued current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or services or (c) any
liability for taxes owed or owing by the Company or any subsidiary of the
Company.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Company within the meaning of Rule 1.02(w) of Regulation
S-X promulgated by the Commission as in effect as of the date of the
Indenture.
"Stated Maturity," when used with respect to any Note, means
December 15, 2001.
"Subsidiary" with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power normally entitled to vote in
the election of directors is at the time, directly or indirectly, owned by
such person, by such person and one or more Subsidiaries of such person or by
one or more Subsidiaries of such person, (ii) a partnership in which such
person or a Subsidiary of such person is, at the time, a general partner and
owns alone or together with one or more Subsidiaries of such person a majority
of the partnership interests, or (iii) any other person (other than a
corporation) in which such person, one or more Subsidiaries of such person, or
such person and one or more Subsidiaries of such person, directly or
indirectly, at the date of determination thereof, has at least a majority
ownership interest.
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SELLING SECURITYHOLDERS
The following table sets forth the name of each Selling Securityholder
and relationship, if any, with the Company and (i) the amount of Notes owned by
each Selling Securityholder as of January 31, 1997 (assuming no Notes have been
sold under this Prospectus as of such date), (ii) the maximum amount of Notes
which may be offered for the account of such Selling Securityholder under this
Prospectus, (iii) the amount of Common Stock owned by each Selling
Securityholder as of January 31, 1997, and (iv) the maximum amount of Common
Stock which may be offered for the account of such Selling Securityholder under
this Prospectus.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL COMMON STOCK
AMOUNT OF AMOUNT OF NOTES OWNED PRIOR COMMON STOCK
NAME OF SELLING SECURITYHOLDER NOTES OWNED OFFERED HEREBY TO OFFERING (1) OFFERED HEREBY (2)
- ----------------------------------------------------- ----------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
CFRW-C,L.P. $ 5,000,000 $ 5,000,000 168,350 168,350
----------- --------------- --------------- --------------
SUBTOTAL 5,000,000 5,000,000 168,350 168,350
----------- --------------- --------------- --------------
Unnamed holders of Notes or any future transferees,
pledgees, donees or successors of or from any such
unnamed holders (3)............................... $92,750,000 $92,750,000 3,122,893 3,122,893
------------- ------------- ------------(4) --------------
TOTAL $97,750,000 $97,750,000 3,291,243 3,291,243
============= ============== ============== ==============
</TABLE>
- -------------------
(1) Comprises the shares of Common Stock into which the Notes held by such
Selling Securityholder are convertible at the initial conversion rate. The
Conversion Rate and the number of shares of Common Stock issuable upon
conversion of the Notes are subject to adjustment under certain circumstances.
See "Description of Notes -- Conversion Rights." Accordingly, the number of
shares of Common Stock issuable upon conversion of the Notes may increase or
decrease from time to time.
(2) Assumes conversion into Common Stock of the full amount of Notes held by
the Selling Securityholder at the initial conversion rate and the offering of
such shares by such Selling Securityholder pursuant to this Prospectus. The
Conversion Rate and the number of shares of Common Stock issuable upon
conversion of the Notes is subject to adjustment under certain circumstances.
See "Description of Notes -- Conversion Rights." Accordingly, the number of
shares of Common Stock issuable upon conversion of the Notes may increase or
decrease from time to time. Fractional shares will not be issued upon
conversion of the Notes; rather, cash will be paid in lieu of fractional
shares, if any.
(3) No such holder may offer Notes pursuant to this Prospectus until such
holder is included as a Selling Securityholder in a supplement to this
Prospectus in according with the Registration Rights Agreement (as defined).
(4) Assumes that the unnamed holders of Notes or any future transferees,
pledgees, donees or successors of or from any such unnamed holder do not
beneficially own any Common Stock other than the Common Stock issuable upon
conversion of the Notes at the initial conversion rate.
Because the Selling Securityholders may, pursuant to this Prospectus, offer
all or some portion of the Notes and Common Stock they presently hold or, with
respect to Common Stock, have the right to acquire upon conversion of such
Notes, no estimate can be given as to the amount of the Notes and Common Stock
that will be held by the Selling Securityholders upon termination of any such
sales. In addition, the Selling Securityholders identified above may have sold,
transferred or otherwise disposed of all or a portion of their Notes and Common
Stock since the date on which they provided the information regarding their
Notes and Common Stock, in transactions exempt from the registration
requirements of the Securities Act. See "Plan of Distribution."
Only Selling Securityholders identified above who beneficially own the
Notes and Common Stock set forth opposite each such Selling Securityholder's
name in the foregoing table on the effective date of the Registration Statement
may sell such Notes and Common Stock pursuant to this Prospectus. The Company
may from time to time, in accordance with the Registration Rights Agreement,
include additional Selling Securityholders in supplements to this Prospectus.
The Company will pay the expenses of registering the Notes and Common Stock
being sold hereunder.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain material United States federal income
and estate tax considerations relating to the purchase, ownership and
disposition of the Notes and of Common Stock into which Notes may be
converted, but does not purport to be a complete analysis of all the potential
tax considerations relating thereto. This summary is based on the provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), the
applicable Treasury Regulations promulgated or proposed thereunder ("Treasury
Regulations"), judicial authority and current administrative rulings and
practice, all of which are subject to change, possibly on a retroactive basis.
This summary deals only with holders that will hold Notes and Common Stock
into which Notes may be converted as "capital assets" (within the meaning of
Section 1221) and does not address tax considerations applicable to investors
that may be subject to special tax rules, such as banks, tax-exempt
organizations, insurance companies, dealers in securities or currencies,
persons that will hold Notes as a position in a hedging transaction,
"straddle" or "conversion transaction" for tax purposes, or persons that
have a "functional currency" other than the U.S. dollar. The Company has not
sought any ruling from the Internal Revenue Service with respect to the
statements made and the conclusions reached in the following summary, and
there can be no assurance that the Internal Revenue Service will agree with
such statements and conclusions. INVESTORS CONSIDERING THE PURCHASE OF NOTES
SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE
UNITED STATES FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR
SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY
STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX
TREATY.
UNITED STATES HOLDERS
As used herein, the term "United States Holder" means the beneficial
owner of a Note or Common Stock that for United States federal income tax
purposes is (i) a citizen or resident of the United States, (ii) treated as a
domestic corporation or domestic partnership, or (iii) an estate or trust that
is subject to United States federal income taxation on a net income basis in
respect of the Notes or Common Stock. For taxable years beginning after
December 31, 1996, a trust will be a "United States Holder" of a Note only
if the trust is subject to the supervision of a court within the United States
and the control of a United States fiduciary as described in Section
7701(a)(30) of the Code.
PAYMENT OF INTEREST
Interest on a Note generally will be includable in the income of a United
States Holder as ordinary income at the time such interest is received or
accrued, in accordance with such Holder's method of accounting for United
States federal income tax purposes. The Notes will not have original issue
discount.
AMORTIZABLE BOND PREMIUM
If a United States Holder of a Note acquires the Note at a cost that is in
excess of the amount payable at maturity (which, under certain proposed
Treasury Regulations, will be determined by reference to an earlier call date
if the call price would increase a United States Holder's yield on the Note),
the United States Holder may elect under Section 171 of the Code to amortize
the excess cost (as an offset to interest income) on a constant interest rate
basis over the term of such Note. If the United States Holder makes an
election to amortize bond premium, the tax basis of all of such United States
Holder's Notes will be reduced by the allowable bond premium amortization.
The amortization election would apply to all debt instruments held or
subsequently acquired by the electing purchaser and cannot be revoked without
permission from the Service. On conversion of a Note into shares of Common
Stock, no additional amortization of any bond premium would be allowed, and
any remaining premium would be added to the United States Holder's basis in
the Common Stock received.
MARKET DISCOUNT
Investors acquiring Notes pursuant to this Prospectus should consider that
the resale of those Notes may be adversely affected by the market discount
provisions of Sections 1276 through 1278 of the Code. Except as described
below, gain recognized on the disposition of a Note that has accrued market
discount will be treated as ordinary income, and not capital gain, to the
extent of the accrued market discount. "Market discount" is defined
generally as the excess, if any, of (i) the principal amount of the Note over
(ii) the tax basis of the Note in the hands of the United States Holder
immediately after its acquisition.
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<PAGE>
Under a de minimis exception, there is no market discount if the excess of
the principal amount of the obligation over the United States Holder's tax
basis in the obligation is less than 0.25% of the principal amount multiplied
by the number of complete years after the acquisition date to the obligation's
date of maturity. Unless the United States Holder elects otherwise, the
accrued market discount generally would be the amount calculated by
multiplying the market discount by a fraction, the numerator of which is the
number of days the obligation has been held by the United States Holder and
the denominator of which is the number of days after the United States
Holder's acquisition of the obligation up to and including its maturity date.
If a United States Holder of a Note acquired with market discount disposes
of such Note in any transaction other than a sale, exchange or involuntary
conversion, such United States Holder will be deemed to have realized an
amount equal to the fair market value of the Note and will be required to
recognize as ordinary income any accrued market discount. See the discussion
below under "--Sale, Exchange or Redemption of the Notes" for the tax
consequences of a sale or exchange. A partial principal payment (if any) on a
Note will be includable as ordinary income upon receipt to the extent of any
accrued market discount thereon. Any accrued market discount not previously
taken into income prior to a conversion of a Note into shares of Common Stock,
however, should (under Treasury Regulations not yet issued) carry over to the
Common Stock received on conversion and be treated as ordinary income upon a
subsequent disposition of such Common Stock, to the extent of any gain
recognized on such disposition. A United States Holder of a Note acquired at
a market discount also may be required to defer the deduction of all or a
portion of the interest on any indebtedness incurred or maintained to purchase
or carry the Note until it is disposed of in a taxable transaction.
A United States Holder of a Note acquired at a market discount may elect to
include the market discount in income as it accrues. This election would
apply to all market discount obligations as acquired by the electing United
States Holder on or after the first day of the first year to which the
election applies. The election may be revoked only with the consent of the
Service. If a United States Holder of a Note elects to include market
discount in income currently, the rules discussed above regarding (i) ordinary
income recognition resulting from a sale and certain other disposition
transactions and (ii) deferral of interest deductions would not apply.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a Note, subject to the market
discount rules discussed above, a United States Holder generally will
recognize capital gain or loss equal to the difference between (i) the amount
of cash proceeds and the fair market value of any property received on the
sale, exchange or redemption (except to the extent such amount is attributable
to accrued interest income not previously recognized by such Holder, which is
taxable as ordinary income) and (ii) such Holder's adjusted tax basis in the
Note. A United States Holder's adjusted tax basis in a Note generally will
equal the cost of the Note to such Holder, less any principal payments
received by such Holder. Such capital gain or loss will be long-term capital
gain or loss if the United States Holder's holding period in the Note is more
than one year at the time of sale, exchange or redemption.
CONVERSION OF THE NOTES
A United States Holder generally will not recognize any income, gain or
loss upon conversion of a Note into Common Stock, except with respect to cash
received in lieu of a fractional share of Common Stock. Such Holder's tax
basis in the Common Stock received on conversion of a Note will be the same as
such Holder's adjusted tax basis in the Note at the time of conversion
(reduced by any basis allocable to a fractional share interest), and the
holding period for the Common Stock received on conversion will generally
include the holding period of the Note converted.
Cash received in lieu of a fractional share of Common Stock upon conversion
should be treated as a payment in exchange for the fractional share of Common
Stock. Accordingly, the receipt of cash in lieu of a fractional share of
Common Stock generally should result in capital gain or loss (measured by the
difference between the cash received for the fractional share and the United
States Holder's adjusted tax basis in the fractional share).
DIVIDENDS
The amount of any distribution by the Company in respect of the Common
Stock will be equal to the amount of cash and the fair market value, on the
date of distribution, of any property distributed. Generally, distributions
will be treated as a dividend, subject to tax as ordinary income, to the
extent of the Company's current or accumulated earnings and profits, then
21
<PAGE>
as a tax-free return of capital to the extent of the Holder's tax basis in the
Common Stock and thereafter as gain from the sale of exchange of such stock.
In general, a dividend distribution to a corporate United States Holder
will qualify for the 70% dividends received deduction if the Holder owns less
than 20% of the voting power and value of the Company's stock (other than any
non-voting, non-convertible, non-participating preferred stock). A corporate
United States Holder that owns 20% or more of the voting power and value of
the Company's stock (other than any non-voting, non-convertible, non-
participating preferred stock) generally will qualify for an 80% dividends
received deduction. The dividends received deduction is subject, however, to
certain holding period, taxable income and other limitations.
If at any time (i) the Company makes a distribution of cash or property to
its stockholders or purchases Common Stock and such distribution or purchase
would be taxable to such stockholders as a dividend for United States federal
income tax purposes (e.g., distributions of evidences of indebtedness or
assets of the Company, but generally not stock dividends or rights to
subscribe for Common Stock) and, pursuant to the antidilution provisions of
the Indenture, the conversion price of the Notes is decreased, or (ii) the
conversion price of the Notes is decreased at the discretion of the Company,
such decrease in conversion price may be deemed to be the payment of a taxable
dividend to United States Holders of Notes (pursuant to Section 305 of the
Code). Such Holders of Notes could therefore have taxable income as a result
of an event pursuant to which they received no cash or property.
SALE OF COMMON STOCK
Upon the sale or exchange of Common Stock, a United States Holder generally
will recognize capital gain or loss equal to the difference between (i) the
amount of cash and the fair market value of any property received upon the
sale or exchange and (ii) such Holder's adjusted tax basis in the Common
Stock. Such capital gain or loss will be long-term if the United States
Holder's holding period in the Common Stock is more than one year at the time
of the sale or exchange. A United States Holder's basis and holding period in
Common Stock received upon conversion of a Note are determined as discussed
above under "--Conversion of the Notes".
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
In general, information reporting requirements will apply to payments of
principal, if any, and interest on a Note, payments of dividends on Common
Stock, payments of the proceeds of the sale of a Note and payments of the
proceeds of the sale of Common Stock to certain noncorporate United States
Holders. The payor will be required to withhold backup withholding tax at the
rate of 31% if (a) the payee fails to furnish a taxpayer identification number
("TIN) to the payor or establish an exemption from backup withholding, (b)
the IRS notifies the payor that the TIN furnished by the payee is incorrect,
(c) there has been a notified payee underreporting with respect to interest,
dividends or original issue discount described in Section 3406(c)of the Code
or (d) there has been a failure of the payee to certify under the penalty of
perjury that the payee is not subject to backup withholding under the Code.
Any amounts withheld under the backup withholding rules from a payment to a
United States Holder will be allowed as a credit against such Holder's United
States federal income tax and may entitle the Holder to a refund, provided
that the required information is furnished to the IRS.
NON-UNITED STATES HOLDERS
As used herein, the term "Non-United States Holder" means any beneficial
owner of a Note or Common Stock that is not a United States Holder.
PAYMENT OF INTEREST
Generally, interest income of a Non-United States Holder that is not
effectively connected with a United States trade or business will be subject
to a withholding tax at a 30% rate (or, if applicable, a lower treaty rate).
However, interest paid on a Note by the Company or any Paying Agent to a Non-
United States Holder will qualify for the "portfolio interest exemption" and
therefore will not be subject to United States federal income tax or
withholding tax, provided that such interest income is not effectively
connected with a United States trade or business of the Non-United States
Holder and provided that the Non-United States Holder (i) does not actually or
constructively own (pursuant to the conversion feature of the Notes or
otherwise) 10% or more of the combined voting power of all classes of stock of
the Company entitled to vote, (ii) is not a controlled
22
<PAGE>
foreign corporation related to the Company actually or constructively through
stock ownership, (iii) is not a bank which acquired the Notes in consideration
for an extension of credit made pursuant to a loan agreement entered into in
the ordinary course of business and (iv) either (a) provides a Form W-8 (or a
suitable substitute form) signed under penalties of perjury that includes its
name and address and certifies as to its non-United States status in
compliance with applicable law and regulations, or (b) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business holds the Note and
provides a statement to the Company or its agent under penalties of perjury in
which it certifies that such a Form W-8 (or a suitable substitute) has been
received by it from the Non-United States Holder or qualifying intermediary
and furnishes the Company or its agent with a copy thereof.
Proposed Treasury Regulations would provide alternative methods for
satisfying the certification requirement described in clause (iv) above. The
proposed Treasury Regulations also would require, in the case of Notes held by
a foreign partnership, that (i) the certification described in clause (iv)
above be provided by the partners rather than by the foreign partnership and
(ii) the partnership provide certain information, including a United States
taxpayer identification number. A look-through rule would apply in the case
of tiered partnerships. The proposed Treasury Regulations are proposed to be
effective for payments made after December 31, 1997. There can be no
assurance that the proposed Treasury Regulations will be adopted or as to the
provisions that they will include if and when adopted in temporary or final
form.
Except to the extent that an applicable treaty otherwise provides, a Non-
United States Holder generally will be taxed in the same manner as a United
States Holder with respect to interest if the interest income is effectively
connected with a United States trade or business of the Non-United States
Holder. Effectively connected interest received by a corporate Non-United
States Holder may also, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate (or, if applicable, a lower
treaty rate). Even though such effectively connected interest is subject to
income tax, and may be subject to the branch profits tax, it is not subject to
withholding tax if the Holder delivers a properly executed IRS Form 4224 to
the payor.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
A Non-United States Holder of a Note will generally not be subject to
United States federal income tax or withholding tax on any gain realized on
the sale, exchange or redemption of the Note (including the receipt of cash in
lieu of fractional shares upon conversion of a Note into Common Stock) unless
(1) the gain is effectively connected with a United States trade or business
of the Non-United States Holder, (2) in the case of a Non-United States Holder
who is an individual, such Holder is present in the United States for a period
or periods aggregating 183 days or more during the taxable year of the
disposition or (3) the Holder is subject to tax pursuant to the provisions of
the Code applicable to certain United States expatriates.
CONVERSION OF THE NOTES
In general, no United States federal income tax or withholding tax will be
imposed upon the conversion of a Note into Common Stock by a Non-United States
Holder except with respect to the receipt of cash in lieu of fractional shares
by Non-United States Holders upon conversion of a Note where any of the
conditions described above under "Non-United States Holders--Sale, Exchange
or Redemption of the Notes" is satisfied.
SALE OR EXCHANGE OF COMMON STOCK
A Non-United States Holder generally will not be subject to United States
federal income tax or withholding tax on the sale or exchange of Common Stock
unless any of the conditions described above under "Non-United States
Holders--Sale, Exchange or Redemption of the Notes" is satisfied.
DIVIDENDS
Distributions by the Company with respect to the Common Stock that are
treated as Dividends paid (or deemed paid), as described above under "United
States Holders--Dividends" to a Non-United States Holder (excluding dividends
that are effectively connected with the conduct of a trade or business in the
United States by such Holder and are taxable as described below) will be
subject to United States federal withholding tax at a 30% rate (or lower rate
provided under any applicable income tax treaty). Except to the extent that
an applicable tax treaty otherwise provides, a Non-United States Holder will
be taxed in the same manner as a United States Holder on dividends paid (or
deemed paid) that are effectively connected with
23
<PAGE>
the conduct of a trade or business in the United States by the Non-United
States Holder. If such Non-United States Holder is a foreign corporation, it
may also be subject to a United States branch profits tax on such effectively
connected income at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. Even though such effectively connected
dividends are subject to income tax, and may be subject to the branch profits
tax, they will not be subject to U.S. withholding tax if the Holder delivers
IRS Form 4224 to the payor.
Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above and, under the current interpretation of the
Treasury Regulations, for purposes of determining the applicability of a tax
treaty rate. Under Treasury Regulations that are proposed to be effective for
distributions after 1997, however, a non-U.S. holder of Common Stock who
wishes to claim the benefit of an applicable treaty rate would be required to
satisfy applicable certification requirements. In addition, under the
proposed Treasury Regulations, in the case of common stock held by a foreign
partnership, the certification requirement would generally be applied to the
partners of the partnership and the partnership would be required to provide
certain information, including a United States taxpayer identification number.
The proposed Treasury Regulations also provide look-through rules for tiered
partnerships. It is not certain whether, or in what form, the proposed
Treasury Regulations will be adopted as final regulations.
DEATH OF A NON-UNITED STATES HOLDER
A Note held by an individual who is not a citizen or resident of the United
States at the time of death will not be includable in the decedent's gross
estate for United States estate tax purposes, provided that such Holder or
beneficial owner did not at the time of death actually or constructively own
10% or more of the combined voting power of all classes of stock of the
Company entitled to vote, and provided that, at the time of death, payments
with respect to such Note would not have been effectively connected with the
conduct by such Non-United States Holder of a trade or business within the
United States.
Common Stock actually or beneficially held (other than through a foreign
corporation) by a Non-United States Holder at the time of his or her death (or
previously transferred subject to certain retained rights or powers) will be
subject to United States federal estate tax unless otherwise provided by an
applicable estate tax treaty.
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
United States information reporting requirements and backup withholding tax
will not apply to payments on a Note to a Non-United States Holder if the
statement described in "Non-United States Holders--Payment of Interest" is
duly provided by such Holder, provided that the payor does not have actual
knowledge that the Holder is a United States person.
Information reporting requirements and backup withholding tax will not
apply to any payment of the proceeds of the sale of a Note or any payment of
the proceeds of the sale of Common Stock effected outside the United States by
a foreign office of a "broker" (as defined in applicable Treasury
Regulations), unless such broker is (i) a United States person, (ii) a foreign
person that derives 50% or more of its gross income for certain periods from
the conduct of a trade or business in the United States or (iii) a controlled
foreign corporation for United States federal income tax purposes. Payment of
the proceeds of any such sale effected outside the United States by a foreign
office of any broker that is described in (i), (ii) or (iii) of the preceding
sentence will not be subject to backup withholding tax, but will be subject to
information reporting requirements unless such broker has documentary evidence
in its records that the beneficial owner is a Non-United States Holder and
certain other conditions are met, or the beneficial owner otherwise
establishes an exemption. Payment of the proceeds of any such sale to or
through the United States office of a broker is subject to information
reporting and backup withholding requirements, unless the beneficial owner of
the Note provides the statement described in "Non-United States Holders--
Payment of Interest" or otherwise establishes an exemption.
If paid to an address outside the United States, dividends on Common Stock
held by a Non-United States Holder will generally not be subject to the
information reporting and backup withholding requirements described in this
section. However, under the proposed Treasury Regulations, dividend payments
will be subject to information reporting and backup withholding unless
applicable certification requirements are satisfied. See the discussion above
with respect to rules applicable to foreign partnerships under the proposed
Treasury Regulations.
24
<PAGE>
THE COMPANY
Under Section 279 of the Code, interest paid or incurred by a corporation
with respect to certain convertible, subordinated indebtedness that is
utilized to provide consideration for the acquisition of stock in another
corporation (or a substantial portion of the assets of another corporation) is
not deductible for federal income tax purposes to the extent interest on such
"corporate acquisition indebtedness" as defined in Section 279 exceeds $5
million per year, reduced by the interest paid on certain other indebtedness
that does not constitute "corporate acquisition indebtedness" for purposes
of Section 279, but is used to fund corporate acquisitions. The Notes may
constitute "corporate acquisition indebtedness" for purposes of Section 279
of the Code, which could result in all or a portion of the interest payments
under the Notes not being deductible for federal income tax purposes.
Although there can be no assurance, the Company does not anticipate that any
significant portion of the interest deductions with respect to the Notes will
be disallowed pursuant to Section 279.
PLAN OF DISTRIBUTION
The Notes were issued to the Selling Securityholders in connection with an
underwritten private placement and are convertible into Common Stock as
described in "Description of Notes--Conversion Rights." The Company entered
into the Registration Rights Agreement with the Initial Purchasers for the
benefit of holders of the Notes to register their Notes and such Common Stock
under the Securities Act under certain circumstances and at certain times.
The Registration Rights Agreement provides for cross-indemnification of the
Selling Securityholders and the Company for losses, claims, damages,
liabilities and expenses arising, under certain circumstances, out of the
registration of the Notes and such Common Stock.
The Notes and such Common Stock may be sold from time to time by the
Selling Securityholders. The Selling Securityholders may from time to time
sell all or a portion of the Notes and such Common Stock in transactions on
the Nasdaq National Market, in the over-the-counter market, in negotiated
transactions, or a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Notes and such Common Stock may be sold
directly or through underwriters or broker-dealers. If the Notes or shares of
Common Stock are sold through underwriters or broker-dealers, the Selling
Securityholders may pay underwriting discounts or brokerage commissions and
charges. The methods by which the Notes and such Common Stock may be sold
include (i) a block trade in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction, (ii) purchases by a
broker or dealer as principal and resale by such broker or dealer for its own
account pursuant to this Prospectus, (iii) exchange distributions and/or
secondary distributions in accordance with the rules of the Nasdaq National
Market, (iv) ordinary brokerage transactions and transactions in which the
broker solicits purchasers, and (v) privately negotiated transactions.
Pursuant to the provisions of the Registration Rights Agreement, the
Company will pay the costs and expenses incident to its registration and
qualification of the Notes and Common Stock offered hereby, including
registration and filing fees. In addition, the Company has agreed to
indemnify the Selling Securityholders against certain liabilities, including
liabilities arising under the Securities Act.
The Selling Securityholders and any underwriter or broker-dealer
participating in the distribution of the Notes and Common Stock may be deemed
to be "underwriters" within the meaning of the Securities Act, and any
profits, discounts, commissions or concessions paid or allowed to any such
underwriter or broker-dealer may be deemed to be underwriting discounts and
commissions under the Securities Act. The Selling Securityholders may
indemnify any broker-dealer that participates in transactions involving the
sale of Notes and Common Stock against certain liabilities, including
liabilities under the Securities Act.
In addition, any securities covered by this Prospectus that qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under
Rule 144 or Rule 144A rather than pursuant to this Prospectus. There can be
no assurance that any Selling Securityholder will sell any or all of the Notes
or Common Stock described herein, and any Selling Securityholder may transfer,
devise or gift such securities by other means not described herein.
LEGAL MATTERS
The validity of the Notes and Common Stock offered hereby will be passed
upon by Vinson & Elkins L.L.P., Dallas, Texas.
25
<PAGE>
EXPERTS
The consolidated financial statements of the Company as of December 31,
1994 and 1995, and for each of the three years in the period ended December
31, 1995, incorporated by reference in this Prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The combined financial statements of Prizm Environmental & Occupational
Health, Inc. incorporated by reference in this Prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein by reference in
reliance upon the authority of said firm as experts in giving said reports.
26
<PAGE>
================================================================================
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made by this Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company, any Selling Securityholder or underwriter. Neither
the delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create an implication that there has been no change in the affairs
of the Company since the date hereof. This Prospectus does not constitute an
offer or solicitation by anyone in any state in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so to anyone to whom it is unlawful to make such offer or
solicitation.
_____________________
TABLE OF CONTENTS
Page
----
Available Information.................... 2
Incorporation of Certain Information
by Reference........................... 2
Risk Factors............................. 3
Recent Developments...................... 6
Ratio of Earnings to Fixed Charges....... 7
Description of Notes..................... 8
Selling Securityholders.................. 19
Certain Federal Income Tax Consequences.. 20
Plan of Distribution..................... 25
Legal Matters............................ 25
Experts.................................. 26
================================================================================
================================================================================
$97,750,000
OCCUSYSTEMS, INC.
6% CONVERTIBLE SUBORDINATED NOTES
DUE 2001
____________
PROSPECTUS
____________
, 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Registrant in connection with the
registration of the Notes and Common Stock offered hereby are as follows:
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee....................... $ 29,622
Nasdaq National Market System Filing Fee... 17,500
Legal Fees and Expenses.................... 35,000
Accounting Fees and Expenses............... 35,000
Fees and Expenses of Transfer Agent........ 10,000
Miscellaneous Expenses..................... 5,000
--------
Total.................................. $132,122
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Tenth of the Certificate of Incorporation of the Registrant
provides that the Registrant shall indemnify its officers and directors to the
maximum extent allowed by the Delaware General Corporation Law. Pursuant to
Section 145 of the Delaware General Corporation Law, the Registrant generally
has the power to indemnify its present and former directors and officers
against expenses and liabilities incurred by them in connection with any suit
to which they are, or are threatened to be made, a party by reason of their
serving in those positions so long as they acted in good faith and in a manner
they reasonably believed to be in, or not opposed to, the best interests of
the Registrant, and with respect to any criminal action, so long as they had
no reasonable cause to believe their conduct was unlawful. With respect to
suits by or in the right of the Registrant, however, indemnification is
generally limited to attorneys' fees and other expenses and is not available
if the person is adjudged to be liable to the Registrant, unless the court
determines that indemnification is appropriate. The statute expressly
provides that the power to indemnify authorized thereby is not exclusive of
any rights granted under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise. The Registrant also has the power to
purchase and maintain insurance for its directors and officers. Additionally,
Article Tenth of the Certificate of Incorporation provides that, in the event
that an officer or director files suit against the Registrant seeking
indemnification of liabilities or expenses incurred, the burden will be on the
Registrant to prove that the indemnification would not be permitted under the
Delaware General Corporation Law.
The preceding discussion of the Registrant's Certificate of Incorporation
and Section 145 of the Delaware General Corporation Law is not intended to be
exhaustive and is qualified in its entirety by the Certificate of
Incorporation and Section 145 of the Delaware General Corporation Law.
The Registrant has entered into indemnity agreements with the
Registrant's directors and officers. Pursuant to such agreements, the
Registrant will, to the extent permitted by applicable law, indemnify such
persons against all expenses, judgments, fines and penalties incurred in
connection with the defense or settlement of any actions brought against them
by reason of the fact that they were directors or officers of the Registrant
or assumed certain responsibilities at the direction of the Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit
Number Description of Exhibits
------- -----------------------
1.1 -- Purchase Agreement dated December 24, 1996 among the Registrant,
Donaldson, Lufkin & Jenrette Securities Corporation, Alex. Brown &
Sons Incorporated and Piper Jaffray, Inc.
4.1 -- Indenture dated as of December 24, 1996, between the Registrant and
United States Trust Company of New York, as Trustee.
4.2 -- Registration Rights Agreement dated as of December 24, 1996, among
the Registrant and Donaldson, Lufkin & Jenrette Securities
Corporation, Alex. Brown & Sons Incorporated and Piper Jaffray Inc.
5.1 -- Opinion of Vinson & Elkins L.L.P.
10.1 -- Form of Amendment to Employment Agreement of John K. Carlyle.
II-1
<PAGE>
Exhibit
Number Description of Exhibits
-------- -----------------------
10.2 -- Amendment to Employment Agreement of Daniel J. Thomas.
10.3 -- Amendment to Employment Agreement of Richard A. Parr II.
10.4 -- Amendment to Employment Agreement of James M. Greenwood.
10.5 -- Amendment to Employment Agreement of W. Thomas Fogarty, M.D.
11.1 -- Statement regarding computation of per share earnings (filed with the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, which is incorporated herein by reference).
12.1 -- Statements regarding computation of ratios.
23.1 -- Consent of Vinson & Elkins L.L.P. (set forth in Exhibit 5.1).
23.2 -- Consent of Arthur Andersen LLP, Independent Auditors.
24.1 -- Powers of Attorney (set forth on signature page).
25.1 -- Form T-1.*
--------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required in Section 10(a)(3) of the
Securities Act of 1933;
(iii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant
to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed to be
a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas, State of Texas, on the 31st
day of January, 1997.
OCCUSYSTEMS, INC.
By: /s/ James M. Greenwood
---------------------------------------
James M. Greenwood
Senior Vice President, Chief Financial
Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below authorizes and appoints each of John K. Carlyle and James M. Greenwood,
and each of them severally, acting alone and without the other, as his
attorney-in-fact to execute in the name of such person and to file any
amendments to this Registration Statement necessary or advisable to enable the
Company to comply with the Securities Act of 1933 and any rules, regulations
and requirements of the Securities and Exchange Commission in respect thereof,
in connection with the registration of the securities which are the subject of
this Registration Statement, which amendments may make such changes in the
Registration Statement as such attorney-in-fact may deem appropriate.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ John K. Carlyle Chairman of the Board and Chief January 31, 1997
------------------------- Executive Officer (Principal Executive Officer);
John K. Carlyle Director
/s/ James M. Greenwood Senior Vice President, Chief Financial Officer January 31, 1997
------------------------- and Treasurer (Principal Financial and Accounting
James M. Greenwood Officer)
/s/ Daniel J. Thomas President and Chief Operating Officer; Director January 31, 1997
-------------------------
Daniel J. Thomas
/s/ Richard D. Rehm, M.D. Director January 31, 1997
-----------------------
Richard D. Rehm, M.D.
Director
-------------------------
Robert W. O'Leary
/s/ Paul B. Queally Director January 31, 1997
-------------------------
Paul B. Queally
/s/ Stephen A. George, M.D. Director January 31, 1997
-------------------------
Stephen A. George, M.D.
/s/ Robert A. Ortenzio Director January 31, 1997
-------------------------
Robert A. Ortenzio
</TABLE>
II-3
<PAGE>
EXHIBIT 1.1
OCCUSYSTEMS, INC.
6% Convertible Subordinated Notes due 2001
PURCHASE AGREEMENT
December 18, 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS INCORPORATED
PIPER JAFFRAY INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
OccuSystems, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to Donaldson, Lufkin & Jenrette Securities Corporation, Alex.
Brown & Sons Incorporated and Piper Jaffray Inc. (each, an "Initial Purchaser"),
$85,000,000 aggregate principal amount of its 6% Convertible Subordinated Notes
due 2001 (the "Firm Notes"). The Company also proposes to issue and sell to the
Initial Purchasers not more than an additional $12,750,000 principal amount of
its 6% Convertible Subordinated Notes due 2001 (the "Additional Notes"), if
requested by the Initial Purchasers as provided in Section 1 hereof. The Firm
Notes and the Additional Notes are herein collectively referred to as the
"Notes." The Notes are to be issued pursuant to an indenture (the "Indenture")
to be dated as of December 24, 1996 between the Company and United States Trust
Company of New York, as trustee (the "Trustee"), pursuant to which the Notes, as
provided therein, will be convertible at the option of the holders thereof into
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"). The Notes and the Common Stock issuable upon conversion thereof are
herein collectively referred to as the "Securities". The Securities and
the Indenture are more fully described in the Final Offering
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Memorandum (as hereinafter defined). Capitalized terms used in the Final
Offering Memorandum without definition herein have the respective meanings
specified in the Final Offering Memorandum.
The Securities will be offered and sold to the Initial Purchasers pursuant
to an exemption from the registration requirements of the Securities Act of
1933, as amended (collectively with the rules and regulations of the SEC
thereunder, the "Act"). The Initial Purchasers have advised the Company that
they will offer and sell the Securities purchased by them hereunder in
accordance with Section 5 hereof as soon as the Initial Purchasers deem
advisable after the execution and delivery of this Agreement.
In connection with the offer and sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated December 3, 1996 (the
"Preliminary Offering Memorandum"), and a final offering memorandum, dated
December 18, 1996 (the "Final Offering Memorandum"). Each of the Preliminary
Offering Memorandum and the Final Offering Memorandum sets forth certain
information concerning the Company and the Securities. The term "Preliminary
Offering Memorandum" and "Final Offering Memorandum" as used herein shall
include all documents incorporated by reference therein. The Company hereby
confirms that it has authorized the use of the Preliminary Offering Memorandum
and the Final Offering Memorandum, and any amendment or supplement thereto
prepared by the Company, in connection with the offer and sale of the Securities
by the Initial Purchasers.
The holders of the Securities will be entitled to the benefits of a
registration rights agreement (the "Registration Rights Agreement"), to be dated
December 24, 1996, between the Company and the Initial Purchasers, in
substantially the form of Exhibit A hereto.
1. Agreements to Sell and Purchase. (a) On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, (i) the Company agrees to issue and sell and (ii) each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company the principal amount of Firm Notes set forth opposite the name of such
Initial Purchaser in Schedule I hereto, at a purchase price of 97% of their
principal amount (the "Purchase Price").
(b) On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, (i) the Company agrees
to issue and sell the Additional Notes and (ii) the Initial Purchasers shall
have the
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right to purchase, severally and not jointly, the Additional Notes from the
Company at the Purchase Price. Additional Notes may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Notes. The Initial Purchasers may exercise their right to purchase
Additional Notes in whole or in part from time to time by giving written notice
thereof to the Company at any time within 30 days after the date of this
Agreement. Donaldson, Lufkin & Jenrette Securities Corporation shall give any
such notice on behalf of the Initial Purchasers and such notice shall specify
the aggregate principal amount of Additional Notes to be purchased pursuant to
such exercise and the date for payment and delivery thereof. The date specified
in any such notice shall be a business day (i) no earlier than the Closing Date
(as hereinafter defined), (ii) no later than ten business days after such notice
has been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Notes are to be purchased, each Initial Purchaser,
severally and not jointly, agrees to purchase from the Company the principal
amount of Additional Notes which bears the same proportion to the total
principal amount of Additional Notes to be purchased from the Company as the
principal amount of Firm Notes set forth opposite the name of such Initial
Purchaser in Schedule I bears to the total principal amount of Firm Notes.
(c) The Company hereby agrees (and the Company shall, concurrently
with the execution of this Agreement, deliver an agreement executed by each of
the directors and executive officers of the Company, pursuant to which each such
person agrees) not to offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for such Common Stock
or in any other manner transfer all or a portion of the economic consequences
associated with the ownership of any such Common Stock, for a period of 90 days
after the date of the Final Offering Memorandum without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation. Notwithstanding
the foregoing, during such period the Company may (i) grant stock options and
issue and award restricted stock pursuant to the Company's existing stock option
and other incentive plans, as such plans may be amended, or any stock option or
other incentive plans that may hereafter be adopted by the Company, (ii) issue
shares of the Company's Common Stock upon (A) the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof or (B)
the exercise of any option under any such plan, and (iii) offer, sell, contract
to sell, or grant any option to purchase or otherwise dispose of any Common
Stock or any securities
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convertible into or exercisable or exchangeable for Common Stock, or in any
manner transfer all or a portion of the economic consequences associated with
the ownership of Common Stock, in connection with (A) the acquisition (directly
or indirectly) of all or a part of another corporation, partnership, other
entity, sole proprietorship, or other business (whether through a merger,
consolidation, share exchange, asset acquisition, or otherwise), or (B) the
formation of a joint venture with a non-affiliate of the Company; provided that
the recipient of any such shares or other securities issued, or economic
consequences transferred, pursuant to this clause (iii) agrees in writing to be
bound by the foregoing restrictions for the remainder of such 90-day period. In
addition, each such director and officer, and any other persons acquiring Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock pursuant to clause (iii) above, may make a bona fide gift or gifts
or charitable contributions, or may make a distribution to the stockholders,
partners, or other interest holders of such persons, provided that such
transferee or transferees similarly agree in writing for the benefit of the
Initial Purchasers not to offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any Common Stock of the Company or securities
convertible into or exercisable or exchangeable for such Common Stock
transferred to them for a period of 90 days after the date of the Final Offering
Memorandum.
2. Delivery and Payment. (a) Delivery to the Initial Purchasers of and
payment for the Firm Notes shall be made at 10:00 A.M., New York City time, on
December 20, 1996 (the "Closing Date") at the offices of Vinson & Elkins L.L.P.,
3700 Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas. The Closing Date and
the location of delivery of and the form of payment for the Firm Notes may be
varied by agreement between you and the Company.
(b) Delivery to the Initial Purchasers of and payment for any
Additional Notes to be purchased by the Initial Purchasers shall be made at the
offices of Vinson & Elkins L.L.P., 3700 Trammell Crow Center, 2001 Ross Avenue,
Dallas, Texas, at 10:00 A.M., New York City time, on the date specified in the
exercise notice given by you pursuant to Section 1(b) (the "Option Closing
Date"). Any such Option Closing Date and the location of delivery of and the
form of payment for the Additional Notes may be varied by agreement between you
and the Company.
(c) At or prior to the Closing Date and each Option Closing Date, if
any, the Company shall execute and deliver for
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authentication the Notes to be purchased and sold on such date and shall deposit
in global form Notes (except for those purchased by institutional "accredited
investors", which shall be in definitive form) with The Depository Trust Company
("DTC") for the account or accounts of participants in DTC (including Euroclear
and CEDEL, as the case may be) purchasing beneficial interests therein. The
Initial Purchasers shall pay or cause the purchase price for such Notes to be
paid to or upon the order of the Company by wire transfer of same day funds
against delivery of such Notes to or for the respective accounts of the Initial
Purchasers. Certificates evidencing the Notes shall be registered in the name of
Cede & Co. as nominee of DTC or such other name or names and in such authorized
denominations as the Initial Purchasers may request in writing at least two full
business days prior to the Closing Date or the Option Closing Date, as the case
may be. The Company will permit the Initial Purchasers to inspect such
certificates at the New York offices of Donaldson, Lufkin & Jenrette Securities
Corporation at least one full business day prior to the Closing Date and each
Option Closing Date, if any.
3. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (b) below, as many copies of the Final Offering Memorandum and
any amendments and supplements thereto as each Initial Purchaser may
reasonably request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(b) At any time prior to the earlier of the expiration of nine months
after the date of the Final Offering Memorandum and the date of the
completion of the sale of the Securities by the Initial Purchasers, the
Company will not amend or supplement the Final Offering Memorandum
(including by way of filing with the SEC any document or report that upon
such filing would become part of the Final Offering Memorandum) if the
Initial Purchasers reasonably object to such amendment or supplement within
two business days after receiving a copy thereof, and if at any time prior
to the earlier of the expiration of nine months after the date of the Final
Offering Memorandum and the date of the completion of the sale of the
Securities by the Initial Purchasers, any event occurs as a result of which
the Final Offering Memorandum, as then amended or supplemented, would
include
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any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it should be necessary to
amend or supplement the Final Offering Memorandum to comply with applicable
law, the Company will promptly notify the Initial Purchasers of the same,
will prepare and provide to the Initial Purchasers the proposed amendment
or supplement which will correct such statement or omission or effect such
compliance and will not publish such amendment or supplement if the Initial
Purchasers reasonably object to the publication of such amendment or
supplement within two business days after receiving a copy thereof.
(c) The Company will arrange for the qualification of the Securities
for sale by the Initial Purchasers under the laws of such jurisdictions, if
any, as the Initial Purchasers may reasonably designate in writing prior to
the date of this Agreement and will maintain such qualifications in effect
so long as reasonably required for the distribution of the Securities,
provided, however, that the Company shall not be required in connection
therewith 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 general or
unlimited service of process or taxation in any jurisdiction where it is
not now so subject. The Company will promptly advise the Initial
Purchasers of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose and will use all reasonable efforts to have such suspensions lifted
as promptly as practicable.
(d) During the period of three years after the latest Option Closing
Date, the Company will not, and will not permit any of its "affiliates" (as
defined in Rule 144 under the Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired
by any of them, except pursuant to an effective registration statement
under the Act.
(e) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under
the
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Act, except pursuant to a registered public offering as provided in the
Registration Rights Agreement.
(f) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States,
except pursuant to a registered public offering as provided in the
Registration Rights Agreement.
(g) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, the Company will,
during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), provide to each holder of such restricted securities and
to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under
the Act. This covenant is intended to be for the benefit of the holders,
and the prospective purchasers designated by such holders, from time to
time of such restricted securities.
(h) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf will engage in any directed selling efforts
in the United States with respect to the Securities, except pursuant to a
registered public offering as provided in the Registration Rights
Agreement, and each of them will comply with the offering restrictions
requirements of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.
(i) The Company will cooperate with the Initial Purchasers and use all
reasonable efforts to permit the Securities to be eligible for clearance
and settlement through The Depository Trust Company and, with respect to
any Securities sold in accordance with Regulation S under the Act, Cedel
and Euroclear.
(j) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, the
Company agrees to pay all costs, expenses, fees and taxes incident to and
in connection with: (i) the preparation, printing and
distribution of the Preliminary Offering Memorandum and the
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Final Offering Memorandum (including, without limitation, financial
statements and supplements thereto), (ii) the preparation, printing
(including, without limitation, reasonable word processing and duplication
costs) and delivery of this Agreement, the Registration Rights Agreement
and the Indenture and all other agreements, memoranda, correspondence and
other documents printed and delivered in connection herewith and with the
sale of the Securities by the Initial Purchasers to certain purchasers as
set forth in Section 5 hereof, (iii) the issuance and delivery of the
Securities, (iv) the preparation of certificates for the Securities
(including, without limitation, printing thereof), (v) the fees,
disbursements and expenses of the Company's counsel and accountants, (vi)
all expenses and listing fees in connection with the application for
quotation of the Securities on PORTAL, (vii) all fees and expenses
(including fees and expenses of counsel) of the Company in connection with
approval of the Securities by DTC for "book-entry" transfer and eligibility
of settlement of transactions in the Securities through Euroclear and Cedel
and (iiiv) the performance by the Company of its other obligations under
this Agreement.
4. Representations and Warranties of the Company. The Company
represents and warrants to each Initial Purchaser that:
(a) The Preliminary Offering Memorandum and the Final Offering
Memorandum do not, and any supplement or amendment to them will not,
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this paragraph
4(a) shall not apply to statements in or omissions from the Preliminary
Offering Memorandum and the Final Offering Memorandum (or any supplement or
amendment thereto) made in reliance upon and in conformity with information
relating to you furnished to the Company in writing by you expressly for
use therein. No stop order preventing the use of the Preliminary Offering
Memorandum or the Final Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated
by this Agreement are subject to the registration requirements of the Act,
has been issued.
(b) Neither the Company, nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Act
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("Regulation D")), nor any person acting on its or their behalf has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Securities under the Act.
(c) No securities of the same class as the Notes have been issued and
sold by the Company within the six-month period immediately prior to the
date hereof.
(d) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.
(e) None of the Company, its subsidiaries or any of its or their
affiliates or any person acting on its or their behalf has engaged or will
engage in any directed selling efforts (as defined in Regulation S) in the
United States with respect to the Securities, and the Company, its
subsidiaries and its or their affiliates and all persons acting on its or
their behalf have complied with and will comply with the offering
restriction requirements of Regulation S.
(f) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(g) The Company has agreed to permit the Securities to be designated
PORTAL eligible securities, will pay the requisite fees related thereto and
has been advised by the National Association of Securities Dealers, Inc.
PORTAL Market ("PORTAL") that the Securities have been designated PORTAL
eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc.
(h) The Company will cause the Common Stock issuable upon conversion
of the Notes to be listed for quotation on the Nasdaq National Market prior
to the 90th day following the latest date of initial issuance of the Notes.
(i) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Indenture and the Registration Rights Agreement and to issue, sell and
deliver the Securities as provided herein and therein.
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(j) This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws
and except as the enforceability hereof may be limited by bankruptcy,
rehabilitation, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of equity.
(k) The Indenture has been duly and validly authorized by the Company
and, when duly executed and delivered by the Company, will be the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms except as the enforceability thereof
may be limited by bankruptcy, rehabilitation, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by
general principles of equity, and except to the extent that the waiver
contained in Section 4.9 of the Indenture may be unenforceable. The
Indenture conforms in all material respects to the description thereof
contained in the Final Offering Memorandum.
(l) The Notes have been duly and validly authorized for issuance by
the Company and, when issued and authenticated in accordance with the terms
of the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will be the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture
except (1) as the enforceability thereof may be limited by bankruptcy,
rehabilitation, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity, and
(2) to the extent that the waiver contained in Section 4.9 of the Indenture
may be deemed unenforceable. The Notes conform in all material respects to
the description thereof in the Final Offering Memorandum.
(m) The Notes are convertible into Common Stock in accordance with the
terms of the Indenture; the shares of Common Stock initially issuable upon
conversion of the Notes have been duly authorized and reserved for issuance
upon such conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable and will
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conform to the description thereof contained in the Final Offering
Memorandum; the Company has the authorized and outstanding capital stock as
set forth in the Final Offering Memorandum; and the stockholders of the
Company have no preemptive rights with respect to the Notes or the Common
Stock issuable upon conversion of the Notes.
(n) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except as the
enforceability thereof may be limited by (i) bankruptcy, rehabilitation,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, (ii) general principles of equity, or (iii) the
enforceability of rights to indemnification and contribution thereunder by
federal or state securities laws. The Registration Rights Agreement
conforms in all material respects to the description thereof in the Final
Offering Memorandum.
(o) The (i) issuance and sale of the Securities by the Company, (ii)
execution, delivery and performance by the Company of this Agreement, the
Indenture and the Registration Rights Agreement, (iii) compliance by the
Company with all the provisions hereof and with the provisions of the
Indenture and the Registration Rights Agreement and (iv) the consummation
by the Company of the transactions contemplated hereby and by the Indenture
and the Registration Rights Agreement will not conflict with, or constitute
a breach or a violation of any of the terms or provisions of, or a default
under, the certificate of incorporation or by-laws or other governing
documents of the Company or any of its subsidiaries, or any indenture,
material agreement, or material instrument to which it or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound
or to which any of their respective properties is subject or any law,
statute, rule, regulation, judgment or decree applicable to the Company or
any of its subsidiaries; provided, however, that the repurchase of the
Notes upon the consummation of a change of control under the Indenture
would constitute a breach of the Loan Agreement.
(p) The Company is subject to and in material compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
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(q) The Company is not required to deliver the information specified
in Rule 144A(d)(4) in connection with the resale by the Initial Purchasers
of the Securities as set forth in Section 5 hereof.
(r) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(s) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement and
the Final Offering Memorandum to register the Securities under the Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(t) Each of the Company and its subsidiaries that is a corporation has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as it is currently
being conducted and to own, lease and operate its properties, and 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, except
where the failure to be so qualified would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Each of the
Company's subsidiaries that is a partnership has been duly formed and is
currently existing under the laws of its jurisdiction of formation and has
the partnership power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties, and
each is duly qualified to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole.
(u) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and, with respect to shares of capital stock,
are fully paid and non-assessable, and are owned by the Company or a
wholly-owned subsidiary of the Company, free and clear of
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any security interest, claim, lien, encumbrance or adverse interest of any
nature except for a pledge of the shares of the subsidiaries' stock and
other ownership interests to Creditanstalt-Bankverein pursuant to the
Amended and Restated Loan and Security Agreement, dated January 3, 1995, as
amended, among the Company, OccuCenters, Inc., and Creditanstalt-
Bankverein, as agent for the lenders (the "Loan Agreement").
(v) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive rights, rights of first refusal or other
similar rights (in each case created by statute or under the Company's
certificate of incorporation or bylaws or any agreement to which the
Company is a party) that have not been waived or satisfied.
(w) The authorized capital stock of the Company conforms in all
material respects to the description thereof contained in the Final
Offering Memorandum.
(x) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or bylaws or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other agreement, indenture
or instrument material to the conduct of the business of the Company and
its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which it or any of its subsidiaries or their
respective property is bound except for such violations or defaults which,
individually or in the aggregate, would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(y) There are no material legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any of
their respective property is the subject, and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated. No contract
or document of a character that would be required to be described in the
Final Offering Memorandum if the Final Offering Memorandum were a
prospectus included in a registration statement on Form S-3 under the Act
is not so described.
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(z) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which in
each case could reasonably be expected to result in any material adverse
change in the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(aa) Each of the Company and its subsidiaries has such permits,
licenses, franchises, consents, approvals, orders, certificates and
authorizations of governmental or regulatory authorities ("permits"),
including, without limitation, under any applicable Environmental Laws, as
are necessary to own, lease and operate its respective properties and to
conduct its business except for those the absence of which would not result
in a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole; each of the Company and its subsidiaries has fulfilled
and performed all of its material obligations with respect to such permits
and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such permit; each
such permit is in full force and effect, each of the Company and its
subsidiaries is operating in compliance with its permits, and there are no
proceedings pending or, to the Company's knowledge, threatened against the
Company or any of its subsidiaries that seek to cause any permit material
to the conduct or prospects of the business of the Company and its
subsidiaries, taken as a whole, to be revoked, withdrawn, cancelled,
suspended or not renewed, except where the failure of a permit to be in
full force or effect or noncompliance with a permit would not, individually
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and, except as described in the Final
Offering Memorandum, such permits contain no restrictions that are
materially burdensome to the Company and its subsidiaries, taken as a
whole.
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(bb) Except as otherwise set forth in the Final Offering Memorandum or
such as are not material to the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, each of the Company and its subsidiaries has good and marketable
title, free and clear of all liens, claims, encumbrances and restrictions
except liens for taxes not yet due and payable, to all property and assets
described in the Final Offering Memorandum as being owned by it. All leases
to which the Company or any of its subsidiaries is a party are valid and
binding and no default has occurred or is continuing thereunder, which
could reasonably be expected to result in any material adverse change in
the business, prospects, financial condition or results of operations of
the Company and its subsidiaries taken as a whole, and the Company and its
subsidiaries enjoy peaceful and undisturbed possession under all such
leases to which any of them is a party as lessee other than such exceptions
that could not reasonably be expected to result in any material adverse
change in the business, prospects, financial condition or results of
operations of the Company and its subsidiaries taken as a whole.
(cc) The Company and each of its subsidiaries maintain reasonably
adequate insurance.
(dd) Arthur Andersen LLP is an independent public accountant with
respect to the Company and its subsidiaries, and with respect to Prizm
Environmental & Occupational Health, Inc. ("Prizm"), as required by the
Act.
(ee) The consolidated financial statements of the Company and its
subsidiaries included in the Final Offering Memorandum present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated
therein at the respective dates or for the respective periods to which they
apply; the combined financial statements of Prizm incorporated by reference
in the Final Offering Memorandum present fairly the combined financial
position, results of operations and changes in financial position of Prizm
on the basis stated therein at the respective dates or for the respective
periods to which they apply; all such statements have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein; and
the other financial and statistical information and data set forth in the
Final Offering Memorandum (and any
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amendment or supplement thereto) is, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements
and the books and records of the Company and Prizm.
(ff) Each of the Company and its subsidiaries has timely filed all
reports required to be filed in connection with federal Medicare and
applicable state Medicaid programs and due on or before the date hereof
(except where the failure to file would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole), and all required
reports are true and complete in all material respects; there are no
claims, actions or appeals pending (and the Company and its subsidiaries
have not filed any thing that would result in any claims, actions or
appeals) before any commission, board or agency with respect to any state
or federal Medicare or Medicaid cost reports or claims filed by the Company
or any of its subsidiaries on or before the date hereof, or with respect to
any disallowances by any intermediary, carrier, other insurer, commission,
board or agency in connection with any audit of any cost reports that, if
adversely determined, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole; no validation review or program
integrity review related to the Company or any of its subsidiaries has been
conducted by any commission, board or agency in connection with federal
Medicare or state Medicaid programs, and no such reviews are scheduled,
pending or, to the Company's knowledge, threatened against or affecting the
Company or any of its subsidiaries; each of the Company and its
subsidiaries has timely filed all material reports, data and other
information required by any other regulatory agency with authority to
regulate the Company, its subsidiaries, or the business of either in any
manner, except where the failure to file would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; and except as
disclosed in the Final Offering Memorandum, (i) each of the Company and its
subsidiaries is in compliance in all material respects with all rules,
regulations and requirements of all regulatory agencies, except where such
noncompliance would not have a material adverse effect on the Company and
its subsidiaries taken as a whole and (ii) the conduct of the business of
each of the Company and its subsidiaries does not violate 42 U.S.C. (S)
1320a-7b (commonly known as the "Anti-Kickback Statute") or 42 U.S.C. (S)
1395nn (commonly known as the "Stark Amendments"), including all amendments
thereto to the extent effective on the date hereof, unless any violation or
noncompliance would not have
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a material adverse effect on the Company and its subsidiaries taken as a
whole.
(gg) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(hh) Except as described in the Final 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.
(ii) The Company and each of its subsidiaries possess all licenses,
patents, patent rights, patent applications, inventions, trade secrets,
know-how, proprietary information and techniques, including processes,
trademarks, service marks, trade names, computer software and copyrights
described or referred to in the Final Offering Memorandum or owned or used
by them or that are necessary for and/or used in the conduct of their
business as described in the Final Offering Memorandum, except where the
failure to possess would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole. Any registrations covering such
patents, trademarks, service marks, trade names or copyrights owned by, or
licensed to, the Company are valid and subsisting, have not been cancelled,
abandoned or otherwise terminated and, if applicable, have been duly issued
or filed, except where any non-validity, failure to be subsisting,
cancellation, abandonment or termination would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Neither the
Company nor any of its subsidiaries is aware of or has received any notice
of infringement of, or conflict or claimed conflict with, asserted rights
of others with respect to any licenses, patents, patent rights, patent
applications, inventions, trade secrets, know-how, proprietary information
or techniques, including processes, trademarks, service marks, trade names,
computer software or copyrights.
(jj) Except as described in the Final Offering Memorandum, neither the
Company nor any of its subsidiaries has any agreement or understanding with
any other person or entity for the acquisition of any stock, other
securities, assets or operations of such person or entity, which
acquisition would be material to the Company and its subsidiaries taken as
a whole.
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(kk) Neither the Company nor any agent thereof acting on its behalf
has taken, and none of them will take, any action that might cause this
Agreement or the issuance or sale of the Securities to violate Regulation G
(12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System or analogous foreign laws and
regulations.
(ll) No bid or purchase by the Company, and no bid or purchase that
could be attributed to the Company (as a result of bids or purchases by an
"affiliated purchaser" within the meaning of Rule 10b-6 under the Exchange
Act), for or of the Common Stock, any securities of the same class or
series as the Common Stock or any securities immediately convertible into
or exchangeable for or that represent any right to acquire Common Stock, is
now pending or in progress or will have commenced at any time prior to the
completion of the distribution of the Securities by the Initial Purchasers
that would constitute a violation under Rule 10b-6 under the Exchange Act.
5. Offering of Securities. Each Initial Purchaser (i) acknowledges
that the Securities have not been registered under the Act and may not be
offered or sold except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Act or pursuant to an effective
registration statement under the Act and (ii) severally and not jointly
represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) and that, in
connection with each such sale, it has taken or will take reasonable steps
to ensure that the purchaser of such Securities is aware that such sale is
being made in reliance on Rule 144A, (ii) to other institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D) who provide to it and to the Company a letter in the form of
Annex A to the Final Offering Memorandum or (iii) to non-U.S. Persons in
accordance with Regulation S of the Act.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D)
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in the United States, except pursuant to a registered public offering as
provided in the Registration Rights Agreement.
(c) No Initial Purchaser or any of their respective affiliates, nor
any person acting on its or their behalf will, directly or indirectly, make
offers or sales of any Security, or solicit offers to buy any Security,
under circumstances that would require the registration of the Securities
under the Act.
(d) No Initial Purchaser or any of their respective affiliates, nor
any person acting on its or their behalf will engage in any directed
selling efforts in the United States with respect to the Securities, except
pursuant to a registered public offering as provided in the Registration
Rights Agreement.
(e) Each of the Initial Purchasers are participating organizations in
the Depository Trust Company ("DTC").
(f) The Securities have not been and will not be registered under the
Act, are "restricted securities" within the meaning of Rule 144 under the
Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with
Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act. Each of the Initial Purchasers
represents that it has not offered, sold or delivered the Securities, and
will not offer, sell or deliver the Securities (i) (A) as part of its
distribution at any time or (B) otherwise until 40 days after the later of
the commencement of the offering and the Closing Date within the United
States or to, or for the account or benefit of, U.S. persons, except in
accordance with Rule 903 of Regulation S or Rule 144A under the Act, or to
institutional "accredited investors" in accordance with Section 5(a) or
(ii) in violation of Rule 144 under the Act. Accordingly, each Initial
Purchaser agrees that neither it, its affiliates nor any persons acting on
its or their behalf has engaged or will engage in any directed selling
efforts as defined in Regulation S with respect to the Securities, and it,
its affiliates and all persons acting on its or their behalf have complied
and will comply with the offering restriction requirements of Regulation S.
(g) Each of the Initial Purchasers represents and agrees that the
Securities offered and sold in reliance on Regulation S have been and will
be offered and sold only in
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"offshore transactions" within the meaning of Regulation S and that such
Securities have been and will be represented upon issuance by a global
security that may not be exchanged for definitive Securities until the
expiration of the Restricted Period (as defined in Regulation S) and only
upon certification of beneficial ownership of the Securities by a non-U.S.
Person or a U.S. person who purchased such Securities in a transaction that
was exempt from the registration requirements of the Act.
(h) Each of the Initial Purchasers agrees that, at or prior to
confirmation of a sale of Securities (other than a sale pursuant to Rule
144A or to institutional "accredited investors" in accordance with Section
5(a)), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities
from it during the Restricted Period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered
under the United States Securities Act of 1933, 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) (A) as part of their distribution
at any time or (B) 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 if available) under the Securities Act or
(ii) in violation of Rule 144 under the Act. Terms used
above have the meaning given to them by Regulation S."
Terms used in this Section 5 that have meanings assigned to them in Regulation S
are used herein as so defined.
6. Indemnification. (a) The Company agrees to indemnify and hold
harmless (i) each Initial Purchaser, (ii) 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, and (iii) the respective officers,
directors, partners, employees, representatives and agents
of the Initial Purchasers or any controlling person (collectively, the
"Indemnified Parties") from and against any and all losses, claims,
damages, liabilities and
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judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Final Offering Memorandum (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) or the Preliminary Offering Memorandum, or caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which made, not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any
such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Initial Purchaser furnished in
writing to the Company by or on behalf of any Initial Purchaser through you
expressly for use therein. The foregoing indemnity, however, insofar as it
relates to any untrue statement or omission or alleged untrue statement or
omission made in the Preliminary Offering Memorandum but eliminated or
remedied in the Final Offering Memorandum shall not inure to the benefit of
any Indemnified Party with respect to any action or claim asserted by a
person who purchased any Notes from such Initial Purchaser unless such
person was sent or given a copy of the Final Offering Memorandum with or
prior to the written confirmation of the sale involved.
(b) In case any action shall be brought against any Indemnified
Party, based upon the Preliminary Offering Memorandum or the Final Offering
Memorandum or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such Indemnified Party shall
promptly notify the Company in writing and the Company shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party and payment of all fees and
expenses. Any Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the employment of such counsel has 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 Indemnified Party and the Company, and such Indemnified Party shall
have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the
right to assume the defense of such action on behalf of such
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Indemnified Party, it being understood, however, that the Company shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all such Indemnified Parties, which firm shall be
designated in writing by Donaldson, Lufkin & Jenrette Securities
Corporation and that all such reasonable fees and expenses shall be
reimbursed as they are incurred). The Company shall not be liable for any
settlement of any such action effected without its written consent, but if
settled with its written consent, it agrees to indemnify and hold harmless
any Indemnified Party from and against any loss or liability by reason of
such settlement. Notwithstanding the immediately preceding sentence, if in
any case where the indemnifying party agrees in writing subsequent to the
date hereof that it will be responsible for the fees and expenses of
counsel for the Indemnified Party and the Indemnified Party shall have
requested the indemnifying party to reimburse the Indemnified Party for
such fees and expenses of counsel as incurred, such indemnifying party
agrees that it shall be liable for any settlement of any action effected
without its written consent if (i) such settlement is entered into more
than twenty business days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the Indemnified Party in accordance with such request for
reimbursement prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened proceeding in respect of which
any Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such proceeding.
(c) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless (i) the Company, (ii) each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and (iii) the officers, directors, partners,
employees, representatives and agents of the Company or any such
controlling person (collectively, the "Indemnified Company Parties") to the
same extent as the foregoing
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<PAGE>
indemnity from the Company to each Initial Purchaser but only with
reference to information relating to such Initial Purchaser furnished in
writing by or on behalf of such Initial Purchaser expressly for use in the
Preliminary Offering Memorandum or the Final Offering Memorandum (or any
amendment or supplement thereto). In case any action shall be brought
against any Indemnified Company Party based on the Preliminary Offering
Memorandum or Final Offering Memorandum and in respect of which indemnity
may be sought against any Initial Purchaser, the Initial Purchaser shall
have the rights and duties given to the Company (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 the expense of such Initial Purchaser), and the Indemnified Company
Party shall have the rights and duties given to the Initial Purchaser, by
paragraph 6(b) hereof.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments 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 Securities. If the allocation provided by the
immediately preceding sentence is not permitted by applicable law for any
reason, the Company and the Initial Purchasers shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Initial Purchasers 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 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, and the total
discounts and commissions received by the Initial Purchasers in connection
with the purchase of the Securities hereunder, bear to the total price to
investors, in each case as set forth on the cover page of the Final
Offering Memorandum. The relative fault of the Company and the Initial
Purchasers
23
<PAGE>
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 or the Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this paragraph 6(d) were
determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Initial Purchaser (or
any related Indemnified Party) shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total discounts
and commissions received by such Initial Purchaser with respect to the
Securities exceeds the amount of any damages which such Initial Purchaser
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 paragraph 6(d) are several in proportion to
the respective principal amount of Notes purchased by each of the Initial
Purchasers and not joint.
7. Conditions of Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the Firm Notes under this
Agreement on the Closing Date and the Additional Notes, if any, on an Option
Closing Date are subject to the satisfaction of each of the following
conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date or an
Option Closing Date, as
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<PAGE>
the case may be, with the same force and effect as if made on and as of the
Closing Date or an Option Closing Date.
(b) The Final Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers as promptly as practicable following
the date of this Agreement or at such other date and time as to which you
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date or any Option Closing Date,
prevent the issuance of the Securities; and no injunction, restraining
order or order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date or any Option
Closing Date which would prevent the issuance of the Securities on the
Closing Date or any Option Closing Date.
(d) (i) Since the date of the latest balance sheet included in the
Final Offering Memorandum, there shall not have been any material adverse
change, or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company, (ii) since the date of the
latest balance sheet included in the Final Offering Memorandum there shall
not have been any material change, or any development that could reasonably
be expected to result in a material adverse change, in the capital stock or
in the long-term debt of the Company from that set forth in the Final
Offering Memorandum, other than changes resulting from (x) the exercise of
stock options which were granted under the Company's currently existing
stock option plans or agreements or (y) the exercise of warrants granted to
Creditanstalt-Bankverein pursuant to the Warrant Agreement between the
Company and Creditanstalt-Bankverein dated as of January 3, 1995, as
amended, (iii) the Company and its subsidiaries shall have no liability or
obligation, direct or contingent, which is material to the Company and its
subsidiaries, taken as a whole, other than those reflected in the Final
Offering Memorandum and (iv) on the Closing Date or an Option Closing Date,
as the case may be, you
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<PAGE>
shall have received a certificate dated the Closing Date (or an Option
Closing Date, as appropriate), signed by John K. Carlyle and James M.
Greenwood, in their capacities as the Chief Executive Officer and Chief
Financial Officer of the Company, respectively, confirming the matters set
forth in paragraphs (a), (b) and (d) of this Section 7.
(e) The Company and the Trustee shall have entered into the Indenture
and you shall have received counterparts, conformed as executed, thereof.
(f) The Company shall have entered into the Registration Rights
Agreement and you shall have received counterparts, conformed as executed,
thereof.
(g) You shall have received on the Closing Date or an Option Closing
Date, as the case may be, an opinion (reasonably satisfactory to you and
counsel for the Initial Purchasers), dated the Closing Date (or an Option
Closing Date, as appropriate) of Vinson & Elkins L.L.P., counsel for the
Company, to the effect that:
(i) each of the Company and its subsidiaries that are
corporations is a corporation validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority required to carry on its business as it
is currently being conducted and to own, lease and operate its
properties;
(ii) each of the Company and its subsidiaries that are
corporations 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, except where the failure to be so
qualified or in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock of,
or other ownership interests in, each of the Company's subsidiaries
that are corporations have been duly authorized and validly issued and
are fully paid and non-assessable, and, to such counsel's knowledge,
except as set forth in the Final Offering Memorandum, are owned by the
Company, free and clear of any
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<PAGE>
security interest, claim, lien, encumbrance or adverse interest of any
nature;
(iv) assuming the accuracy of the representations and warranties
of the Company and the Initial Purchasers contained in this Agreement,
the issuance and sale of the Securities to the Initial Purchasers and
the offering, resale and delivery of the Securities by the Initial
Purchasers, in each case in the manner contemplated by the Final
Offering Memorandum, are exempt from the registration requirements of
the Act and until the effectiveness of the Shelf Registration
Statement it shall not be necessary to qualify the Indenture under the
Trust Indenture Act;
(v) the Company has the corporate power and authority to enter
into and perform this Agreement, the Indenture, the Securities and the
Registration Rights Agreement;
(vi) the Indenture has been duly authorized, executed and
delivered by the Company and (assuming due execution and delivery
thereof by the Trustee) is a valid and binding agreement of the
Company, enforceable in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, rehabilitation,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity, and
except to the extent that the waiver contained in Section 4.9 of the
Indenture may not be enforceable.
(vii) the Notes have been duly authorized and when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to the Initial Purchasers against payment therefor as
provided by this Agreement, will be entitled to the benefits of the
Indenture, and will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy,
rehabilitation, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of
equity, and except to the extent that the waiver contained in Section
4.9 of the Indenture may not be enforceable, and to such counsel's
best knowl-edge, except as otherwise set forth in the Final Offering
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Memorandum, the issuance of the Notes is not subject to any preemptive
or similar rights;
(viii) The Notes are convertible into Common Stock in accordance
with the terms of the Indenture; the shares of Common Stock initially
issuable upon conversion of the Notes have been duly authorized and
reserved for issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and nonassessable; to
such counsel's best knowledge, the issuance of such Common Stock is
not subject to any preemptive or similar rights;
(ix) the Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except as rights to indemnity and contribution thereunder may be
limited by applicable law and except as the enforceability thereof may
be limited by bankruptcy, rehabilitation, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity;
(x) this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as rights to
indemnity and contribution thereunder may be limited by applicable law
and except as the enforceability thereof may be limited by bankruptcy,
rehabilitation, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of
equity;
(xi) the Notes, the Indenture and the Registration Rights
Agreement conform as to legal matters to the descriptions thereof
contained in the Final Offering Memorandum;
(xii) the authorized capital stock of the Company, including the
Common Stock, conforms in all material respects as to legal matters to
the description thereof contained under the caption "Description of
Capital Stock" in the Final Offering Memorandum;
(xiii) to the best knowledge of such counsel, there are no
outstanding subscriptions, rights, warrants, options,
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<PAGE>
calls, convertible 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, or other ownership interest in, the Company
or any Subsidiary except as otherwise disclosed in the Final Offering
Memorandum and except for the pledge to the Banks of capital stock of
certain of the subsidiaries;
(xiv) all the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive rights, rights of first refusal or other
similar rights (in each case created by statute or under the Company's
certificate of incorporation or bylaws or any agreement to which the
Company is a party of which such counsel has knowledge), except for
those that have been waived or satisfied in writing;
(xv) the statements under the caption "Certain Federal Income Tax
Consequences" in the Final Offering Memorandum insofar as such
statements constitute a summary of legal matters, fairly present such
legal matters in all material respects;
(xvi) to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its subsidiaries is in violation of its
respective charter or bylaws and neither the Company nor any of its
subsidiaries has received or expects to receive notice that it is in
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument
material to the conduct of the business of the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which it or any of its subsidiaries or
their respective property is bound;
(xvii) the execution, delivery and performance of this Agreement,
the Indenture and the Registration Rights Agreement by the Company,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require
any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
29
<PAGE>
(except as such may be required under the Act, the Trust Indenture
Act, or other securities or Blue Sky laws) and will not contravene or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or bylaws of the Company or any of its subsidiaries
or any agreement, indenture or other instrument known to and
identified to such counsel by the Company as material to which the
Company and any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective properties are bound,
or violate or contravene any laws, administrative regulations or
rulings or court decrees known to such counsel applicable to the
Company or any of its subsidiaries or their respective properties;
provided, however, that the repurchase of the Notes upon the
consummation of a change of control under the Indenture would
constitute a breach of the Loan Agreement;
(xviii) such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of their respective property
is subject which would be required to be described in the Final
Offering Memorandum if the Final Offering Memorandum were a prospectus
included in a registration statement on Form S-3 under the Act and is
not so described, and no contract or other document exists which would
be required to be described in the Final Offering Memorandum if the
Final Offering Memorandum were a prospectus included in a registration
statement on Form S-3 under the Act and is not so described;
(xix) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended; and
(xx) to the best of such counsel's knowledge, except as otherwise
set forth in the Final 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.
In addition to the matters set forth above, such opinion shall include
a statement that such counsel has no reason to believe that (except for
financial statements and other financial and statistical information and data,
as to which no
30
<PAGE>
opinion need be expressed) the Final Offering Memorandum, as of its date and as
of the Closing Date or the Option Closing Date, as the case may be, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In providing such statement with respect to the matters covered by the
immediately preceding paragraph, such counsel may state that their opinion and
belief are based upon their participation in the preparation of the Final
Offering Memorandum and review and discussion of the contents thereof, but are
without independent check or verification except as specified.
The opinion of Vinson & Elkins L.L.P. described in this paragraph 7(g)
shall be rendered to you at the request of the Company and shall so state
therein.
(h) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Initial Purchasers),
dated the Closing Date, of Richard A. Parr II, Executive Vice President,
General Counsel and Secretary for the Company, to the effect that:
(i) each of the Company and its subsidiaries has such permits,
licenses, franchises, consents, approvals, orders, certificates and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own, lease and operate its respective properties and to
conduct its business in the manner described in the Final Offering
Memorandum except where the failure to have a permit would not,
individually or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(ii) to the best of such counsel's knowledge, each of the Company and
its subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus, except where the
failure to perform or fulfill such material obligations or the occurrence
of any such event would not, individually or in the aggregate, have
31
<PAGE>
a material adverse effect on the Company and its subsidiaries, taken
as a whole; and
(iii) to the best of such counsel's knowledge, each permit is in full
force and effect, each of the Company and its subsidiaries is operating in
compliance with its permits, and there are no proceedings pending or
threatened against the Company or any of its subsidiaries that seek to
cause any permit material to the conduct or prospects of the business of
the Company and its subsidiaries, taken as a whole, to be revoked,
withdrawn, cancelled, suspended or not renewed, except where the failure of
a permit to be in full force or effect or noncompliance with a permit would
not, individually or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(i) You shall have received on the Closing Date or an Option Closing
Date, as the case may be, an opinion, dated the Closing Date (or an Option
Closing Date, as appropriate), of Weil, Gotshal & Manges LLP, counsel for
the Initial Purchasers, as to the matters referred to in clauses (iv),
(vi), (vii), (viii), (ix), (x) and (xi) of paragraph 7(g).
In addition to the matters set forth above, such opinion shall include
a statement that such counsel has no reason to believe that the Final
Offering Memorandum, as amended or supplemented, if applicable (except for
financial statements and other financial and statistical information and
data, as to which no opinion need be expressed) contains any untrue
statement of a material fact 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.
In providing such statement with respect to the matters covered by the
immediately preceding paragraph, such counsel may state that their opinion
and belief are based upon their participation in the preparation of the
Final Offering Memorandum and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without independent
check or verification except as specified.
(j) You shall have received letters on and as of the Closing Date or
an Option Closing Date, as the case may be,
32
<PAGE>
in form and substance satisfactory to you, from Arthur Andersen LLP,
independent public accountants, with respect to the financial statements
and certain financial information contained or incorporated by reference in
the Final Offering Memorandum and substantially in the form and substance
of the letters delivered to you by such independent public accountants on
the date of this Agreement.
(k) The Company shall not have failed at or prior to the Closing Date
or an Option Closing Date, as the case may be, to perform or comply in any
material respect with any of the agreements herein contained and required
to be performed or complied with by the Company at or prior to the Closing
Date.
(l) The several obligations of the Initial Purchasers to purchase any
Additional Notes hereunder are subject to satisfaction on and as of each
Option Closing Date of the conditions set forth in paragraphs (a) through
(k) except that the opinions called for in paragraphs (g), (h) and (i) and
the letters referred to in paragraph (j) shall be revised to reflect the
sale of the Additional Notes.
8. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the execution of this Agreement.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the Final
Offering Memorandum, any material adverse change, or development that could
reasonably be expected to result in a material adverse change, in the condition,
financial or otherwise, of the Company and its subsidiaries, taken as a whole,
or the earnings, affairs, or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which would, in your judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Final Offering
Memorandum, (ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable to
market the Securities on the terms and in the manner contemplated in the Final
Offering Memorandum, (iii) the suspension or material limitation of trading in
securities on the
33
<PAGE>
New York Stock Exchange, the American Stock Exchange or The Nasdaq Stock Market
or limitation on prices for securities on any such exchange or The Nasdaq Stock
Market, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business or operations of the
Company and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
9. Default by an Initial Purchaser. If one of the Initial
Purchasers shall fail to purchase and pay for any of the Notes agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for the Notes which the defaulting Initial Purchaser agreed but
failed to purchase; provided, however, that in the event that the aggregate
principal amount of Notes which the defaulting Initial Purchaser agreed but
failed to purchase shall exceed 10% of the aggregate principal amount of Notes
set forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Notes, and if such non-defaulting Initial Purchasers do not purchase all the
Notes, this Agreement will terminate without liability to any non-defaulting
Initial Purchaser or the Company. In the event of a default by any Initial
Purchaser as set forth in this Section 9, the Closing Date or the Option Closing
Date, as the case may be, shall be postponed for such period, not exceeding
seven days, as the remaining Initial Purchasers shall determine in order that
the required changes in the Final Offering Memorandum or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Initial Purchaser of its liability, if any, to the
Company or any non-defaulting Initial Purchaser for damages occasioned by its
default hereunder.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to OccuSystems,
Inc., 3010 LBJ Freeway, Suite 400, Dallas, Texas 75234, (b) if to any Initial
Purchaser, c/o Donaldson, Lufkin & Jenrette Securities Corporation, 2200
34
<PAGE>
Ross Avenue, Suite 2900, Dallas, Texas 75201, Attention: William G. Payne, or in
any case to such other address as the person to be notified may have requested
in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and its officers and directors
and of the several Initial Purchasers set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and payment for the Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Initial
Purchaser or by or on behalf of the Company, the officers or directors of the
Company or any controlling person of the Company, (ii) acceptance of the Notes
and payment for them hereunder and (iii) termination of this Agreement.
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 to fulfill any of the conditions of this Agreement, the Company shall
reimburse the Initial Purchasers for all out-of-pocket expenses (including the
fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchasers, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Notes from any of the several Initial Purchasers merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Initial Purchasers.
Very truly yours,
OCCUSYSTEMS, INC.
By: /s/ RICHARD A. PARR II
------------------------------
Name: Richard A. Parr II
----------------------------
Title: Executive Vice President,
---------------------------
General Counsel and
Secretary
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ RICHARD DEITCH
------------------------------------
Name: Richard Deitch
----------------------------------
Title: Vice President
---------------------------------
ALEX. BROWN & SONS INCORPORATED
By: /s/ ALEXANDER T. DAIGNAULT, JR.
------------------------------------
Name: Alexander T. Daignault, Jr.
----------------------------------
Title: Managing Director
---------------------------------
PIPER JAFFRAY INC.
By: /S/ MARK COPMAN
------------------------------------
Name: Mark Copman
----------------------------------
Title: Managing Director
---------------------------------
<PAGE>
SCHEDULE I
Number of
Firm Notes to
Name of Initial Purchaser be Purchased
------------------------- -------------
Donaldson, Lufkin, & Jenrette
Securities Corporation ............. $ 46,750,000
Alex. Brown & Sons
Incorporated........................ $ 25,500,000
Piper Jaffray Inc................... $ 12,750,000
------------
Total.......................... $ 85,000,000
============
<PAGE>
EXHIBIT A
6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
REGISTRATION RIGHTS AGREEMENT
DATED AS OF DECEMBER 24, 1996
BY AND AMONG
OCCUSYSTEMS, INC.
AS THE COMPANY,
AND
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS INCORPORATED
AND
PIPER JAFFRAY INC.,
AS THE INITIAL PURCHASERS
<PAGE>
This Registration Rights Agreement is made and entered into as of December
24, 1996, by and among OccuSystems, Inc., a Delaware corporation (the
"Company"), and Donaldson, Lufkin & Jenrette Securities Corporation, Alex. Brown
& Sons Incorporated and Piper Jaffray Inc. (collectively, the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated December
18, 1996, among the Company and the Initial Purchasers (the "Purchase
Agreement"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
contained in this Agreement to the Initial Purchasers and to their respective
direct and indirect transferees. The execution of this Agreement is a condition
to the closing of the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
I. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Advice: As defined in the last paragraph of Section 4 hereof.
Affiliate of any specified person shall mean any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control," when used with respect to any person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Registration Rights Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms hereof.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is
not a day on which banking institutions in New York, New York are authorized or
obligated by law or executive order to close.
Closing Date: The Closing Date as defined in the Purchase Agreement.
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<PAGE>
Common Stock: Common Stock, $.01 par value per share, of the Company.
Company: OccuSystems, Inc., a Delaware corporation, and any successor
corporation thereto.
controlling person: As defined in Section 6(a) hereof.
Damage Payment Date: Each of the semi-annual interest payment dates
provided in the Indenture.
Effectiveness Period: As defined in Section 2(a) hereof.
Effectiveness Target Date: The 180th day following the Closing Date.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC pursuant thereto.
Filing Date: The 90th day after the Closing Date.
Holder: Each registered holder of any Transfer Restricted Securities.
Indemnified Person: As defined in Section 6(a) hereof.
Indenture: The Indenture, dated the date hereof, between the Company and
the Trustee thereunder, pursuant to which the Notes are being issued, as
amended, modified or supplemented from time to time in accordance with the terms
thereof.
Initial Purchasers: As defined in the preamble hereof.
Liquidated Damages: As defined in Section 3(a) hereof.
Notes: Up to $97,750,000 aggregate principal amount of 6% Convertible
Subordinated Notes due 2001 of the Company being issued (or authorized to be
issued) pursuant to the Indenture.
Paying Agent: As defined in the Indenture.
Proceeding: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
3
<PAGE>
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Transfer Restricted Securities
covered by such Registration Statement, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
Registration Default: As defined in Section 3(a) hereof.
Registration Statement: Any registration statement of the Company that
covers any of the Transfer Restricted Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
Rule 174: Rule 174 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
4
<PAGE>
Rule 424: Rule 424 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.
Shelf Registration Statement: As defined in Section 2 hereof.
Special Counsel: Any special counsel to the holders of Transfer Restricted
Securities, for which holders of Transfer Restricted Securities will be
reimbursed pursuant to Section 5(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Securities: The Notes and the shares of Common Stock
into which the Notes are convertible, upon original issuance thereof, and at all
times subsequent thereto, until, in the case of any such Note or share, the
earliest of (i) the date on which it has been registered effectively pursuant to
the Securities Act and disposed of in accordance with the Registration Statement
relating to it, (ii) the date on which either such Note or the shares of Common
Stock issued upon conversion of such Note are distributed to the public pursuant
to Rule 144 (or any similar provisions then in effect) or are salable pursuant
to Rule 144(k) promulgated by the SEC pursuant to the Securities Act or (iii)
the date on which it ceases to be outstanding.
Trustee: United States Trust Company of New York, the trustee under the
Indenture.
underwritten registration or underwritten offering: A registration in
connection with which securities of the Company are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
2. Shelf Registration
(a) The Company agrees to file with the SEC as promptly as practicable
after the Closing Date, but in no event later than the Filing Date, a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Transfer Restricted Securities (the "Shelf
Registration Statement"). The Shelf Registration Statement
5
<PAGE>
shall be on Form S-3 under the Securities Act or another appropriate form
permitting registration of such Transfer Restricted Securities for resale by the
Holders in the manner or manners reasonably designated by them (including,
without limitation, one or more underwritten offering). The Company shall use
all reasonable efforts, as described in Section 4, to cause the Shelf
Registration Statement to be declared effective pursuant to the Securities Act
as promptly as practicable following the filing thereof, but in no event later
than the Effectiveness Target Date, and to keep the Shelf Registration Statement
continuously effective under the Securities Act for 36 months after the Closing
Date (the "Effectiveness Period"), or such shorter period ending when either (1)
all Transfer Restricted Securities covered by the Shelf Registration Statement
have been sold in the manner set forth in the Shelf Registration Statement or
(2) there cease to be outstanding any Transfer Restricted Securities.
(b) Supplements and Amendments. The Company shall use all reasonable
efforts to keep the Shelf Registration Statement continuously effective by
supplementing and amending the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration Statement, if required by the Securities Act, or if
reasonably requested by the holders of a majority of the Transfer Restricted
Securities (on a fully converted basis) covered by such Shelf Registration
Statement or by any underwriter of such Transfer Restricted Securities.
(c) Suspension of Shelf Registration Statement. Notwithstanding
anything to the contrary in this Section 2, but subject to compliance with
Section 3, the Company may, by delivering written notice to the Holders,
prohibit offers and sales of Transfer Restricted Securities pursuant to the
Shelf Registration Statement at any time if (A) (i) the Company is in
possession of material non-public information, (ii) 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 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) (i) 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 that is material to the Company and its
subsidiaries taken as a whole and (ii) the Company determines in good faith
that (x) 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 Company shall determine) is not in the best interests
of the Company and its stockholders or (y) that it would be impracticable at
the time to obtain any financial statements relating to such acquisition or
business combination transaction that would be required to be set forth in the
Shelf Registration Statement; provided, however, that upon (i) the public
disclosure by the Company of the material non-public information described in
clause (A) of this paragraph or (ii) the abandonment or termination of, or the
availability of the required financial statements with respect to, a
transaction described in clause (B) of this
6
<PAGE>
paragraph, the suspension of the use of the Shelf Registration Statement
pursuant to this Section 2(c) shall cease and the Company shall promptly comply
with Section 4(b) hereof.
3. Liquidated Damages
(a) The Company and the Initial Purchasers agree that the Holders of
Transfer Restricted Securities will suffer damages if the Company fails to
fulfill its obligations pursuant to Section 2 and Section 4(b) hereof and that
it would not be possible to ascertain the extent of such damages. Accordingly,
in the event of such failure by the Company to fulfill such obligations, the
Company hereby agrees to pay liquidated damages ("Liquidated Damages") to each
Holder of Transfer Restricted Securities under the circumstances and to the
extent set forth below:
(i) if the Shelf Registration Statement has not been filed with
the SEC on or prior to the Filing Date; or
(ii) if the Shelf Registration Statement is not declared effective
by the SEC on or prior to the Effectiveness Target Date; or
(iii) the Shelf Registration Statement has been declared effective
by the SEC and thereafter ceases to be effective or the Prospectus
contained therein ceases to be usable (including as a result of a
suspension of the use of the Shelf Registration Statement as described in
Section 2(c) hereof), for a period of time that exceeds 90 days in any
period of 365 consecutive days;
(any of the foregoing, a "Registration Default") then the Company shall pay
Liquidated Damages to each Holder of Transfer Restricted Securities during the
first 90-day period immediately following the occurrence of such Registration
Default in an amount equal to $.05 per week per $1,000 principal amount of Notes
and, if applicable, $.0015 per week per share (subject to adjustment in the
event of stock splits, stock recombinations, stock dividends and the like) of
Common Stock constituting Transfer Restricted Securities held by such Holder for
each week or portion thereof that the Registration Default continues. The
amount of such Liquidated Damages will increase by an additional $.05 per week
per $1,000 principal amount of Notes and, if applicable, by $.0015 per week per
share (subject to adjustment as set forth above) of Common Stock constituting
Transfer Restricted Securities for each subsequent 90-day period until all
Registration Defaults have been cured; provided, however, that Liquidated
Damages shall not at any time exceed $.25 per week per $1,000 principal amount
of Notes or, if applicable, $.0015 per week per share (subject to adjustment as
set forth above) of Common Stock constituting Transfer Restricted Securities.
Following the cure of all Registration Defaults relating to any Transfer
Restricted Securities, the accrual of Liquidated Damages with
7
<PAGE>
respect to such Transfer Restricted Securities will cease. A Registration
Default under clause (i) above shall be cured on the date that the Shelf
Registration Statement is filed with the SEC; a Registration Default under
clause (ii) above shall be cured on the date that the Shelf Registration
Statement is declared effective by the SEC; and a Registration Default under
clause (iii) above shall be cured on the date the Shelf Registration Statement
is declared effective or the Prospectus contained therein again becomes usable.
(b) The Company shall notify the Trustee within one Business Day after
each and every date on which a Registration Default occurs. On each Damage
Payment Date, Liquidated Damages shall be paid by the Company to the Holders of
Transfer Restricted Securities as of the immediately preceding Record Date (as
defined in the Indenture) specified in the Indenture in the same manner interest
is paid to Holders of Notes pursuant to the Indenture. Each obligation to pay
Liquidated Damages shall be deemed to commence accruing on the date of the
applicable Registration Default and to cease accruing when all Registration
Defaults have been cured. In no event shall the Company pay Liquidated Damages
in excess of the applicable maximum weekly amount set forth above, regardless of
whether one or multiple Registration Defaults exist (e.g., subject to increase
as set forth above for each subsequent 90-day period, Liquidated Damages shall
equal $.05 per week per $1,000 principal amount of Notes during the first 90-day
period immediately following the occurrence of the first Registration Default
regardless of whether additional Registration Defaults occur during such 90-day
period).
4. Registration Procedures
In connection with the Company's registration obligations pursuant to
Section 2 above, the Company shall as expeditiously as possible:
(a) No fewer than five Business Days prior to the initial filing of a
Registration Statement or Prospectus and no fewer than two Business Days prior
to the filing of any amendment or supplement thereto (other than any document
that would be incorporated or deemed to be incorporated therein by reference),
furnish to the Holders of the Transfer Restricted Securities, their Special
Counsel and the managing underwriters, if any, copies of all such documents
proposed to be filed, which documents (other than those incorporated or deemed
to be incorporated by reference) will be subject to the review of such Holders,
their Special Counsel and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent certified
public accountants to the Company to respond to such inquiries as shall be
necessary in connection with such Registration Statement, in the reasonable
opinion of Special Counsel and such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file any such Registration Statement or related Prospectus or any amendments or
8
<PAGE>
supplements thereto (other than any document that would be incorporated or
deemed to be incorporated in the Registration Statement by reference) to which
the Holders of a majority of the Transfer Restricted Securities, their Special
Counsel, or the managing underwriters, if any, shall reasonably object on a
timely basis; provided, that the Company may assume, for the purposes of this
subparagraph (a), that objections to the inclusion of information specifically
requested to be included in the Registration Statement by the staff of the SEC,
or in the opinion of counsel to the Company required to be in the Registration
Statement, or specifically required by the Securities Act or other applicable
law, shall not be deemed to be reasonable;
(b) Prepare and file with the SEC such amendments, including post-
effective amendments, to each Registration Statement as may be necessary,
subject to Section 2(c) hereof, to keep such Registration Statement continuously
effective for the applicable time period; cause, subject to Section 2(c) hereof,
the Prospectus and any document incorporated or deemed to be incorporated
therein by reference to be supplemented or amended, and file, subject to Section
2(c) hereof, any other required document so that, as thereafter delivered such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Transfer Restricted
Securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented;
(c) Notify the Holders of Transfer Restricted Securities to be sold or
their Special Counsel and the managing underwriters, if any, promptly (and in
the case of an event specified by clause (i)(A) of this paragraph in no event
fewer than two Business Days prior to such filing), and (if requested by any
such person), confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment is proposed to be filed, and,
(B) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any other
Federal or state governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC, any state securities commission, any other
governmental agency or any court of any stop order, order or injunction
suspending or enjoining the use or the effectiveness of a Registration Statement
or the initiation of any proceedings for that purpose, (iv) if at any time any
of the representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 4(l) hereof cease
to be true and correct in all material respects, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Transfer Restricted Securities for
sale in any jurisdiction, or the initiation or threatening of any Proceeding for
such purpose,
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<PAGE>
and (vi) of the happening of any event that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that, in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(d) Use all reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of a Registration Statement or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Transfer
Restricted Securities for sale in any jurisdiction, at the earliest practicable
moment;
(e) If requested by the managing underwriters, if any, or the Holders
of a majority of the Transfer Restricted Securities (on a fully converted basis)
being sold in connection with such offering, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, and such Holders reasonably request should be
included therein relating to the terms of the sale of the Transfer Restricted
Securities of such Holder in the Prospectus, and (ii) make all required filings
of such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
pursuant to this Section 4(e) that would, in the opinion of counsel for the
Company, violate applicable law;
(f) Furnish to each Holder of Transfer Restricted Securities, their
Special Counsel and each managing underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and each amendment thereto,
including financial statements (but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits,
unless requested in writing by such Holder, counsel or managing underwriter);
(g) Deliver to each Holder of Transfer Restricted Securities, their
Special Counsel, and the underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses and each amendment or supplement thereto as such
persons reasonably request; and the Company hereby consents, subject to Section
4(p) hereof, to the use of such Prospectus
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<PAGE>
and each amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Securities and the underwriters, if any, in connection with
the offering and sale of the Transfer Restricted Securities covered by such
Prospectus and any amendment or supplement thereto;
(h) Prior to any public offering of Transfer Restricted Securities,
use all reasonable efforts to register or qualify or cooperate with the Holders
of Transfer Restricted Securities to be sold, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Transfer
Restricted Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder or underwriter
reasonably requests in writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject;
(i) In connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold, which certificates shall
not bear any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company and to enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or Holders may request at least two Business Days
prior to any sale of Transfer Restricted Securities;
(j) Use all reasonable efforts to cause the offering of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities within the
United States as may require such registration or approval, except as may be
required as a consequence of the nature of such selling Holder's business, in
which case the Company will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Transfer Restricted Securities; provided,
however, that the Company shall not be required to register the Transfer
Restricted Securities in any jurisdiction that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so
subject or to
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<PAGE>
require the Company to qualify to do business in any jurisdiction where it is
not then so qualified;
(k) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, provide a CUSIP number for the
Transfer Restricted Securities;
(l) Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and take
all such other reasonable actions in connection therewith (including those
reasonably requested by the managing underwriters, if any, or the Holders of a
majority of the Transfer Restricted Securities (on a fully converted basis)
being sold) in order to expedite or facilitate the disposition of such Transfer
Restricted Securities, and in such connection, if an underwriting agreement is
entered into, (i) make such representations and warranties to the underwriters,
if any, with respect to the business of the Company and its subsidiaries
(including with respect to businesses or assets acquired or to be acquired by
any of them), and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, in
form, substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, addressed to each of the underwriters, if any,
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by the
underwriters; (iii) use all reasonable efforts to obtain customary "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data is, or is
required to be, included in the Registration Statement), addressed (where
reasonably possible) to the selling Holders of Transfer Restricted Securities
and each of the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
no less favorable to the selling Holders of Transfer Restricted Securities and
the underwriters, if any, than those set forth in Section 6 hereof (or such
other provisions and procedures acceptable to Holders of a majority of the
Transfer Restricted Securities (on a fully converted basis) covered by such
Registration Statement and the managing underwriters); and (v) deliver such
documents and certificates as may be reasonably requested by the managing
underwriters, if any, to evidence the continued validity of the representations
and warranties made pursuant to clause (i) of this
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Section 4(l) and to evidence compliance with any customary conditions contained
in the underwriting agreement or other agreement entered into by the Company;
(m) Make available for inspection by a representative of the Holders
of not less than 50% of the Transfer Restricted Securities (on a fully-converted
basis) being sold, any underwriter participating in any such disposition of
Transfer Restricted Securities, if any, and any Special Counsel, consultant or
accountant retained by such selling Holders or underwriter, at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries as they may reasonably request (including with respect to business
and assets acquired or to be acquired to the extent that such information is
available to the Company), and cause the officers, directors, agents and
employees of the Company and its subsidiaries (including with respect to
business and assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information in each case
reasonably requested by any such representa tive, underwriter, attorney,
consultant or accountant in connection with such Registration Statement,
provided, however, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons, unless (i) disclosure of
such information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to Federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus), (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement;
(n) Cause the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement relating to the Transfer
Restricted Securities; and in connection therewith, cooperate with the trustee
under the Indenture and the holders of the Transfer Restricted Securities 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 all
reasonable efforts to cause such trustee to execute, all customary documents as
may be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so qualified in
a timely manner;
(o) Make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder, no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in
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<PAGE>
which Transfer Restricted Securities are sold to underwriters in a firm
commitment or reasonable efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of Rule 158;
and
(p) concurrently with the effectiveness of the first Registration
Statement (i) list all Notes and Common Stock covered by such Registration
Statement on any securities exchange on which the Common Stock is then listed or
(ii) authorize for quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or the National Market System of NASDAQ
all Notes and Common Stock covered by such Registration Statement if the Common
Stock is then so authorized for quotation.
The Company may require each seller of Transfer Restricted Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Transfer Restricted Securities as
is required by law to be disclosed in the applicable Registration Statement and
the Company may exclude from such registration the Transfer Restricted
Securities of any seller who unreasonably fails to furnish such information
within a reasonable time after receiving such request. Each seller of Transfer
Restricted Securities will furnish to the Company information concerning sales
made pursuant to the Registration Statement. Each such Holder agrees, by the
acquisition of Transfer Restricted Securities, and agrees to confirm such
agreement in writing upon request of the Company, to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Holder to the Company or of the occurrence of any event as a
result of which any Prospectus relating to such registration contains or would
contain an untrue statement of a material fact regarding such Holder or such
Holder's intended method of distribution of such Transfer Restricted Securities,
or omits to state any material fact regarding such Holder or such Holder's
intended method of distribution of such Transfer Restricted Securities,
necessary to make the statements therein, in light of the circumstances then
existing, not misleading and promptly to furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
Holder or the distribution of such Transfer Restricted Securities, an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances then existing, not
misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as
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<PAGE>
a recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
Each Holder of Transfer Restricted Securities agrees by acquisition of
such Transfer Restricted Securities that, upon receipt of any notice from the
Company pursuant to Section 2(c) hereof or of the happening of any event of the
kind described in Section 4(c)(ii), 4(c)(iii), 4(c)(v) or 4(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Transfer Restricted
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(b) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus, and, if so directed by the Company, such 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 at the time of receipt of such
notice.
5. Registration Expenses
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by it whether or not any
Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to any Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc., (B) in compliance with
securities or Blue Sky laws (including, without limitation and in addition to
that provided for in (b) below, reasonable fees and disbursements of counsel for
the underwriters or Special Counsel for the Holders in connection with Blue Sky
qualifications of the Transfer Restricted Securities and determination of the
eligibility of the Transfer Restricted Securities for investment under the laws
of such jurisdictions as the managing underwriters, if any, or Holders of a
majority (on a fully converted basis) of Transfer Restricted Securities may
designate)), and (c) the fees payable in connection with the listing of the
Notes in accordance with Section 4(q) hereof, (ii) printing expenses (including,
without limitation, expenses of printing certificates for Transfer Restricted
Securities in a form eligible for deposit with The Depository Trust Company and
of
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printing Prospectuses if the printing of Prospectuses is requested by the
managing underwriters, if any, (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company and Special Counsel for
the Holders (plus any local counsel, deemed appropriate by the Holders of a
majority of the Transfer Restricted Securities, on a fully converted basis), in
accordance with the provisions of Section 5(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 4(m)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) Securities Act liability insurance, if the Company so desires such
insurance, and (vii) fees and expenses of all other persons retained by the
Company. In addition, the Company shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the securities to
be registered on any securities exchange. Notwithstanding the foregoing, the
Holders of the Transfer Restricted Securities being registered shall pay all
commissions, placement agent fees and underwriting discounts and commissions
attributable to the sale of such Transfer Restricted Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
Holders (severally or jointly), other than Special Counsel.
(b) In connection with any registration hereunder, the Company shall
reimburse the Holders of the Transfer Restricted Securities being registered or
tendered for in such registration for the reasonable fees and disbursements of
not more than one firm of attorneys representing the selling Holders (in
addition to any local counsel), which firm, if any, shall be chosen by the
Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis).
6. Indemnification
(a) The Company agrees to indemnify and hold harmless (i) each Initial
Purchaser, (ii) each Holder of Transfer Restricted Securities, (iii) each
person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) any of the foregoing (any of the persons
referred to in this clause (iii) being hereinafter referred to as a "controlling
person"), and (iv) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers, each Holder of Transfer
Restricted Securities, or any controlling person (any person referred to in
clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
"Indemnified Person"), from and against any and all losses, claims, damages,
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary Prospectus or in any amendment or supplement thereto, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the
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<PAGE>
statements therein (in the case of any Prospectus or preliminary Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Indemnified Person
furnished in writing to the Company by or on behalf of such Indemnified Person
expressly for use therein; provided that the foregoing indemnity with respect to
any preliminary Prospectus shall not inure to the benefit of any Indemnified
Person from whom the person asserting such losses, claims, damages, liabilities
and judgments purchased securities if such untrue statement or omission or
alleged untrue statement or omission made in such preliminary Prospectus is
eliminated or remedied in the Prospectus and a copy of the Prospectus shall not
have been furnished to such person in a timely manner; provided that the Company
has delivered the Prospectus to such Indemnified Person in requisite quantity on
a timely basis to permit such delivery or sending. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement, any preliminary prospectus or the
Prospectus or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such Indemnified Person shall
promptly notify the Company in writing and the Company shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Person and payment of all fees and expenses. Any Indemnified Person
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person, unless (i) the employment of
such counsel 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 Indemnified Person and the Company, and such Indemnified
Person shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Indemnified Person, it being
understood, however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all such Indemnified Persons,
which firm shall be designated in writing by such Indemnified Persons, and that
all such fees and expenses shall be reimbursed as they are incurred). The
Company shall not be liable for any settlement of any such action effected
without its written consent, but if settled with its written consent, it agrees
to indemnify and hold harmless any Indemnified Person from and against any loss
or liability by reason of such settlement. Notwithstanding the immediately
preceding sentence, if in any
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<PAGE>
case where the indemnifying party agrees in writing subsequent to the date
hereof that it will be responsible for the fees and expenses of counsel for the
Indemnified Person and the Indemnified Person shall have requested the
indemnifying party to reimburse the Indemnified Person for such fees and
expenses of counsel as incurred, such indemnifying party agrees that it shall be
liable for any settlement of any action effected without its written consent if
(i) such settlement is entered into more than twenty Business Days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall have failed to reimburse the Indemnified Person in accordance with
such request for reimbursement prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(c) In connection with any Registration Statement in which a Holder of
Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers and any person controlling the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, to the same extent as the foregoing indemnity from the Company
to each Indemnified Person but only with reference to information relating to
such Holder furnished in writing by or on behalf of such Holder expressly for
use in such Registration Statement, the Prospectus or any preliminary
prospectus. In case any action shall be brought against the Company, any of its
directors or officers, or any person controlling the Company based on such
Registration Statement, the Prospectus or any preliminary prospectus and in
respect of which indemnity may be sought against any Holder, the Holder shall
have the rights and duties given to the Company (except that if the Company
shall have assumed the defense thereof, such Holder shall not be required to do
so, but may employ separate counsel therein and participate in defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Holder), and the Company, its directors and officers, and any person controlling
the Company shall have the rights and duties given to the Indemnified Person, by
Section 6(b) hereof. This indemnity agreement will be in addition to any other
liability which such Holder may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments in such proportion as is appropriate to
reflect the relative fault of the Company and each such Indemnified Person in
connection with the
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<PAGE>
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 Company and each such Indemnified
Person shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or such Indemnified
Person and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Indemnified Persons were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Indemnified Person shall be
required to contribute any amount in excess of the amount by which the proceeds
received by it in connection with the sale of Transfer Restricted Securities
pursuant to this Agreement exceeds the amount of any damages which such
Indemnified Person has otherwise been required to pay or has paid by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Indemnified
Persons' obligations to contribute pursuant to this Section 6(d) are several in
proportion to the respective amount of Transfer Restricted Securities included
in any such Registration Statement by each Indemnified Person and not joint.
7. Rules 144 and 144A
The Company shall file the reports required to be filed by it under
the Securities Act and the Exchange Act in a timely manner and, if at any time
it is not required to file such reports but in the past had been required to or
did file such reports, it will, upon the request of any holder of Transfer
Restricted Securities, make available other information as required by, and so
long as necessary to permit, sales of its Transfer Restricted Securities
pursuant to Rule 144 and Rule 144A. Notwithstanding the foregoing, nothing in
this Section 7 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
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8. Underwritten Registrations
(a) If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority (on a
fully converted basis) of such Transfer Restricted Securities included in such
offering, subject to the consent of the Company (which will not be unreasonably
withheld or delayed).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
(b) Each Holder of Transfer Restricted Securities agrees, if requested
(pursuant to a timely written notice) by the managing underwriters in an
underwritten offering or placement agent in a private offering of the Company's
securities, not to effect any sale or distribution (including a sale pursuant to
Rule 144(k) and Rule 144A, but excluding non-public sales to any of its
affiliates, officers, directors, employees and controlling persons of any of the
Notes, in the case of an offering of the Company's debt securities, or the
Common Stock, in the case of an offering of the Company's equity securities),
during the period ending 90 days after the closing date of the underwritten
offering.
(c) The Initial Purchasers and all Holders of Transfer Restricted
Securities agree that, notwithstanding any other term or provision hereof, the
Company shall not be required to enter into any agreements (including
underwriting agreements) or take any other actions contemplated by Section 4(l)
hereof unless requested in writing by the holders of at least 50% of the
Transfer Restricted Securities (on a fully converted basis) sold to the Initial
Purchasers pursuant to the Purchase Agreement.
The foregoing provisions shall not apply to any Holder of Transfer
Restricted Securities if such Holder is prevented by applicable statute or
regulation from entering into any such agreement.
20
<PAGE>
9. Miscellaneous
(a) Remedies. In the event of a breach by the Company, or by a holder
of Transfer Restricted Securities, of any of their obligations under this
Agreement, each holder of Transfer Restricted Securities or the Company, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company and each holder of Transfer Restricted
Securities agree that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company shall not 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 hereof.
(c) No Piggyback on Registrations. The Company shall not grant to any
of its security holders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in any
Shelf Registration Statement other than Transfer Restricted Securities.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, without the written consent of the Holders of a majority of
the then outstanding Tra nsfer Restricted Securities (on a fully converted
basis); provided, however, that, for the purposes of this Agreement, Transfer
Restricted Securities that are owned, directly or indirectly, by either the
Company or an Affiliate of the Company shall not be deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Transfer Restricted Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders of Transfer Restricted Securities may be
given by Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis) being sold by such Holders pursuant to such Registration
Statement; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
21
<PAGE>
(e) Notices. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy:
(i) if to the Company, as provided in the Purchase Agreement,
(ii) if to the Initial Purchasers, as provided in the Purchase
Agreement, or
(iii) if to any other person who is then the registered Holder of
any Transfer Restricted Securities, to the address of such
Holder as it appears in the Note or Common Stock register of
the Company.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a next
day air courier; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder of Transfer Restricted
Securities. The Company may not assign its rights or obligations hereunder
without the prior written consent of each Holder of Transfer Restricted
Securities. Notwithstanding the foregoing, no transferee shall have any of the
rights granted under this Agreement until such transferee shall acknowledge its
rights and obligations hereunder by a signed written statement of such
transferee's acceptance of such rights and obligations.
(g) 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.
(h) Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, as applied to contracts made and performed
within the State of New York without regard to principles of conflicts of law.
22
<PAGE>
(i) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(k) Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court, shall
be entitled to recover its reasonable attorneys' fees in addition to any other
available remedy.
23
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
OCCUSYSTEMS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
The foregoing Registration Rights Agreement is
hereby confirmed and accepted as of the date
first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS INCORPORATED
PIPER JAFFRAY INC.
By: Donaldson, Lufkin & Jenrette
Securities Corporation
By:______________________________
Name:____________________________
Title:___________________________
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
OCCUSYSTEMS, INC.,
ISSUER,
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
TRUSTEE
-----------------
INDENTURE
Dated as of December 24, 1996
-----------------
$97,750,000
6% Convertible Subordinated Notes due 2001
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE................. 1
SECTION 1.1 Definitions............................................ 1
SECTION 1.2 Incorporation by Reference of TIA...................... 11
SECTION 1.3 Rules of Construction.................................. 11
ARTICLE II
THE SECURITIES.................................. 12
SECTION 2.1 Form and Dating........................................ 12
SECTION 2.2 Execution and Authentication........................... 13
SECTION 2.3 Registrar and Paying Agent............................. 14
SECTION 2.4 Paying Agent to Hold Assets in Trust................... 14
SECTION 2.5 Securityholder Lists................................... 15
SECTION 2.6 Transfer and Exchange.................................. 15
SECTION 2.7 Replacement Securities................................. 23
SECTION 2.8 Outstanding Securities................................. 23
SECTION 2.9 Treasury Securities.................................... 24
SECTION 2.10 Temporary Securities................................... 24
SECTION 2.11 Cancellation........................................... 25
SECTION 2.12 Defaulted Interest..................................... 25
ARTICLE III
REDEMPTION................................... 26
SECTION 3.1 Right of Redemption.................................... 26
SECTION 3.2 Notices to Trustee..................................... 27
SECTION 3.3 Selection of Securities to Be Redeemed................. 27
SECTION 3.4 Notice of Redemption................................... 27
SECTION 3.5 Effect of Notice of Redemption......................... 29
SECTION 3.6 Deposit of Redemption Price............................ 29
SECTION 3.7 Securities Redeemed in Part............................ 30
i
<PAGE>
ARTICLE IV
COVENANTS.................................. 30
SECTION 4.1 Payment of Securities................................... 30
SECTION 4.2 Maintenance of Office or Agency......................... 30
SECTION 4.3 Corporate Existence..................................... 31
SECTION 4.4 Payment of Taxes and Other Claims....................... 31
SECTION 4.5 Maintenance of Properties and Insurance................. 32
SECTION 4.6 Compliance Certificate; Notice of Default............... 32
SECTION 4.7 Reports................................................. 33
SECTION 4.8 Limitation on Status as Investment Company.............. 33
SECTION 4.9 Waiver of Stay, Extension or Usury Laws................. 34
SECTION 4.10 Rule 144A Information Requirement....................... 34
ARTICLE V
SUCCESSOR CORPORATION........................... 34
SECTION 5.1 Limitation on Merger, Sale or Consolidation............. 34
SECTION 5.2 Successor Corporation Substituted....................... 35
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES....................... 35
SECTION 6.1 Events of Default....................................... 35
SECTION 6.2 Acceleration of Maturity Date; Rescission and Annulment. 38
SECTION 6.3 Collection of Indebtedness and Suits for Enforcement by
Trustee................................................. 39
SECTION 6.4 Trustee May File Proofs of Claim........................ 40
SECTION 6.5 Trustee May Enforce Claims Without Possession of
Securities.............................................. 41
SECTION 6.6 Priorities.............................................. 41
SECTION 6.7 Limitation on Suits..................................... 42
SECTION 6.8 Unconditional Right of Holders to Receive Principal,
Premium, Interest and Liquidated Damages,
and to Convert.......................................... 43
SECTION 6.9 Rights and Remedies Cumulative.......................... 43
SECTION 6.10 Delay or Omission Not Waiver............................ 43
SECTION 6.11 Control by Holders...................................... 43
SECTION 6.12 Waiver of Past Default.................................. 44
SECTION 6.13 Undertaking for Costs................................... 44
ii
<PAGE>
SECTION 6.14 Restoration of Rights and Remedies.................... 45
ARTICLE VII
TRUSTEE................................. 45
SECTION 7.1 Duties of Trustee...................................... 45
SECTION 7.2 Rights of Trustee...................................... 47
SECTION 7.3 Individual Rights of Trustee........................... 48
SECTION 7.4 Trustee's Disclaimer................................... 48
SECTION 7.5 Notice of Default...................................... 48
SECTION 7.6 Reports by Trustee to Holders.......................... 48
SECTION 7.7 Compensation and Indemnity............................. 49
SECTION 7.8 Replacement of Trustee................................. 50
SECTION 7.9 Successor Trustee by Merger, Etc....................... 51
SECTION 7.10 Eligibility; Disqualification.......................... 51
SECTION 7.11 Preferential Collection of Claims Against Company...... 52
ARTICLE VIII
SATISFACTION AND DISCHARGE........................ 52
Satisfaction and Discharge of Indenture................ 52
SECTION 8.2 Repayment to the Company............................... 52
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS.................... 53
SECTION 9.1 Supplemental Indentures Without Consent of Holders..... 53
SECTION 9.2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders..................................... 53
SECTION 9.3 Compliance with TIA.................................... 55
SECTION 9.4 Revocation and Effect of Consents...................... 55
SECTION 9.5 Notation on or Exchange of Securities.................. 56
SECTION 9.6 Trustee to Sign Amendments, Etc........................ 56
ARTICLE X
[RESERVED]
............................................................................ 56
iii
<PAGE>
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL........... 57
SECTION 11.1 Repurchase of Securities at Option of the Holder Upon a
Change of Control...................................... 57
ARTICLE XII
SUBORDINATION.............................. 60
SECTION 12.1 Securities Subordinated to Senior Indebtedness......... 60
SECTION 12.2 No Payment on Securities in Certain Circumstances...... 60
SECTION 12.3 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation
or Reorganization...................................... 62
SECTION 12.4 Securityholders to Be Subrogated to Rights of Holders of
Senior Indebtedness.................................... 63
SECTION 12.5 Obligations of the Company Unconditional............... 64
SECTION 12.6 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice...................................... 64
SECTION 12.7 Application by Trustee of Assets Deposited with It..... 65
SECTION 12.8 Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness....... 65
SECTION 12.9 Securityholders Authorize Trustee to Effectuate
Subordination of Securities............................ 65
SECTION 12.10 Right of Trustee to Hold Senior Indebtedness........... 66
SECTION 12.11 Article XII Not to Prevent Events of Default........... 66
SECTION 12.12 No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness........................................... 66
ARTICLE XIII
CONVERSION OF SECURITIES......................... 67
SECTION 13.1 Conversion Privilege................................... 67
SECTION 13.2 Exercise of Conversion Privilege....................... 67
SECTION 13.3 Fractional Interests................................... 68
SECTION 13.4 Conversion Price....................................... 69
SECTION 13.5 Adjustment of Conversion Price......................... 69
SECTION 13.6 Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or
Sale of Assets......................................... 75
SECTION 13.7 Notice of Certain Events............................... 77
iv
<PAGE>
SECTION 13.8 Taxes on Conversion................................... 78
SECTION 13.9 Company to Provide Stock.............................. 78
SECTION 13.10 Disclaimer of Responsibility for Certain Matters...... 79
SECTION 13.11 Return of Funds Deposited for Redemption of Converted
Securities............................................ 79
ARTICLE XIV
MISCELLANEOUS............................. 80
SECTION 14.1 TIA Controls.......................................... 80
SECTION 14.3 Communications by Holders with Other Holders.......... 81
SECTION 14.4 Certificate and Opinion as to Conditions Precedent.... 81
SECTION 14.5 Statements Required in Certificate or Opinion......... 81
SECTION 14.6 Rules by Trustee, Paying Agent, Registrar............. 82
SECTION 14.7 Legal Holidays........................................ 82
SECTION 14.8 Governing Law......................................... 82
SECTION 14.9 No Adverse Interpretation of Other Agreements......... 83
SECTION 14.10 No Recourse Against Others............................ 83
SECTION 14.11 Successors............................................ 83
SECTION 14.12 Duplicate Originals................................... 83
SECTION 14.13 Severability.......................................... 83
SECTION 14.14 Table of Contents, Headings, Etc...................... 83
SECTION 14.15 Qualification of Indenture............................ 84
SECTION 14.16 Registration Rights................................... 84
SIGNATURES............................................................ 85
SIGNATURES................................................................. 83
EXHIBIT A - FORM OF SECURITY............................................... A-1
EXHIBIT B - REPRESENTATION LETTER.......................................... B-1
EXHIBIT C - FORM OF CONVERSION NOTICE...................................... C-1
v
<PAGE>
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4). N.A.
(a)(5). 7.10
(b) 7.8;
7.10;
14.2
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.5
(b) 14.3
(c) 14.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6;
14.2
(d) 7.6
314(a) 4.6;
13.2
(b) N.A.
(c)(1) 2.2;
7.2;
14.4
(c)(2) 7.2;
14.4
(c)(3) N.A.
(d) N.A.
(e) 14.5
(f) N.A.
vi
<PAGE>
TIA INDENTURE
SECTION SECTION
- ------- ---------
315(a) 7.1(b)
(b) 7.5;
7.6;
14.2
(c) 7.1(a)
(d) 2.8;
6.11;
7.1(b)(c)
(e) 6.14
316(a)(last sentence) 2.9
(a)(1)(A) 6.11
(a)(1)(B) 6.12
(a)(2) N.A.
(b) 6.12;
6.7
317(a)(1) 6.3
(a)(2) 6.4
(b) 2.4
318(a) 14.1
__________
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
vii
<PAGE>
INDENTURE, dated as of December 24, 1996, between OCCUSYSTEMS, INC., a
Delaware corporation (the "Company"), and UNITED STATES TRUST COMPANY OF NEW
YORK, a New York state banking corporation, as Trustee.
Each party hereto agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders of the Company's 6% Convertible
Subordinated Notes due 2001:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.2.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal, state
or foreign law for the relief of debtors.
"beneficial owner" for purposes of the definition of Change of Control has
the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act (as
in effect on the Issue Date), whether or not applicable, except that a "person"
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time or upon the occurrence of certain events.
"Board of Directors" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with
<PAGE>
respect to any particular matter, to exercise the power of the Board of
Directors of such person.
"Board Resolution" means, with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, as to any Person, the obligation of
such Person to pay rent or other amounts under a lease to which such Person is a
party that is required to be classified and accounted for as a capital lease
obligation under GAAP.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Cash" means such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts.
"Change of Control" means (i) an event or series of events as a result of
which any "person" or "group" (as such terms are used in Sections 13(d)(3) and
14(d) of the Exchange Act) (excluding the Company or any wholly-owned subsidiary
thereof) is or becomes, directly or indirectly, the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not
applicable) of more than 50% of the combined voting power of the then
outstanding securities entitled to vote generally in elections of directors,
managers or trustees, as applicable, of the Company or any successor entity
("Voting Stock"), (ii) the completion of any consolidation with or merger of the
Company into any other Person, or conveyance, transfer or lease by the Company
of all or substantially all of its assets to any Person, or any merger of any
other Person into the Company in a single transaction or series of related
transactions, and, in the case of any such transaction or series of related
transactions, the outstanding Common Stock of the Company is changed or
exchanged as a result, unless the stockholders of the Company immediately before
such transaction own, directly or indirectly, immediately following such
transaction, at least a majority of the combined voting power of the outstanding
voting securities of the Person resulting from such transaction in substantially
the same proportion as their ownership of the Voting Stock immediately before
such
2
<PAGE>
transaction, or (iii) such time as the Continuing Directors do not constitute a
majority of the Board of Directors of the Company (or, if applicable, a
successor corporation to the Company); provided that a Change of Control shall
not be deemed to have occurred if either (x) the last sale price of the Common
Stock for any five Trading Days during the 10 Trading Days immediately preceding
the Change of Control is at least equal to 105% of the Conversion Price in
effect on such day, or (y) with respect to a merger or consolidation otherwise
constituting a Change of Control described in clause (ii) above, at least 90% of
the consideration in such transaction or transactions consists of common stock
or securities convertible into common stock that are, or upon issuance will be,
traded on a United States national securities exchange or approved for quotation
on the Nasdaq National Market.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Company's common stock, par value $.01 per share,
or as such stock may be reconstituted from time to time.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to the Indenture, and thereafter means such successor.
"Continuing Director" means at any date a member of the Company's Board of
Directors (i) who was a member of such board on the Issue Date or (ii) who was
nominated or elected by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election or whose election to the
Company's Board of Directors was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such nomination or
election.
"Conversion Price" shall have the meaning specified in Section 13.4.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Date of Conversion" shall have the meaning specified in Section 13.2.
"Default" means any event or condition that is, or after notice or passage
of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
3
<PAGE>
"Definitive Securities" means Securities that are in the form of Security
attached hereto as Exhibit A that do not include the information called for by
footnotes 1 and 3 thereof.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the person specified in Section 2.3 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Capital Stock" means, with respect to the Company, Capital
Stock of the Company that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event or the passage of time would be, required to be redeemed or
repurchased (including at the option of the holder thereof) by the Company, in
whole or in part, on or prior to the Stated Maturity of the Notes, provided that
only the portion of such Capital Stock which is so convertible, exercisable,
exchangeable or redeemable or subject to repurchase prior to such Stated
Maturity shall be deemed to be Disqualified Capital Stock.
"Distribution Date" shall have the meaning specified in Section 13.5.
"DTC" shall have the meaning specified in Section 2.3.
"Event of Default" shall have the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Expiration Time" shall have the meaning specified in Section 13.5.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board ("FASB") or in such
other statements by such other entity as approved by a significant segment of
the accounting profession which are in effect in the United States; provided,
however, that for purposes of determining compliance with covenants in the
Indenture, "GAAP" means such generally accepted accounting principles which are
in effect as of the Issue Date.
4
<PAGE>
"Global Security" means a Security that contains the paragraph referred to
in footnote 1 and the additional schedule referred to in footnote 3 to the form
of Security attached hereto as Exhibit A. There shall be separate Global
Securities, with separate CUSIP Numbers, to evidence interests (x) in the
Securities held by "qualified institutional buyers," as defined in Rule 144A
under the Securities Act, and (y) by persons who acquired their interest in the
Securities in compliance with Regulation S under the Securities Act.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such person, (i) in
respect of borrowed money (whether or not the lender has recourse to all or any
portion of the assets of such person), (ii) evidenced by credit or loan
agreements, bonds, notes, debentures or similar instruments (including, without
limitation, notes or similar instruments given in connection with the
acquisition or any business, properties or assets of any kind), (iii) evidenced
by bankers' acceptances or similar instruments issued or accepted by banks, (iv)
for the payment of money relating to a Capitalized Lease Obligation, or (v)
evidenced by a letter of credit or a reimbursement obligation of such person
with respect to any letter of credit; (b) all obligations of such person issued
or assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (c) all net obligations of such person under Interest Swap and
Hedging Obligations; (d) all liabilities of others of the kind described in the
preceding clause (a), (b) or (c) that such person has guaranteed or that is
otherwise its legal liability, or which is secured by a lien on property of such
person, and all obligations to purchase, redeem or acquire any Capital Stock;
and (e) any and all deferrals, renewals, extensions, modifications,
replacements, restatements, refinancings and refundings (whether direct or
indirect) of, or any indebtedness or obligations issued in exchange for, any
liability of the kind described in any of the preceding clauses (a), (b), (c) or
(d), or this clause (e), whether or not between or among the same parties.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation, Alex. Brown & Sons Incorporated and Piper Jaffray Inc.
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
5
<PAGE>
"Interest Swap and Hedging Obligation" means the obligations of any Person
under any interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement or other interest rate hedge agreement, interest rate collar agreement
or other similar agreement or arrangement to which such Person is a party or
beneficiary.
"Issue Date" means the date of first issuance of the Securities under this
Indenture.
"Junior Securities" means any Qualified Capital Stock and any Indebtedness
of the Company that is fully subordinated in right of payment to the Securities
and has no scheduled installment of principal due, by redemption, sinking fund
payment or otherwise, on or prior to the Stated Maturity of the Securities.
"Last Sale Price" shall have the meaning specified in Section 13.3.
"Legal Holiday" shall have the meaning specified in Section 14.7.
"Lien" means any mortgage, lien, pledge, charge, security interest or other
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement and any lease deemed to constitute a security interest and any option
or other agreement to give any security interest).
"Liquidated Damages" shall have the meaning specified in the Registration
Rights Agreement.
"Loan Agreement" means the Amended and Restated Loan and Security
Agreement, dated as of January 3, 1996, among OccuCenters, Inc., the Company,
the lenders from time to time party thereto and Creditanstalt-Bankverein, as
agent for the lenders thereunder, as the same may from time to time be amended,
modified, supplemented, restated, renewed, refunded, restructured, refinanced,
replaced or extended, in whole or in part, whether with same or different agents
or lenders thereunder.
"non-electing share" shall have the meaning specified in Section 13.6.
"Non-Payment Default" shall have the meaning specified in Section 12.2.
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"Notice of Default" shall have the meaning specified in Section 6.1(3), (4)
or (5).
"Offer" shall have the meaning specified in Section 13.5.
"Officer" means, with respect to the Company, the Chief Executive Officer,
the President, any Vice President, the Chief Financial Officer, the Treasurer,
the Controller, or the Secretary of the Company.
"Officers' Certificate" means, with respect to the Company, a certificate
signed by two Officers or by an Officer and an Assistant Secretary of the
Company and otherwise complying with the requirements of Section 2.2, if
applicable, and Sections 14.4 and 14.5.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee and which complies with the requirements of
Sections 14.4 and 14.5.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Payment Blockage Period" shall have the meaning specified in Section 12.2.
"Payment Default" shall have the meaning specified in Section 12.2.
"Payment Notice" shall have the meaning specified in Section 12.2.
"Person" or "person" means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state or political
subdivision thereof, trust, municipality or other entity.
"principal" of any Indebtedness means the principal of such Indebtedness
plus, without duplication, any applicable premium, if any, on such Indebtedness.
"property" means any right or interest in or to property or assets of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
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"Purchase Agreement" means that certain Purchase Agreement, dated December
18, 1996, by and among the Company and the Initial Purchasers, as such agreement
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.
"Purchased Shares" shall have the meaning specified in Section 13.5.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Record Date" means a Record Date specified in the Securities whether or
not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture and Paragraph 5 in the form of Security.
"Redemption Price," when used with respect to any Security to be redeemed,
means the redemption price for such redemption pursuant to Paragraph 5 in the
form of Security, which shall include, without duplication, in each case,
accrued and unpaid interest and Liquidated Damages, if any, to and including the
Redemption Date.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated the date hereof, by and among the Initial Purchasers and the Company, as
such agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Repurchase Date" shall have the meaning specified in Section 11.1.
"Repurchase Offer" shall have the meaning specified in Section 11.1.
"Repurchase Offer Period" shall have the meaning specified in Section 11.1.
"Repurchase Price" shall have the meaning specified in Section 11.1.
"Repurchase Put Date" shall have the meaning specified in Section 11.1.
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"Restricted Security" means a Security, unless or until it has been (i)
disposed of in a transaction effectively registered under the Securities Act or
(ii) distributed to the public pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the 6% Convertible Subordinated Notes due
2001, as supplemented from time to time in accordance with the terms hereof,
issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to the
Securities in global form, or any successor entity thereto.
"Senior Indebtedness" means all obligations of the Company to pay the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with, any
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the
Company, unless the instrument creating or evidencing such Indebtedness provides
that such Indebtedness is not senior or superior in right of payment to the
Securities or which is pari passu with, or subordinated to, the Securities;
provided that in no event shall Senior Indebtedness include (a) Indebtedness of
the Company owed or owing to any Subsidiary of the Company or any officer,
director or employee of the Company or any Subsidiary of the Company, (b)
Indebtedness representing or with respect to any account payable or other
accrued current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or services or (c) any
liability for taxes owed or owing by the Company or any Subsidiary of the
Company.
"Shelf Registration Statement" shall have the meaning specified in the
Registration Rights Agreement.
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"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Company within the meaning of Rule 1.02(w) of Regulation S-X
promulgated by the Commission as in effect as of the date of the Indenture.
"Special Record Date" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Security, means December
15, 2001.
"Subsidiary" with respect to any person, means (i) a corporation a majority
of whose Capital Stock with voting power normally entitled to vote in the
election of directors is at the time, directly or indirectly, owned by such
person, by such person and one or more Subsidiaries of such person or by one or
more Subsidiaries of such person, (ii) a partnership in which such person or a
Subsidiary of such person is, at the time, a general partner and owns alone or
together with one or more Subsidiaries of such person a majority of the
partnership interests, or (iii) any other person (other than a corporation) in
which such person, one or more Subsidiaries of such person, or such person and
one or more Subsidiaries of such person, directly or indirectly, at the date of
determination thereof has at least majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-
77bbbb) as in effect on the date of the execution of this Indenture unless
otherwise specified herein.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the Nasdaq National
Market (or, if the Common Stock is not admitted to trading thereon, on the
principal national securities exchange on which the Common Stock is at that time
listed or admitted to trading).
"Transfer Restricted Securities" means Securities that bear or are required
to bear the legend set forth in Section 2.6 hereof.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Trust Officer" means any officer within the corporate trust division (or
any successor group) of the Trustee or any other officer of the Trustee
customarily performing
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functions similar to those performed by the Persons who at that time shall be
such officers, and also means, with respect to a particular corporate trust
matter, any other officer of the Trustee to whom such trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"U.S. Government Obligations" means direct non-callable obligations of, or
noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"Voting Stock" means the combined voting power of the then outstanding
securities entitled to vote generally in elections of directors, managers or
trustees, as applicable, of the Company or any successor entity.
SECTION 1.2 Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3 Rules of Construction.
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Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) references to Sections or Articles means reference to such Section or
Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating.
The Securities and the Trustee's certificate of authentication, in respect
thereof, shall be substantially in the form of Exhibit A hereto, which Exhibit
is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company shall
approve the form of the Securities and any notation, legend or endorsement on
them. Any such notations, legends or endorsements not contained in the form of
Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the
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Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
SECTION 2.2 Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Security for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless and the
Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security but such
signature shall be conclusive evidence that the Security has been authenticated
pursuant to the terms of this Indenture.
The Trustee shall authenticate the Securities for original issue in the
aggregate principal amount of up to $97,750,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Securities to be authenticated and the date on which
the Securities are to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $97,750,000, except as
provided in Section 2.7; provided, that Securities in excess of $85,000,000
shall not be issued other than pursuant to the over-allotment option granted by
the Company to the Initial Purchasers as provided in the Purchase Agreement.
Upon the written order of the Company in the form of an Officers' Certificate,
the Trustee shall authenticate Securities in substitution of Securities
originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company, any Affiliate of the Company, or any of their
respective Subsidiaries.
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
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SECTION 2.3 Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of Manhattan,
The City of New York, where Securities may be presented for registration of
transfer, conversion or for exchange ("Registrar") and an office or agency where
Securities may be presented for payment ("Paying Agent") and where notices and
demands to or upon the Company in respect of the Securities may be served. The
Company may act as Registrar or Paying Agent, except that, for the purposes of
Articles III, VIII and XI and as otherwise specified in the Indenture, neither
the Company nor any Affiliate of the Company shall act as Paying Agent. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-Registrars and one or more
additional Paying Agents. The term "Paying Agent" includes any additional
Paying Agent. The Company hereby initially appoints the Trustee as Registrar,
Paying Agent and conversion agent, and the Trustee hereby initially agrees so to
act.
The Company shall enter into an appropriate written agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities Custodian
with respect to the Global Securities.
SECTION 2.4 Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of Holders
and the Trustee all assets held by the Paying Agent for the payment of principal
of, premium, if any, interest on or Liquidated Damages with respect to, the
Securities (whether such assets have been distributed to it by the Company or
any other obligor on the Securities), and shall notify the Trustee in writing of
any Default in making any such payment. If either of the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate such assets
and hold them as a separate trust fund for the benefit of the Holders and the
Trustee. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any
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assets disbursed and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent (if
other than the Company or an Affiliate of the Company) shall have no further
liability for such assets.
SECTION 2.5 Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before the third Business Day preceding each Interest Payment Date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee reasonably may require of the names and
addresses of Holders.
SECTION 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Registrar or a co-Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations;
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company and
the Registrar or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of a Definitive Security that is a Transfer
Restricted Security, shall be accompanied by the following additional
information and documents, as applicable:
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(A) if such Definitive Security is being delivered to the
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 set forth on the reverse of the Security); or
(B) if 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 under the Securities Act,
a certification to that effect (in substantially the form set forth on
the reverse of the Security); or
(C) if such Definitive Security is being transferred in
accordance with Regulation S under the Securities Act, a certification
to that effect (in substantially the form set forth on the reverse of
the Security) and if either the Trustee or the Company so requests, an
Opinion of Counsel satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act;
(D) if such Definitive Security is being transferred to an
institutional investor that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act, a
certification to that effect (in substantially the form set forth on
the reverse of the Security) accompanied by a certificate in the form
of Exhibit B to the Indenture to the Trustee and if either the Trustee
or the Company so requests, an Opinion of Counsel satisfactory to the
Company to the effect that such transfer is in compliance with the
Securities Act; or
(E) if such Definitive 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 set forth on the reverse of the Security) and if either the
Trustee or the Company so requests, an Opinion of Counsel satisfactory
to the Company to the effect that such transfer is in compliance with
the Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security may not be exchanged for a
beneficial interest in a Global Security except 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 reasonably satisfactory to the Company and the
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Registrar or Co-Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form set forth on the reverse
of the Security, that such Definitive Security is being transferred (x) to
a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act or
(y) in accordance with Regulation S under 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 Global
Security to reflect an increase in the aggregate principal amount of the
Securities represented by the applicable 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 appropriate Global
Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall issue and the Trustee shall authenticate an
appropriate new Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. 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.
(d) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security.
(i) Upon receipt by the Trustee of written instructions or
such other form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any Person having a beneficial
interest in a Global Security and upon receipt by the Trustee of a written
order or such other form of instructions as is customary for the Depositary
or the Person designated by the Depositary as having such a beneficial
interest in a Transfer Restricted Security only, the following additional
information and documents (all of which may be submitted by facsimile):
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(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 set forth on the reverse of the Security); 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,
a certification to that effect from the transferor (in substantially
the form set forth on the reverse of the Security); or
(C) if such beneficial interest is being transferred in
accordance with Regulation S under the Securities Act, a certification
to that effect (in substantially the form set forth on the reverse of
the Security) and if either the Trustee or the Company so requests, an
Opinion of Counsel satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act;
(D) if such beneficial interest is being transferred to an
institutional investor that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act, a
certification to that effect (in substantially the form set forth on
the reverse of the Security) accompanied by a certificate in the form
of Exhibit B to the Indenture to the Trustee and if either the Trustee
or the Company so requests, an Opinion of Counsel satisfactory to the
Company to the effect that such transfer is in compliance with the
Securities Act; or
(E) 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 set forth on the reverse of
the Security) and if either the Trustee or the Company so requests, an
Opinion of Counsel satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act;
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 applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an
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authentication order in the form of an Officers' Certificate, the Trustee will
authenticate and deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to subsection (d) this Section 2.6
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.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), 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.
(f) Authentication of Definitive Securities in Absence of Depositary.
If at any time:
(i) the Depositary for the Securities notifies the Company and
the Company notifies the Trustee in writing that the Depositary is no
longer willing or able 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, in its sole discretion, notifies the Trustee in
writing that it elects to cause all Securities under this Indenture to be
in the form of Definitive Securities;
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate 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.
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(g) Legends.
(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:
THE SECURITIES EVIDENCED HEREBY HAVE 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 OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, REGISTRATION.
THE HOLDER OF THE SECURITIES EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF
AGREES THAT SUCH SECURITIES ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 UNDER THE SECURITIES ACT AND THAT IT AND ANY
SUBSEQUENT HOLDER WILL NOT 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) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) PURSUANT TO RULE 144A, FOR SO LONG AS IT IS
AVAILABLE, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN
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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) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATIONS UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR," WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF 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 CLAUSE (D), (E) OR (F)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
(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:
(A) in the case of any Transfer Restricted Security that is
a Definitive Security or that is represented by a Global Security, the
Registrar
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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 (1) in the case of a sale or transfer
pursuant to Rule 144 under the Securities Act, after delivery of a
customary opinion of counsel satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act or (2) in
the case of a sale or transfer pursuant to an effective registration
statement under 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 subsection (c) of this Section 2.6 hereof).
(h) Cancellation and/or Adjustment of Global Security. 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 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.
(i) Obligations with respect to Transfers and Exchanges of
Definitive Securities and Global Securities.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-Registrar's
request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer taxes,
assessments, or similar governmental charge payable upon exchanges or
transfers pursuant to Section 2.2 (fourth paragraph), 2.10, 3.7, 9.5, or
11.1 (final paragraph)).
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(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article III, except
the unredeemed portion of any Definitive Security being redeemed in part,
or (b) any Security for a period beginning 15 days before the mailing of a
notice of an offer to repurchase pursuant to Article XI hereof or the
mailing of a notice of redemption of Securities pursuant to Article III
hereof and ending at the close of business on the day of such mailing.
SECTION 2.7 Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims and submits an affidavit or other evidence, satisfactory to
the Trustee, to the Trustee to the effect that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a 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, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the conditions set forth in the preceding
paragraph.
Every new Security issued pursuant to this Section 2.7 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and such new Security 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 2.7 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies of any Holder with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.8 Outstanding Securities.
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Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security, except as provided in Section
2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date the Paying Agent (other than the Company or an
Affiliate of the Company) holds Cash or U.S. Government Obligations sufficient
to pay all of the principal and interest due on the Securities payable on that
date in accordance with Section 3.6 hereof and payment of the Securities called
for redemption is not otherwise prohibited pursuant to Article XII hereof or
otherwise, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.9 Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or an Affiliate of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that the Trustee knows are so owned shall be
disregarded.
SECTION 2.10 Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company reasonably and in good faith considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be
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entitled to the same benefits under this Indenture as permanent Securities
authenticated and delivered hereunder.
SECTION 2.11 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no one else, shall
cancel and, at the written direction of the Company, shall dispose of all
Securities surrendered for transfer, exchange, payment or cancellation. Subject
to Section 2.7, the Company may not issue new Securities to replace Securities
that have been paid or delivered to the Trustee for cancellation. No Securities
shall be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section 2.11, except as expressly permitted in the form of
Securities and as permitted by this Indenture.
SECTION 2.12 Defaulted Interest.
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 Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest (collectively, herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant Record Date, 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 Cash equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall
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make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such Cash when deposited to be held in trust
for the benefit of the persons entitled to such Defaulted Interest as
provided in this clause (1). 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 mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names the
Securities (or their respective predecessor Securities) are registered 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 shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.12, each
Security delivered under this Indenture upon 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.
ARTICLE III
REDEMPTION
SECTION 3.1 Right of Redemption.
Redemption of Securities, as permitted by any provision of this
Indenture, shall be made in accordance with Paragraph 5 of the Securities and
this Article III. The Company will not have the right to redeem any Securities
prior to December 15, 1999. On or after
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December 15, 1999, the Company will have the right to redeem all or any part of
the Securities at the Redemption Prices specified in Paragraph 5 therein under
the caption "Redemption," in each case including accrued and unpaid interest and
Liquidated Damages, if any, to, but excluding, the Redemption Date.
SECTION 3.2 Notices to Trustee.
If the Company elects to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed and whether it wants the
Trustee to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities to
be redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee for
cancellation, it shall so notify the Trustee of the amount of the reduction and
deliver such Securities with such notice.
The Company shall give each notice to the Trustee provided for in this
Section 3.2 at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee). Any such notice may be cancelled at any
time prior to notice of such redemption being mailed to any Holder and shall
thereby be void and of no effect.
SECTION 3.3 Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on a
pro rata basis, by lot or by such other method as the Trustee shall determine to
be fair and appropriate and in such manner as complies with any applicable
depositary, legal and stock exchange or automated quotation system requirements.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 may be redeemed only in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
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SECTION 3.4 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall send a notice of redemption to the Trustee and each Holder
whose Securities are to be redeemed. At the Company's request, the Trustee shall
give the notice of redemption in the Company's name and at the Company's
expense. Each notice for redemption shall identify the Securities to be redeemed
and shall state:
(1) the Redemption Date, and that the Securities called for
redemption may not be converted after the fifth Business Day prior to the
Redemption Date;
(2) the Redemption Price, including the amount of accrued and
unpaid interest and Liquidated Damages, if any, to be paid upon such
redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent at the address specified in such notice to collect the
Redemption Price;
(5) that, unless (a) the Company defaults in its obligation to
deposit Cash with the Paying Agent in accordance with Section 3.6 hereof or
(b) such redemption payment is prohibited pursuant to Article XII hereof or
otherwise, interest on, and Liquidated Damages with respect to, Securities
called for redemption ceases to accrue on and after the Redemption Date and
the only remaining right of the Holders of such Securities is to receive
payment of the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to, but excluding, the Redemption Date, upon
surrender to the Paying Agent of the Securities called for redemption and
to be redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount, equal to $1,000 or any integral multiple thereof, of such
Security to be redeemed and that, after the Redemption Date, and upon
surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
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(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.4
and pursuant to the redemption provisions of Paragraph 5 of the Securities.
SECTION 3.5 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date. Upon surrender to the
Trustee or Paying Agent, such Securities called for redemption shall be paid at
the Redemption Price, including accrued and unpaid interest and Liquidated
Damages, if any, to, but excluding, the Redemption Date; provided that if the
Redemption Date is after a regular Record Date and on or prior to the
corresponding Interest Payment Date, the accrued interest and Liquidated
Damages, if any, shall be payable to the Holder of the redeemed Securities
registered on the relevant Record Date; and provided, further, that if a
Redemption Date is a Legal Holiday, payment shall be made on the next succeeding
Business Day and no interest or Liquidated Damages shall accrue for the period
from such Redemption Date to such succeeding Business Day.
SECTION 3.6 Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (other than the Company or an Affiliate of the Company) Cash
sufficient to pay the Redemption Price of, including accrued and unpaid interest
on, and Liquidated Damages with respect to, all Securities to be redeemed on
such Redemption Date (other than Securities or portions thereof called for
redemption on that date that have been delivered by the Company to the Trustee
for cancellation). The Paying Agent shall promptly return to the Company any
Cash so deposited which is not required for that purpose upon the written
request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not prohibited under
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Article XII or otherwise, interest and Liquidated Damages on the Securities to
be redeemed will cease to accrue on and after the applicable Redemption Date,
whether or not such Securities are presented for payment. Notwithstanding
anything herein to the contrary, if any Security surrendered for redemption in
the manner provided in the Securities shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, Liquidated Damages shall continue to accrue and be paid from the
Redemption Date if so required pursuant to Section 3 of the Registration Rights
Agreement and interest shall continue to accrue and be paid from the Redemption
Date until such payment is made on the unpaid principal, and, to the extent
lawful, on any interest not paid on such unpaid principal, in each case at the
rate and in the manner provided in Section 4.1 hereof and the Security.
SECTION 3.7 Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities.
The Company shall pay the principal of, interest on, and Liquidated
Damages with respect to, the Securities on the dates and in the manner provided
in the Securities and the Registration Rights Agreement, as applicable. An
installment of principal of, interest on, or Liquidated Damages with respect to,
the Securities shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company or an Affiliate of the Company) holds for
the benefit of the Holders, on or before 10:00 a.m. New York City time on that
date, Cash deposited and designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
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SECTION 4.2 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and for conversion and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of 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 address of the Trustee set forth in Section 14.2.
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 the
Borough of Manhattan, The City of New York, for such purposes. The Company shall
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. The
Company hereby initially designates the corporate trust office of the Trustee as
such office.
SECTION 4.3 Corporate Existence.
Subject to Article V, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate or other existence of each of its Subsidiaries in
accordance with the respective organizational documents of each of them and the
rights (charter and statutory) and corporate franchises of the Company and each
of its Subsidiaries; provided, however, that the Company shall not be required
to preserve, with respect to itself, any right or franchise, and with respect to
any of its Subsidiaries, any such existence, right or franchise, if (a) the
Company shall, in good faith, reasonably determine that the preservation thereof
is no longer desirable in the conduct of the business of such entity and (b) the
loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 4.4 Payment of Taxes and Other Claims.
Except with respect to immaterial items, the Company shall, and shall
cause each of its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same
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shall become delinquent, (i) all taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon the Company or any of its Subsidiaries or any of their
respective properties and assets and (ii) all lawful claims, whether for labor,
materials, supplies, services or anything else, which have become due and
payable and which by law have or may become a Lien upon the property and assets
of the Company or any of its Subsidiaries; provided, however, that neither the
Company nor any Subsidiary shall be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which disputed amounts adequate reserves have been
established in accordance with GAAP.
SECTION 4.5 Maintenance of Properties and Insurance.
The Company shall cause all material properties used or useful to the
conduct of its business and the business of each of its Subsidiaries to be
maintained and kept in good condition, repair and working order (reasonable wear
and tear excepted) and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in its reasonable good faith judgment may be
necessary, so that the business carried on in connection therewith may be
properly conducted at all times; provided, however, that nothing in this Section
4.5 shall prevent the Company or any Subsidiary from discontinuing any operation
or maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is (a), in the judgment of the Company, desirable in
the conduct of the business of such entity and (b) not disadvantageous in any
material respect to the Holders.
The Company shall provide, or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith judgment
of the Company is adequate and appropriate for the conduct of the business of
the Company and such Subsidiaries in a prudent manner, with (except for self-
insurance) reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as shall be customary, in the reasonable, good
faith judgment of the Company and adequate and appropriate for the conduct of
the business of the Company and such Subsidiaries in a prudent manner for
entities similarly situated in the industry, unless failure to provide such
insurance (together with all other such failures) would not have a material
adverse effect on the financial condition or results of operations of the
Company or such Subsidiary.
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SECTION 4.6 Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within 120 days after the
end of its fiscal year an Officers' Certificate complying with Section 314(a)(4)
of the TIA and stating that a review of its activities and the activities of its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture and further stating, as to each such Officer signing such certificate,
whether or not the signer knows of any failure by the Company or any Subsidiary
of the Company to comply with any conditions or covenants in this Indenture and,
if such signor does know of such a failure to comply, the certificate shall
describe such failure with particularity. The Officers' Certificate shall also
notify the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any
Default, Event of Default or fact which would prohibit the making of any payment
to or by the Trustee in respect of the Securities, an Officers' Certificate
specifying such Default, Event of Default or fact and what action the Company is
taking or proposes to take with respect thereto. The Trustee shall not be
deemed to have knowledge of any Default, any Event of Default or any such fact
unless one of its Trust Officers receives notice thereof from the Company or any
of the Holders.
SECTION 4.7 Reports.
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder and to prospective purchasers of Securities
identified to the Company by an Initial Purchaser, within 15 days after it is or
would have been required to file such with the SEC, annual and quarterly
consolidated financial statements substantially equivalent to financial
statements that would have been included in reports filed with the SEC if the
Company was subject to the requirements of Section 13 or 15(d) of the Exchange
Act, including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required in
such reports to the SEC and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required.
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SECTION 4.8 Limitation on Status as Investment Company.
Neither the Company nor any of its Subsidiaries shall become an
"investment company" (as that term is defined in the Investment Company Act of
1940, as amended), or otherwise become subject to regulation under the
Investment Company Act.
SECTION 4.9 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law which would prohibit or forgive the Company from paying all or any
portion of the principal of, premium of, interest on, or Liquidated Damages with
respect to, the Securities as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 4.10 Rule 144A Information Requirement.
If at any time there are Transfer Restricted Securities outstanding
and the Company shall cease to have a class of equity securities registered
under Section 12(g) of the Exchange Act or shall cease to be subject to Section
15(d) of the Exchange Act, the Company shall furnish to the Holders or
beneficial holders of the Securities or the underlying Common Stock and
prospective purchasers of Securities or the underlying Common Stock designated
by the Holders of Transfer Restricted Securities, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act until such time as the Shelf Registration Statement has become
effective under the Securities Act. The Company shall also furnish such
information during the pendency of any suspension of effectiveness of the Shelf
Registration Statement.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 Limitation on Merger, Sale or Consolidation.
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(a) The Company shall not, directly or indirectly, consolidate with or
merge with or into another Person or sell, lease, convey or transfer all or
substantially all of its assets (other than to a wholly-owned subsidiary or
subsidiaries) whether in a single transaction or a series of related
transactions, to another Person or group of affiliated Persons, unless (i)
either (a) in the case of a merger or consolidation, the Company is the
surviving entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Securities and the
Indenture; and (ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect to such transaction; and (iii) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and, if a supplemental
indenture is required, such supplemental indenture comply with the Indenture and
that all conditions precedent relating to such transaction have been satisfied.
(b) For purposes of clause (a) of this Section 5.1 and Section 13.6,
the sale, lease, conveyance, assignment, transfer, or other disposition of all
or substantially all of the properties and assets of one or more Subsidiaries of
the Company, which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.2 Successor Corporation Substituted.
Upon any consolidation or merger or any sale, lease, conveyance or
transfer of all or substantially all of the assets of the Company in accordance
with the foregoing, the successor corporation formed by such consolidation or
into which the Company is merged or to which such sale, lease, conveyance or
transfer is made, shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under the Indenture with the same effect
as if such successor corporation had been named therein as the Company, and when
a successor corporation duly assumes all of the obligations of the Company
pursuant hereto and pursuant to the Securities, the predecessor shall be
released from such obligations (except with respect to any obligations that
arise from or as a result of such transaction).
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, 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) failure to pay any installment of interest on, or Liquidated
Damages with respect to, the Securities as and when the same becomes due
and payable, or to perform any conversion of the Securities required under
this Indenture, and the continuance of such failure for a period of 30
days, whether or not such payment is prohibited by Article XII;
(2) failure to pay all or any part of the principal of, or
premium, if any on the Securities when and as the same become due and
payable at maturity, redemption, by acceleration or otherwise, including,
without limitation, failure to pay all or any part of the Repurchase Price
on the Repurchase Date in accordance with Article XI, whether or not such
payment is prohibited by Article XII;
(3) failure by the Company to observe or perform any covenant or
agreement contained in the Securities or this Indenture (other than a
default in the performance of any covenant or agreement which is
specifically dealt with elsewhere in this Section 6.1), and continuance of
such failure 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 Holders of at least 25% in aggregate principal
amount of the then outstanding Securities, a written notice specifying such
failure, requesting it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(4) failure by the Company or any Significant Subsidiary to pay
principal, premium or interest when due (after giving effect to any
applicable period of grace) at maturity of any Indebtedness (other than
non-recourse obligations),
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in an amount in excess of $10,000,000 and the continuance of such failure
for 30 days after there has been given, by registered or certified mail, to
the Company or to the Trustee by the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities, a written notice
specifying such default, requesting that it be remedied and stating that
such notice is a "Notice of Default" hereunder;
(5) default by the Company or any Significant Subsidiary with
respect to any Indebtedness (other than non-recourse obligations), which
default results in the acceleration of Indebtedness having a principal
amount in excess of $10,000,000 without such Indebtedness having been
discharged or such acceleration having been rescinded or annulled for 30
days after there has been given, by registered or certified mail, to the
Company or to the Trustee by the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities, a written notice
specifying such default, requesting that it be remedied and stating that
such notice is a "Notice of Default" hereunder;
(6) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudging the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company or any of its
Significant Subsidiaries under any bankruptcy or similar law, and such
decree, judgment, or order shall have continued undischarged and unstayed
for a period of 60 days; or a decree or order of a court of competent
jurisdiction over the appointment of a receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency of the Company, any of its Significant
Subsidiaries, or of the property of any such Person, or for the winding up
or liquidation of the affairs of any such Person, shall have been entered,
and such decree, judgment, or order shall have remained in force
undischarged and unstayed for a period of 60 days;
(7) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization under any bankruptcy
or similar law or similar statute, or shall consent to the filing of any
such petition, or shall consent to the appointment of a Custodian,
receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of
it or any of its assets or property, or shall make a general assignment for
the benefit of creditors; or take any corporate action in furtherance of or
to facilitate, conditionally or otherwise, any of the foregoing; or
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(8) final unsatisfied judgments not covered by insurance,
aggregating in excess of $10,000,000 at any one time shall have been
rendered against the Company or any of its Significant Subsidiaries and not
have been stayed, bonded or discharged for a period (during which execution
shall not be effectively stayed) of 60 days (or, in the case of any such
final judgment which provides for payment over time, which shall so remain
unstayed, unbonded or undischarged beyond any applicable payment date
provided therein).
Notwithstanding the 60-day period and notice requirement contained in
Section 6.1(3) above, with respect to a default under Article XI the 60-day
period referred to in Section 6.1(3) shall be deemed to have begun as of the
date the Change of Control notice is required to be sent in the event that the
Company has not complied with the provisions of Section 11.1 and the Trustee or
Holders of at least 25% in principal amount of the outstanding Securities
thereafter give the Notice of Default referred to in Section 6.1(3) to the
Company and, if applicable, the Trustee; provided, however, that if the breach
or default is a result of a default in the payment when due of the Repurchase
Price on the Repurchase Date, such Event of Default shall be deemed, for
purposes of this Section 6.1, to arise no later than on the last Repurchase
Date.
SECTION 6.2 Acceleration of Maturity Date; Rescission and
Annulment.
If an Event of Default (other than an Event of Default specified in
Section 6.1(6) or (7) relating to the Company) occurs and is continuing, then,
and in every such case, unless the principal of all of the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of then outstanding Securities, by a
notice in writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all of the principal of the Securities (or
the Repurchase Price if the Event of Default includes failure to pay the
Repurchase Price, determined as set forth below), including in each case accrued
interest thereon and Liquidated Damages with respect thereto, to be due and
payable immediately. If an Event of Default specified in Section 6.1(6) or (7)
relating to the Company occurs, all principal, accrued interest thereon and
Liquidated Damages with respect thereto will be immediately due and payable on
all outstanding Securities without any declaration or other act on the part of
Trustee or the Holders.
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 provided in this Article VI, the Holders of no less
than a majority in aggregate principal
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amount of then outstanding Securities, by written notice to the Company and the
Trustee, may rescind, on behalf of all Holders, any such declaration of
acceleration if:
(1) the Company has paid or deposited with the Trustee Cash
sufficient to pay
(A) all overdue interest on, and Liquidated Damages with
respect to, all Securities,
(B) the principal of (and premium, if any, applicable to)
any Securities which would then be due otherwise than by such
declaration of acceleration, and interest thereon at the rate borne by
the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest and Liquidated Damages at the rate
borne by the Securities,
(D) all sums paid or advanced by the Trustee hereunder and
the compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and
(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, interest on and Liquidated Damages with
respect to Securities that have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.12,
including, if applicable, any Event of Default relating to the covenants
contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event. No such waiver shall cure or waive any subsequent Default or Event of
Default or impair any right consequent thereon.
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SECTION 6.3 Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if an Event of Default in payment of
principal, premium, interest or Liquidated Damages specified in clause (1) or
(2) of Section 6.1 occurs and is continuing, the Company shall, 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, premium (if
any), interest, Liquidated Damages and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal (and
premium, if any), Liquidated Damages 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 reasonable costs and expenses of collection,
including compensation to, and reasonable expenses, disbursements and advances
of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective 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 6.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, interest or Liquidated
Damages) shall be enti-
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tled and empowered, by intervention in such proceeding or otherwise to take any
and all actions under the TIA, including
(1) to file and prove a claim for the whole amount of principal
(and premium, if any), interest and Liquidated Damages owing and unpaid in
respect of the Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel) and of
the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same in accordance
with Section 6.6;
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 for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder 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 of any Holder in any such proceeding.
SECTION 6.5 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 in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
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SECTION 6.6 Priorities.
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any), interest or Liquidated Damages, 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 the Trustee in payment of all amounts due pursuant to
Section 7.7;
SECOND: To the holders of Senior Indebtedness of the Company to the
extent provided in Article XII;
THIRD: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), interest on and Liquidated Damages with
respect to, the Securities in respect 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, premium (if
any), interest and Liquidated Damages, respectively; and
FOURTH: The remainder, if any, shall be repaid to the Company.
SECTION 6.7 Limitation on Suits.
No Holder of any Security shall have any right to institute or order
or direct the Trustee 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
(A) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of then
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;
(C) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred or reasonably probable to be incurred in compliance with such
request;
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(D) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(E) 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 then 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 6.8 Unconditional Right of Holders to Receive Principal,
Premium, Interest and Liquidated Damages, and to Convert.
Notwithstanding any other provision of this Indenture but subject to
the provisions of Article XII, 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), interest on and Liquidated Damages with respect to, such
Security when due (including, in the case of redemption, the Redemption Price on
the applicable Redemption Date, and in the case of the Repurchase Price, on the
applicable Repurchase Date) and to convert such Security in accordance with
Article XIII 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 6.9 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, 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.
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SECTION 6.10 Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI 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 6.11 Control by Holders.
The Holder or Holders of no less than a majority in aggregate
principal amount of then 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 upon the Trustee,
provided, that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12 Waiver of Past Default.
The Holder or Holders of not less than a majority in aggregate
principal amount of then outstanding Securities may, on behalf of all Holders,
prior to the declaration of acceleration of the maturity of the Securities,
waive any past default hereunder and its consequences, except a default
(A) in the payment of the principal of, premium, if any, interest
on, or Liquidated Damages with respect to, any Security not yet cured, or
(B) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the Holder
of each outstanding Security affected.
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Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
SECTION 6.13 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.13 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of then outstanding Securities, or to any suit
instituted by any Holder for enforcement of the payment of principal of, premium
(if any), interest on or Liquidated Damages with respect to, any Security on or
after the respective Stated Maturity of such Security (including, in the case of
redemption, on or after the Redemption Date).
SECTION 6.14 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 case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively 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.
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ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
SECTION 7.1 Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants or
obligations shall be implied in or read into this Indenture which are
adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
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(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.11.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.2 Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 14.4 and 14.5. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or advice of counsel.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
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(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Unless otherwise specifically provided for in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(h) The Trustee shall have no duty to inquire as to the performance of
the Company's covenants in Article IV hereof. In addition, the Trustee shall
not be deemed to have knowledge of any Default or Event of Default except (i)
any Event of Default occurring pursuant to Sections 6.1(1), 6.1(2) or 5.1, or
(ii) any Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any of
its Subsidiaries, or their respective Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication, or the use or application of any funds received
by a Paying Agent other than the Trustee.
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SECTION 7.5 Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any) of, interest on or Liquidated
Damages with respect to, any Security (including the payment of the Repurchase
Price on the Repurchase Date and the payment of the Redemption Price on the
Redemption Date), the Trustee may withhold the notice if and so long as a Trust
Officer in good faith determines that withholding the notice is in the interest
of the Securityholders.
SECTION 7.6 Reports by Trustee to Holders.
Within 60 days after each July 15 beginning with the July 15 following
the date of this Indenture, the Trustee shall, if required by law, mail to each
Securityholder a brief report dated as of such July 15 that complies with TIA
(S) 313(a). The Trustee also shall comply with TIA (S)(S) 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC, if required by law, and
each stock exchange, if any, on which the Securities are listed.
SECTION 7.7 Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust). The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances incurred or made by it. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents, accountants, experts and counsel.
The Company agrees to indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, expense (including but not
limited to reasonable compensation,
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disbursements and expenses of the Trustee's agents and counsel), loss or
liability incurred by it without negligence, bad faith or willful misconduct on
its part, arising out of or in connection with the administration of this trust
and its rights or duties hereunder including the reasonable costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company need not pay for any settlement made
without its written consent. The Company need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all assets held or collected by the Trustee, in its capacity as
Trustee, except assets held in trust to pay principal and premium, if any, of or
interest or Liquidated Damages on particular Securities pursuant to Article III.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's obligations pursuant to Article VIII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
SECTION 7.8 Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in principal amount of then outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian, or other public officer takes charge
of the Trustee or its property; or
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(d) the Trustee becomes incapable of acting.
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 this Section 7.8.
If the instrument of acceptance by a successor Trustee required by
this Section 7.8 shall not have been delivered to the Trustee within 30 days
after the giving of such notice of removal, the removed Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. At any time within one year after a successor Trustee appointed by the
Company takes office, the Holder or Holders of a majority in principal amount of
then outstanding Securities may, with the Company's consent, appoint a successor
Trustee to replace such successor Trustee as so appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in
Section 7.7 have been paid, the retiring Trustee shall transfer all property
held by it as trustee to the successor Trustee, subject to the lien provided in
Section 7.7, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the Company or any Holder or Holders of
at least 10% in principal amount of then outstanding Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder or
Holders of at least 10% in principal amount of then outstanding Securities may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
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SECTION 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee, provided such
corporation shall be otherwise eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
delivery the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA (S)
310(a)(1), (2) and (5). The Trustee shall have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition. The Trustee shall comply with TIA (S) 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge of Indenture.
The Company may terminate its obligations under this Indenture
(subject to the provisions of this Article VIII) when it shall have delivered to
the Trustee for cancellation all Securities theretofore authenticated (other
than any Securities which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Article II hereof) and the
following conditions shall be satisfied:
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(1) The Company has paid all sums payable under the Indenture; and
(2) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent have been complied with as contemplated by this
Section 8.1.
SECTION 8.2 Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, for the payment of the principal of, premium, if any, interest
on or Liquidated Damages with respect to any Security and remaining unclaimed
for two years after such principal, premium, if any, interest or Liquidated
Damages has become due and payable shall be paid to the Company on its request;
and the Holder of such Security shall thereafter look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by
Board Resolutions, and the Trustee, 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 cure any ambiguity, defect, or inconsistency, 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 (1) does not adversely affect
the rights of any Holder in any respect;
(2) to create additional covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company or to make any other change that does not adversely affect the rights of
any Holder, provided, that the Company has delivered to the Trustee an Opinion
of Counsel stating that such change pursuant to this clause (2) does not
adversely affect the rights of any Holder;
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(3) to provide for collateral for or guarantors of the Securities;
(4) to evidence the succession of another Person to the Company and
the assumption by any such successor of the obligations of the Company herein
and in the Securities in accordance with Article V; or
(5) to comply with the TIA.
SECTION 9.2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders.
Subject to the last sentence of this paragraph, with the consent of
the Holders of not less than a majority in aggregate principal amount of then
outstanding Securities, by written act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by Board Resolutions, and the
Trustee may amend or supplement this Indenture or the Securities or 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 the Securities or of modifying in any manner the rights of the
Holders under this Indenture or the Securities. Subject to the last sentence of
this paragraph, the Holder or Holders of not less than a majority in aggregate
principal amount of then outstanding Securities may, in writing, waive
compliance by the Company with any provision of this Indenture or the
Securities. Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall, without the consent of the Holder of
each outstanding Security affected thereby:
(1) change the Stated Maturity of any Security or reduce the principal
amount thereof or the rate (or extend the time for payment) 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
the interest thereon or Liquidated Damages with respect thereto is payable, or
impair the right to institute suit for the enforcement of any such payment or
the conversion of any Security on or after the due date thereof (including, in
the case of redemption, on or after the Redemption Date), or reduce the
Repurchase Price, or alter the terms of this Indenture regarding a Repurchase
Offer or redemption provisions in a manner adverse to the Holders;
(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such amendment,
supplemental indenture or waiver provided for in the Indenture;
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(3) adversely affect the right of such Holder to convert Securities;
or
(4) provide that other provisions of the Indenture cannot be modified
or waived without the consent of the Holder of each outstanding Security
affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section 9.2 or
Section 9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or (at the option of the
Company) to all Holders, consideration for consent to such amendment, supplement
or waiver.
SECTION 9.3 Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4 Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by written notice to the
Company or the Person designated by the Company as the Person to whom consents
should be sent if such revocation is received by the Company or such Person
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite
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principal amount of Securities have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company. If a record date is fixed, then notwithstanding the last sentence of
the immediately preceding paragraph, those Persons who were Holders at such
record date, and only those Persons (or their duly designated proxies), shall be
entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (4) of Section 9.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest on and Liquidated Damages with respect to
a Security, on or after the respective dates set for such amounts to become due
and payable as then expressed in such Security, or to bring suit for the
enforcement of any such payment on or after such respective dates.
SECTION 9.5 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms. Any
failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment, supplement or waiver.
SECTION 9.6 Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
shall not be obligated to,
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execute any such amendment, supplement or waiver which affects the Trustee's own
rights, duties or immunities under this Indenture. The Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
and an Officer's Certificate stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article IX is authorized or
permitted by this Indenture and that all conditions precedent have been
satisfied.
ARTICLE X
[RESERVED]
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL
SECTION 11.1 Repurchase of Securities at Option of the Holder
Upon a Change of Control.
(a) In the event that a Change of Control occurs, each Holder shall
have the right, at such Holder's option, subject to the terms and conditions of
this Indenture, to require the Company to repurchase all or any part of such
Holder's Securities (provided, that the principal amount of such Securities must
be $1,000 or an integral multiple thereof) on a date to be established by the
Company (the "Repurchase Date") that is no later than 50 Business Days (as such
date may be extended pursuant to clause (2) of subsection (b) of this
Section 11.1) after the occurrence of such Change of Control, at a cash price
(the "Repurchase Price") equal to 100% of the principal amount thereof, together
with accrued and unpaid interest to, but excluding, the Repurchase Date.
(b) In the event that, pursuant to this Section 11.1, the Company
shall be required to commence an offer to purchase Securities (a "Repurchase
Offer"), the Company shall follow the procedures set forth in this Section 11.1
as follows:
(1) the Repurchase Offer shall commence within 25 Business Days
following a Change of Control;
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(2) the Repurchase Offer shall remain open for 20 Business Days
following its commencement, except to the extent that a longer period is
required by applicable law, but in any case the Repurchase Offer must be
completed and the Repurchase Date must occur not more than 60 Business Days
following the Change of Control (the "Repurchase Offer Period");
(3) upon the expiration of a Repurchase Offer, the Company shall
purchase all Securities tendered in response to the Repurchase Offer;
(4) if the Repurchase Date is on or after an interest payment
record date and on or before the related Interest Payment Date and Damage
Payment Date, any accrued interest and Liquidated Damages will be paid to
the Person in whose name a Security is registered at the close of business
on such record date, and no additional interest or Liquidated Damages will
be payable to Securityholders who tender Securities pursuant to the
Repurchase Offer;
(5) the Company shall provide the Trustee with notice of the
Repurchase Offer at least 5 Business Days before the commencement of any
Repurchase Offer; and
(6) on or before the commencement of any Repurchase Offer, the
Company or the Trustee (upon the request and at the expense of the Company)
shall send, by first-class mail, a notice to each of the Securityholders,
which (to the extent consistent with this Indenture) shall govern the terms
of the Repurchase Offer and shall state:
(i) that the Repurchase Offer is being made pursuant to
such notice and this Section 11.1 and that all Securities, or portions
thereof, tendered will be accepted for payment;
(ii) the Repurchase Price (including the amount of accrued
and unpaid interest and Liquidated Damages, if any), the Repurchase Date
and the Repurchase Put Date;
(iii) that any Security, or portion thereof, not tendered
or accepted for payment will continue to accrue interest and Liquidated
Damages, if any;
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(iv) that, unless the Company defaults in depositing Cash
with the Paying Agent in accordance with the last paragraph of this clause
(b) or such payment is prevented pursuant to Article XII, any Security, or
portion thereof, accepted for payment pursuant to the Repurchase Offer
shall cease to accrue interest and Liquidated Damages after the Repurchase
Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Repurchase Offer will be required to
surrender the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Paying Agent
(which may not for purposes of this Section 11.1, notwithstanding anything
in this Indenture to the contrary, be the Company or any Affiliate of the
Company) at the address specified in the notice prior to the close of
business on the earlier of (a) the third Business Day prior to the
Repurchase Date and (b) the third Business Day following the expiration of
the Repurchase Offer (such earlier date being the "Repurchase Put Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent (which may not for
purposes of this Section 11.1, notwithstanding anything in this Indenture
to the contrary, be the Company or any Affiliate of the Company) receives,
up to the close of business on the Repurchase Put Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Securities the Holder is withdrawing and a
statement that such Holder is withdrawing his election to have such
principal amount of Securities purchased; and
(vii) a brief description of the events resulting in such
Change of Control.
Any such Repurchase Offer shall comply with all applicable provisions
of Federal and state laws, including those regulating tender offers, if
applicable, and any provisions of this Indenture which conflict with such laws
shall be deemed to be superseded by the provisions of such laws.
On or before the Repurchase Date, the Company shall (i) accept for
payment Securities or portions thereof properly tendered pursuant to the
Repurchase Offer on or before the Repurchase Put Date, (ii) deposit with the
Paying Agent Cash sufficient to pay the Repurchase Price of all Securities or
portions thereof so tendered and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate listing the Securities or
portions
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thereof being purchased by the Company. The Paying Agent shall
promptly mail to Holders of Securities so accepted payment in an amount equal to
the Repurchase Price (together with accrued and unpaid interest and Liquidated
Damages, if any), and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Security or Securities equal in principal amount
to any unpurchased portion of the Securities surrendered. Any Securities not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof The Company will publicly announce the results of the Repurchase Offer
on or as soon as practicable after the Repurchase Date.
ARTICLE XII
SUBORDINATION
SECTION 12.1 Securities Subordinated to Senior Indebtedness.
The Company and each Holder, by its acceptance of Securities, agree
that (a) the payment of the principal of and interest on the Securities and (b)
any other payment in respect of the Securities, including on account of the
acquisition or redemption of the Securities by the Company and any premium and
Liquidated Damages (including, without limitation, pursuant to Article XI) is
subordinated, to the extent and in the manner provided in this Article XII, to
the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter created, incurred,
assumed or guaranteed, and that these subordination provisions are for the
benefit of the holders of Senior Indebtedness.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are made obligees hereunder and any one
or more of them may enforce such provisions.
SECTION 12.2 No Payment on Securities in Certain Circumstances.
(a) No payment may be made by the Company on account of the principal
of, premium, if any, interest on, or Liquidated Damages with respect to, the
Securities, or to acquire any of the Securities (including repurchases of
Securities at the option of the Holder pursuant to a Repurchase Offer) for cash
or property (other than Junior Securities), or
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on account of the redemption provisions of the Securities, (i) upon the maturity
of any Senior Indebtedness of the Company by lapse of time, acceleration (unless
waived) or otherwise, unless and until all principal of, premium, if any, and
interest on such Senior Indebtedness are first paid in full (or such payment is
duly provided for), or (ii) in the event of default in the payment of any
principal of, premium, if any, or interest on any Senior Indebtedness of the
Company when it becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise (a "Payment Default"), unless and
until such Payment Default has been cured or waived or otherwise has ceased to
exist.
(b) Upon (i) the happening of an event of default (other than a
Payment Default) that permits, or would permit, with (w) the passage or time,
(x) the giving of notice, (y) the making of any payment in respect of the
Securities then required to be made, or (z) any combination thereof
(collectively, a "Non-Payment Default"), the holders of Senior Indebtedness
having a principal amount then outstanding in excess of $3,000,000 (or with
respect to which Senior Indebtedness the holders are obligated to lend the
Company in excess of $3,000,000 principal amount) or their representative
immediately to accelerate its maturity and (ii) written notice of such Non-
Payment Default given to the Company and the Trustee by the holders of an
aggregate of at least $3,000,000 principal amount outstanding of such Senior
Indebtedness (or holders of commitments to lend an aggregate of at least
$3,000,000 principal amount of Senior Indebtedness) or their representative (a
"Payment Notice"), then, unless and until such Non-Payment Default has been
cured or waived or otherwise has ceased to exist, no payment (by set-off or
otherwise) may be made by or on behalf of the Company on account of the
principal of, premium, if any, interest on, or Liquidated Damages with respect
to, the Securities, or to acquire or repurchase any of the Securities for cash
or property, or on account of the redemption provisions of the Securities, in
any such case other than payments made with Junior Securities. Notwithstanding
the foregoing, unless (i) the Senior Indebtedness in respect of which such Non-
Payment Default exists has been declared due and payable in its entirety within
179 days after the Payment Notice is delivered as set forth above (the "Payment
Blockage Period"), and (ii) such declaration has not been rescinded or waived,
at the end of the Payment Blockage Period, the Company shall be required to pay
all sums not paid to the Holders of the Securities during the Payment Blockage
Period due to the foregoing prohibitions and to resume all other payments as and
when due on the Securities. Not more than one Payment Notice may be given in any
365-day period, irrespective of the number of defaults with respect to Senior
Indebtedness during such period. However, if any Payment Notice within such
365-day period is given by or on behalf of any holders of Senior Indebtedness
other than under the Loan Agreement, the agent under the Loan Agreement shall be
permitted to give another Payment Notice within such 365-day period. In no
event, however, may the
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total number of days during which any Payment Blockage Period or Payment
Blockage Periods are in effect exceed 179 days in the aggregate during any
consecutive 365-day period.
(c) In furtherance of the provisions of Section 12.1, in the event
that, notwithstanding the foregoing provisions of this Section 12.2, any payment
or distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee or the Holders or any Paying Agent at a time when such
payment or distribution is prohibited by the provisions of this Section 12.2,
then such payment or distribution (subject to the provisions of Section 12.7)
shall be received and held in trust by the Trustee or such Holder or Paying
Agent for the benefit of the holders of Senior Indebtedness of the Company, and
shall be paid or delivered by the Trustee or such Holders or such Paying Agent,
as the case may be, to the holders of Senior Indebtedness of the Company
remaining unpaid or unprovided for or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness of the Company may have
been issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness of the Company held or represented by each,
for application to the payment of all Senior Indebtedness of the Company in full
after giving effect to any concurrent payment and distribution to the holders of
such Senior Indebtedness.
SECTION 12.3 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshalling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company shall
first be entitled to receive payments in full (or have such payment duly
provided for) before the Holders are entitled to receive any payment on
account of the principal of, premium, if any, interest on, and Liquidated
Damages with respect to, the Securities (other than Junior Securities);
(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than
Junior Securities) to which the Holders or the Trustee on behalf of the
Holders would be entitled (by setoff or otherwise), except for the
provisions of this Article XII, shall be paid by the liquidating trustee or
agent or other Person making such a payment or distribution directly
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to the holders of Senior Indebtedness of the Company or their
representative to the extent necessary to make payment in full of all such
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether
in cash, property or securities (other than Junior Securities), shall be
received by the Trustee or the Holders or any Paying Agent (or, if the
Company or any Affiliate of the Company is acting as its own Paying Agent,
money for any such payment or distribution shall be segregated or held in
trust) on account of the principal of, premium, if any, interest on and
Liquidated Damages with respect to, the Securities before all Senior
Indebtedness of the Company is paid in full, such payment or distribution
(subject to the provisions of Section 12.7) shall be received and held in
trust by the Trustee or such Holder or Paying Agent for the benefit of the
holders of such Senior Indebtedness, or their respective representative,
ratably according to the respective amounts of such Senior Indebtedness
held or represented by each, to the extent necessary to make payment as
provided herein of all such Senior Indebtedness remaining unpaid after
giving effect to all concurrent payments and distributions and all
provisions therefor to or for the holders of such Senior Indebtedness, but
only to the extent that as to any holder of such Senior Indebtedness, as
promptly as practical following notice from the Trustee to the holders of
such Senior Indebtedness that such prohibited payment has been received by
the Trustee, Holder(s) or Paying Agent (or has been segregated as provided
above), such holder (or a representative therefor) notifies the Trustee of
the amounts then due and owing on such Senior Indebtedness, if any, held by
such holder and only the amounts specified in such notices to the Trustee
shall be paid to the holders of such Senior Indebtedness.
SECTION 12.4 Securityholders to Be Subrogated to Rights of Holders of
Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the
Company as provided herein, the Holders of Securities shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Securities shall be paid in full, and for the
purpose of such subrogation no such payments or distributions to the holders of
such Senior Indebtedness by the Company, or by or on behalf of the Holders by
virtue of this Article XII, which otherwise would have been made to the Holders
shall, as between the
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Company and the Holders, be deemed to be payment by the Company or on account of
such Senior Indebtedness, it being understood that the provisions of this
Article XII are and are intended solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any payments
or distributions received by such holders of Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full.
SECTION 12.5 Obligations of the Company Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Securities is intended to or shall impair as between the Company and
the Holders, the obligation of each such Person, which is absolute and
unconditional, to pay to the Holders the principal of, premium, if any, interest
on, and Liquidated Damages with respect to, the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XII, of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Notwithstanding anything to the contrary in this
Article XII or elsewhere in this Indenture or in the Securities, upon any
distribution of assets of the Company referred to in this Article XII, the
Trustee, subject to the provisions of Sections 7.1 and 7.2, and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XII so long as such court has been apprised of the provisions
of, or the order, decree or certificate makes reference to, the provisions of
this Article XII. Nothing in this Article XII
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shall apply to the claims of, or payments to, the Trustee under or pursuant to
Sections 6.6 and 7.7.
SECTION 12.6 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than one Business Day prior to such payment,
written notice thereof from the Company or from one or more holders of Senior
Indebtedness or from any representative therefor and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections 7.1
and 7.2, shall be entitled in all respects conclusively to assume that no such
fact exists.
SECTION 12.7 Application by Trustee of Assets Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with this Indenture shall be for the sole benefit of Securityholders
and, to the extent allocated for the payment of Securities, shall not be subject
to the subordination provisions of this Article XII. Otherwise, any deposit of
assets with the Trustee or the Agent (whether or not in trust) for the payment
of principal of or interest on any Securities shall be subject to the provisions
of Sections 12.1, 12.2, 12.3 and 12.4; provided that, if prior to one Business
Day preceding the date on which by the terms of this Indenture any such assets
may become distributable for any purpose (including, without limitation, the
payment of either principal of or interest on any Security) the Trustee or such
Paying Agent shall not have received with respect to such assets the written
notice provided for in Section 12.6, then the Trustee or such Paying Agent shall
have full power and authority to receive such assets and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such date.
SECTION 12.8 Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination provisions contained in this Article XII 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 of this Indenture,
regardless of any knowledge thereof which any such holder
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may have or be otherwise charged with. The holders of Senior Indebtedness may
extend, renew, modify or amend the terms of the Senior Indebtedness or any
security therefor and release, sell or exchange such security and otherwise deal
freely with the Company, all without affecting the liabilities and obligations
of the parties to this Indenture or the Holders.
SECTION 12.9 Securityholders Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors of the Company),
the immediate filing of a claim for the unpaid balance of his Securities in the
form required in said proceedings and cause said claim to be approved. If the
Trustee does not file a proper claim or proof of debt in the form required in
such proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then the holders of the Senior Indebtedness or their
representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 12.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Indebtedness at any time held by it to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
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SECTION 12.11 Article XII Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if
any, interest on, or Liquidated Damages with respect to, the Securities by
reason of any provision of this Article XII shall not be construed as preventing
the occurrence of a Default or an Event of Default under Section 6.1 or in any
way prevent the Holders from exercising any right hereunder other than the right
to receive payment on the Securities.
SECTION 12.12 No Fiduciary Duty of Trustee to 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
(other than for its willful misconduct or negligence) if it shall in good faith
mistakenly pay over or distribute to the Holders of Securities or the Company or
any other Person, cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article XII or otherwise.
Nothing in this Section 12.12 shall affect the obligation of any other such
Person to hold such payment for the benefit of, and to pay such payment over
to, the holders of Senior Indebtedness or their representative.
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.1 Conversion Privilege.
Subject to and upon compliance with the provisions of this Article
XIII, at the option of the Holder thereof, any Security may at any time
commencing on the 90th day following the latest date of the initial issuance of
the Securities under this Indenture and ending as of the close of business on
the Stated Maturity, be converted, in whole, or in part in multiples of $1,000
principal amount, into fully paid and non-assessable shares of Common Stock
issuable upon conversion of the Securities, at the conversion price in effect at
the Date of Conversion, unless such Security or some portion thereof shall have
been called for redemption or delivered for repurchase prior to such date and no
default is made in making due provision for the payment of the redemption price
in accordance with the terms of this Indenture, in which case, with respect to
such Security or portion thereof as has been so called for redemption or
delivered for repurchase, such Security or portion thereof may be so converted
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until and including, but not after, the close of business on the Business Day
prior to the Redemption Date or Repurchase Date, as applicable, for such
Security, unless the Company subsequently fails to pay the applicable Redemption
Price or Repurchase Price, as the case may be.
SECTION 13.2 Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security to the Company at any
time during usual business hours at its office or agency maintained for the
purpose as provided in this Indenture, accompanied by a fully executed written
notice, in substantially the form set forth on the reverse of the Security, that
the Holder elects to convert such Security or a stated portion thereof
constituting a multiple of $1,000 principal amount, and, if such Security is
surrendered for conversion during the period between the close of business on
any Record Date and the opening of business on the next following Interest
Payment Date and has not been called for redemption on a Redemption Date which
occurs within such period, accompanied (except in the case of the Interest
Payment Date occurring on December 15, 1999) also by payment of an amount equal
to the interest payable on such Interest Payment Date on the principal amount of
the Security being surrendered for conversion, notwithstanding such conversion.
Such notice of conversion shall also state the name or names (with address) in
which the certificate or certificates for shares of Common Stock shall be
issued. Securities surrendered for conversion shall (if reasonably required by
the Company or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company duly
executed by, the Holder or his attorney duly authorized in writing. As promptly
as practicable after the receipt of such notice and the surrender of such
Security as aforesaid, the Company shall, subject to the provisions of
Section 13.8 hereof, issue and deliver at such office or agency to such Holder,
or on his written order, a certificate or certificates for the number of full
shares of Common Stock issuable on such conversion of Securities in accordance
with the provisions of this Article XIII and Cash, as provided in Section 13.3
hereof, in respect of any fraction of a share of Common Stock otherwise issuable
upon such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date (herein called the "Date
of Conversion") on which such Security shall have been surrendered as aforesaid,
and the person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become on the Date of Conversion the holder or holders of record
of the shares represented thereby; provided, however, that any such surrender on
any date when the stock transfer books of the Company shall be closed shall
cause the person or persons in whose name or names the certificate or
certificates for such shares are to be issued to be
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deemed to have become the record holder or holders thereof for all purposes at
the opening of business on the next succeeding day on which such stock transfer
books are open but such conversion shall nevertheless be at the conversion price
in effect at the close of business on the date when such Security shall have
been so surrendered with the conversion notice. In the case of conversion of a
portion, but less than all, of a Security, the Company shall as promptly as
practicable execute, and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Company, a Security or Securities in the
aggregate principal amount of the unconverted portion of the Security
surrendered. Except as otherwise expressly provided in this Indenture, no
payment or adjustment shall be made for interest accrued on any Security (or
portion thereof) converted or for dividends or distributions on any Common Stock
issued upon conversion of any Security.
SECTION 13.3 Fractional Interests.
No fractions of shares or scrip representing fractions of shares 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 so surrendered. If any
fraction of a share of Common Stock would, except for the foregoing provisions
of this Section 13.3, be issuable on the conversion of any Security or
Securities, the Company shall make payment in lieu thereof in an amount of Cash
equal to the value of such fraction computed on the basis of the last sale price
of the Common Stock as reported on the New York Stock Exchange (or if not listed
for trading thereon, then on the principal national securities exchange or on
the principal automated quotation system on which the Common Stock is listed or
admitted to trading) at the close of business on the Date of Conversion or if no
such sale takes place on such day, the last sale price for such day shall be the
average of the closing bid and asked prices regular way on the New York Stock
Exchange (or if not listed for trading thereon, on the principal national
securities exchange or on the principal automated quotation system on which the
Common Stock is listed or admitted to trading) for such day (any such last sale
price being hereinafter referred to as the "Last Sale Price"). If on such
Trading Day the Common Stock is not quoted by any such organization, the fair
value of such Common Stock on such day, as reasonably determined in good faith
by the Board of Directors of the Company, shall be used.
SECTION 13.4 Conversion Price.
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The conversion price per share of Common Stock issuable upon
conversion of the Securities (herein called the "Conversion Price") shall
initially be $29.70 (or $29.70 in principal amount of Securities for each such
share of Common Stock).
SECTION 13.5 Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustment from time to time
as follows:
(a) In case the Company shall make or pay a dividend or make a
distribution in shares of Common Stock on any class of Capital Stock of the
Company, the Conversion Price in effect immediately following the record
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on such date
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution. An
adjustment made pursuant to this subsection (a) shall become effective
immediately, except as provided in subsections (i) and (j) below, after
such record date.
(b) In case the Company shall (1) subdivide its outstanding
shares of Common Stock into a greater number of shares or (2) combine or
reclassify its outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price in effect immediately following the
effectiveness of such action shall be adjusted by multiplying such
Conversion Price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding immediately prior to such subdivision
or combination and the denominator shall be the number of shares
outstanding immediately after giving effect to such subdivision or
combination. An adjustment made pursuant to this subsection (b) shall
become effective immediately, except as provided in subsections (i) and (j)
below, after the effective date of a subdivision or combination.
(c) In case the Company shall issue rights, options or warrants
to all or substantially all holders of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less
than the then current market price per share of the Common Stock (as
determined pursuant to subsection (g) below) on the record date fixed for
determination of the stockholders entitled to receive such rights, option
or warrants, the Conversion Price in effect immediately following such
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record date shall be adjusted to a price, computed to the nearest cent, so
that the same shall equal the price determined by multiplying:
(i) such Conversion Price by a fraction, of which
(ii) the numerator shall be (A) the number of shares of
Common Stock outstanding on such record date plus (B) the number of
shares which the aggregate offering price of the total number of
shares so offered for subscription or purchase would purchase at such
current market price (determined by multiplying such total number of
shares by the exercise price of such rights, options or warrants and
dividing the product so obtained by such current market price), and of
which
(iii) the denominator shall be (A) the number of shares of
Common Stock outstanding on such record date plus (B) the number of
additional shares of Common Stock which are so offered for
subscription or purchase.
Such adjustment shall become effective immediately, except as provided
in subsections (i) and (j) below, after the record date for the
determination of holders entitled to receive such rights, options or
warrants; provided, however, that if any such rights, options or warrants
issued by the Company as described in this subsection (c) are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Price will not be adjusted as provided in this subsection (c)
until such triggering events occur.
(d) In case the Company or any Subsidiary of the Company shall
distribute to all or substantially all holders of Common Stock, any of its
assets, evidences of indebtedness, cash or securities (other than (x)
dividends or distributions exclusively in cash, or (y) any dividend or
distribution for which an adjustment is required to be made in accordance
with subsection (a) or (c) above or (z) any distribution of rights or
warrants subject to subsection (l) below) then in each such case the
Conversion Price in effect immediately following the record date fixed for
the determination of the stockholders entitled to such distribution) shall
be adjusted so that the same shall equal the price determined by
multiplying such Conversion Price by a fraction of which the numerator
shall be the then current market price per share of the Common Stock
(determined as provided in subsection (g) below) on such record date less
the then fair market value (as reasonably determined in good faith by the
Board of
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Directors of the Company) of the portion of the assets so distributed
applicable to one share of Common Stock, and of which the denominator shall
be such current market price per share of the Common Stock. Such adjustment
shall become effective immediately, except as provided in subsections (i)
and (j) below, after the record date for the determination of stockholders
entitled to receive such distribution.
(e) In case the Company or any Subsidiary of the Company shall
make any distribution consisting exclusively of cash (excluding any cash
portion of distributions for which an adjustment is required to be made in
accordance with subsection (d) above, or cash distributed upon a merger or
consolidation to which Section 13.6 applies) to all or substantially all
holders of Common Stock in an aggregate amount that, combined together with
(i) all other such all-cash distributions made within the then preceding 12
months in respect of which no adjustment pursuant to this subsection (e)
has been made and (ii) any cash and the fair market value of other
consideration paid or payable in respect of any tender or exchange offer by
the Company or any of its Subsidiaries for Common Stock concluded within
the preceding 12 months in respect of which no adjustment has been made,
exceeds 15% of the Company's market capitalization (defined as being the
product of the then current market price of the Common Stock (determined as
provided in subsection (g) below) times the number of shares of Common
Stock then outstanding) on the record date fixed for the determination of
the stockholders entitled to such distribution, in each such case the
Conversion Price immediately following such record date shall be adjusted
so that the same shall equal the price determined by multiplying such
Conversion Price by a fraction of which the numerator shall be the then
current market price per share of the Common Stock on such record date less
the amount of the cash and/or fair market value (as reasonably determined
in good faith by the Board of Directors of the Company) of other
consideration so distributed applicable to one share of Common Stock, and
of which the denominator shall be such current market price per share of
the Common Stock. Such adjustment shall become effective immediately,
except as provided in subsections (i) and (j) below, after the record date
for the determination of stockholders entitled to receive such
distribution.
(f) In case the Company or any Subsidiary of the Company shall
complete a tender or exchange offer for all or any portion of the Common
Stock (any such tender or exchange offer being referred to as an "Offer")
that involves an aggregate consideration having a fair market value as of
the expiration of such Offer (the "Expiration Time") that, together with
(i) any cash and the fair market value of any other consideration payable
in respect of any other tender or exchange offer, as of the
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expiration of such other tender or exchange offer, expiring within the 12
months preceding the expiration of such Offer and in respect of which no
Conversion Price adjustment pursuant to this subsection (f) has been made
and (ii) the aggregate amount of any all-cash distributions referred to in
subsection (e) of this Section 13.5 to all holders of Common Stock within
the 12 months preceding the expiration of such Offer for which no
conversion price adjustment pursuant to such subsection (e) has been made,
exceeds 15% of the product of the then current market price per share
(determined as provided in subsection (g) below) of the Common Stock on the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, the Conversion
Price in effect immediately following such Expiration Time shall be reduced
by multiplying such Conversion Price by a fraction of which the numerator
shall be (i) the product of the then current market price per share
(determined as provided in subsection (g) below) of the Common Stock on the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time minus (ii) the fair
market value of the aggregate consideration payable to stockholders based
on the acceptance (up to any maximum specified in the terms of the Offer)
of all shares validly tendered and not withdrawn as of the Expiration Time
(the shares deemed so accepted being referred to as the "Purchased Shares")
and the denominator shall be the product of (i) such current market price
per share on the Expiration Time times (ii) such number of outstanding
shares on the Expiration Time less the number of Purchased Shares, such
reduction to become effective immediately prior to the opening of business
on the day following the Expiration Time.
For purposes of this subsection (f), the fair market value of any
consideration with respect to an Offer shall be reasonably determined in
good faith by the Board of Directors of the Company and described in a
Board Resolution.
(g) For the purpose of any computation under subsections (c),
(d), (e) and (f) above, the current market price per share of Common Stock
on any date shall be deemed to be the average of the Last Sale Prices of a
share of Common Stock for the five consecutive Trading Days selected by the
Company commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the date in question and the date before the
"`ex' date," with respect to the issuance, distribution or Offer requiring
such computation. If on any such Trading Day the Common Stock is not
quoted by any organization referred to in the definition of Last Sale Price
in Section 13.3, the fair value of the Common Stock on such day, as
reasonably determined in good faith by the Board of Directors of the
Company, shall be used. For purposes of
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this paragraph, the term "`ex' date," when used with respect to any
issuance, distribution or payments with respect to an Offer, means the
first date on which the Common Stock trades regular way on the New York
Stock Exchange (or if not listed or admitted to trading thereon, then on
the principal national securities exchange or the Nasdaq Stock Market's
National Market if the Common Stock is listed or admitted to trading
thereon) without the right to receive such issuance, distribution or Offer.
(h) In addition to the foregoing adjustments in subsections (a),
(b), (c), (d), (e) and (f) above, the Company from time to time and to the
extent permitted by applicable Law, shall be permitted to reduce the
Conversion Price by any amount for any period of at least 20 Business Days,
in which case the Company shall give at least 15 days notice of such
reduction, if the Board of Directors has made a determination that such
reduction would be in the best interests of the Company, which
determination shall be conclusive. The Company, at its option, shall be
permitted to make such other reductions in the Conversion Price, in
addition to those set forth above in subsections (a), (b), (c), (d), (e),
(f) and the first sentence of this subsection (h), as the Board of
Directors deems advisable to avoid or diminish any income tax to holders of
Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such a dividend or
distribution for United States federal income tax purposes.
(i) In any case in which this Section 13.5 shall require that an
adjustment be made immediately following a record date, the Company may
elect to defer the effectiveness of such adjustment (but in no event until
a date later than the effective time of the event giving rise to such
adjustment), in which case the Company shall, with respect to any Security
converted after such record date and on and before such adjustment shall
have become effective (i) defer paying any Cash payment pursuant to
Section 13.3 hereof or issuing to the Holder of such Security the number of
shares of Common Stock and other capital stock of the Company (or other
assets or securities) issuable upon such conversion in excess of the number
of shares of Common Stock and other Capital Stock of the Company issuable
thereupon only on the basis of the Conversion Price prior to adjustment,
and (ii) not later than five Business Days after such adjustment shall have
become effective, pay to such Holder the appropriate Cash payment pursuant
to Section 13.3 hereof and issue to such Holder the additional shares of
Common Stock and other Capital Stock of the Company issuable on such
conversion.
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(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least
1.0% of the Conversion Price; provided, that any adjustments which by
reason of this subsection (i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article XIII shall be made to the nearest cent or
to the nearest one-hundredth of a share, as the case may be.
(k) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly (i) file with the Trustee and each conversion
agent an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring
such adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (ii) mail or cause to be mailed a
notice of such adjustment to each holder of Securities at his address as
the same appears on the registry books of the Company.
(l) In the event that the Company distributes rights or warrants
(other than those referred to in subsection (c) above) pro rata to holders
of Common Stock, so long as any such rights or warrants have not expired or
been redeemed by the Company, the Company shall make proper provision so
that the Holder of any Note surrendered for conversion will be entitled to
receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion (the "Conversion Shares"), a number of rights
or warrants to be determined as follows: (i) if such conversion occurs on
or prior to the date for the distribution to the holders of rights or
warrants of separate certificates evidencing such rights or warrants (the
"Distribution Date"), the same number of rights or warrants to which a
holder of a number of shares of Common Stock equal to the number of
Conversion Shares is entitled at the time of such conversion in accordance
with the terms and provisions of and applicable to the rights or warrants,
and (ii) if such conversion occurs after such Distribution Date, the same
number of rights or warrants to which a holder of the number of shares of
Common Stock into which the principal amount of such Note so converted was
convertible immediately prior to such Distribution Date would have been
entitled on such Distribution Date in accordance with the terms and
provisions of and applicable to the rights or warrants.
SECTION 13.6 Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or Sale of Assets.
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If any of the following shall occur, namely: (a) any reclassification
or change of outstanding shares of Common Stock issuable upon conversion of the
Securities (other than a change in par value, or from par value to no par value,
or from no par value, to par value, or as a result of a subdivision or
combination), (b) any consolidation or merger of the Company with or into any
other Person, or the merger of any other Person with or into the Company (other
than a merger which does not result in any reclassification, change, conversion,
exchange or cancellation of outstanding shares of Common Stock) or (c) any sale,
transfer or conveyance of all or substantially all of the assets of the Company,
then the Company, or such successor or purchasing entity, as the case may be,
shall, as a condition precedent to such reclassification, change, consolidation,
merger, sale or conveyance, execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right to convert such Security only into the kind and amount of shares of
stock and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance by
a holder of the number of shares of Common Stock issuable upon conversion of
such Security immediately prior to such reclassification, change, consolidation,
merger, sale, transfer or conveyance assuming such holder of Common Stock of the
Company failed to exercise his rights of an election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance
(provided that if the kind or amount of securities, cash, and other property
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance is not the same for each share of Common Stock of the
Company held immediately prior to such reclassification, change, consolidation,
merger, sale, transfer or conveyance in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section 13.6 the kind and amount of securities, cash and other property
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance by each non-electing share shall be deemed to be the kind
and amount so receivable per share by a plurality of the non-electing shares).
Such supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article XIII. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and property (including cash) of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provisions of this Section 13.6 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
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Notice of the execution of each such supplemental indenture shall be
mailed to each Holder of Securities at his address as the same appears on the
registry books of the Company.
Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, sale or conveyance or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Article VIII hereof, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
SECTION 13.7 Notice of Certain Events.
In case:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of Common Stock (other than cash dividends);
(b) the Company shall authorize the granting to the holders of Common
Stock of rights, warrants or options to subscribe for or purchase any shares of
stock of any class or of any other rights;
(c) the Company shall authorize any reclassification or change of the
Common Stock (including a subdivision or combination of its outstanding shares
of Common Stock), or any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or the
sale or conveyance of all or substantially all the property or business of the
Company;
(d) there shall be proposed any voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(e) the Company or any of its Subsidiaries shall complete an Offer;
then, the Company shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Securities as provided in Section 13.2 hereof,
and shall cause to be mailed to
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each Holder of Securities, at his address as it shall appear on the registry
books of the Company, at least 20 days before the date hereinafter specified (or
the earlier of the dates hereinafter specified, in the event that more than one
date is specified), a notice stating the date on which (1) a record is expected
to be taken for the purpose of such dividend, distribution, rights, warrants or
options or Offer, or if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights, warrants or options or to participate in such Offer are to be
determined, or (2) such reclassification, change, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding-up is expected to become
effective and the date, if any is to be fixed, 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 or other property deliverable upon such
reclassification, change, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding-up.
SECTION 13.8 Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant thereto; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the Holder of the Securities to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery 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. The Company extends no protection with respect to any other taxes
imposed in connection with conversion of Securities.
SECTION 13.9 Company to Provide Stock.
The Company shall reserve, free from pre-emptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Securities from time to time as such Securities are presented for
conversion, provided, that nothing contained herein shall be construed to
preclude the Company from satisfying its obligations in respect of the
conversion of Securities by delivery of repurchased shares of Common Stock which
are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon
78
<PAGE>
conversion, then the Company covenants that it will in good faith and as
expeditiously as possible use its best efforts to secure such registration or
approval, as the case may be, provided, however, that nothing in this
Section 13.9 shall be deemed to limit in any way the obligations of the Company
provided in this Article XIII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and non-
assessable by the Company and free of preemptive rights.
SECTION 13.10 Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any agent of the Trustee shall at any time be
under any duty or responsibility to any Holder of Securities to determine
whether any facts exist which may require any adjustment of the Conversion
Price, or with respect to the Officers' Certificate referred to in Section 13.5,
or with respect to the nature or extent of any such adjustment when made, or
with respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any agent
of the Trustee shall 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 (including cash), which may at any time be issued or delivered upon the
conversion of any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
agent of the Trustee shall be responsible for any failure of the Company to
issue, register the transfer of or deliver any shares of Common Stock or stock
certificates or other securities or property (including cash) upon the surrender
of any Security for the purpose of conversion or, subject to Article VIII
hereof, to comply with any of the covenants of the Company contained in this
Article XIII.
SECTION 13.11 Return of Funds Deposited for Redemption of Converted
Securities.
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other Paying Agent for the purpose of
paying the principal of
79
<PAGE>
and interest on any of the Securities and which shall not be required for such
purposes because of the conversion of such Securities, as provided in this
Article XIII, shall after such conversion be repaid to the Company by the
Trustee or such other Paying Agent.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, whether or
not this Indenture has been qualified under the TIA, shall control.
SECTION 14.2 Notices.
Any notices or other communications to the Company or the Trustee
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Company:
OccuSystems, Inc.
3010 LBJ Freeway
Suite 400
Dallas, Texas 75234
Attention: General Counsel
Telecopy: (972) 241-8048
if to the Trustee:
United States Trust Company of New York
114 West 47 Street
New York, New York 10036-1532
Attention: Corporate Trust Division
Telecopy: (212) 852-1625
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<PAGE>
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 14.3 Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA (S) 312(c).
SECTION 14.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) An Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
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<PAGE>
SECTION 14.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided, however,
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
SECTION 14.6 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 14.7 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 14.8 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
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<PAGE>
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
SECTION 14.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 14.10 No Recourse Against Others.
No direct or indirect partner, employee, stockholder, director or
officer, as such, past, present or future of the Company or any successor
corporation, shall have any personal liability in respect of the obligations of
the Company under the Securities or this Indenture by reason of his, her or its
status as such partner, stockholder, employee, director or officer. Each
Securityholder by accepting a Security waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Securities.
SECTION 14.11 Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 14.12 Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 14.13 Severability.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
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<PAGE>
SECTION 14.14 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 14.15 Qualification of Indenture.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of the Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive
from the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 14.16 Registration Rights.
Certain Holders of the Securities are entitled to certain registration
rights with respect to such Securities pursuant to, and subject to the terms of,
the Registration Rights Agreement.
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<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
OCCUSYSTEMS, INC., a Delaware corporation
By: /s/ JAMES M. GREENWOOD
---------------------------------------
Name: James M. Greenwood
--------------------------------
Title: Senior Vice President
-------------------------------
UNITED STATES TRUST COMPANY OF NEW YORK, a New York
state banking corporation, as Trustee
By: /s/ MARGARET M. CIESMELEWSKI
---------------------------------------
Name: Margaret M. Ciesmelewski
--------------------------------
Title: Assistant Vice President
-------------------------------
<PAGE>
EXHIBIT A
[FORM OF SECURITY]
OCCUSYSTEMS, INC.
6% CONVERTIBLE SUBORDINATED NOTE
DUE 2001
No. CUSIP No. ____________
$ _______
OccuSystem, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _____, or registered
assigns, the principal sum of _____ Dollars, on December 15, 2001.
Interest Payment Dates: June 15 and December 15; commencing June 15,
1997.
Record Dates: June 1 and December 1.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
OCCUSYSTEMS, INC., a Delaware corporation
[Seal]
By:
--------------------------------------
Name:
------------------------------
Title:
-----------------------------
Attest:
-----------------------------------
Secretary
A-1
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
United States Trust Company of New York, as Trustee
By
-------------------------------------------------
Authorized Signatory
Dated:
A-2
<PAGE>
OCCUSYSTEMS, INC.
6% CONVERTIBLE SUBORDINATED NOTE
DUE 2001
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 certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Company or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein./1/
THE SECURITIES EVIDENCED HEREBY HAVE 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 OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION./2/
THE HOLDER OF THE SECURITIES EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF
AGREES THAT SUCH SECURITIES ARE "RESTRICTED SECURITIES" WITHIN THE MEANING
OF RULE 144 UNDER THE SECURITIES ACT AND THAT IT AND ANY SUBSEQUENT HOLDER
WILL NOT 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
- -------------------
1. This paragraph should only be added if the Security is issued in global
form.
2. This paragraph should be included only for the Transfer Restricted
Securities.
A-3
<PAGE>
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
PURSUANT TO RULE 144A, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON IT
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) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR,"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF 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 CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE./3/
1. Interest.
OccuSystems, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Security
at the rate of 6% per annum. To the extent it is lawful, the Company promises
to pay interest on any interest payment due but unpaid on such principal amount
at a rate of 6% per annum compounded semi-annually.
- -------------------
3. This paragraph should be included only for the Transfer Restricted
Securities.
A-4
<PAGE>
The Company will pay interest semi-annually on June 15 and December 15
of each year (each, an "Interest Payment Date"), commencing June 15, 1997.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
December 24, 1996. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders
must surrender Securities to a Paying Agent to collect principal payments. Any
such interest not so punctually paid, and defaulted interest relating thereto,
may be paid to the Persons who are registered Holders at the close of business
on a Special Record Date for the payment of such defaulted interest, as more
fully provided in the Indenture referred to below. Except as provided below,
the Company shall pay principal and interest in such coin or currency of the
United States of America as at the time of payment shall be legal tender for
payment of public and private debts ("U.S. Legal Tender"). The Securities will
be payable as to principal, premium, interest and Liquidated Damages at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, or at the option of the Company, payment of
principal, premium, interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the registry of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of, premium and interest on and Liquidated
Damages with respect to Global Securities and all other Securities the Holders
of which shall have provided wire transfer instructions to the Company or the
Paying Agent.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the "Trustee")
will act as Paying Agent, Registrar and conversion agent. The Company may
change any Paying Agent, Registrar or co-Registrar or conversion agent without
notice to the Holders. The Company or any of its Subsidiaries may, subject to
certain exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
December 24, 1996 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Securities
A-5
<PAGE>
are subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are general
unsecured obligations of the Company limited in aggregate principal amount to
$97,750,000.
5. Redemption.
The Securities may be redeemed in whole or from time to time in part
at any time on and after December 15, 1999, at the option of the Company, at the
Redemption Price (expressed as a percentage of principal amount) set forth below
with respect to the indicated Redemption Date, in each case, plus any accrued
but unpaid interest and Liquidated Damages to, but excluding, the Redemption
Date. The Securities may not be so redeemed prior to December 15, 1999.
If redeemed during
the 12-month period
beginning December 15,
Redemption Price
1999......................... 102.4%
2000......................... 101.2%
Any such redemption will comply with Article III of the Indenture.
6. Notice of Redemption.
Notice of redemption will be sent by first class mail, postage
prepaid, at least 30 days and not more than 60 days prior to the Redemption Date
to the Holder of each Security to be redeemed at such Holder's last address as
then shown upon the registry books of the Registrar. Securities may be redeemed
in part in multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date and payment of
the Securities called for redemption is not prohibited under Article XII of the
Indenture, the Securities called for redemption will cease to bear interest and
the only right of the Holders of such Securities will be to receive payment of
the Redemption Price, plus any accrued and unpaid interest and Liquidated
Damages, if any, to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange
A-6
<PAGE>
Securities in accordance with, the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
9. Unclaimed Money.
If money for the payment of principal, interest or Liquidated Damages
remains unclaimed for two years, the Trustee and the Paying Agent(s) will pay
the money back to the Company at its written request. After that, all liability
of the Trustee and such Paying Agent(s) with respect to such money shall cease.
10. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented, and any existing Default or Event of Default or
compliance with any provision may be waived, with the written consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Securities to, among other things,
cure any ambiguity, defect or inconsistency, or make any other change that does
not adversely affect the rights of any Holder of a Security.
11. Conversion Rights.
Subject to the provisions of the Indenture, the Holders have the right
to convert the principal amount of the Securities into fully paid and
nonassessable shares of Common Stock of the Company at the initial conversion
price per share of Common Stock of $29.70 (or $29.70 in principal amount of
Securities for each such share of Common Stock), or at the adjusted conversion
price then in effect, if adjustment has been made as provided in the Indenture,
upon surrender of the Security to the Company, together with a fully executed
notice in substantially the form attached hereto and, if required by the
Indenture, an amount equal to accrued interest payable on such Security.
A-7
<PAGE>
12. Ranking.
Payment of principal, premium, if any, interest on and Liquidated
Damages with respect to the Securities is subordinated, in the manner and to the
extent set forth in the Indenture, to the prior payment in full of all Senior
Indebtedness.
13. Repurchase at Option of Holder Upon a Change of Control.
If there is a Change of Control, the Company shall be required to
offer to purchase on the Repurchase Date all outstanding Securities at a
purchase price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to, but excluding, the
Repurchase Date. Holders of Securities will receive a Repurchase Offer from the
Company prior to any related Repurchase Date and may elect to have such
Securities purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
14. Successors.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than as Event
of Default relating to certain events of bankruptcy, insolvency or
reorganization), then in every such case, unless the principal of all of the
securities shall have already become due and payable, either the Trustee or the
Holders of 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Securities may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in aggregate principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Securities notice of any continuing Default or Event of
Default (except a Default in payment of principal, interest or Liquidated
Damages), if it determines that withholding notice is in their interest.
16. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
A-8
<PAGE>
17. No Recourse Against Others.
No stockholder, director, officer or employee, as such, past, present
or future, of the Company or any successor corporation shall have any personal
liability in respect of the obligations of the Company under the Securities or
the Indenture by reason of his, her or its status as such stockholder, director,
officer or employee. Each Holder of a Security by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
21. Additional Rights of Holders of Transfer Restricted Securities.
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration Rights Agreement.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Request may be made to:
OccuSystems, Inc.
3010 LBJ Freeway
Suite 400
Dallas, Texas 75234
Attention: General Counsel
A-9
<PAGE>
Attention: General Counsel
A-10
<PAGE>
[FORM OF] ASSIGNMENT
I or we assign this Security to
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_________________________
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Dated: _______________ Signed:
(Sign exactly as name appears on
the other side of this Security)
A-11
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Article XI of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Article XI of the Indenture, state the amount you want
to be purchased: $________
Date: ________________ Signature:__________________________________________
(Sign exactly as your name appears on the
other side of this Security)
A-12
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES/4/
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Amount Principal Security following officer
Date of of this Global Amount such decrease (or of Trustee or
Exchange Security of this Global increase) Securities
Security Custodian
---------------------------------------------------------------------------------------
</TABLE>
- -------------------
4. This schedule should only be added if the Security is issued in global
form.
A-13
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001 OF OCCUSYSTEMS, INC.
This Certificate relates to $______ principal amount of Securities held
in *_____ book-entry or * ______ definitive form by _____ (the "Transferor").
1. The Transferor:*
[ ] (a) has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the 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
[ ] (b) has requested the Trustee by written order to exchange or
register the transfer of a Security or Securities.
2. In connection with any such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act because:*
[ ] (a) Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
[ ] (b) Such Security is being transferred to a person who the Transferor
reasonably believes is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) purchasing for its own account or for the account
of a qualified institutional buyer over which it exercises sole investment
discretion that is aware that the transfer is being made in reliance on
Rule 144A (in satisfaction of Section 2.6(a)(ii)(B), Section 2.6(b)(i)(x) or
Section 2.6(d)(i)(B) of the Indenture).
____________________
A-14
<PAGE>
* Check applicable box.
A-15
<PAGE>
[ ] (c) Such Security is being transferred in accordance with Regulation
S under the Securities Act (in satisfaction of Section 2.6(a)(ii)(C), Section
2.6(b)(i)(y) or Section 2.6(d)(i)(C) of the Indenture). An Opinion of Counsel,
if so requested by the Company or the Trustee, to the effect that such transfer
is in compliance with the Securities Act accompanies this Certificate (in
satisfaction of Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
[ ] (d) Such Security is being transferred to an institutional investor
that is an "accredited investor" within the meaning of Rule 501(a)(1),(2),(3) or
(7) under the Securities Act which delivers a certificate in the form of Exhibit
B to the Indenture to the Trustee (in satisfaction of Section 2.6(a)(ii)(D) or
Section 2.6(d)(i)(D) of the Indenture). An Opinion of Counsel, if so requested
by the Company or the Trustee, to the effect that such transfer is in compliance
with the Securities Act accompanies this Certificate (in satisfaction of Section
2.6(a)(ii)(D) or Section 2.6(d)(i)(D) of the Indenture).
[ ] (e) Such Security is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act. An Opinion of Counsel, if so requested by the Company or the
Trustee, to the effect that such transfer is in compliance with the Securities
Act accompanies this Certificate (in satisfaction of Section 2.6(a)(ii)(E) or
Section 2.6(d)(i)(E) of the Indenture).
_________________________________________
[INSERT NAME OF TRANSFEROR]
By:______________________________________
Date:________________________
3. Affiliation with the Company [check if applicable]
[ ] (a) The undersigned represents and warrants that it is, or at some
time during which it held this Security was, an Affiliate of the
Company.
A-16
<PAGE>
(b) If 3(a) above is checked and if the undersigned was not an
Affiliate of the Company at all times during which it held this
Security, indicate the periods during which the undersigned was
an Affiliate of the Company:
________________________________.
(c) If 3(a) above is checked and if the Transferee will not pay the
full purchase price for the transfer of this Security on or prior
to the date of transfer indicate when such purchase price will be
paid:
________________________________.
TO BE COMPLETED BY TRANSFEREE IF 2(b) ABOVE IS CHECKED AND THE TRANSFEROR IS NOT
A QUALIFIED INSTITUTIONAL BUYER:
The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933,
as amended, and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information.
Dated:
NOTICE: To be executed by
an officer.
TO BE COMPLETED BY TRANSFEREE IF 2(c) ABOVE IS CHECKED:
The undersigned represents and warrants that it is not a "U.S. Person"
(as defined in Regulation S under the Securities Act of 1933, as amended).
Dated:
NOTICE: To be executed by
an officer.
If none of the boxes under Section 2 of this certificate is checked or if any of
the above representations required to be made by the Transferee is not made, the
Registrar shall not be obligated to register this Security in the name of any
person other than the Holder hereof.
THE UNDERSIGNED HEREBY AGREES THAT, UNLESS THE BOX ABOVE UNDER ITEM 3(a) IS
CHECKED, THE UNDERSIGNED SHALL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT NOR
HAS IT BEEN AT ANY TIME DURING WHICH IT HELD THIS SECURITY AN AFFILIATE, AS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE
COMPANY.
A-17
<PAGE>
Dated:
NOTICE: The signature of the Holder to this
assignment must correspond with the name as
written upon the face of this Security
particular, without alteration or enlargement
or any change whatsoever.
A-18
<PAGE>
EXHIBIT B
INVESTOR LETTER OF REPRESENTATION
OccuSystems, Inc.
c/o the Trustee
Ladies and Gentlemen:
This letter is delivered by the undersigned to request a transfer of
$_____ principal amount of the 6% Convertible Subordinated Notes due 2001 (the
"Notes") of OccuSystems, Inc. (the "Company"). The Notes are described in that
certain Offering Memorandum (the "Offering Memorandum") dated December 18, 1996
relating to the offering of the Notes. We acknowledge receipt of the Offering
Memorandum and acknowledge that we have read the Offering Memorandum, have had
access to such financial and other information and have been afforded the
opportunity to ask such questions of representatives of the Company and receive
answers thereto, as we deem necessary in connection with our decision to
purchase the Notes.
Upon transfer the Notes would be registered in the name of the
undersigned:
Name: ____________________________________________________
Address: _________________________________________________
Taxpayer ID Number: ______________________________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended (the "Securities Act")), purchasing for our own account or for
the account of such an institutional "accredited investor," and we are
acquiring the Notes for investment purposes and not with a view to, or
for offer or sale in connection with any distribution in violation of
the Securities Act and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risk of our investment in the Notes and invest in or
purchase securities similar to the Notes in the normal course of our
business,
B-1
<PAGE>
and we, and any accounts for which we are acting, are each able to
bear the economic risk of our or its investment. We confirm that
neither the Company nor any person acting on its behalf has offered to
sell the Notes by, and that we have not been made aware of the
offering of the Notes by, any form of general solicitation or general
advertising, including, but not limited to, any advertisement,
article, notice or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio.
2. We understand that the Notes and the Common Stock issuable
upon conversion of the Notes (the Notes and such Common Stock are
collectively referred to herein as "Restricted Securities") have not
been registered under the Securities Act and, unless so registered,
may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for
which we are purchasing Notes are "restricted securities" within the
meaning of Rule 144 under the Securities Act and to offer, sell or
otherwise transfer such Notes prior to the date which is three years
after the later of the date of original issue (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement that has been
declared effective under the Securities Act, (c) pursuant to Rule 144A
under the Securities Act, for so long as it is available, to a person
we reasonably believe is a qualified institutional buyer under Rule
144A under the Securities Act (a "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) pursuant to
offers and sales that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing
for its own account or for the account of an institutional "accredited
investor," in each case, with respect to the Notes, 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 our property or the
property of such investor account or accounts be at all times within
our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale
or other transfer of the Notes is proposed to be made pursuant to
clause (e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in
the form of this letter to the Company and the trustee (the "Trustee")
under the indenture, dated as of December __, 1996, between the
Company and the Trustee relating to the Notes, which shall provide,
among other things, that the transferee is an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3)
or (7) under the Securities Act and that it
B-2
<PAGE>
is acquiring such Notes for investment purposes and not for
distribution in violation of the Securities Act. Each purchaser
acknowledges that the Company and the Trustee reserve the right prior
to any offer, sale or other transfer, prior to the Resale Restriction
Termination Date of the Restricted Securities pursuant to clause (d),
(e) or (f) above to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company
and the Trustee.
3. We understand that the Notes will be in the form of
definitive physical certificates bearing the legend set forth in
clause (4) in the "Notice to Investors" section of the Offering
Memorandum.
We acknowledge that you, the Initial Purchasers and others will rely
upon our confirmations, acknowledgements and agreements set forth herein, and we
agree to notify you promptly in writing if any of our representations and
warranties herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
________________________
By: _____________________
B-3
<PAGE>
EXHIBIT C
FORM OF CONVERSION NOTICE
To: OccuSystems, Inc.
The undersigned owner of this Security hereby: (i) irrevocably
exercises the option to convert this Security, or the portion hereof below
designated, for shares of Common Stock of OccuSystems, Inc. in accordance with
the terms of this Indenture referred to in this Security and (ii) directs that
such shares of Common Stock deliverable upon the conversion, together with any
check in payment for fractional shares and any Security(ies) representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. If shares are
to be delivered registered in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto. Any
amount required to be paid by the undersigned on account of interest accompanies
this Security.
Dated ___________________
_______________________________________
Signature
Fill in for registration of shares if to be delivered, and of
Securities if to be issued, otherwise than to and in the name of the registered
holder.
---------------------------------------
Social Security or other
Taxpayer Identifying Number
(Name)
(Street Address)
(City, State and Zip Code)
(Please print name and address)
Principal amount to be
C-1
<PAGE>
converted: (if less than all)
$________________________________________
C-2
<PAGE>
EXHIBIT 4.2
6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
REGISTRATION RIGHTS AGREEMENT
DATED AS OF DECEMBER 24, 1996
BY AND AMONG
OCCUSYSTEMS, INC.
AS THE COMPANY,
AND
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS INCORPORATED
AND
PIPER JAFFRAY INC.,
AS THE INITIAL PURCHASERS
<PAGE>
This Registration Rights Agreement is made and entered into as of
December 24, 1996, by and among OccuSystems, Inc., a Delaware corporation (the
"Company"), and Donaldson, Lufkin & Jenrette Securities Corporation, Alex. Brown
& Sons Incorporated and Piper Jaffray Inc. (collectively, the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
December 18, 1996, among the Company and the Initial Purchasers (the "Purchase
Agreement"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
contained in this Agreement to the Initial Purchasers and to their respective
direct and indirect transferees. The execution of this Agreement is a condition
to the closing of the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
I. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Advice: As defined in the last paragraph of Section 4 hereof.
Affiliate of any specified person shall mean any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control," when used with respect to any person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Registration Rights Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
Closing Date: The Closing Date as defined in the Purchase Agreement.
2
<PAGE>
Common Stock: Common Stock, $.01 par value per share, of the Company.
Company: OccuSystems, Inc., a Delaware corporation, and any successor
corporation thereto.
controlling person: As defined in Section 6(a) hereof.
Damage Payment Date: Each of the semi-annual interest payment dates
provided in the Indenture.
Effectiveness Period: As defined in Section 2(a) hereof.
Effectiveness Target Date: The 180th day following the Closing Date.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC pursuant thereto.
Filing Date: The 90th day after the Closing Date.
Holder: Each registered holder of any Transfer Restricted Securities.
Indemnified Person: As defined in Section 6(a) hereof.
Indenture: The Indenture, dated the date hereof, between the Company
and the Trustee thereunder, pursuant to which the Notes are being issued, as
amended, modified or supplemented from time to time in accordance with the
terms thereof.
Initial Purchasers: As defined in the preamble hereof.
Liquidated Damages: As defined in Section 3(a) hereof.
Notes: Up to $97,750,000 aggregate principal amount of 6% Convertible
Subordinated Notes due 2001 of the Company being issued (or authorized to be
issued) pursuant to the Indenture.
Paying Agent: As defined in the Indenture.
Proceeding: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
3
<PAGE>
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Transfer Restricted Securities
covered by such Registration Statement, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
Registration Default: As defined in Section 3(a) hereof.
Registration Statement: Any registration statement of the Company that
covers any of the Transfer Restricted Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 174: Rule 174 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
4
<PAGE>
Rule 424: Rule 424 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Shelf Registration Statement: As defined in Section 2 hereof.
Special Counsel: Any special counsel to the holders of Transfer
Restricted Securities, for which holders of Transfer Restricted Securities will
be reimbursed pursuant to Section 5(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Securities: The Notes and the shares of Common
Stock into which the Notes are convertible, upon original issuance thereof, and
at all times subsequent thereto, until, in the case of any such Note or share,
the earliest of (i) the date on which it has been registered effectively
pursuant to the Securities Act and disposed of in accordance with the
Registration Statement relating to it, (ii) the date on which either such Note
or the shares of Common Stock issued upon conversion of such Note are
distributed to the public pursuant to Rule 144 (or any similar provisions then
in effect) or are salable pursuant to Rule 144(k) promulgated by the SEC
pursuant to the Securities Act or (iii) the date on which it ceases to be
outstanding.
Trustee: United States Trust Company of New York, the trustee under
the Indenture.
underwritten registration or underwritten offering: A registration in
connection with which securities of the Company are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
2. Shelf Registration
(a) The Company agrees to file with the SEC as promptly as practicable
after the Closing Date, but in no event later than the Filing Date, a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Transfer Restricted Securities (the "Shelf
Registration Statement"). The Shelf Registration Statement
5
<PAGE>
shall be on Form S-3 under the Securities Act or another appropriate form
permitting registration of such Transfer Restricted Securities for resale by the
Holders in the manner or manners reasonably designated by them (including,
without limitation, one or more underwritten offering). The Company shall use
all reasonable efforts, as described in Section 4, to cause the Shelf
Registration Statement to be declared effective pursuant to the Securities Act
as promptly as practicable following the filing thereof, but in no event later
than the Effectiveness Target Date, and to keep the Shelf Registration Statement
continuously effective under the Securities Act for 36 months after the Closing
Date (the "Effectiveness Period"), or such shorter period ending when either (1)
all Transfer Restricted Securities covered by the Shelf Registration Statement
have been sold in the manner set forth in the Shelf Registration Statement or
(2) there cease to be outstanding any Transfer Restricted Securities.
(b) Supplements and Amendments. The Company shall use all reasonable
efforts to keep the Shelf Registration Statement continuously effective by
supplementing and amending the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration Statement, if required by the Securities Act, or if
reasonably requested by the holders of a majority of the Transfer Restricted
Securities (on a fully converted basis) covered by such Shelf Registration
Statement or by any underwriter of such Transfer Restricted Securities.
(c) Suspension of Shelf Registration Statement. Notwithstanding
anything to the contrary in this Section 2, but subject to compliance with
Section 3, the Company may, by delivering written notice to the Holders,
prohibit offers and sales of Transfer Restricted Securities pursuant to the
Shelf Registration Statement at any time if (A) (i) the Company is in possession
of material non-public information, (ii) 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 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)
(i) 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 that is material to the Company and its subsidiaries taken as a
whole and (ii) the Company determines in good faith that (x) 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
Company shall determine) is not in the best interests of the Company and its
stockholders or (y) that it would be impracticable at the time to obtain any
financial statements relating to such acquisition or business combination
transaction that would be required to be set forth in the Shelf Registration
Statement; provided, however, that upon (i) the public disclosure by the Company
of the material non-public information described in clause (A) of this paragraph
or (ii) the abandonment or termination of, or the availability of the required
financial statements with respect to, a transaction described in clause (B) of
this
6
<PAGE>
paragraph, the suspension of the use of the Shelf Registration Statement
pursuant to this Section 2(c) shall cease and the Company shall promptly comply
with Section 4(b) hereof.
3. Liquidated Damages
(a) The Company and the Initial Purchasers agree that the Holders of
Transfer Restricted Securities will suffer damages if the Company fails to
fulfill its obligations pursuant to Section 2 and Section 4(b) hereof and that
it would not be possible to ascertain the extent of such damages. Accordingly,
in the event of such failure by the Company to fulfill such obligations, the
Company hereby agrees to pay liquidated damages ("Liquidated Damages") to each
Holder of Transfer Restricted Securities under the circumstances and to the
extent set forth below:
(i) if the Shelf Registration Statement has not been filed with the
SEC on or prior to the Filing Date; or
(ii) if the Shelf Registration Statement is not declared effective by
the SEC on or prior to the Effectiveness Target Date; or
(iii) the Shelf Registration Statement has been declared effective by
the SEC and thereafter ceases to be effective or the Prospectus contained
therein ceases to be usable (including as a result of a suspension of the use of
the Shelf Registration Statement as described in Section 2(c) hereof), for a
period of time that exceeds 90 days in any period of 365 consecutive days;
(any of the foregoing, a "Registration Default") then the Company shall pay
Liquidated Damages to each Holder of Transfer Restricted Securities during the
first 90-day period immediately following the occurrence of such Registration
Default in an amount equal to $.05 per week per $1,000 principal amount of Notes
and, if applicable, $.0015 per week per share (subject to adjustment in the
event of stock splits, stock recombinations, stock dividends and the like) of
Common Stock constituting Transfer Restricted Securities held by such Holder for
each week or portion thereof that the Registration Default continues. The
amount of such Liquidated Damages will increase by an additional $.05 per week
per $1,000 principal amount of Notes and, if applicable, by $.0015 per week per
share (subject to adjustment as set forth above) of Common Stock constituting
Transfer Restricted Securities for each subsequent 90-day period until all
Registration Defaults have been cured; provided, however, that Liquidated
Damages shall not at any time exceed $.25 per week per $1,000 principal amount
of Notes or, if applicable, $.0015 per week per share (subject to adjustment as
set forth above) of Common Stock constituting Transfer Restricted Securities.
Following the cure of all Registration Defaults relating to any Transfer
Restricted Securities, the accrual of Liquidated Damages with
7
<PAGE>
respect to such Transfer Restricted Securities will cease. A Registration
Default under clause (i) above shall be cured on the date that the Shelf
Registration Statement is filed with the SEC; a Registration Default under
clause (ii) above shall be cured on the date that the Shelf Registration
Statement is declared effective by the SEC; and a Registration Default under
clause (iii) above shall be cured on the date the Shelf Registration Statement
is declared effective or the Prospectus contained therein again becomes usable.
(b) The Company shall notify the Trustee within one Business Day after
each and every date on which a Registration Default occurs. On each Damage
Payment Date, Liquidated Damages shall be paid by the Company to the Holders of
Transfer Restricted Securities as of the immediately preceding Record Date (as
defined in the Indenture) specified in the Indenture in the same manner interest
is paid to Holders of Notes pursuant to the Indenture. Each obligation to pay
Liquidated Damages shall be deemed to commence accruing on the date of the
applicable Registration Default and to cease accruing when all Registration
Defaults have been cured. In no event shall the Company pay Liquidated Damages
in excess of the applicable maximum weekly amount set forth above, regardless of
whether one or multiple Registration Defaults exist (e.g., subject to increase
as set forth above for each subsequent 90-day period, Liquidated Damages shall
equal $.05 per week per $1,000 principal amount of Notes during the first 90-day
period immediately following the occurrence of the first Registration Default
regardless of whether additional Registration Defaults occur during such 90-day
period).
4. Registration Procedures
In connection with the Company's registration obligations pursuant to
Section 2 above, the Company shall as expeditiously as possible:
(a) No fewer than five Business Days prior to the initial filing of a
Registration Statement or Prospectus and no fewer than two Business Days prior
to the filing of any amendment or supplement thereto (other than any document
that would be incorporated or deemed to be incorporated therein by reference),
furnish to the Holders of the Transfer Restricted Securities, their Special
Counsel and the managing underwriters, if any, copies of all such documents
proposed to be filed, which documents (other than those incorporated or deemed
to be incorporated by reference) will be subject to the review of such Holders,
their Special Counsel and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent certified
public accountants to the Company to respond to such inquiries as shall be
necessary in connection with such Registration Statement, in the reasonable
opinion of Special Counsel and such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file any such Registration Statement or related Prospectus or any amendments or
8
<PAGE>
supplements thereto (other than any document that would be incorporated or
deemed to be incorporated in the Registration Statement by reference) to which
the Holders of a majority of the Transfer Restricted Securities, their Special
Counsel, or the managing underwriters, if any, shall reasonably object on a
timely basis; provided, that the Company may assume, for the purposes of this
subparagraph (a), that objections to the inclusion of information specifically
requested to be included in the Registration Statement by the staff of the SEC,
or in the opinion of counsel to the Company required to be in the Registration
Statement, or specifically required by the Securities Act or other applicable
law, shall not be deemed to be reasonable;
(b) Prepare and file with the SEC such amendments, including post-
effective amendments, to each Registration Statement as may be necessary,
subject to Section 2(c) hereof, to keep such Registration Statement continuously
effective for the applicable time period; cause, subject to Section 2(c) hereof,
the Prospectus and any document incorporated or deemed to be incorporated
therein by reference to be supplemented or amended, and file, subject to Section
2(c) hereof, any other required document so that, as thereafter delivered such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Transfer Restricted
Securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented;
(c) Notify the Holders of Transfer Restricted Securities to be sold or
their Special Counsel and the managing underwriters, if any, promptly (and in
the case of an event specified by clause (i)(A) of this paragraph in no event
fewer than two Business Days prior to such filing), and (if requested by any
such person), confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment is proposed to be filed, and,
(B) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any other
Federal or state governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC, any state securities commission, any other
governmental agency or any court of any stop order, order or injunction
suspending or enjoining the use or the effectiveness of a Registration Statement
or the initiation of any proceedings for that purpose, (iv) if at any time any
of the representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 4(l) hereof cease
to be true and correct in all material respects, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Transfer Restricted Securities for
sale in any jurisdiction, or the initiation or threatening of any Proceeding for
such purpose,
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<PAGE>
and (vi) of the happening of any event that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that, in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(d) Use all reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of a Registration Statement or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Transfer
Restricted Securities for sale in any jurisdiction, at the earliest practicable
moment;
(e) If requested by the managing underwriters, if any, or the Holders
of a majority of the Transfer Restricted Securities (on a fully converted basis)
being sold in connection with such offering, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, and such Holders reasonably request should be
included therein relating to the terms of the sale of the Transfer Restricted
Securities of such Holder in the Prospectus, and (ii) make all required filings
of such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
rovided, however, that the Company shall not be required to take any action
pursuant to this Section 4(e) that would, in the opinion of counsel for the
Company, violate applicable law;
(f) Furnish to each Holder of Transfer Restricted Securities, their
Special Counsel and each managing underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and each amendment thereto,
including financial statements (but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits,
unless requested in writing by such Holder, counsel or managing underwriter);
(g) Deliver to each Holder of Transfer Restricted Securities, their
Special Counsel, and the underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses and each amendment or supplement thereto as such
persons reasonably request; and the Company hereby consents, subject to Section
4(p) hereof, to the use of such Prospectus
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<PAGE>
and each amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Securities and the underwriters, if any, in connection with
the offering and sale of the Transfer Restricted Securities covered by such
Prospectus and any amendment or supplement thereto;
(h) Prior to any public offering of Transfer Restricted Securities,
use all reasonable efforts to register or qualify or cooperate with the Holders
of Transfer Restricted Securities to be sold, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Transfer
Restricted Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder or underwriter
reasonably requests in writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject;
(i) In connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold, which certificates shall
not bear any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company and to enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or Holders may request at least two Business Days
prior to any sale of Transfer Restricted Securities;
(j) Use all reasonable efforts to cause the offering of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities within the
United States as may require such registration or approval, except as may be
required as a consequence of the nature of such selling Holder's business, in
which case the Company will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Transfer Restricted Securities; provided,
however, that the Company shall not be required to register the Transfer
Restricted Securities in any jurisdiction that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so
subject or to
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<PAGE>
require the Company to qualify to do business in any jurisdiction where it is
not then so qualified;
(k) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, provide a CUSIP number for the
Transfer Restricted Securities;
(l) Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and take
all such other reasonable actions in connection therewith (including those
reasonably requested by the managing underwriters, if any, or the Holders of a
majority of the Transfer Restricted Securities (on a fully converted basis)
being sold) in order to expedite or facilitate the disposition of such Transfer
Restricted Securities, and in such connection, if an underwriting agreement is
entered into, (i) make such representations and warranties to the underwriters,
if any, with respect to the business of the Company and its subsidiaries
(including with respect to businesses or assets acquired or to be acquired by
any of them), and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, in
form, substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, addressed to each of the underwriters, if any,
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by the
underwriters; (iii) use all reasonable efforts to obtain customary "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data is, or is
required to be, included in the Registration Statement), addressed (where
reasonably possible) to the selling Holders of Transfer Restricted Securities
and each of the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
no less favorable to the selling Holders of Transfer Restricted Securities and
the underwriters, if any, than those set forth in Section 6 hereof (or such
other provisions and procedures acceptable to Holders of a majority of the
Transfer Restricted Securities (on a fully converted basis) covered by such
Registration Statement and the managing underwriters); and (v) deliver such
documents and certificates as may be reasonably requested by the managing
underwriters, if any, to evidence the continued validity of the representations
and warranties made pursuant to clause (i) of this
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Section 4(l) and to evidence compliance with any customary conditions contained
in the underwriting agreement or other agreement entered into by the Company;
(m) Make available for inspection by a representative of the Holders
of not less than 50% of the Transfer Restricted Securities (on a fully-converted
basis) being sold, any underwriter participating in any such disposition of
Transfer Restricted Securities, if any, and any Special Counsel, consultant or
accountant retained by such selling Holders or underwriter, at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries as they may reasonably request (including with respect to business
and assets acquired or to be acquired to the extent that such information is
available to the Company), and cause the officers, directors, agents and
employees of the Company and its subsidiaries (including with respect to
business and assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information in each case
reasonably requested by any such repres entative, underwriter, attorney,
consultant or accountant in connection with such Registration Statement,
provided, however, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons, unless (i) disclosure of
such information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to Federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus), (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement;
(n) Cause the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement relating to the Transfer
Restricted Securities; and in connection therewith, cooperate with the trustee
under the Indenture and the holders of the Transfer Restricted Securities 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 all
reasonable efforts to cause such trustee to execute, all customary documents as
may be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so qualified in
a timely manner;
(o) Make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder, no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in
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<PAGE>
which Transfer Restricted Securities are sold to underwriters in a firm
commitment or reasonable efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of Rule 158;
and
(p) concurrently with the effectiveness of the first Registration
Statement (i) list all Notes and Common Stock covered by such Registration
Statement on any securities exchange on which the Common Stock is then listed or
(ii) authorize for quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or the National Market System of NASDAQ
all Notes and Common Stock covered by such Registration Statement if the Common
Stock is then so authorized for quotation.
The Company may require each seller of Transfer Restricted Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Transfer Restricted Securities as
is required by law to be disclosed in the applicable Registration Statement and
the Company may exclude from such registration the Transfer Restricted
Securities of any seller who unreasonably fails to furnish such information
within a reasonable time after receiving such request. Each seller of Transfer
Restricted Securities will furnish to the Company information concerning sales
made pursuant to the Registration Statement. Each such Holder agrees, by the
acquisition of Transfer Restricted Securities, and agrees to confirm such
agreement in writing upon request of the Company, to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Holder to the Company or of the occurrence of any event as a
result of which any Prospectus relating to such registration contains or would
contain an untrue statement of a material fact regarding such Holder or such
Holder's intended method of distribution of such Transfer Restricted Securities,
or omits to state any material fact regarding such Holder or such Holder's
intended method of distribution of such Transfer Restricted Securities,
necessary to make the statements therein, in light of the circumstances then
existing, not misleading and promptly to furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
Holder or the distribution of such Transfer Restricted Securities, an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances then existing, not
misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as
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<PAGE>
a recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
Each Holder of Transfer Restricted Securities agrees by acquisition of
such Transfer Restricted Securities that, upon receipt of any notice from the
Company pursuant to Section 2(c) hereof or of the happening of any event of the
kind described in Section 4(c)(ii), 4(c)(iii), 4(c)(v) or 4(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Transfer Restricted
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(b) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus, and, if so directed by the Company, such 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 at the time of receipt of such
notice.
5. Registration Expenses
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by it whether or not any
Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to any Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc., (B) in compliance with
securities or Blue Sky laws (including, without limitation and in addition to
that provided for in (b) below, reasonable fees and disbursements of counsel for
the underwriters or Special Counsel for the Holders in connection with Blue Sky
qualifications of the Transfer Restricted Securities and determination of the
eligibility of the Transfer Restricted Securities for investment under the laws
of such jurisdictions as the managing underwriters, if any, or Holders of a
majority (on a fully converted basis) of Transfer Restricted Securities may
designate)), and (c) the fees payable in connection with the listing of the
Notes in accordance with Section 4(q) hereof, (ii) printing expenses (including,
without limitation, expenses of printing certificates for Transfer Restricted
Securities in a form eligible for deposit with The Depository Trust Company and
of
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<PAGE>
printing Prospectuses if the printing of Prospectuses is requested by the
managing underwriters, if any, (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company and Special Counsel for
the Holders (plus any local counsel, deemed appropriate by the Holders of a
majority of the Transfer Restricted Securities, on a fully converted basis), in
accordance with the provisions of Section 5(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 4(m)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) Securities Act liability insurance, if the Company so desires such
insurance, and (vii) fees and expenses of all other persons retained by the
Company. In addition, the Company shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the securities to
be registered on any securities exchange. Notwithstanding the foregoing, the
Holders of the Transfer Restricted Securities being registered shall pay all
commissions, placement agent fees and underwriting discounts and commissions
attributable to the sale of such Transfer Restricted Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
Holders (severally or jointly), other than Special Counsel.
(b) In connection with any registration hereunder, the Company shall
reimburse the Holders of the Transfer Restricted Securities being registered or
tendered for in such registration for the reasonable fees and disbursements of
not more than one firm of attorneys representing the selling Holders (in
addition to any local counsel), which firm, if any, shall be chosen by the
Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis).
6. Indemnification
(a) The Company agrees to indemnify and hold harmless (i) each Initial
Purchaser, (ii) each Holder of Transfer Restricted Securities, (iii) each
person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) any of the foregoing (any of the persons
referred to in this clause (iii) being hereinafter referred to as a "controlling
person"), and (iv) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers, each Holder of Transfer
Restricted Securities, or any controlling person (any person referred to in
clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
"Indemnified Person"), from and against any and all losses, claims, damages,
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary Prospectus or in any amendment or supplement thereto, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the
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<PAGE>
statements therein (in the case of any Prospectus or preliminary Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Indemnified Person
furnished in writing to the Company by or on behalf of such Indemnified Person
expressly for use therein; provided that the foregoing indemnity with respect to
any preliminary Prospectus shall not inure to the benefit of any Indemnified
Person from whom the person asserting such losses, claims, damages, liabilities
and judgments purchased securities if such untrue statement or omission or
alleged untrue statement or omission made in such preliminary Prospectus is
eliminated or remedied in the Prospectus and a copy of the Prospectus shall not
have been furnished to such person in a timely manner; provided that the Company
has delivered the Prospectus to such Indemnified Person in requisite quantity on
a timely basis to permit such delivery or sending. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement, any preliminary prospectus or the
Prospectus or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such Indemnified Person shall
promptly notify the Company in writing and the Company shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Person and payment of all fees and expenses. Any Indemnified Person
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person, unless (i) the employment of
such counsel 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 Indemnified Person and the Company, and such Indemnified
Person shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Indemnified Person, it being
understood, however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all such Indemnified Persons,
which firm shall be designated in writing by such Indemnified Persons, and that
all such fees and expenses shall be reimbursed as they are incurred). The
Company shall not be liable for any settlement of any such action effected
without its written consent, but if settled with its written consent, it agrees
to indemnify and hold harmless any Indemnified Person from and against any loss
or liability by reason of such settlement. Notwithstanding the immediately
preceding sentence, if in any
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<PAGE>
case where the indemnifying party agrees in writing subsequent to the date
hereof that it will be responsible for the fees and expenses of counsel for the
Indemnified Person and the Indemnified Person shall have requested the
indemnifying party to reimburse the Indemnified Person for such fees and
expenses of counsel as incurred, such indemnifying party agrees that it shall be
liable for any settlement of any action effected without its written consent if
(i) such settlement is entered into more than twenty Business Days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall have failed to reimburse the Indemnified Person in accordance with
such request for reimbursement prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(c) In connection with any Registration Statement in which a Holder of
Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers and any person controlling the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, to the same extent as the foregoing indemnity from the Company
to each Indemnified Person but only with reference to information relating to
such Holder furnished in writing by or on behalf of such Holder expressly for
use in such Registration Statement, the Prospectus or any preliminary
prospectus. In case any action shall be brought against the Company, any of its
directors or officers, or any person controlling the Company based on such
Registration Statement, the Prospectus or any preliminary prospectus and in
respect of which indemnity may be sought against any Holder, the Holder shall
have the rights and duties given to the Company (except that if the Company
shall have assumed the defense thereof, such Holder shall not be required to do
so, but may employ separate counsel therein and participate in defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Holder), and the Company, its directors and officers, and any person controlling
the Company shall have the rights and duties given to the Indemnified Person, by
Section 6(b) hereof. This indemnity agreement will be in addition to any other
liability which such Holder may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments in such proportion as is appropriate to
reflect the relative fault of the Company and each such Indemnified Person in
connection with the
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<PAGE>
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 Company and each such Indemnified
Person shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or such Indemnified
Person and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Indemnified Persons were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Indemnified Person shall be
required to contribute any amount in excess of the amount by which the proceeds
received by it in connection with the sale of Transfer Restricted Securities
pursuant to this Agreement exceeds the amount of any damages which such
Indemnified Person has otherwise been required to pay or has paid by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Indemnified
Persons' obligations to contribute pursuant to this Section 6(d) are several in
proportion to the respective amount of Transfer Restricted Securities included
in any such Registration Statement by each Indemnified Person and not joint.
7. Rules 144 and 144A
The Company shall file the reports required to be filed by it under
the Securities Act and the Exchange Act in a timely manner and, if at any time
it is not required to file such reports but in the past had been required to or
did file such reports, it will, upon the request of any holder of Transfer
Restricted Securities, make available other information as required by, and so
long as necessary to permit, sales of its Transfer Restricted Securities
pursuant to Rule 144 and Rule 144A. Notwithstanding the foregoing, nothing in
this Section 7 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
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8. Underwritten Registrations
(a) If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority (on a
fully converted basis) of such Transfer Restricted Securities included in such
offering, subject to the consent of the Company (which will not be unreasonably
withheld or delayed).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
(b) Each Holder of Transfer Restricted Securities agrees, if requested
(pursuant to a timely written notice) by the managing underwriters in an
underwritten offering or placement agent in a private offering of the Company's
securities, not to effect any sale or distribution (including a sale pursuant to
Rule 144(k) and Rule 144A, but excluding non-public sales to any of its
affiliates, officers, directors, employees and controlling persons of any of the
Notes, in the case of an offering of the Company's debt securities, or the
Common Stock, in the case of an offering of the Company's equity securities),
during the period ending 90 days after the closing date of the underwritten
offering.
(c) The Initial Purchasers and all Holders of Transfer Restricted
Securities agree that, notwithstanding any other term or provision hereof, the
Company shall not be required to enter into any agreements (including
underwriting agreements) or take any other actions contemplated by Section 4(l)
hereof unless requested in writing by the holders of at least 50% of the
Transfer Restricted Securities (on a fully converted basis) sold to the Initial
Purchasers pursuant to the Purchase Agreement.
The foregoing provisions shall not apply to any Holder of Transfer
Restricted Securities if such Holder is prevented by applicable statute or
regulation from entering into any such agreement.
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9. Miscellaneous
(a) Remedies. In the event of a breach by the Company, or by a holder
of Transfer Restricted Securities, of any of their obligations under this
Agreement, each holder of Transfer Restricted Securities or the Company, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company and each holder of Transfer Restricted
Securities agree that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company shall not 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 hereof.
(c) No Piggyback on Registrations. The Company shall not grant to any
of its security holders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in any
Shelf Registration Statement other than Transfer Restricted Securities.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, without the written consent of the Holders of a majority of
the then o utstanding Transfer Restricted Securities (on a fully converted
basis); provided, however, that, for the purposes of this Agreement, Transfer
Restricted Securities that are owned, directly or indirectly, by either the
Company or an Affiliate of the Company shall not be deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Transfer Restricted Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders of Transfer Restricted Securities may be
given by Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis) being sold by such Holders pursuant to such Registration
Statement; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
21
<PAGE>
(e) Notices. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy:
(i) if to the Company, as provided in the Purchase Agreement,
(ii) if to the Initial Purchasers, as provided in the Purchase
Agreement, or
(iii) if to any other person who is then the registered Holder of
any Transfer Restricted Securities, to the address of such
Holder as it appears in the Note or Common Stock register of
the Company.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a
next-day air courier; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder of Transfer Restricted
Securities. The Company may not assign its rights or obligations hereunder
without the prior written consent of each Holder of Transfer Restricted
Securities. Notwithstanding the foregoing, no transferee shall have any of the
rights granted under this Agreement until such transferee shall acknowledge its
rights and obligations hereunder by a signed written statement of such
transferee's acceptance of such rights and obligations.
(g) 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.
(h) Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, as applied to contracts made and performed
within the State of New York without regard to principles of conflicts of law.
22
<PAGE>
(i) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(k) Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court, shall
be entitled to recover its reasonable attorneys' fees in addition to any other
available remedy.
23
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
OCCUSYSTEMS, INC.
By: /s/ RICHARD A. PARR II
---------------------------------
Name: Richard A. Parr II
-------------------------------
Title: Executive Vice President,
------------------------------
General Counsel and
Secretary
The foregoing Registration Rights Agreement is
hereby confirmed and accepted as of the date
first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS INCORPORATED
PIPER JAFFRAY INC.
By: Donaldson, Lufkin & Jenrette
Securities Corporation
By: /s/ RICHARD DEITCH II
------------------------------
Name: Richard Deitch II
----------------------------
Title: Vice President
---------------------------
24
<PAGE>
EXHIBIT 5.1
{LETTERHEAD OF VINSON & ELKINS APPEARS HERE]
January 31, 1997
OccuSystems, Inc.
3010 LBJ Freeway, Suite 400
Dallas, Texas 75234
Ladies and Gentlemen:
We have acted as counsel for OccuSystems, Inc., a Delaware corporation (the
"Company"), in connection with the registration under the Securities Act of 1933
(the "Securities Act") on a Registration Statement on Form S-3 (the
"Registration Statement") of the resales of $97,750,000 aggregate principal
amount of the Company's 6% Convertible Subordinated Notes due 2001 (the "Notes")
and the 3,291,246 shares (as such number may be adjusted as set forth in the
Indenture, dated as of December 24, 1996 (the "Indenture"), between the Company
and United States Trust Company of New York, as trustee (the "Trustee")) of
Common Stock, par value $.01 per share, of the Company (the "Common Stock") as
shall be issuable upon conversion of the Notes in accordance with the Indenture.
In reaching the opinions set forth in this letter, we have reviewed
originals or copies of the Registration Statement, the Indenture, the Notes and
such other agreements, certificates of public officials, certificates of
officers of the Company, records, documents and matters of law as we deemed
relevant.
Based on and subject to the foregoing and subject further to the
assumptions, exceptions and qualifications hereinafter stated, we are of the
opinion that:
(i) The Notes constitute legally binding obligations of the Company; and
(ii) The shares of Common Stock issuable upon conversion of the Notes will
be, when issued in accordance with their terms, legally issued, fully paid and
non-assessable.
<PAGE>
OccuSystems, Inc.
January 31, 1997
Page 2
The opinions expressed above are subject to the following assumptions,
exceptions and qualifications:
A. We have assumed that (i) all information contained in all documents
reviewed by us is true and correct, (ii) all signatures on all documents
reviewed by us are genuine, (iii) all documents submitted to us as originals are
true and complete, (iv) all documents submitted to us as copies are true and
complete copies of the originals thereof, (v) each natural person signing any
document reviewed by us had the legal capacity to do so, (vi) each natural
person signing in a representative capacity any document reviewed by us had
authority to sign in such capacity and (vii) the Indenture is a valid and
binding agreement of the Trustee.
B. The opinions expressed in this letter are limited to the Delaware
General Corporation Law, the federal laws of the United States of America and
the laws of the State of Texas. We express no opinion about the effect of
federal or state securities laws or the laws of any other jurisdiction.
This opinion may be filed as an exhibit to the Registration Statement.
Consent is also given to the reference to this firm under the caption "Legal
Matters" in the Prospectus included in the Registration Statement as having
passed on certain legal matters in connection with the Notes and the Common
Stock. In giving this consent, we do not admit that we come within the category
of persons whose consent is required under Section 7 of the Securities Act or
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
This opinion speaks as of the date hereof, and we disclaim any duty to
advise you regarding any changes subsequent to the date hereof in, or to
otherwise communicate with you with respect to, the matters addressed herein.
Very truly yours,
/s/ Vinson & Elkins L.L.P.
<PAGE>
EXHIBIT 10.1
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
----------------------------------------
This Amendment No. 1 to Employment Agreement (the "Amendment") is made and
entered into this 26th day of December, 1996, by and between OccuSystems, Inc.,
a Delaware corporation (the "Company"), and John K. Carlyle ("Executive").
WITNESSETH:
WHEREAS, the Company and Executive have entered into a certain Employment
Agreement, dated as of May 15, 1995 (the "Employment Agreement"); and
WHEREAS, the Company and Executive now desire to enter into this Amendment
for the purpose of making certain amendments to the Employment Agreement deemed
necessary and desirable and in the best interests of the Company and Executive,
all as more fully described herein; and
WHEREAS, the members of the Option and Compensation Committee of the
Company's Board of Directors have heretofore approved the execution and delivery
of this Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Executive hereby agree as follows:
1. Compensation Upon Termination or Failure to Renew Prior to a Change in
----------------------------------------------------------------------
Control of the Company. Section 6 of the Employment Agreement is hereby amended
- ----------------------
to read in its entirety as follows:
"6. Compensation Upon Termination or Failure to Renew Prior to a
------------------------------------------------------------
Change in Control of the Company. Prior to the occurrence of a Change in
--------------------------------
Control of the Company, Executive shall be entitled to the following
compensation from the Company upon the termination of his employment or
upon the Company's delivery of notice pursuant to Section 1 that the Term
of this Agreement shall not following any anniversary of the date hereof be
automatically extended for an additional year.
(a) Death. If Executive's employment shall be terminated by
-----
reason of his death, the Company shall pay to such person as shall have
been designated in a notice filed with the Company prior to Executive's
death, or, if no such person shall be designated, to his estate as a death
benefit, his Base Salary to the date of his death in addition to any
payments Executive's spouse, beneficiaries, or estate may be entitled to
receive pursuant to any pension or employee benefit plan or other
arrangement or life insurance policy maintained by the Company. In
1
<PAGE>
addition, the Company shall make payments of premiums to continue the
medical and dental insurance coverage of Executive's spouse and children
under age twenty-five (25) as in effect at and as of the date of
Executive's death (or to provide as similar coverage as possible for the
same premiums if the continuation of existing coverage is not permitted)
for one (1) year after the date of Executive's death, in each case to the
extent such coverage is available.
(b) Disability. During any period that Executive fails to
----------
perform his material managerial duties and responsibilities hereunder as a
result of incapacity due to physical or mental illness, Executive shall
continue to receive his Base Salary and any bonus payments until
Executive's employment is terminated pursuant to Section 5(b) hereof or
until Executive terminates his employment pursuant to Section 5(d)(2)
hereof, whichever first occurs. After such termination, the Company shall
pay to Executive, on or before the fifth day following the Date of
Termination (as hereinafter defined) his Base Salary to the Date of
Termination. In addition, the Company shall make payments of premiums as
necessary to cause Executive and Executive's spouse and children under age
twenty-five (25) to continue to be covered by the medical and dental
insurance as in effect at and as of the Date of Termination (or to provide
as similar coverage as possible for the same premiums if the continuation
of existing coverage is not permitted) for one (1) year after the Date of
Termination, in each case to the extent such coverage is available.
(c) Cause. If Executive's employment shall be terminated for
-----
Cause, the Company shall pay Executive his Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given. Such payments shall fully discharge the Company's obligations
hereunder.
(d) Breach by the Company, for Good Reason, or Upon Failure to
----------------------------------------------------------
Renew. If (1) in breach of this Agreement, the Company shall terminate
-----
Executive's employment (it being understood that a purported termination of
Executive's employment by the Company pursuant to any provision of this
Agreement that is disputed and finally determined not to have been proper
shall be a termination by the Company in breach of this Agreement), or (2)
Executive shall terminate his employment for Good Reason, or (3) the
Company shall give Executive notice pursuant to Section 1 prior to any
anniversary of the date hereof that the Term of this Agreement shall not be
automatically extended for an additional year on any such anniversary date,
then the Company shall pay Executive:
(A) his Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given;
2
<PAGE>
(B) in lieu of any further salary payments to Executive for
periods subsequent to the Date of Termination, the Company shall
pay as severance pay to Executive on or before the fifth day
following the Date of Termination, a lump sum in cash equal to
Executive's full annual Base Salary at the rate in effect at the
time the Notice of Termination is given; and
(C) all benefits payable under the terms of any employee benefit
plan or other arrangement as of the Date of Termination.
In addition, the Company shall make payments of premiums as
necessary to cause Executive and Executive's spouse and children under age
twenty-five (25) to continue to be covered by the medical and dental
insurance as in effect at and as of the Date of Termination (or to provide
as similar coverage as possible for the same premiums if the continuation
of existing coverage is not permitted) for one (1) year after the Date of
Termination, in each case to the extent such coverage is available.
(e) Mitigation. Executive shall not be required to mitigate
the amount of any payment provided for in this Section 6 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Section 6 be reduced by any compensation earned by Executive as the
result of employment by another employer after the Date of Termination, or
otherwise."
2. Compensation Upon Termination or Failure to Renew After a Change in
-------------------------------------------------------------------
Control of the Company. Section 7 of the Employment Agreement is hereby amended
- ----------------------
to read in its entirety as follows:
"7. Compensation Upon Termination or Failure to Renew After a
---------------------------------------------------------
Change in Control of the Company.
---------------------------------
(a) Compensation. If, after the occurrence of a Change in
------------
Control of the Company, Executive's employment is terminated by the Company
or by Executive, as the case may be, for any of the reasons described in
Section 5 above or the Company delivers notice pursuant to Section 1 that
the Term of this Agreement shall not following any anniversary of the date
hereof be automatically extended for an additional year, then Executive
shall be entitled to (1) the same compensation benefits from the Company as
set forth in Section 6 above to which he would have been entitled if the
termination of his employment had occurred prior to the occurrence of a
Change in Control of the Company plus (2) in the event the termination
occurs
3
<PAGE>
as described in either Section 6(d)(1) or 6(d)(2) above or notice is
given as described in Section 6(d)(3) above, then Executive shall be
entitled to the following additional benefits:
(A) on or before the fifth day following the Date of
Termination, the Company shall pay to Executive a lump sum in cash
equal to Executive's full annual Base Salary at the rate in effect at
the time the Notice of Termination is given (it being understood and
agreed that the combined effect of the provisions of Section 6(d)(B)
and this Section 7(a)(A) is to pay to Executive two times such Base
Salary); provided, however, that the amount of cash paid pursuant to
--------- --------
this Section 7(a)(A) plus the value of any other compensation paid to
Executive, pursuant to this Agreement or otherwise, as a result of the
termination of Executive's employment that is subject to the
provisions of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), shall in no event exceed $100 less than 3.00
times Executive's Annualized Includable Compensation (within the
meaning of section 280G(d)(1) of the Code), and the amount of the
Company's cash payment to Executive under this Section 7(a)(A) shall
be adjusted accordingly to achieve this result; notwithstanding the
provisions of this Section 7(a)(A), nothing contained in this Section
7(a)(A) shall be construed to imply that any payments to the Executive
other than pursuant to this Section 7(a)(A) are subject to the
provisions of Section 280G of the Code;
(B) the Company shall maintain in full force and effect, for the
continued benefit of Executive, Executive's spouse, and Executive's
minor children, as applicable, for a two-year period beginning upon
the Date of Termination, all employee benefit plans and other
arrangements (including medical and dental insurance coverage) as in
effect and in which such persons were entitled to participate
immediately prior to the Date of Termination, provided that the
continued participation of such persons is possible under the general
terms and provisions of such plans and arrangements. However, in no
event shall this paragraph be construed to reduce the duration or
benefits derived from any such plans or arrangements that otherwise
would extend beyond such two-year period. If the participation of any
of such persons in any such plan or arrangement is barred, the Company
shall arrange to provide such person with benefits substantially
similar to those which such persons would otherwise have been entitled
to receive under such plans and arrangements from which such
4
<PAGE>
persons' continued participation is barred. At the end of the period
of coverage, Executive shall have the option to have assigned to him
at no cost and with no apportionment of prepaid premiums any
assignable insurance policy owned by the Company which relates
specifically to him; and
(C) the Company shall pay all other damages to which Executive
may be entitled as a result of the termination of his employment under
this Agreement, including all legal fees and expenses incurred by him
in contesting or disrupting any such termination or in seeking to
obtain or enforce any right or benefit provided by this Agreement in
accordance with, and as contemplated by, Section 11 hereof.
(b) Mitigation. Executive shall not be required to mitigate the
----------
amount of any payment provided for in this Section 7 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Section 7 be reduced by any compensation earned by Executive as the
result of employment by another employer after the Date of Termination, or
otherwise."
3. Other Provisions Relating to Termination. Section 8(b) of the
----------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"(b) Date of Termination. For purposes of this Agreement, "Date of
-------------------
Termination" shall mean: (1) if Executive's employment is terminated by his
death, the date of his death; (2) if Executive's employment is terminated
because of a disability pursuant to Section 5(b), then thirty (30) days
after Notice of Termination is given (provided that Executive shall not
have returned to the performance of his duties on a full-time basis during
such thirty (30) day period); (3) if Executive's employment is terminated
by the Company for Cause or by Executive for Good Reason, then, subject to
Sections 8(c) and 8(d), the date specified in the Notice of Termination;
(4) if the Company gives Executive notice pursuant to Section 1 prior to
any anniversary of the date hereof that the Term of this Agreement shall
not be automatically extended for an additional year on any such
anniversary date, the date upon which the Term expires; and (5) if
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given."
4. No Change. Except as expressly modified hereby, the Employment
----------
Agreement shall continue in effect unchanged.
5
<PAGE>
IN WITNESS WHEREOF, the Company and Executive have executed this Amendment
on and as of the date first set forth above.
THE COMPANY: EXECUTIVE:
OCCUSYSTEMS, INC.
By: /s/John J. Carlyle
-------------------------- ----------------------------
Richard D.Rehm, M.D. John K. Carlyle
Chairman
6
<PAGE>
EXHIBIT 10.2
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
----------------------------------------
This Amendment No. 1 to Employment Agreement (the "Amendment") is made and
entered into this 26th day of December, 1996, by and between OccuSystems, Inc.,
a Delaware corporation (the "Company"), and Daniel J. Thomas ("Executive").
WITNESSETH:
WHEREAS, the Company and Executive have entered into a certain Employment
Agreement, dated as of May 15, 1995 (the "Employment Agreement"); and
WHEREAS, the Company and Executive now desire to enter into this Amendment
for the purpose of making certain amendments to the Employment Agreement deemed
necessary and desirable and in the best interests of the Company and Executive,
all as more fully described herein; and
WHEREAS, the members of the Option and Compensation Committee of the
Company's Board of Directors have heretofore approved the execution and delivery
of this Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Executive hereby agree as follows:
1. Compensation Upon Termination or Failure to Renew. Section 6 of the
-------------------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"6. Compensation Upon Termination or Failure to Renew. Executive
-------------------------------------------------
shall be entitled to the following compensation from the Company upon the
termination of his employment or upon the Company's delivery of notice
pursuant to Section 1 that the Term of this Agreement shall not following
any anniversary of the date hereof be automatically extended for an
additional year.
(a) Death. If Executive's employment shall be terminated by
-----
reason of his death, the Company shall pay to such person as shall have
been designated in a notice filed with the Company prior to Executive's
death, or, if no such person shall be designated, to his estate as a death
benefit, his Base Salary to the date of his death in addition to any
payments Executive's spouse, beneficiaries, or estate may be entitled to
receive pursuant to any pension or employee benefit plan or other
arrangement or life insurance policy maintained by the Company. In
addition, the Company shall make payments of premiums to continue the
medical and dental insurance coverage of Executive's spouse and children
1
<PAGE>
under age twenty-five (25) as in effect at and as of the date of
Executive's death (or to provide as similar coverage as possible for the
same premiums if the continuation of existing coverage is not permitted)
for one (1) year after the date of Executive's death, in each case to the
extent such coverage is available.
(b) Disability. During any period that Executive fails to
----------
perform his material managerial duties and responsibilities hereunder as a
result of incapacity due to physical or mental illness, Executive shall
continue to receive his Base Salary and any bonus payments until
Executive's employment is terminated pursuant to Section 5(b) hereof or
until Executive terminates his employment pursuant to Section 5(d)(2)
hereof, whichever first occurs. After such termination, the Company shall
pay to Executive, on or before the fifth day following the Date of
Termination (as hereinafter defined) his Base Salary to the Date of
Termination. In addition, the Company shall make payments of premiums as
necessary to cause Executive and Executive's spouse and children under age
twenty-five (25) to continue to be covered by the medical and dental
insurance as in effect at and as of the Date of Termination (or to provide
as similar coverage as possible for the same premiums if the continuation
of existing coverage is not permitted) for one (1) year after the Date of
Termination, in each case to the extent such coverage is available.
(c) Cause. If Executive's employment shall be terminated for
-----
Cause, the Company shall pay Executive his Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given. Such payments shall fully discharge the Company's obligations
hereunder.
(d) Breach by the Company, for Good Reason, or Upon Failure to
----------------------------------------------------------
Renew. If (1) in breach of this Agreement, the Company shall terminate
-----
Executive's employment (it being understood that a purported termination of
Executive's employment by the Company pursuant to any provision of this
Agreement that is disputed and finally determined not to have been proper
shall be a termination by the Company in breach of this Agreement), or (2)
Executive shall terminate his employment for Good Reason, or (3) the
Company shall give Executive notice pursuant to Section 1 prior to any
anniversary of the date hereof that the Term of this Agreement shall not be
automatically extended for an additional year on any such anniversary date,
then the Company shall pay Executive:
(A) his Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given;
2
<PAGE>
(B) in lieu of any further salary payments to Executive for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to Executive on or before the fifth day following the
Date of Termination, a lump sum in cash equal to Executive's full
annual Base Salary at the rate in effect at the time the Notice of
Termination is given; and
(C) all benefits payable under the terms of any employee benefit
plan or other arrangement as of the Date of Termination.
In addition, the Company shall make payments of premiums as necessary
to cause Executive and Executive's spouse and children under age twenty-
five (25) to continue to be covered by the medical and dental insurance as
in effect at and as of the Date of Termination (or to provide as similar
coverage as possible for the same premiums if the continuation of existing
coverage is not permitted) for one (1) year after the Date of Termination,
in each case to the extent such coverage is available.
(e) Mitigation. Executive shall not be required to mitigate the
----------
amount of any payment provided for in this Section 6 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Section 6 be reduced by any compensation earned by Executive as the
result of employment by another employer after the Date of Termination, or
otherwise."
2. Other Provisions Relating to Termination. Section 7(b) of the
----------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"(b) Date of Termination. For purposes of this Agreement, "Date of
-------------------
Termination" shall mean: (1) if Executive's employment is terminated by his
death, the date of his death; (2) if Executive's employment is terminated
because of a disability pursuant to Section 5(b), then thirty (30) days
after Notice of Termination is given (provided that Executive shall not
have returned to the performance of his duties on a full-time basis during
such thirty (30) day period); (3) if Executive's employment is terminated
by the Company for Cause or by Executive for Good Reason, then, subject to
Sections 7(c) and 7(d), the date specified in the Notice of Termination;
(4) if the Company gives Executive notice pursuant to Section 1 prior to
any anniversary of the date hereof that the Term of this Agreement shall
not be automatically extended for an additional year on any such
anniversary date, the date upon which the Term expires; and (5) if
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given."
3
<PAGE>
3. No Change. Except as expressly modified hereby, the Employment
----------
Agreement shall continue in effect unchanged.
IN WITNESS WHEREOF, the Company and Executive have executed this Amendment
on and as of the date first set forth above.
THE COMPANY: EXECUTIVE:
OCCUSYSTEMS, INC.
By: /s/ John K. Carlyle /s/ Daniel J. Thomas
------------------------- ---------------------------
John K. Carlyle Daniel J. Thomas
President
4
<PAGE>
EXHIBIT 10.3
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
---------------------------------------
This Amendment No. 1 to Employment Agreement (the "Amendment") is made and
entered into this 26th day of December, 1996, by and between OccuSystems, Inc.,
a Delaware corporation (the "Company"), and Richard A. Parr II ("Executive").
WITNESSETH:
WHEREAS, the Company and Executive have entered into a certain Employment
Agreement, dated as of August 1, 1996 (the "Employment Agreement"); and
WHEREAS, the Company and Executive now desire to enter into this Amendment
for the purpose of making certain amendments to the Employment Agreement deemed
necessary and desirable and in the best interests of the Company and Executive,
all as more fully described herein; and
WHEREAS, the members of the Option and Compensation Committee of the
Company's Board of Directors have heretofore approved the execution and delivery
of this Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Executive hereby agree as follows:
1. Compensation Upon Termination or Failure to Renew. Section 6 of the
-------------------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"6. Compensation Upon Termination or Failure to Renew. Executive
-------------------------------------------------
shall be entitled to the following compensation from the Company upon the
termination of his employment or upon the Company's delivery of notice
pursuant to Section 1 that the Term of this Agreement shall not following
any anniversary of the date hereof be automatically extended for an
additional year.
(a) Death. If Executive's employment shall be terminated by
-----
reason of his death, the Company shall pay to such person as shall have
been designated in a notice filed with the Company prior to Executive's
death, or, if no such person shall be designated, to his estate as a death
benefit, his Base Salary to the date of his death in addition to any
payments Executive's spouse, beneficiaries, or estate may be entitled to
receive pursuant to any pension or employee benefit plan or other
arrangement or life insurance policy maintained by the Company. In
addition, the Company shall make payments of premiums to continue the
medical and dental insurance coverage of Executive's spouse and children
1
<PAGE>
under age twenty-five (25) as in effect at and as of the date of
Executive's death (or to provide as similar coverage as possible for the
same premiums if the continuation of existing coverage is not permitted)
for one (1) year after the date of Executive's death, in each case to the
extent such coverage is available.
(b) Disability. During any period that Executive fails to
----------
perform his material managerial duties and responsibilities hereunder as a
result of incapacity due to physical or mental illness, Executive shall
continue to receive his Base Salary and any bonus payments until
Executive's employment is terminated pursuant to Section 5(b) hereof or
until Executive terminates his employment pursuant to Section 5(d)(2)
hereof, whichever first occurs. After such termination, the Company shall
pay to Executive, on or before the fifth day following the Date of
Termination (as hereinafter defined) his Base Salary to the Date of
Termination. In addition, the Company shall make payments of premiums as
necessary to cause Executive and Executive's spouse and children under age
twenty-five (25) to continue to be covered by the medical and dental
insurance as in effect at and as of the Date of Termination (or to provide
as similar coverage as possible for the same premiums if the continuation
of existing coverage is not permitted) for one (1) year after the Date of
Termination, in each case to the extent such coverage is available.
(c) Cause. If Executive's employment shall be terminated for
-----
Cause, the Company shall pay Executive his Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given. Such payments shall fully discharge the Company's obligations
hereunder.
(d) Breach by the Company, for Good Reason, or Upon Failure to
----------------------------------------------------------
Renew. If (1) in breach of this Agreement, the Company shall terminate
-----
Executive's employment (it being understood that a purported termination of
Executive's employment by the Company pursuant to any provision of this
Agreement that is disputed and finally determined not to have been proper
shall be a termination by the Company in breach of this Agreement), or (2)
Executive shall terminate his employment for Good Reason, or (3) the
Company shall give Executive notice pursuant to Section 1 prior to any
anniversary of the date hereof that the Term of this Agreement shall not be
automatically extended for an additional year on any such anniversary date,
then the Company shall pay Executive:
(A) his Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given;
2
<PAGE>
(B) in lieu of any further salary payments to Executive for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to Executive on or before the fifth day following the
Date of Termination, a lump sum in cash equal to Executive's full
annual Base Salary at the rate in effect at the time the Notice of
Termination is given; and
(C) all benefits payable under the terms of any employee benefit plan
or other arrangement as of the Date of Termination.
In addition, the Company shall make payments of premiums as necessary
to cause Executive and Executive's spouse and children under age twenty-
five (25) to continue to be covered by the medical and dental insurance as
in effect at and as of the Date of Termination (or to provide as similar
coverage as possible for the same premiums if the continuation of existing
coverage is not permitted) for one (1) year after the Date of Termination,
in each case to the extent such coverage is available.
(e) Mitigation. Executive shall not be required to mitigate the
-----------
amount of any payment provided for in this Section 6 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Section 6 be reduced by any compensation earned by Executive as the
result of employment by another employer after the Date of Termination, or
otherwise."
2. Other Provisions Relating to Termination. Section 7(b) of the
----------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"(b) Date of Termination. For purposes of this Agreement, "Date of
-------------------
Termination" shall mean: (1) if Executive's employment is terminated by his
death, the date of his death; (2) if Executive's employment is terminated
because of a disability pursuant to Section 5(b), then thirty (30) days
after Notice of Termination is given (provided that Executive shall not
have returned to the performance of his duties on a full-time basis during
such thirty (30) day period); (3) if Executive's employment is terminated
by the Company for Cause or by Executive for Good Reason, then, subject to
Sections 7(c) and 7(d), the date specified in the Notice of Termination;
(4) if the Company gives Executive notice pursuant to Section 1 prior to
any anniversary of the date hereof that the Term of this Agreement shall
not be automatically extended for an additional year on any such
anniversary date, the date upon which the Term expires; and (5) if
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given."
3
<PAGE>
3. No Change. Except as expressly modified hereby, the Employment
----------
Agreement shall continue in effect unchanged.
IN WITNESS WHEREOF, the Company and Executive have executed this
Amendment on and as of the date first set forth above.
THE COMPANY: EXECUTIVE
OCCUSYSTEMS, INC.
By: /s/ John K. Carlyle /s/ Richard A. Parr II
------------------------------ -------------------------------
John K. Carlyle Richard A. Parr II
President
4
<PAGE>
EXHIBIT 10.4
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
---------------------------------------
This Amendment No. 1 to Employment Agreement (the "Amendment") is made and
entered into this 26th day of December, 1996, by and between OccuSystems, Inc.,
a Delaware corporation (the "Company"), and James M. Greenwood ("Executive").
WITNESSETH:
WHEREAS, the Company and Executive have entered into a certain Employment
Agreement, dated as of May 15, 1995 (the "Employment Agreement"); and
WHEREAS, the Company and Executive now desire to enter into this Amendment
for the purpose of making certain amendments to the Employment Agreement deemed
necessary and desirable and in the best interests of the Company and Executive,
all as more fully described herein; and
WHEREAS, the members of the Option and Compensation Committee of the
Company's Board of Directors have heretofore approved the execution and delivery
of this Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Executive hereby agree as follows:
1. Compensation Upon Termination or Failure to Renew. Section 6 of the
-------------------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"6. Compensation Upon Termination or Failure to Renew. Executive
-------------------------------------------------
shall be entitled to the following compensation from the Company upon the
termination of his employment or upon the Company's delivery of notice
pursuant to Section 1 that the Term of this Agreement shall not following
any anniversary of the date hereof be automatically extended for an
additional year.
(a) Death. If Executive's employment shall be terminated by
-----
reason of his death, the Company shall pay to such person as shall have
been designated in a notice filed with the Company prior to Executive's
death, or, if no such person shall be designated, to his estate as a death
benefit, his Base Salary to the date of his death in addition to any
payments Executive's spouse, beneficiaries, or estate may be entitled to
receive pursuant to any pension or employee benefit plan or other
arrangement or life insurance policy maintained by the Company. In
addition, the Company shall make payments of premiums to continue the
medical and dental insurance coverage of Executive's spouse and children
1
<PAGE>
under age twenty-five (25) as in effect at and as of the date of
Executive's death (or to provide as similar coverage as possible for the
same premiums if the continuation of existing coverage is not permitted)
for one (1) year after the date of Executive's death, in each case to the
extent such coverage is available.
(b) Disability. During any period that Executive fails to
----------
perform his material managerial duties and responsibilities hereunder as a
result of incapacity due to physical or mental illness, Executive shall
continue to receive his Base Salary and any bonus payments until
Executive's employment is terminated pursuant to Section 5(b) hereof or
until Executive terminates his employment pursuant to Section 5(d)(2)
hereof, whichever first occurs. After such termination, the Company shall
pay to Executive, on or before the fifth day following the Date of
Termination (as hereinafter defined) his Base Salary to the Date of
Termination. In addition, the Company shall make payments of premiums as
necessary to cause Executive and Executive's spouse and children under age
twenty-five (25) to continue to be covered by the medical and dental
insurance as in effect at and as of the Date of Termination (or to provide
as similar coverage as possible for the same premiums if the continuation
of existing coverage is not permitted) for one (1) year after the Date of
Termination, in each case to the extent such coverage is available.
(c) Cause. If Executive's employment shall be terminated for
-----
Cause, the Company shall pay Executive his Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given. Such payments shall fully discharge the Company's obligations
hereunder.
(d) Breach by the Company, for Good Reason, or Upon Failure to
----------------------------------------------------------
Renew. If (1) in breach of this Agreement, the Company shall terminate
-----
Executive's employment (it being understood that a purported termination of
Executive's employment by the Company pursuant to any provision of this
Agreement that is disputed and finally determined not to have been proper
shall be a termination by the Company in breach of this Agreement), or (2)
Executive shall terminate his employment for Good Reason, or (3) the
Company shall give Executive notice pursuant to Section 1 prior to any
anniversary of the date hereof that the Term of this Agreement shall not be
automatically extended for an additional year on any such anniversary date,
then the Company shall pay Executive:
(A) his Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given;
2
<PAGE>
(B) in lieu of any further salary payments to Executive for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to Executive on or before the fifth day following the
Date of Termination, a lump sum in cash equal to Executive's full
annual Base Salary at the rate in effect at the time the Notice of
Termination is given; and
(C) all benefits payable under the terms of any employee benefit
plan or other arrangement as of the Date of Termination.
In addition, the Company shall make payments of premiums as
necessary to cause Executive and Executive's spouse and children under age
twenty-five (25) to continue to be covered by the medical and dental
insurance as in effect at and as of the Date of Termination (or to provide
as similar coverage as possible for the same premiums if the continuation
of existing coverage is not permitted) for one (1) year after the Date of
Termination, in each case to the extent such coverage is available.
(e) Mitigation. Executive shall not be required to mitigate the
----------
amount of any payment provided for in this Section 6 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Section 6 be reduced by any compensation earned by Executive as the
result of employment by another employer after the Date of Termination, or
otherwise."
2. Other Provisions Relating to Termination. Section 7(b) of the
----------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"(b) Date of Termination. For purposes of this Agreement, "Date of
-------------------
Termination" shall mean: (1) if Executive's employment is terminated by his
death, the date of his death; (2) if Executive's employment is terminated
because of a disability pursuant to Section 5(b), then thirty (30) days
after Notice of Termination is given (provided that Executive shall not
have returned to the performance of his duties on a full-time basis during
such thirty (30) day period); (3) if Executive's employment is terminated
by the Company for Cause or by Executive for Good Reason, then, subject to
Sections 7(c) and 7(d), the date specified in the Notice of Termination;
(4) if the Company gives Executive notice pursuant to Section 1 prior to
any anniversary of the date hereof that the Term of this Agreement shall
not be automatically extended for an additional year on any such
anniversary date, the date upon which the Term expires; and (5) if
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given."
3
<PAGE>
3. No Change. Except as expressly modified hereby, the Employment
----------
Agreement shall continue in effect unchanged.
IN WITNESS WHEREOF, the Company and Executive have executed this Amendment
on and as of the date first set forth above.
THE COMPANY: EXECUTIVE:
OCCUSYSTEMS, INC.
By: /s/ John K. Carlyle /s/ James M. Greenwood
---------------------- ------------------------
John K. Carlyle James M. Greenwood
President
4
<PAGE>
EXHIBIT 10.5
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
---------------------------------------
This Amendment No. 1 to Employment Agreement (the "Amendment") is made and
entered into this 26th day of December, 1996, by and between OccuSystems, Inc.,
a Delaware corporation (the "Company"), and W. Thomas Fogarty, M.D.
("Executive").
WITNESSETH:
WHEREAS, the Company and Executive have entered into a certain Employment
Agreement, dated as of May 15, 1995 (the "Employment Agreement"); and
WHEREAS, the Company and Executive now desire to enter into this Amendment
for the purpose of making certain amendments to the Employment Agreement deemed
necessary and desirable and in the best interests of the Company and Executive,
all as more fully described herein; and
WHEREAS, the members of the Option and Compensation Committee of the
Company's Board of Directors have heretofore approved the execution and delivery
of this Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Executive hereby agree as follows:
1. Compensation Upon Termination or Failure to Renew. Section 6 of the
-------------------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"6. Compensation Upon Termination or Failure to Renew. Executive
-------------------------------------------------
shall be entitled to the following compensation from the Company upon the
termination of his employment or upon the Company's delivery of notice
pursuant to Section 1 that the Term of this Agreement shall not following
any anniversary of the date hereof be automatically extended for an
additional year.
(a) Death. If Executive's employment shall be terminated by
-----
reason of his death, the Company shall pay to such person as shall have
been designated in a notice filed with the Company prior to Executive's
death, or, if no such person shall be designated, to his estate as a death
benefit, his Base Salary to the date of his death in addition to any
payments Executive's spouse, beneficiaries, or estate may be entitled to
receive pursuant to any pension or employee benefit plan or other
arrangement or life insurance policy maintained by the Company. In
addition, the Company shall make payments of premiums to continue the
medical and dental insurance coverage of Executive's spouse and children
1
<PAGE>
under age twenty-five (25) as in effect at and as of the date of
Executive's death (or to provide as similar coverage as possible for the
same premiums if the continuation of existing coverage is not permitted)
for one (1) year after the date of Executive's death, in each case to the
extent such coverage is available.
(b) Disability. During any period that Executive fails to
----------
perform his material managerial duties and responsibilities hereunder as a
result of incapacity due to physical or mental illness, Executive shall
continue to receive his Base Salary and any bonus payments until
Executive's employment is terminated pursuant to Section 5(b) hereof or
until Executive terminates his employment pursuant to Section 5(d)(2)
hereof, whichever first occurs. After such termination, the Company shall
pay to Executive, on or before the fifth day following the Date of
Termination (as hereinafter defined) his Base Salary to the Date of
Termination. In addition, the Company shall make payments of premiums as
necessary to cause Executive and Executive's spouse and children under age
twenty-five (25) to continue to be covered by the medical and dental
insurance as in effect at and as of the Date of Termination (or to provide
as similar coverage as possible for the same premiums if the continuation
of existing coverage is not permitted) for one (1) year after the Date of
Termination, in each case to the extent such coverage is available.
(c) Cause. If Executive's employment shall be terminated for
-----
Cause, the Company shall pay Executive his Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given. Such payments shall fully discharge the Company's obligations
hereunder.
(d) Breach by the Company, for Good Reason, or Upon Failure to
----------------------------------------------------------
Renew. If (1) in breach of this Agreement, the Company shall terminate
-----
Executive's employment (it being understood that a purported termination of
Executive's employment by the Company pursuant to any provision of this
Agreement that is disputed and finally determined not to have been proper
shall be a termination by the Company in breach of this Agreement), or (2)
Executive shall terminate his employment for Good Reason, or (3) the
Company shall give Executive notice pursuant to Section 1 prior to any
anniversary of the date hereof that the Term of this Agreement shall not be
automatically extended for an additional year on any such anniversary date,
then the Company shall pay Executive:
(A) his Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given;
2
<PAGE>
(B) in lieu of any further salary payments to Executive for
periods subsequent to the Date of Termination, the Company shall pay
as severance pay to Executive on or before the fifth day following the
Date of Termination, a lump sum in cash equal to Executive's full
annual Base Salary at the rate in effect at the time the Notice of
Termination is given; and
(C) all benefits payable under the terms of any employee benefit
plan or other arrangement as of the Date of Termination.
In addition, the Company shall make payments of premiums as necessary
to cause Executive and Executive's spouse and children under age twenty-
five (25) to continue to be covered by the medical and dental insurance as
in effect at and as of the Date of Termination (or to provide as similar
coverage as possible for the same premiums if the continuation of existing
coverage is not permitted) for one (1) year after the Date of Termination,
in each case to the extent such coverage is available.
(e) Mitigation. Executive shall not be required to mitigate
-----------
the amount of any payment provided for in this Section 6 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Section 6 be reduced by any compensation earned by Executive as the
result of employment by another employer after the Date of Termination, or
otherwise."
2. Other Provisions Relating to Termination. Section 7(b) of the
----------------------------------------
Employment Agreement is hereby amended to read in its entirety as follows:
"(b) Date of Termination. For purposes of this Agreement, "Date of
-------------------
Termination" shall mean: (1) if Executive's employment is terminated by his
death, the date of his death; (2) if Executive's employment is terminated
because of a disability pursuant to Section 5(b), then thirty (30) days
after Notice of Termination is given (provided that Executive shall not
have returned to the performance of his duties on a full-time basis during
such thirty (30) day period); (3) if Executive's employment is terminated
by the Company for Cause or by Executive for Good Reason, then, subject to
Sections 7(c) and 7(d), the date specified in the Notice of Termination;
(4) if the Company gives Executive notice pursuant to Section 1 prior to
any anniversary of the date hereof that the Term of this Agreement shall
not be automatically extended for an additional year on any such
anniversary date, the date upon which the Term expires; and (5) if
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given."
3
<PAGE>
3. No Change. Except as expressly modified hereby, the Employment
----------
Agreement shall continue in effect unchanged.
IN WITNESS WHEREOF, the Company and Executive have executed this Amendment
on and as of the date first set forth above.
THE COMPANY: EXECUTIVE:
OCCUSYSTEMS, INC.
By: /s/ John K. Carlyle /s/ W. Thomas Fogarty, M.D.
------------------------------- --------------------------------
John K.Carlyle W. Thomas Fogarty, M.D.
President
4
<PAGE>
EXHIBIT 12.1
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Pro Nine Months Ended Pro
Year Ended December 31, Forma September 30, Forma
1993 1994 1995 1995 1995 1996 1996
------------------------- ------ ----------------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental expense 2,816 4,072 5,951 7,845 4,307 6,004 6,312
Fixed charge factor 25% 25% 25% 25% 25% 25% 25%
------- ------ ------ ------ ------ ------ ------
704 1,018 1,488 1,961 1,077 1,501 1,578
Interest expense 1,710 1,869 3,015 5,710 2,587 1,552 4,282
------- ------ ------ ------ ------ ------ ------
Total fixed charges(A) 2,414 2,887 4,503 7,671 3,664 3,053 5,860
======= ====== ====== ====== ====== ====== ======
EBIT (19,425) 77 7,559 10,322 6,529 13,927 11,439
Fixed Charges 2,414 2,887 4,503 7,671 3,664 3,053 5,860
------- ------ ------ ------ ------ ------ ------
Total(B) (17,011) 2,964 12,062 17,993 10,193 16,980 17,299
======= ====== ====== ====== ====== ====== ======
(B)/(A) (7.0) 1.0 2.7 2.3 2.8 5.6 3.0
======= ====== ====== ====== ====== ====== ======
</TABLE>
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement, of our report dated February 9, 1996
incorporated by reference in OccuSystems, Inc.'s Form 10-K for the year ended
December 31, 1995, our report dated September 15, 1995 included in OccuSystems,
Inc.'s Form 8-K, dated January 2, 1996, and our report dated October 17, 1996
included in OccuSystems, Inc.'s Form 8-K/A, dated December 5, 1996, and to all
references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Dallas, Texas
January 31, 1997
