EXHIBIT 4.3
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
43/4% Convertible Subordinated Notes
due 2006
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INDENTURE
Dated as of November 26, 2001
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SUNTRUST BANK,
TRUSTEE
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CROSS REFERENCE TABLE*
TIA Section Indenture Section
310(a)(1)......................................... 7.09
(a)(2)............................................ 7.09
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(b)............................................... 7.08; 7.10
(c)............................................... N.A.
7.13
311(a)............................................ 7.13
(b)............................................... N.A
(c)............................................... 2.05
312(a)............................................ 12.03
(b)............................................... 12.03
(c)............................................... 7.14
313(a)............................................ N.A.
(b)(1)............................................ 7.14
(b)(2)............................................ 12.02
(c)............................................... 7.14
(d)............................................... 4.02; 4.03; 12.02
314(a)............................................ N.A.
(b)............................................... 12.04
(c)(1)............................................ 12.04
(c)(2)............................................ N.A.
(c)(3)............................................ N.A.
(d)............................................... 12.05
(e)............................................... N.A.
(f)............................................... 7.01
315(a)............................................ 7.15; 12.02
(b)............................................... 7.01
(c)............................................... 7.01
(d)............................................... 6.11
(e)............................................... 2.08
316(a) (last sentence)............................ 6.05
(a)(1)(A)......................................... 6.04
(a)(1)(B)......................................... N.A.
(a)(2)........................................... 6.07
(b)............................................... 6.08
317(a)(1)......................................... 6.09
(a)(2)............................................ 2.04
(b)............................................... 12.01
318(a)............................................
N. A. means Not Applicable
-------------------
* Note: This Cross Reference Table shall not, for any purpose be deemed to be
part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions..................................................................1
SECTION 1.02 Other Definitions...........................................................10
SECTION 1.03 Incorporation by Reference of Trust Indenture Act...........................11
SECTION 1.04 Rules of Construction.......................................................12
SECTION 1.05 Acts of Holders.............................................................12
ARTICLE 2
THE NOTES
SECTION 2.01 Form and Dating.............................................................13
SECTION 2.02 Execution and Authentication................................................15
SECTION 2.03 Registrar, Paying Agent and Conversion Agent................................15
SECTION 2.04 Paying Agent to Hold Money and Notes in Trust...............................16
SECTION 2.05 Noteholder Lists............................................................16
SECTION 2.06 Transfer and Exchange.......................................................16
SECTION 2.07 Replacement Notes...........................................................18
SECTION 2.08 Outstanding Notes; Determinations of Holders' Action........................19
SECTION 2.09 Temporary Notes.............................................................19
SECTION 2.10 Cancellation................................................................20
SECTION 2.11 Persons Deemed Owners.......................................................20
SECTION 2.12 Global Notes................................................................20
SECTION 2.13 CUSIP Numbers...............................................................25
SECTION 2.14 Defaulted Interest..........................................................25
SECTION 2.15 Registration Default........................................................25
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 [Reserved]..................................................................26
SECTION 3.02 Optional Redemption.........................................................26
SECTION 3.03 Notice of Trustee...........................................................26
SECTION 3.04 Selection of Notes to be Redeemed...........................................26
SECTION 3.05 Notice of Redemption........................................................27
SECTION 3.06 Effect of Notice of Redemption..............................................28
SECTION 3.07 Deposit of Redemption Price.................................................28
SECTION 3.08 Notes Redeemed in Part......................................................28
SECTION 3.09 Conversion Arrangement on Call for Redemption...............................28
SECTION 3.10 Repurchase of Notes at Option of the Holder upon Change in Control..........29
SECTION 3.11 Effect of Change in Control Repurchase Notice...............................33
SECTION 3.12 Deposit of Change in Control Repurchase Price...............................34
SECTION 3.13 Notes Purchased in Part.....................................................35
SECTION 3.14 Covenant to Comply with Securities Laws upon Purchase of Notes..............35
SECTION 3.15 Repayment to the Company....................................................35
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Principal, Premium, Interest on the Notes........................35
SECTION 4.02 SEC and Other Reports.......................................................36
SECTION 4.03 Compliance Certificate......................................................36
SECTION 4.04 Further Instruments and Acts................................................36
SECTION 4.05 Maintenance of Office or Agency.............................................36
SECTION 4.06 Delivery of Certain Information.............................................37
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets...................................37
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default...........................................................38
SECTION 6.02 Acceleration................................................................40
SECTION 6.03 Other Remedies..............................................................41
SECTION 6.04 Waiver of Past Defaults.....................................................41
SECTION 6.05 Control by Majority.........................................................41
SECTION 6.06 Limitation on Suits.........................................................41
SECTION 6.07 Rights of Holders to Receive Payment........................................42
SECTION 6.08 Collection Suit by Trustee..................................................42
SECTION 6.09 Trustee May File Proofs of Claim............................................42
SECTION 6.10 Priorities..................................................................43
SECTION 6.11 Undertaking for Costs.......................................................43
SECTION 6.12 Waiver of Stay, Extension or Usury Laws.....................................43
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ARTICLE 7
TRUSTEE
SECTION 7.01 Duties and Responsibilities of the Trustee; During Default; Prior to Default44
SECTION 7.02 Certain Rights of the Trustee...............................................45
SECTION 7.03 Trustee Not Responsible for Recitals, Disposition of Notes or Application
of Proceeds Thereof.........................................................46
SECTION 7.04 Trustee and Agents May Hold Notes; Collections, etc.........................46
SECTION 7.05 Moneys Held by Trustee......................................................47
SECTION 7.06 Compensation and Indemnification of Trustee and Its Prior Claim.............47
SECTION 7.07 Right of Trustee to Rely on Officers' Certificate, etc......................47
SECTION 7.08 Conflicting Interests.......................................................48
SECTION 7.09 Persons Eligible for Appointment as Trustee.................................48
SECTION 7.10 Resignation and Removal; Appointment of Successor Trustee...................48
SECTION 7.11 Acceptance of Appointment by Successor Trustee..............................49
SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business of Trustee......50
SECTION 7.13 Preferential Collection of Claims Against the Company.......................50
SECTION 7.14 Reports by the Trustee......................................................50
SECTION 7.15 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances50
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Notes.............................................51
SECTION 8.02 Repayment of the Company....................................................51
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders..................................................51
SECTION 9.02 With Consent of Holders.....................................................52
SECTION 9.03 Compliance with Trust Indenture Act.........................................53
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions......................53
SECTION 9.05 Notation on or Exchange of Notes............................................53
SECTION 9.06 Trustee to Sign Supplemental Indentures.....................................53
SECTION 9.07 Effect of Supplemental Indentures...........................................53
ARTICLE 10
CONVERSION
SECTION 10.01 Conversion Right and Conversion Price.......................................54
SECTION 10.02 Exercise of Conversion Right................................................54
SECTION 10.03 Fractions of Shares.........................................................55
SECTION 10.04 Adjustment of Conversion Price..............................................55
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SECTION 10.05 Notice of Adjustments of Conversion Price...................................65
SECTION 10.06 Notice Prior to Certain Actions.............................................65
SECTION 10.07 Company to Reserve Common Stock.............................................66
SECTION 10.08 Taxes on Conversions........................................................66
SECTION 10.09 Covenant as to Common Stock.................................................66
SECTION 10.10 Cancellation of Converted Notes.............................................66
SECTION 10.11 Effect of Reclassification, Consolidation, Merger or Sale...................66
SECTION 10.12 Adjustment for Other Distributions..........................................68
SECTION 10.13 Responsibility of Trustee for Conversion Provisions.........................69
ARTICLE 11
SUBORDINATION
SECTION 11.01 Agreement to Subordinate....................................................69
SECTION 11.02 Liquidation; Dissolution; Bankruptcy........................................69
SECTION 11.03 Default on Designated Senior Indebtedness...................................70
SECTION 11.04 Acceleration of Notes.......................................................71
SECTION 11.05 When Distribution Must Be Paid Over.........................................71
SECTION 11.06 Notice by the Company.......................................................72
SECTION 11.07 Subrogation.................................................................72
SECTION 11.08 Relative Rights.............................................................72
SECTION 11.09 Subordination May Not Be Impaired by the Company............................72
SECTION 11.10 Distribution or Notice to Representative....................................73
SECTION 11.11 Rights of Trustee and Paying Agent..........................................73
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act Controls................................................73
SECTION 12.02 Notices.....................................................................73
SECTION 12.03 Communication by Holders with Other Holders.................................74
SECTION 12.04 Certificate and Opinion as to Conditions Precedent..........................74
SECTION 12.05 Statements Required in Certificate or Opinion...............................75
SECTION 12.06 Separability Clause.........................................................75
SECTION 12.07 Rules by Trustee, Paying Agent, Conversion Agent and Registrar..............75
SECTION 12.08 Legal Holidays..............................................................75
SECTION 12.09 GOVERNING LAW...............................................................75
SECTION 12.10 No Recourse Against Others..................................................75
SECTION 12.11 Successors..................................................................76
SECTION 12.12 Multiple Originals..........................................................76
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EXHIBITS
Exhibit A-1 Form of Face of Global Note
Exhibit A-2 Form of Certificated Note
Exhibit B-1 Transfer Certificate
Exhibit C-1 Form of Accredited Investor Representation Letter
v
INDENTURE dated as of November 26, 2001 between THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia corporation (the "Company") and SUNTRUST BANK, a
Georgia banking corporation with trust powers, as trustee hereunder (the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 43/4%
Convertible Subordinated Notes due 2006 (herein called the "Notes") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Notes, when the Notes are executed by the
Company and authenticated and delivered hereunder, the valid obligations of the
Company, and to make this Indenture a valid agreement of the Company, in
accordance with their and its terms, have been done. Further, all things
necessary to duly authorize the issuance of the Common Stock of the Company
issuable upon the conversion of the Notes, and to duly reserve for issuance the
number of shares of Common Stock issuable upon such conversion, have been done.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act of 1939, as amended, that are required to be a part of
and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
when used with respect to any specified person means the power to direct or
cause the direction of the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. In connection with Section 6.01(7) only, the term
Affiliate shall not include any officers or directors or any controlling
shareholders of the Company.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Note or any beneficial interest therein, the rules and
procedures of the Depositary for such Note, in each case to the extent
applicable to such transaction and as in effect from time to time.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of such board.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to be in full force and effect on the date of such certification,
shall have been delivered to the Trustee.
"Business Day" means each day of the year other than a Saturday or a Sunday
on which banking institutions are not required or authorized to close in the
City of New York or the city in which the Corporate Trust Office is located.
"Capital Stock" of any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"Certificated Notes" means Notes that are in the form of the Notes attached
hereto as Exhibit A-2.
"Closing Price" of any security on any date of determination means:
(1) the closing sale price (or, if no closing sale price is reported,
the last reported sale price) of such security on the New York Stock
Exchange on such date;
(2) if such security is not listed for trading on the New York Stock
Exchange on any such date, the closing sale price as reported in the
composite transactions for the principal U.S. securities exchange on which
such security is so listed;
(3) if such security is not so listed on a U.S. national or regional
securities exchange, the closing sale price as reported by the NASDAQ
National Market;
(4) if such security is not so reported, the last quoted bid price for
such security in the over-the-counter market as reported by the National
Quotation Bureau or similar organization; or
2
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of such security on such date from at least
three nationally recognized independent investment banking firms retained
for this purpose by the Company.
"Common Stock" means the Common Stock, without par value, of the Company
authorized at the date of this instrument as originally executed or, if
applicable in the case of any redemption pursuant to Section 3.10 hereof upon
the occurrence of a Change in Control, any stock of any class of capital stock
of a successor to the Company which has no preference in respect of dividends or
of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of such successor to the Company. Subject to the
provisions of Section 10.11, shares issuable on conversion or repurchase of
Notes shall include only shares of Common Stock or shares of any class or
classes of common stock resulting from any reclassification or reclassifications
thereof; provided, however, that if at any time there shall be more than one
such resulting class, the shares so issuable on conversion of Notes shall
include shares of all such classes, and the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture, and, thereafter, "Company" shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any two Officers.
"Conversion Agent" means any person authorized by the Company to convert
Notes in accordance with Article 10 hereof.
"Corporate Trust Office" means the principal office of the Trustee at which
at any time its corporate trust business shall be administered, which office at
the date hereof is located at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Division, or such other address as the Trustee may
designate from time to time by notice to the Holders and the Company, or the
principal corporate trust office of any successor Trustee (or such other address
as a successor Trustee may designate from time to time by notice to the Holders
and the Company).
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Designated Senior Indebtedness" means all Senior Indebtedness under the
Senior Credit Facility.
3
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Global Notes" means Notes that are in the form of the Notes attached
hereto as Exhibit A-1, and to the extent that such Notes are required to bear
the Legend required by Section 2.06(f) such Notes with such Legend.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, contingent or otherwise, in any manner (including, without limitation,
letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness.
"Holder" or "Noteholder" means a person in whose name a Note is registered
on the Registrar's books.
"Indebtedness" means, with respect to any person, without duplication:
(1) all indebtedness, obligations and other liabilities, contingent or
otherwise, of such person for borrowed money (including overdrafts) or for
the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities incurred in the ordinary
course of business, but including, without limitation, all obligations,
contingent or otherwise, of such person in connection with any letters of
credit and acceptances issued under letter of credit facilities, acceptance
facilities or other similar facilities;
(2) all obligations of such person evidenced by bonds, credit or loan
agreements, notes, debentures or other similar instruments;
(3) indebtedness of such person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such person (even if the rights and remedies of the
seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), but excluding trade payables
arising in the ordinary course of business;
(4) all obligations and liabilities, contingent or otherwise, in
respect of leases of the person required, in conformity with GAAP, to be
accounted for as capitalized lease obligations on the balance sheet of the
person and all obligations and other liabilities, contingent or otherwise,
under any lease or related document, including a purchase agreement, in
connection with the lease of real property or improvements thereon which
provides that the person is contractually obligated to purchase or cause a
third party to purchase the leased property or pay an agreed upon residual
value of the leased property to the lessor and the obligations of the
person under the lease or related document to purchase or to cause a third
party to purchase the leased property whether or not such lease transaction
is characterized as an operating lease or a capitalized lease in accordance
with GAAP, including, without limitations, synthetic lease obligations;
4
(5) all obligations of such person under or in respect of interest
rate agreements, currency agreements or other swap, cap floor or collar
agreement, hedge agreement, forward contract or similar instrument or
agreement or foreign currency, hedge, exchange or purchase or similar
instrument or agreement;
(6) all indebtedness referred to in (but not excluded from) the
preceding clauses (1) through (5) of other persons and all dividends of
other persons, the payment of which is secured by (or for which the holder
of such indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien or with respect to property (including, without
limitation, accounts and contract rights) owned by such person, even though
such person has not assumed or become liable for the payment of such
indebtedness (the amount of such obligation being deemed to be the lesser
of the value of such property or asset or the amount of the obligation so
secured);
(7) all guarantees by such person of indebtedness referred to in this
definition or of any other person;
(8) all Redeemable Capital Stock of such person valued at the greater
of its voluntary or involuntary maximum fixed repurchase price plus accrued
and unpaid dividends;
(9) the present value of the obligation of such person as lessee for
net rental payments (excluding all amounts required to be paid on account
of maintenance and repairs, insurance, taxes, assessments, water, utilities
and similar charges to the extent included in such rental payments) during
the remaining term of the lease included in any such sale and leaseback
transaction including any period for which such lease has been extended or
may, at the option of the lessor, be extended. Such present value shall be
calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP; and
(10) any and all refinancings, replacements, deferrals, renewals,
extensions and refundings of or amendments, modifications or supplements
to, any indebtedness, obligation or liability of the kind described in
clauses (1) through (9) above.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Institutional Accredited Investor" shall mean an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
5
"Interest Rate" means 43/4% per annum.
"Issue Date" of any Note means the date on which the Note was originally
issued or deemed issued as set forth on the face of the Note.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or
security interest).
"Notes" has the meaning ascribed to it in the first paragraph under the
caption "Recitals of the Company".
"Officer" means the Chairman of the Board, the Vice Chairman, the Chief
Executive Officer, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the Treasurer or the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 12.04 and 12.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by the principal
executive Officer, the principal financial Officer or the principal accounting
Officer of the Company but need not contain the information specified in
Sections 12.04 and 12.05.
"144A Global Note" means a permanent Global Note in the form of the Note
attached hereto as Exhibit A-1, and that is deposited with and registered in the
name of the Depositary, representing Notes sold in reliance on Rule 144A under
the Securities Act.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 12.04 and 12.05, from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"person" or "Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof, including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity, subdivision or
business.
"principal" of a Note means the principal amount due on the Stated Maturity
of the principal payment of such Note as set forth on the face of the Note.
"Redeemable Capital Stock" means any class of the Company's Capital Stock
that, either by its terms, by the terms of any securities into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the
6
happening of an event or passage of time would be, required to be redeemed
(whether by sinking fund or otherwise) prior to the date that is 91 days after
the Stated Maturity of the Notes or is redeemable at the option of the Holder
thereof at any time prior to such date, or is convertible into or exchangeable
for debt securities at any time prior to such date (unless it is convertible or
exchangeable solely at the Company's option).
"Redemption Date" or "redemption date" means the date specified for
redemption of the Notes in accordance with the terms of the Notes and this
Indenture.
"Redemption Price" or "redemption price" shall have the meaning set forth
in paragraph 5 on the reverse side of the Notes.
"Registration Rights Agreement" means the Registration Rights Agreement of
even date herewith entered into by the Company, ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇
and ▇▇▇▇▇ and the other initial purchasers named therein.
"Regular Record Date" means, with respect to the interest payable on any
Interest Payment Date, the close of business on May 11 or November 11 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date.
"Responsible Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject.
"Restricted Note" means a Note required to bear the restrictive legend set
forth in the form of Note set forth in Exhibits A-1 and A-2 of this Indenture.
"Restriction Termination Date" means, with respect to any Note or Common
Stock, as the case may be, the date that is two years after the later of:
(1) the Issue Date of the Note, or, in the case of Common Stock, the
Issue Date of the Note upon the conversion of which such Common Stock was
issued; and
(2) the last date on which any "affiliate," as defined in Rule 144 (or
successor provision) under the Securities Act, of the Company was the owner
of such Note or Common Stock.
"Rights Plan" means the Shareholder Protection Rights Agreement between the
Company and First Union National Bank, as rights agent , dated as of August 9,
2000, as the same may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
7
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the United States Securities Act of 1933 (or any
successor statute), as amended from time to time.
"Senior Credit Facility" means the credit agreement dated as of July 29,
1998 among the Company, as the borrower, the Company's domestic subsidiaries, as
guarantors, the various financial institutions from time to time that are
parties thereto, as lenders, and Bank of America, N.A., as agent for the
lenders, including amendments, renewals, extensions, substitutions,
refinancings, restructurings and supplements thereto.
"Senior Indebtedness" means:
(1) all obligations of the Company, now or hereafter existing, under
or in respect of the Senior Credit Facility and the documents and
instruments executed in connection therewith, whether for principal,
premium, if any, interest, (including interest accruing after the filing
of, or which would have accrued but for the filing of, a petition by or
against the Company under the Bankruptcy Law, whether or not such interest
is allowed as a claim after such filing in any proceeding under such law),
and other amounts due in connection therewith, including, without
limitation, any fees, premiums, expenses, reimbursement obligations with
respect to indemnities, whether outstanding on the date of this Indenture
or thereafter created, incurred or assumed and any hedging obligations with
respect thereto; and
(2) the principal of and premium, if any, and interest on, and fees,
costs, enforcement expenses, collateral protection expenses and other
reimbursement or indemnity obligations in respect of all of the
Indebtedness of the Company or obligations to any person for money borrowed
that is evidenced by a note, bond, debenture, loan agreement, or similar
instrument or agreement including default interest and interest accruing
after a bankruptcy, unless, in the case of any particular Indebtedness or
obligation, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness or
obligation shall not be senior in right of payment to the Notes.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include:
(a) Indebtedness of the Company that is expressly subordinate in right
of payment to any other Indebtedness of the Company;
(b) Indebtedness evidenced by the Notes;
(c) Indebtedness of the Company that by operation of law is
subordinate to any general unsecured obligations of the Company;
(d) any liability for federal, state or local taxes or other taxes
owed or owing by the Company;
8
(e) accounts payable or other liabilities owed or owing by the Company
to trade creditors including guarantees thereof or instruments evidencing
such liabilities;
(f) amounts owed by the Company for compensation to employees or for
services rendered to the Company;
(g) Indebtedness of the Company to any Subsidiary or any other
Affiliate of the Company or any of such Affiliate's Subsidiaries;
(h) Capital Stock of the Company;
(i) Indebtedness of the Company evidenced by any Guarantee of any
Indebtedness ranking equal or junior in right of payment to the Notes; and
(j) Indebtedness of the Company which, when incurred and without
respect to any election under Section 1111(b) of Title 11 of the United
States Code, is without recourse to the Company.
"Significant Subsidiary" means a Subsidiary of the Company, including its
Subsidiaries, which meets any of the following conditions:
(1) the Company's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 10 percent of the total assets of the
Company and its Subsidiaries consolidated as of the end of any two of the
three most recently completed fiscal years; or
(2) the Company's and its other Subsidiaries' proportionate share of
the total assets of the Subsidiary exceeds 10 percent of the total assets
of the Company and its Subsidiaries consolidated as of the end of any two
of the three most recently completed fiscal years; or
(3) the Company's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 10 percent of such income of the Company and its Subsidiaries
consolidated as of the end of any two of the three most recently completed
fiscal years.
"Stated Maturity", when used with respect to any Note or any installment of
interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subsidiary" means (i) a corporation, a majority of whose Capital Stock
with voting power, under ordinary circumstances, to elect directors is, at the
date of determination, directly or indirectly owned by the Company, by one or
more Subsidiaries of the Company or by the Company and one or more Subsidiaries
of the Company, (ii) a partnership in which the Company or a Subsidiary of the
Company holds a majority interest in the equity capital or profits of such
partnership, or (iii) any other person (other than a corporation) in which the
9
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"Trading Day" means a day during which trading in the Common Stock
generally occurs on the New York Stock Exchange or, if the Common Stock is not
listed on the New York Stock Exchange, on the principal other national or
regional securities exchange on which the Common Stock is then listed or, if the
Common Stock is not listed on a national or regional securities exchange, on the
National Association of Notes Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (its "possessions" including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
SECTION 1.02 Other Definitions.
Defined in
Term Section
---- ------------
"Act".................................................... 1.05(a)
"Agent Members".......................................... 2.12(f)
"Bankruptcy Law"......................................... .01
"Change in Control"...................................... 3.10(a)
"Change in Control Repurchase Date"...................... 3.10(a)
"Change in Control Repurchase Notice".................... 3.10(d)
"Change in Control Repurchase Price"..................... 3.10(a)
"Conversion Price"....................................... 10.01
"Current Market Price"................................... 10.04(g)
"Custodian".............................................. 6.01
"Depositary"............................................. 2.01(a)
"DTC".................................................... .01(a)
"Event of Default"....................................... 6.01
10
Defined in
Term Section
---- ------------
"Exchange Act"........................................... 3.10(a)
"excluded securities".................................... 10.04(d)
"Expiration Time"........................................ 10.04(f)
"fair market value"...................................... 10.04(g)
"Legal Holiday".......................................... 12.08
"Legend"................................................. 2.06(f)
"Non-Electing Share"..................................... 10.11
"Non-Payment Default".................................... 11.03(b)
"Notice of Default"...................................... 6.01
"Paying Agent"........................................... 2.03
"Payment Blockage Period"................................ 11.03(b)
"Payment Default"........................................ 11.03(a)
"Purchased Shares"....................................... 10.04(f)
"Permitted Junior Securities" 11.02
"QIB".................................................... 2.01(a)
"Record Date"............................................ 10.04(g)
"Reference Period"....................................... 10.04(d)
"Registrar".............................................. 2.03
"Rule 144A Information".................................. 4.06
"Trigger Event".......................................... 10.04(d)
SECTION 1.03 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the 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 Notes" means the Notes.
"indenture Note holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture Notes means the Company.
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 have the
meanings assigned to them by such definitions.
11
SECTION 1.04 Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect from time to time;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the plural
include the singular.
SECTION 1.05 Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by their agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to such officer the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
The ownership of Notes shall be proved by the register for the Notes or by
a certificate of the Registrar.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Note shall bind every future Holder of the same
Note and the holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
12
If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a resolution of the Board of Directors, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for purposes of determining whether Holders of the requisite proportion
of outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Notes shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
ARTICLE 2
THE NOTES
SECTION 2.01 Form and Dating. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form
annexed hereto as Exhibits A-1 and A-2, which are incorporated in and made a
part of this Indenture. The terms and provisions contained in the form of Note
shall constitute, and are hereby expressly made, a part of this Indenture and to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed or designated for issuance, or to conform to usage.
(a) Global Notes and Certificated Notes. Notes offered and sold within the
United States to qualified institutional buyers as defined in Rule 144A ("QIBs")
in reliance on Rule 144A shall be issued, initially in the form of a 144A Global
Note in registered form, which shall be deposited with the Trustee at its
Corporate Trust Office, as custodian for, and registered in the name of, The
Depository Trust Company ("DTC") or the nominee thereof (such depositary, or any
successor thereto, and any such nominee being hereinafter referred to as the
"Depositary"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Interests in 144A Global Notes will be available for
purchase only by QIBs. The aggregate principal amount of the 144A Global Note
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary as hereinafter provided.
13
Notes (i) offered and sold to Institutional Accredited Investors who are
not QIBs or (ii) issued pursuant to Section 2.12 hereof in exchange for
interests in Global Notes shall be issued in the form of Certificated Notes in
registered form, substantially in the form of Exhibit A-2 attached hereto.
(b) Global Notes in General. Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, redemptions and conversions.
Any adjustment of the aggregate principal amount of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
(c) Book-Entry Provisions. This Section 2.01(c) shall apply only to Global
Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(c), authenticate and deliver initially one or more Global Notes
that (a) shall be registered in the name of the Depositary, (b) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF."
14
(d) Restrictive Legends. Until the Restriction Termination Date, all Global
Notes and all Certificated Notes shall bear the Legend, unless such Notes have
been transferred pursuant to a registration statement that has been declared
effective under the Securities Act. Until the Restriction Termination Date, the
Company covenants that any stock certificate representing shares of Common Stock
delivered by the Company upon conversion of any Notes will bear the Legend,
unless such shares have been sold pursuant to a registration statement that has
been declared effective under the Securities Act.
SECTION 2.02 Execution and Authentication. The Notes shall be executed on
behalf of the Company by any Officer, under its corporate seal impressed or
reproduced thereon. The signature of the Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signatures of individuals who were at
the time of the execution of the Notes the proper Officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of authentication of such Notes.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized officer or other
representative, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Notes for original issue in an
aggregate initial principal amount of up to $110,000,000 upon its receipt of one
or more Company Orders without any further action by the Company; provided,
however, that the Company may, without the consent of the Holders, "reopen" the
series of Notes established hereunder and issue additional Notes from time to
time in the future. Any Notes issued in connection with such a reopening shall
have the same terms as the Notes other than the date of original issuance and
the date on which interest shall begin to accrue. The Notes and any additional
Notes issued by the Company in connection with any such reopening shall
constitute a single series of Notes for purposes of this Indenture. Subject to
the Company's right to reopen the series of Notes, the aggregate principal
amount of Notes outstanding at any time may not exceed $110,000,000, except as
provided in Section 2.07.
The Notes shall be issued only in registered form without coupons and only
in denominations of $1,000 in principal amount and any integral multiple
thereof.
SECTION 2.03 Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Notes may be presented for registration
of transfer or for exchange ("Registrar"), an office or agency where Notes may
be presented for purchase or payment ("Paying Agent") and an office or agency
where Notes may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may have one or more co-registrars, one or more additional paying agents
and one or more additional conversion agents. The term Paying Agent includes any
15
additional paying agent, including any named pursuant to Section 4.05. The term
Conversion Agent includes any additional conversion agent, including any named
pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (other than the
Trustee). The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.06. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion Agent
and Paying Agent in connection with the Notes.
SECTION 2.04 Paying Agent to Hold Money and Notes in Trust. Except as
otherwise provided herein, on or prior to each due date of payments in respect
of any Note, the Company shall deposit with the Paying Agent a sum of money (in
immediately available funds if deposited on the due date) or, in the event the
Company shall elect to pay any Change in Control Repurchase Price in Common
Stock pursuant to Section 3.10 hereof, Common Stock sufficient to make such
payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Noteholders or the Trustee all money and Common Stock
held by the Paying Agent for the making of payments in respect of the Notes and
shall notify the Trustee of any default by the Company in making any such
payment. At any time during the continuance of any such default, the Paying
Agent shall, upon the written request of the Trustee, forthwith pay to the
Trustee all money and Common Stock so held in trust. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money and Common Stock held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money and Common Stock held by it to the Trustee and to account for any
funds and Common Stock disbursed by it. Upon doing so, the Paying Agent shall
have no further liability for the money or Common Stock.
SECTION 2.05 Noteholder 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 Noteholders. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semi-annually, on
January 1 and July 1, a listing of Noteholders dated within 13 days of the date
on which the list is furnished 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 may
reasonably require of the names and addresses of Noteholders.
SECTION 2.06 Transfer and Exchange. (a) Subject to Section 2.12 hereof,
upon surrender for registration of transfer of any Note, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Noteholder or such Noteholder's attorney duly authorized in writing, at the
16
office or agency of the Company designated as Registrar or co-registrar pursuant
to Section 2.03, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Notes of any authorized denomination or denominations, of a like
aggregate principal amount. The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the transfer or exchange of the Notes
from the Noteholder requesting such transfer or exchange.
At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination or denominations, of a like aggregate principal amount,
upon surrender of the Notes to be exchanged, together with a written instrument
of transfer satisfactory to the Registrar duly executed by the Noteholder or
such Noteholder's attorney duly authorized in writing, at such office or agency.
Whenever any Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes which the Holder
making the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Notes selected for redemption (except, in
the case of Notes to be redeemed in part, the portion thereof not to be
redeemed) or any Notes in respect of which a Change in Control Repurchase Notice
(as defined in Section 3.10(d)) has been given and not withdrawn by the Holder
thereof in accordance with the terms of this Indenture (except, in the case of
Notes to be purchased in part, the portion thereof not to be purchased) or any
Notes for a period of 15 days before the mailing of a notice of redemption of
Notes to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Note remains outstanding and is held by or on behalf of the Depositary,
transfers of a Global Note, in whole or in part, shall be made only in
accordance with Section 2.12 and this Section 2.06(b). Transfers of a Global
Note shall be limited to transfers of such Global Note in whole, or in part, to
nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.
(c) Successive registrations and registrations of transfers and exchanges
as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Notes.
(d) Any Registrar appointed pursuant to Section 2.03 hereof shall provide
to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Notes upon transfer or
exchange of Notes.
(e) No Registrar shall be required to make registrations of transfer or
exchange of Notes during any periods designated in the text of the Notes or in
this Indenture as periods during which such registration of transfers and
exchanges need not be made.
(f) If Notes are issued upon the transfer, exchange or replacement of Notes
subject to restrictions on transfer and bearing the legends set forth on the
form of Note attached hereto as Exhibits A-1 and A-2 setting forth such
17
restrictions (collectively, the "Legend"), or if a request is made to remove the
Legend on a Note, the Notes so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company and
the Registrar such satisfactory evidence, which shall include an Opinion of
Counsel, as may be reasonably required by the Company and the Registrar, that
neither the Legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of Rule
144A or Rule 144 under the Securities Act or that such Notes are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon (i)
provision of such satisfactory evidence, or (ii) notification by the Company to
the Trustee and Registrar of the sale of such Note pursuant to a registration
statement that is effective at the time of such sale, the Trustee, at the
written direction of the Company, shall authenticate and deliver a Note that
does not bear the Legend. If the Legend is removed from the face of a Note and
the Note is subsequently held by an Affiliate of the Company, the Company shall
cause such Affiliate to notify the Trustee in writing and request a replacement
Note bearing the Legend.
SECTION 2.07 Replacement Notes. If (a) any mutilated Note is surrendered to
the Trustee, or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Note, and there is
delivered to the Company and the Trustee such Note or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or any Responsible Officer of the Trustee that such Note has been
acquired by a bona fide purchaser, the Company shall execute and upon receipt of
a Company Request the Trustee shall authenticate and deliver, in exchange for
any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a
new Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, or is about to be purchased or redeemed by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Note, pay or purchase such Note, as the case may be.
Upon the issuance of any new Notes under this Section 2.07, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Notes duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
18
SECTION 2.08 Outstanding Notes; Determinations of Holders' Action. Notes
outstanding at any time are all the Notes authenticated by the Trustee except
for those cancelled by it or delivered to it for cancellation, those paid
pursuant to Section 2.07 and those described in this Section 2.08 as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate thereof holds the Note; provided, however, that in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given or concurred in any request, demand, authorization, direction, notice,
consent or waiver hereunder, Notes owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Subject to the foregoing, only Notes outstanding at the time of such
determination shall be considered in any such determination (including, without
limitation, determinations pursuant to Articles 6 and 9).
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following the Change in Control
Repurchase Date, or on Stated Maturity, money or securities, if permitted
hereunder, sufficient to pay Notes payable on that date, then immediately after
such Redemption Date, Change in Control Repurchase Date or Stated Maturity, as
the case may be, such Notes shall cease to be outstanding and interest on such
Notes shall cease to accrue; provided that, if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor reasonably satisfactory to the Trustee has been made.
If a Note is converted in accordance with Article 10, then from and after
the time of conversion on the conversion date, such Note shall cease to be
outstanding and interest shall cease to accrue on such Note.
SECTION 2.09 Temporary Notes. Pending the preparation of definitive Notes,
the Company may execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as conclusively
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes to
be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 2.03, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes the
Company shall execute and the Trustee shall authenticate and deliver in exchange
19
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.10 Cancellation. All Notes surrendered for payment, purchase by
the Company pursuant to Article 3, conversion, redemption or registration of
transfer or exchange shall, if surrendered to any person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Trustee. The Company may not issue new Notes to replace Notes it has paid or
delivered to the Trustee for cancellation or that any Holder has converted
pursuant to Article 10. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
shall be destroyed by the Trustee and the Trustee shall, upon request, deliver a
certificate of destruction to the Company.
SECTION 2.11 Persons Deemed Owners. Prior to due presentment of a Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Note is registered as the
owner of such Note for the purpose of receiving payment of principal of the Note
or the payment of any Redemption Price or Change in Control Repurchase Price in
respect thereof, and interest thereon, for the purpose of conversion and for all
other purposes whatsoever, whether or not such Note be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 2.12 Global Notes. (a) Notwithstanding any other provisions of this
Indenture or the Notes, (A) transfers of a Global Note, in whole or in part,
shall be made only in accordance with Section 2.06 and Section 2.12(a)(i), (B)
transfer of a beneficial interest in a Global Note for a Certificated Note shall
comply with Section 2.06 and Section 2.12(a)(ii), and (C) transfers of a
Certificated Note shall comply with Section 2.06 and Sections 2.12(a)(iii) and
(iv).
(i) Transfer of Global Note. A Global Note may not be transferred, in
whole or in part, to any Person other than the Depositary or a nominee or
any successor thereof, and no such transfer to any such other Person may be
registered; provided that this clause shall not prohibit any transfer of a
Note that is issued in exchange for a Global Note but is not itself a
Global Note. No transfer of a Note to any Person shall be effective under
this Indenture or the Notes unless and until such Note has been registered
in the name of such Person. Nothing in this Section 2.12(a)(i) shall
prohibit or render ineffective any transfer of a beneficial interest in a
Global Note effected in accordance with the other provisions of this
Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
Note for a Certificated Note. A beneficial interest in a Global Note may
not be exchanged for a Certificated Note except upon satisfaction of the
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requirements set forth below. Upon receipt by the Trustee of a transfer of
a beneficial interest in a Global Note (which transfer, if made to an
Institutional Accredited Investor, shall be made to a Holder that is
acquiring a minimum of $100,000 aggregate principal amount of Notes) in
accordance with Applicable Procedures for a Certificated Note in the form
satisfactory to the Trustee, together with:
(a) so long as the Notes are Restricted Notes, certification, in
the form set forth in Exhibit B-1 hereto and, in the case of a
transfer to an Institutional Accredited Investor that is not a QIB, a
representation letter in the form set forth in Exhibit C-1 hereto;
(b) written instructions to the Trustee to make, or direct the
Registrar to make, an adjustment on its books and records with respect
to such Global Note to reflect a decrease in the aggregate principal
amount of the Notes represented by the Global Note, such instructions
to contain information regarding the Depositary account to be credited
with such decrease; and
(c) if the Company or Registrar so requests, an opinion of
counsel or other evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the Legend,
then the Trustee shall cause, or direct the Registrar to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Registrar, the aggregate principal amount of Notes represented by the
Global Note to be decreased by the aggregate principal amount of the
Certificated Note to be issued, shall issue such Certificated Note and shall
debit or cause to be debited to the account of the Person specified in such
instructions a beneficial interest in the Global Note equal to the principal
amount of the Certificated Note so issued.
(iii) Transfer and Exchange of Certificated Notes. When Certificated
Notes are presented to the Registrar with a request:
(x) to register the transfer of such Certificated Notes; or
(y) to exchange such Certificated Notes for an equal principal
amount of Certificated Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Notes surrendered for transfer or exchange:
(a) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(b) so long as such Notes are Restricted Notes, such Notes are being
transferred or exchanged pursuant to an effective registration statement
under the Securities Act or pursuant to clause (A), (B) or (C) below, and
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are accompanied by the following additional information and documents, as
applicable:
(A) if such Certificated Notes are 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; or
(B) if such Certificated Notes are being transferred to the
Company, a certification to that effect; or
(C) if such Certificated Notes are being transferred pursuant to
an exemption from registration (including any transfer to an
Institutional Accredited Investor), (i) a certification to that effect
(in the form set forth in Exhibits B-1, if applicable) and (ii) if the
Company or Registrar so requests, an opinion of counsel or other
evidence reasonably satisfactory to them as to the compliance with the
restrictions set forth in the Legend.
(iv) Restrictions on Transfer of a Certificated Note for a Beneficial
Interest in a Global Note. A Certificated Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below in connection with certain transfers of such
Notes, including any transfer from an Institutional Accredited Investor
that is not a QIB to a QIB.
Upon receipt by the Trustee of a Certificated Note, duly endorsed or accompanied
by appropriate instruments of transfer, in form reasonably satisfactory to the
Trustee, together with:
(x) so long as the Notes are Restricted Notes, certification, in the
form set forth in Exhibit B-1, that such Certificated Note is being
transferred to a QIB in accordance with Rule 144A; and
(y) written instructions directing the Trustee to make, or to direct
the Registrar to make, an adjustment on its books and records with respect
to such Global Note to reflect an increase in the aggregate principal
amount of the Notes represented by the Global Note, such instructions to
contain information regarding the Depositary account to be credited with
such increase, then the Trustee shall cancel such Certificated Note and
cause, or direct the Registrar to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Registrar, the aggregate principal amount of Notes represented by the
Global Note to be increased by the aggregate principal amount of the
Certificated Note to be exchanged, and shall credit or cause to be credited
to the account of the Person specified in such instructions a beneficial
interest in the Global Note equal to the principal amount of the
Certificated Note so cancelled. If no Global Notes are then outstanding,
the Company shall issue and the Trustee shall authenticate, upon written
order of the Company in the form of an Officers' Certificate, a new Global
Note in the appropriate principal amount.
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(b) Subject to the succeeding paragraph, every Note shall be subject to the
restrictions on transfer provided in the Legend including the delivery of an
opinion of counsel, if so provided. Whenever any Restricted Note is presented or
surrendered for registration of transfer or for exchange for a Note registered
in a name other than that of the Holder, such Note must be accompanied by a
certificate in substantially the form set forth in Exhibit B-1, dated the date
of such surrender and signed by the Holder of such Note, as to compliance with
such restrictions on transfer. The Registrar shall not be required to accept for
such registration of transfer or exchange any Note not so accompanied by a
properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability of any
Note shall cease and terminate when such Note has been sold pursuant to an
effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Note as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Note for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Note has been
made in compliance with Rule 144 or such successor provision), be exchanged for
a new Note, of like tenor and aggregate principal amount, which shall not bear
the restrictive Legend. The Company shall inform the Trustee of the effective
date of any registration statement registering the Notes under the Securities
Act. The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among DTC participants, members
or beneficial owners in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms of this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof. The Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance with the
aforementioned opinion of counsel or registration statement.
(d) In the event that Rule 144(k) as promulgated under the Securities Act
is amended to shorten the two-year restriction period, then restrictions on
transfer on the Notes and the Common Stock will be deemed to refer to the
shortened restriction period. The Company undertakes to inform the Trustee if
such change to Rule 144(k) occurs and the effect (if any) to the restrictions on
transfer applicable to the Notes and Common Stock and shall provide additional
information (including an Opinion of Counsel and/or an Officers' Certificate) if
so requested by the Trustee.
(e) As used in the preceding two paragraphs of this Section 2.12, the term
"transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Note.
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(f) The provisions of clauses (1), (2), (3) and (4) below shall apply only
to Global Notes:
(1) Notwithstanding any other provisions of this Indenture or the
Notes, except as provided in Section 2.12(a)(i), a Global Note shall not be
exchanged in whole or in part for a Note registered in the name of any
Person other than the Depositary or one or more nominees thereof, provided
that a Global Note may be exchanged for Notes registered in the names of
any person designated by the Depositary in the event that (i) the
Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Note or such Depositary is no longer
eligible or in good standing under the Exchange Act or any other applicable
Statute or regulation to continue as Depository for the Global Notes, and a
successor Depositary is not appointed by the Company within 90 days after
the Company receives notice of becomes aware of their ineligibility or (ii)
if the Company in its sole discretion determines that the Notes will no
longer be represented by 144A Global Notes or (iii) an Event of Default has
occurred and is continuing with respect to the Notes. Any Global Note
exchanged pursuant to clauses (i) above shall be so exchanged in whole and
not in part, and any Global Note exchanged pursuant to clauses (ii) or
(iii) above may be exchanged in whole or from time to time in part as
directed by the Depositary. Any Note issued in exchange for a Global Note
or any portion thereof shall be a Global Note; provided that any such Note
so issued that is registered in the name of a Person other than the
Depositary or a nominee thereof shall not be a Global Note.
(2) Notes issued in exchange for a Global Note or any portion thereof
shall be issued in definitive, fully registered form, without interest
coupons, shall have an aggregate principal amount equal to that of such
Global Note or portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the Depositary shall
designate and shall bear the applicable legends provided for herein. Any
Global Note to be exchanged in whole shall be surrendered by the Depositary
to the Trustee, as Registrar. With regard to any Global Note to be
exchanged in part, either such Global Note shall be so surrendered for
exchange or, if the Trustee is acting as custodian for the Depositary or
its nominee with respect to such Global Note, the principal amount thereof
shall be reduced, by an amount equal to the portion thereof to be so
exchanged, by means of an appropriate adjustment made on the records of the
Trustee. Upon any such surrender or adjustment, the Trustee shall
authenticate and deliver the Note issuable on such exchange to or upon the
order of the Depositary or an authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the registered
Holder may grant proxies and otherwise authorize any Person, including
Agent Members (as defined below) and persons that may hold interests
through Agent Members, to take any action which a Holder is entitled to
take under this Indenture or the Notes.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the Trustee a
reasonable supply of Certificated Notes in definitive, fully registered
form, without interest coupons.
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(5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on whose behalf
Agent Members may act shall have any rights under this Indenture with
respect to any Global Note registered in the name of the Depositary or any
nominee thereof, or under any such Global Note, and the Depositary or such
nominee, as the case may be, may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner and holder of
such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
such nominee, as the case may be, or impair, as between the Depositary, its
Agent Members and any other person on whose behalf an Agent Member may act,
the operation of customary practices of such Persons governing the exercise
of the rights of a Holder of any Note.
SECTION 2.13 CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.
SECTION 2.14 Defaulted Interest. If the Company defaults in a payment of
interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.14 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.15 Registration Default. The interest rate borne by the Notes
shall be increased upon a Registration Default (as defined in the Registration
Rights Agreement) as provided in the Notes. If a Registration Default occurs,
the Company shall deliver to the Trustee an Officers' Certificate stating (1)
the increase in the Interest Rate, (2) when such increase is effective and (3)
when such additional interest is payable. Unless and until a Responsible Officer
of the Trustee receives such an Officer's Certificate, the Trustee shall assume
there has been no increase in the Interest Rate.
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ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 [Reserved].
SECTION 3.02 Optional Redemption. The Notes are not redeemable prior to
November 26, 2004. On and after November 26, 2004, the Company may, at its
option, redeem the Notes in whole or in part at any time and from time to time,
on any date prior to Stated Maturity, upon notice as set forth in Section 3.05,
at a redemption price of $1,000 per $1,000 principal amount of Notes (the
"Optional Redemption Price"), plus any interest accrued but not paid prior to
(but not including) the Optional Redemption Date, if the Closing Price of the
Common Stock has exceeded 140% of the Conversion Price (as defined in Article 10
and as such may be adjusted from time to time) then in effect for at least 20
Trading Days in any consecutive 30 Trading Day period ending on the Trading Day
prior to the date of mailing of the notice of optional redemption pursuant to
Section 3.05.
SECTION 3.03 Notice of Trustee. If the Company elects to redeem Notes
pursuant to the redemption provisions of Section 3.02 hereof, it shall notify
the Trustee at least 30 days prior but not more than 60 days prior to the
Redemption Date of such intended Redemption Date, the principal amount of Notes
to be redeemed and the CUSIP numbers of the Notes to be redeemed. In addition,
the Company shall furnish the Trustee with an Officer's Certificate certifying
that all conditions precedent to any such redemption have been satisfied in
full.
SECTION 3.04 Selection of Notes to be Redeemed. If fewer than all the Notes
are to be redeemed, the Trustee shall select the particular Notes to be redeemed
from the outstanding Notes by a method that complies with the requirements of
any exchange on which the Notes are listed, or, if the Notes are not listed on
an exchange, on a pro rata basis or by lot or in accordance with any other
method of Trustee considers fair and appropriate. Notes and portions thereof
that the Trustee selects shall be in principal amounts equal to $1,000 or any
whole multiple thereof.
If any Note selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed to be the portion
selected for redemption (provided, however, that the Holder of such Note so
converted and deemed redeemed shall not be entitled to any additional interest
payment as a result of such deemed redemption than such Holder would have
otherwise been entitled to receive upon conversion of such Note). Notes which
have been converted during a selection of Notes to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and the Registrar in writing
of the Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Notes shall relate, in the case of
any Notes redeemed or to be redeemed only in part, to the portion of the
principal amount of such Notes which has been or is to be redeemed.
SECTION 3.05 Notice of Redemption. Notice of redemption shall be given in
the manner provided in Section 12.02 hereof to the Holders of Notes to be
redeemed. Such notice shall be given not less than 30 nor more than 60 days
prior to the Redemption Date for redemption pursuant to Section 3.02.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price and interest accrued and unpaid to, but not
including, the Redemption Date, if any;
(3) whether the Redemption Price will be payable in cash or Common
Stock or a combination thereof (if the Company elects to make such payment
with a combination of cash and Common Stock, such notice shall provide the
proportion of cash and Common Stock) pursuant to the formula set forth in
Section 3.10(a) hereof;
(4) if fewer than all the outstanding Notes are to be redeemed, the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes which will be outstanding after such partial
redemption;
(5) that on the Redemption Date the Redemption Price and interest
accrued and unpaid to, but not including, the Redemption Date, if any, will
become due and payable upon each such Note to be redeemed, and that
interest thereon shall cease to accrue on and after such date;
(6) the Conversion Price, the date on which the right to convert the
principal of the Notes to be redeemed will terminate and the places where
such Notes may be surrendered for conversion;
(7) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and accrued and unpaid interest, if any;
and
(8) the CUSIP number of the Notes.
The notice given shall specify the last date on which exchanges or
transfers of Notes may be made pursuant to Section 2.06 hereof, and shall
specify the serial numbers of Notes and the portions thereof called for
redemption.
Notice of redemption of Notes to be redeemed at the election of the Company
shall be given by the Company.
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SECTION 3.06 Effect of Notice of Redemption. Notice of redemption having
been given as provided in Section 3.05 hereof, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued and unpaid interest) such
Notes shall cease to bear interest. Upon surrender of any such Note for
redemption in accordance with such notice, such Note shall be paid by the
Company at the Redemption Price plus accrued and unpaid interest, if any, to,
but not including, the Redemption Date; provided, however, that the installments
of interest on Notes whose Stated Maturity is prior to or on the Redemption Date
shall be payable to the Holders of such Notes, or one or more predecessor Notes,
registered as such on the relevant Record Date according to their terms and the
provisions of Section 2.01 hereof.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid,
bear interest from the Redemption Date at the Interest Rate.
SECTION 3.07 Deposit of Redemption Price. Prior to or on any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent an
amount of money sufficient to pay the Redemption Price of all the Notes to be
redeemed on that Redemption Date, other than any Notes called for redemption on
that date which have been converted prior to the date of such deposit, and
accrued and unpaid interest, if any, on such Notes.
If any Note called for redemption is converted, any money deposited with
the Trustee or with a Paying Agent or so segregated and held in trust for the
redemption of such Note shall (subject to any right of the Holder of such Note
or any predecessor Note to receive interest as provided in Section 4.01 hereof)
be paid to the Company on Company Request or, if then held by the Company, shall
be discharged from such trust.
SECTION 3.08 Notes Redeemed in Part. Any Note which is to be redeemed only
in part shall be surrendered at an office or agency of the Company designated
for that purpose pursuant to Section 4.05 hereof (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or the Holder's attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Note so
surrendered.
SECTION 3.09 Conversion Arrangement on Call for Redemption. In connection
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes called for redemption by an agreement with one or more
investment banks or other purchasers to purchase such Notes by paying to the
Trustee in trust for the Noteholders, on or prior to 11:00 a.m. New York City
time on the Redemption Date, an amount that, together with any amounts deposited
with the Trustee by the Company for the redemption of such Notes, is not less
than the Redemption Price of such Notes. Notwithstanding anything to the
contrary contained in this Article 3, the obligation of the Company to pay the
28
Redemption Price of such Notes shall be deemed to be satisfied and discharged to
the extent such amount is so paid by such purchasers. If such an agreement is
entered into, any Notes not duly surrendered for conversion by the Holders
thereof may, at the option of the Company, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article 10) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the Redemption Date, subject to payment of the above amount as
aforesaid. The Trustee shall hold and pay to the Holders whose Notes are
selected for redemption any such amount paid to it for purchase and conversion
in the same manner as it would moneys deposited with it by the Company for the
redemption of Notes. Without the Trustee's prior written consent, no arrangement
between the Company and such purchasers for the purchase and conversion of any
Notes shall increase or otherwise affect any of the powers, duties,
responsibilities, protections, privileges, immunities or obligations of the
Trustee as set forth in this Indenture, and the Company agrees to indemnify,
defend, and hold the Trustee and its officers, directors, employees and agents
harmless against, any loss, liability or expense arising out of or in connection
with any such arrangement for the purchase and conversion of any Notes between
the Company and such purchasers, including the costs and expenses incurred by
the Trustee in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture, except to the extent such
loss, liability, expense or cost results from Trustee's gross negligence or
willful misconduct.
SECTION 3.10 Repurchase of Notes at Option of the Holder upon Change in
Control. (a) If there shall have occurred a Change in Control, all or any
portion of the Notes of any Holder equal to $1,000 or a whole multiple of
$1,000, not previously called for redemption, shall be repurchased by the
Company, at the option of such Holder, at a repurchase price equal to 100% of
the principal amount of the Notes to be repurchased, together with interest
accrued and unpaid to, but excluding, the repurchase date (the "Change in
Control Repurchase Price"), on the date (the "Change in Control Repurchase
Date") that is 45 days (or if that 45th day is not a Business Day, the next
succeeding Business Day) after the Change in Control Repurchase Notice;
provided, however, that installments of interest on Notes whose Stated Maturity
is prior to or on the Change in Control Repurchase Date shall be payable to the
Holders of such Notes, or one or more predecessor Notes, registered as such on
the relevant Regular Record Date according to their terms.
Subject to the fulfillment by the Company of the conditions set forth in
Section 3.10(b) hereof, the Company may elect to pay the Change in Control
Repurchase Price (to the extent not paid in cash) by delivering the number of
shares of Common Stock equal to (i) the Change in Control Repurchase Price
divided by (ii) 95% of the average of the Closing Prices per share of Common
Stock for the five consecutive Trading Days immediately preceding and including
the third Trading Day prior to the Change in Control Repurchase Date.
Whenever in this Indenture (including Sections 2.01, 6.01(a) and 6.07
hereof) or Exhibit A-1 annexed hereto there is a reference, in any context, to
the principal of any Note as of any time, such reference shall be deemed to
include reference to the Change in Control Repurchase Price payable in respect
to such Note to the extent that such Change in Control Repurchase Price is, was
or would be so payable at such time, and express mention of the Change in
29
Control Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Change in Control Repurchase Price in those
provisions of this Indenture when such express mention is not made; provided,
however, that, for the purposes of Article 11 hereof, such reference shall be
deemed to include reference to the Change in Control Repurchase Price only to
the extent the Change in Control Repurchase Price is payable in cash or Common
Stock or a combination thereof.
A "Change in Control" of the Company shall be deemed to have occurred at
such time after the original issuance of Notes as any of the following events
shall occur:
(i) the acquisition by any person, including any syndicate or group
deemed to be a "person" under Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of beneficial ownership,
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of the Capital Stock of
the Company entitling that person to exercise 50% or more of the total
voting power of all shares of such Capital Stock entitled to vote generally
in elections of directors, other than any acquisition by the Company, any
of its Subsidiaries or any employee benefit plans of the Company; or
(ii) any consolidation or merger of the Company with or into any other
person, any merger of another person into the Company, or any conveyance,
transfer, sale, lease or other disposition of all or substantially all of
the Company's properties and assets to another person, other than:
(A) any transaction (1) that does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of the Capital Stock of the Company and (2) pursuant to which
holders of the Capital Stock of the Company immediately prior to the
transaction have the entitlement to exercise, directly or indirectly,
50% or more of the total voting power of all shares of the Capital
Stock of the Company entitled to vote generally in the election of
directors of the continuing or surviving person immediately after the
transaction; or
(B) any merger solely for the purpose of changing the Company's
jurisdiction of incorporation and resulting in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely
into shares of Common Stock of the surviving entity;
(iii) during any consecutive two-year period, individuals who at the
beginning of that two-year period constituted the Board of Directors
(together with any new directors whose election to the Board of Directors,
or whose nomination for election by the shareholders of the Company, was
approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election were previously so approved) cease for any reason
to constitute a majority of the Board of Directors then in office; or
30
(iv) the Company is liquidated or dissolved or a resolution is passed
by the Company's stockholders approving a plan of liquidation or
dissolution of the Company other than in a transaction which complies with
the provisions described in Article 5 of the Indenture.
Beneficial ownership shall be determined in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act. The term "person" shall
include any syndicate or group that would be deemed to be a "person" under
Section 13(d)(3) of the Exchange Act.
(b) The following are conditions to the Company's election to pay for the
Change in Control Repurchase Price in Common Stock:
(i) The shares of Common Stock to be issued upon repurchase of Notes
hereunder:
(A) shall not require registration under any federal securities
law before such shares may be freely transferable without being
subject to any transfer restrictions under the Securities Act upon
repurchase or, if such registration is required, such registration
shall be completed and shall become effective prior to the Change in
Control Repurchase Date; and
(B) shall not require registration with, or approval of, any
governmental authority under any state law or any other federal law
before shares may be validly issued or delivered upon repurchase or if
such registration is required or such approval must be obtained, such
registration shall be completed or such approval shall be obtained
prior to the Change in Control Repurchase Date.
(ii) The shares of Common Stock to be listed upon repurchase of Notes
hereunder are, or shall have been, approved for listing on the Nasdaq
National Market or the New York Stock Exchange or listed on another
national securities exchange, in any case, prior to the Change in Control
Repurchase Date.
(iii) All shares of Common Stock which may be issued upon repurchase
of Notes will be issued out of the Company's authorized but unissued Common
Stock and will, upon issue, be duly and validly issued and fully paid and
nonassessable and free of any preemptive or similar rights.
(iv) If any of the conditions set forth in clauses (i) through (iii)
of this Section 3.08(b) are not satisfied in accordance with the terms
thereof, the Change in Control Repurchase Price shall be paid by the
Company only in cash.
(c) Unless the Company shall have theretofore called for redemption all of
the outstanding Notes, prior to or on the 30th day after the occurrence of a
Change in Control, the Company, or, at the written request and expense of the
Company prior to or on the 30th day after such occurrence, the Trustee, shall
give to all Noteholders, in the manner provided in Section 12.02 hereof, notice
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of the occurrence of the Change in Control and of the repurchase right set forth
herein arising as a result thereof. The Company shall also deliver a copy of
such notice of a repurchase right to the Trustee. The notice shall include a
form of Change in Control Repurchase Notice (as defined in Section 3.10(d)) to
be completed by the Noteholder and shall state:
(1) briefly, the events causing a Change in Control and the date of
such Change in Control;
(2) the date by which the Change in Control Repurchase Notice pursuant
to this Section 3.10 must be given;
(3) the Change in Control Repurchase Date;
(4) the Change in Control Repurchase Price;
(5) the name and address of the Paying Agent and the Conversion Agent;
(6) the Conversion Price and any adjustments thereto;
(7) that Notes as to which a Change in Control Repurchase Notice has
been given may be converted pursuant to Article 10 hereof only if the
Change in Control Repurchase Notice has been withdrawn in accordance with
the terms of this Indenture;
(8) that Notes must be surrendered to the Paying Agent to collect
payment;
(9) that the Change in Control Repurchase Price for any Note as to
which a Change in Control Repurchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Change in
Control Repurchase Date and the time of surrender of such Note as described
in (8) above;
(10) briefly, the procedures the Holder must follow to exercise rights
under this Section 3.08;
(11) briefly, the conversion rights of the Notes;
(12) the procedures for withdrawing a Change in Control Repurchase
Notice;
(13) that, unless the Company defaults in making payment of such
Redemption Price, interest on Notes called for redemption will cease to
accrue on and after the Redemption Date;
(14) the CUSIP number of the Notes; and
(15) whether the Change in Control Repurchase Price shall be paid by
the Company in cash or by delivery of shares of Common Stock or a
combination thereof, and if a combination thereof, such notice shall
provide the proportion of cash and Common Stock.
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(d) A Holder may exercise its rights specified in Section 3.10(a) hereof
upon delivery of a written notice of purchase (a "Change in Control Repurchase
Notice") to the Paying Agent at any time prior to the close of business on the
Change in Control Repurchase Date, stating:
(1) the certificate number of the Note which the Holder will deliver
to be purchased;
(2) the portion of the principal amount of the Note which the Holder
will deliver to be purchased, which portion must be $1,000 or an integral
multiple thereof; and
(3) that such Note shall be purchased pursuant to the terms and
conditions specified in paragraph 6 on the reverse side of the Notes.
The delivery of such Note to the Paying Agent prior to, on or after the
Change in Control Repurchase Date (together with all necessary endorsements) at
the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change in Control Repurchase Price therefor; provided, however,
that such Change in Control Repurchase Price shall be so paid pursuant to this
Section 3.10 only if the Note so delivered to the Paying Agent shall conform in
all respects to the description thereof set forth in the related Change in
Control Repurchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.10, a portion of a Note if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Note also apply to the purchase of such
portion of such Note.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.10 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Change in Control
Repurchase Date and the time of delivery of the Note to the Paying Agent in
accordance with this Section 3.10.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change in Control Repurchase Notice contemplated by this
Section 3.10(d) shall have the right to withdraw such Change in Control
Repurchase Notice at any time prior to the close of business on the Change in
Control Repurchase Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 3.11.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Repurchase Notice or written withdrawal thereof.
SECTION 3.11 Effect of Change in Control Repurchase Notice. Upon receipt by
the Paying Agent of the Change in Control Repurchase Notice specified in Section
3.10(d), the Holder of the Note in respect of which such Change in Control
Repurchase Notice was given shall (unless such Change in Control Repurchase
Notice is withdrawn as specified in the following two paragraphs) thereafter be
33
entitled to receive solely the Change in Control Repurchase Price with respect
to such Note. Such Change in Control Repurchase Price shall be paid to such
Holder, subject to receipt of consideration for the Notes and/or Notes from the
Holders by the Paying Agent, promptly following the later of (x) the Change in
Control Repurchase Date with respect to such Note (provided the conditions in
Section 3.10(d) have been satisfied) and (y) the time of delivery of such Note
to the Paying Agent by the Holder thereof in the manner required by Section
3.10(d). Notes in respect of which a Change in Control Repurchase Notice, has
been given by the Holder thereof may not be converted pursuant to Article 10
hereof on or after the date of the delivery of such Change in Control Repurchase
Notice unless such Change in Control Repurchase Notice has first been validly
withdrawn as specified in the following two paragraphs.
A Change in Control Repurchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Change in Control Repurchase Notice at any time prior to the
close of business on the Change in Control Repurchase Date specifying:
(1) the certificate number of the Note in respect of which such notice
of withdrawal is being submitted,
(2) the principal amount of the Note with respect to which such notice
of withdrawal is being submitted, and
(3) the principal amount, if any, of such Note which remains subject
to the original Change in Control Repurchase Notice and which has been or
will be delivered for purchase by the Company.
There shall be no repurchase of any Notes pursuant to Section 3.10 if there
has occurred (prior to, on or after, as the case may be, the giving, by the
Holders of such Notes, of the required Change in Control Repurchase Notice) and
is continuing an Event of Default (other than a default in the payment of the
Change in Control Repurchase Price with respect to such Notes). The Paying Agent
will promptly return to the respective Holders thereof any Notes (x) with
respect to which a Change in Control Repurchase Notice has been withdrawn in
compliance with this Indenture, or (y) held by it during the continuance of an
Event of Default (other than a default in the payment of the Change in Control
Repurchase Price with respect to such Notes) in which case, upon such return,
the Change in Control Repurchase Notice with respect thereto shall be deemed to
have been withdrawn.
SECTION 3.12 Deposit of Change in Control Repurchase Price. Prior to 11:00
a.m. (New York City time) on the Change in Control Repurchase Date the Company
shall deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 2.04) an amount of
money (in immediately available funds if deposited on such Business Day) or
Common Stock, or a combination thereof, if permitted hereunder, sufficient to
34
pay the aggregate Change in Control Repurchase Price of all the Notes or
portions thereof which are to be purchased as of the Change in Control
Repurchase Date.
SECTION 3.13 Notes Purchased in Part. Any Note which is to be purchased
only in part shall be surrendered at the office of the Paying Agent (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such ▇▇▇▇▇▇'s attorney duly authorized in
writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Note, without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder in aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Note so surrendered which is not purchased.
SECTION 3.14 Covenant to Comply with Securities Laws upon Purchase of
Notes. In connection with any offer to purchase or repurchase of Notes under
Section 3.10 hereof (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or purchase), the Company shall (i) comply with Rule 13e-4, Rule 14e-1 and
any other tender offer rules under the Exchange Act which may then be
applicable, (ii) file the related Schedule TO (or any successor schedule, form
or report) or any other schedule required under the Exchange Act, and (iii)
otherwise comply with all federal and state securities laws so as to permit the
rights and obligations under Section 3.10 to be exercised in the time and in the
manner specified in Section 3.10.
SECTION 3.15 Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in paragraph 12 of the Notes, together with interest or
dividends, if any, thereon, held by them for the payment of the Change in
Control Repurchase Price; provided, however, that to the extent that the
aggregate amount of cash or shares of Common Stock deposited by the Company
pursuant to Section 3.12 exceeds the aggregate Change in Control Repurchase
Price of the Notes or portions thereof which the Company is obligated to
purchase as of the Change in Control Repurchase Date then promptly after the
Business Day following the Change in Control Repurchase Date the Trustee shall
return any such excess to the Company together with interest or dividends, if
any, thereon.
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Principal, Premium, Interest on the Notes. The
Company will duly and punctually pay the principal of and premium, if any, and
interest at the Interest Rate in respect of the Notes in accordance with the
terms of the Notes and this Indenture. The Company will deposit or cause to be
deposited with the Trustee as directed by the Trustee, no later than 11:00 a.m.,
New York City time on the day of the Stated Maturity of any interest installment
or principal payment of any Note, all payments so due. Principal amount,
Redemption Price, Change in Control Repurchase Price, and cash interest shall be
considered paid on the applicable date due if at 11:00 a.m., New York City time
on such date (or, in the case of a Change in Control Repurchase Price on the
Business Day following the applicable Change in Control Repurchase Date) the
Trustee or the Paying Agent holds, in accordance with this Indenture, money or
Notes, if permitted hereunder, sufficient to pay all such amounts then due.
35
The Company shall, to the extent permitted by law, pay cash interest on
overdue amounts at the rate per annum set forth in paragraph 1 on the reverse
side of the Notes, compounded semi-annually, which interest shall accrue from
the date such overdue amount was originally due to the date payment of such
amount, including interest thereon, has been made or duly provided for. All such
overdue interest shall be payable on demand.
SECTION 4.02 SEC and Other Reports. The Company shall file with the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. If at any time the Company is not
subject to Section 13 or 15(d) of the Exchange Act, such reports shall be
provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements. The
Company also shall comply with the other provisions of TIA Section 314(a).
SECTION 4.03 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 2001) an Officers'
Certificate, stating whether or not to the knowledge of the signers thereof the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 4.04 Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
SECTION 4.05 Maintenance of Office or Agency. The Company will maintain in
the Borough of Manhattan, the City of New York, an office or agency of the
Trustee, Registrar, Paying Agent and Conversion Agent where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The office of Computer Share, located c/o SunTrust
Bank, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, shall initially be
such office or agency for all of the aforesaid purposes. The Company shall give
prompt written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee). If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 12.02.
36
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, 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.
SECTION 4.06 Delivery of Certain Information. At any time when the Company
is not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a
Holder or any beneficial Holder of Notes or shares of Common Stock issued upon
conversion thereof, the Company will promptly furnish or cause to be furnished
Rule 144A Information (as defined below) to such Holder or any beneficial holder
of Notes or holder of shares of Common Stock issued upon conversion of Notes, or
to a prospective purchaser of any such security designated by any such holder,
as the case may be, to the extent required to permit compliance by such Holder
or holder with Rule 144A under the Securities Act in connection with the resale
of any such security. "Rule 144A Information" shall be such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets. The Company shall
not consolidate with, merge with or into any other person or convey, transfer or
lease its properties and assets substantially as an entirety to any person,
unless:
(a) either (1) the Company shall be the continuing corporation or (2)
the person (if other than the Company) formed by such consolidation or into
which the Company is merged or the person which acquires by conveyance,
transfer or lease the properties and assets of the Company substantially as
an entirety (i) shall be organized and validly existing under the laws of
the United States and (ii) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Notes and this Indenture;
(b) at the time of such transaction, no Event of Default and no event
which, after notice or lapse of time, would become an Event of Default,
shall have happened and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article 5 and that all conditions
precedent herein provided for relating to such transaction have been
satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the properties and assets of one or more Subsidiaries (other than
to the Company or another Subsidiary), which, if such assets were owned by the
37
Company, would constitute all or substantially all of the properties and assets
of the Company, shall be deemed to be the transfer of all or substantially all
of the properties and assets of the Company.
The successor person formed by such consolidation or into which the Company
is merged or the successor person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, except in the
case of a lease and obligations the Company may have under a supplemental
indenture pursuant to Section 10.11, the Company shall be discharged from all
obligations and covenants under this Indenture and the Notes. Subject to Section
9.06, the Company, the Trustee and the successor person shall enter into a
supplemental indenture to evidence the succession and substitution of such
successor person and such discharge and release of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default. An "Event of Default" occurs if:
(1) the Company fails to pay when due the principal of or premium, if
any, on any of the Notes at maturity, upon redemption or exercise of a
repurchase right or otherwise, whether or not such payment is prohibited by
Article 11 of this Indenture;
(2) the Company fails to pay an installment of interest (including
liquidated damages, if any) on any of the Notes that continues for 30 days
after the date when due, whether or not such payment is prohibited by
Article 11 of this Indenture;
(3) the Company fails to deliver shares of Common Stock, together with
cash in lieu of fractional shares, when such Common Stock or cash in lieu
of fractional shares is required to be delivered upon conversion of a Note
and such failure continues for 10 days after such delivery date;
(4) the Company fails to perform or observe any other term, covenant
or agreement contained in the Notes or this Indenture for a period of 30
days after receipt by the Company of a Notice of Default (as defined in
this Section 6.01);
(5) the Company fails to give or cause the Trustee to give all
Noteholders notice of the occurrence of a Change in Control in accordance
with the provisions of Section 3.10(c) hereof;
(6) one or more defaults in the payment of principal of or premium, if
any, on any of the Company's Indebtedness aggregating $5.0 million or more,
when the same becomes due and payable at the scheduled maturity thereof,
and such default or defaults shall have continued after any applicable
grace period and shall not have been cured or waived within a 30-day period
38
after the date of a Notice of Default or (B) any of the Company's
Indebtedness aggregating $5.0 million or more shall have been accelerated
or otherwise declared due and payable, or required to be prepaid or
repurchased (other than by regularly scheduled required prepayment) prior
to the scheduled maturity thereof and such acceleration is not rescinded or
annulled within a 30-day period after a Notice of Default;
(7) the rendering against the Company or any of its Affiliates of one
or more final unsatisfied judgments not covered by insurance aggregating in
excess of $5.0 million, which are not stayed, bonded or discharged within
60 days;
(8) the Company, or any Significant Subsidiary, or any Subsidiaries of
the Company which in the aggregate would constitute a Significant
Subsidiary pursuant to or under or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding or the commencement of any case against
it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such a petition or the appointment
of or taking possession by a Custodian; or
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary or any Subsidiaries of the Company which in the aggregate
would constitute a Significant Subsidiary in an involuntary case or
proceeding, or adjudicates the Company or any Significant Subsidiary
or any Subsidiaries of the Company which in the aggregate would
constitute a Significant Subsidiary insolvent or bankrupt;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or any Subsidiaries of the Company which in the aggregate
would constitute a Significant Subsidiary or for any substantial part
of its or their properties; or
39
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary or any Subsidiaries of the Company which in the
aggregate would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 days.
"Bankruptcy Law" means Title 11, United States Code, or any
similar federal or state law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clauses (4), (6) or (7) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes at the time outstanding notify the
Company and the Trustee, of the Default and the Company does not cure such
Default (and such Default is not waived) within the time specified in clause
(4), (6) or (7) above after actual receipt of such notice. Any such notice must
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default".
The Company will deliver to the Trustee, within five Business Days of
becoming aware of the occurrence of an Event of Default, written notice thereof.
In addition, the Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the lapse of time and the giving of notice would become an Event of Default
under clause (4), (6) or (7) above, its status and what action the Company is
taking or proposes to take with respect thereto.
SECTION 6.02 Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.01(8) or (9)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Notes at the time outstanding by notice to the Company
and the Trustee, may declare the Notes due and payable at their principal amount
together with accrued interest. Upon a declaration of acceleration, such
principal and accrued and unpaid interest to the date of payment shall be
immediately due and payable.
If an Event of Default specified in Section 6.01(8) or (9) above occurs and
is continuing, then the principal and the interest on all the Notes shall become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Noteholders.
The Holders of a majority in aggregate principal amount of the Notes at the
time outstanding, by notice to the Trustee (and without notice to any other
Noteholder) may rescind or annul an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of the principal
and any accrued cash interest that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.06 have been
paid. No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
40
SECTION 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal, the premium, if any, and any accrued cash interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Notes or produce any of the Notes in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of, or acquiescence in, the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Notes at the time outstanding, by notice to
the Trustee (and without notice to any other Noteholder), may waive an existing
Default and its consequences except (1) an Event of Default described in Section
6.01(1) or (2), (2) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Noteholder affected or (3) a
Default which constitutes a failure to convert any Note in accordance with the
terms of Article 10. When a Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or impair any consequent
right. This Section 6.04 shall be in lieu of Section 316(a)1(B) of the TIA and
such Section 316(a)1(B) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
SECTION 6.05 Control by Majority. The Holders of a majority in aggregate
principal amount of the Notes at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Noteholders or would involve the Trustee in personal
liability unless the Trustee is offered indemnity reasonably satisfactory to it
against loss, liability or expense. This Section 6.05 shall be in lieu of
Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly
excluded from this Indenture, as permitted by the TIA.
SECTION 6.06 Limitation on Suits. A Noteholder may not pursue any remedy
with respect to this Indenture or the Notes unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity; and
41
(5) the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights of any
other Noteholder or to obtain a preference or priority over any other
Noteholder.
SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount, premium, if any, plus Redemption Price, Change in Control
Repurchase Price or any accrued cash interest in respect of the Notes held by
such Holder, on or after the respective due dates expressed in the Notes or any
Redemption Date, and to convert the Notes in accordance with Article 10, or to
bring suit for the enforcement of any such payment on or after such respective
dates or the right to convert, shall not be impaired or affected adversely
without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default described
in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Notes and the amounts provided
for in Section 7.06.
SECTION 6.09 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 Notes or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal amount, Redemption Price, Change in Control Repurchase
Price or any accrued cash interest in respect of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
any such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of the principal
amount, Redemption Price, Change in Control Repurchase Price or any accrued
cash interest 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 agents and counsel or any
other amounts due the Trustee under Section 7.06) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
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 the
42
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 7.06.
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 Notes 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 6.10 Priorities. If the Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the following order:
(1) to the Trustee for amounts due under Section 7.06;
(2) to Noteholders for amounts due and unpaid on the Notes for the
principal amount, Redemption Price, Change in Control Purchase Price or any
accrued cash interest as the case may be, ratably, without preference or
priority of any kind, according to such amounts due and payable on the
Notes; and
(3) the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. At least 15 days before such record
date, the Trustee shall mail to each Noteholder and the Company a notice that
states the record date, the payment date and the amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in aggregate principal amount of the
Notes at the time outstanding. This Section 6.11 shall be in lieu of Section
315(e) of the TIA and such Section 315(e) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 6.12 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, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
the Company from paying all or any portion of the principal amount, Redemption
Price, Change in Control Repurchase Price or any accrued cash interest in
respect of Notes, or any interest on such amounts, as contemplated herein, or
which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
43
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties and Responsibilities of the Trustee; During Default;
Prior to Default. The Trustee, prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all such Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default hereunder
has occurred (which has not been cured or waived), the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default hereunder and after the
curing or waiving of all such Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders pursuant to Section 6.05 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.
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None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 7.01 are in furtherance of and subject to
Sections 315 and 316 of the TIA.
SECTION 7.02 Certain Rights of the Trustee. In furtherance of and subject
to the TIA and subject to Section 7.01:
(a) Trustee may rely, and shall be protected in acting or refraining
from acting upon, any resolution, Officers' Certificate, Company Request,
Company Order, or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note, coupon,
Note or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the secretary or an assistant secretary of the
Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture in accordance with the
request, order or direction of any of the Noteholders pursuant to the
provisions of this Indenture, unless such Noteholders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all such Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing to
do so by the Holders of not less than a majority in aggregate principal
45
amount of the Notes then outstanding; provided that, if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Company or, if paid by the Trustee or
any predecessor trustee, shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder;
(h) The Trustee's immunities and protections from liability and its
rights to compensation and indemnification in connection with the
performance of its duties under this Indenture shall extend to the
Trustee's officers, directors, agents and employees and its services as
Paying Agent, Registrar or any other role assumed by the Trustee hereunder
or to which it has been appointed. Such immunities and protections and
right to indemnification, together with the Trustee's right to
compensation, shall survive the Trustee's resignation or removal and the
final payment of the Notes;
(i) The Trustee is not required to give any bond or surety with
respect to the performance of its duties or the exercise of its powers
under this Indenture; and
(j) The Trustee shall not be deemed to have knowledge of any Default
or Event of Default hereunder except (i) during any period it is serving as
Paying Agent for the Notes, any Event of Default pursuant to Sections 6.01
(1), (2) or (3), or (ii) any Default or Event of Default of which a
Responsible Officer shall have received written notification or otherwise
obtained actual knowledge.
SECTION 7.03 Trustee Not Responsible for Recitals, Disposition of Notes or
Application of Proceeds Thereof. The recitals contained herein and in the Notes,
except the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity
or sufficiency of this Indenture or of the Notes. The Trustee shall not be
accountable for the use or application by the Company of any of the Notes or of
the proceeds thereof.
SECTION 7.04 Trustee and Agents May Hold Notes; Collections, etc. The
Trustee or any agent of the Company or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes with the same rights it
would have if it were not the Trustee or such agent and, subject to Sections
7.08 and 7.13, if operative, may otherwise deal with the Company and receive,
collect, hold and retain collections from the Company with the same rights it
would have if it were not the Trustee or such agent.
46
SECTION 7.05 Moneys Held by Trustee. Subject to the provisions of Section
8.02 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of the Company or
the Trustee shall be under any liability for interest on any moneys received by
it hereunder.
SECTION 7.06 Compensation and Indemnification of Trustee and Its Prior
Claim. The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) to be agreed to in writing by the Trustee and the Company, and
the Company covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including (i) the reasonable compensation and
the expenses and disbursements of its counsel and of all agents and other
persons not regularly in its employ and (ii) interest at the prime rate on any
disbursements and advances made by the Trustee and not paid by the Company
within 5 days after receipt of an invoice for such disbursement or advance)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee and
each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim of liability
in the premises. The obligations of the Company under this Section 7.06 to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture. Such additional
indebtedness shall be a senior claim to that of the Notes upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the Holders of particular Notes, and the Notes are hereby
effectively subordinated to such senior claim to such extent. The provisions of
this Section 7.06 shall survive the termination of this Indenture and the
resignation or removal of the Trustee. When the Trustee incurs expenses or
renders services in connection with an Event of Default specified in Section
6.01 or in connection with Article Six hereof, the expenses (including the
reasonable fees and expenses of its counsel) and the compensation for services
in connection therewith are to constitute expenses of administration under any
bankruptcy law.
SECTION 7.07 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 7.01 and 7.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
47
SECTION 7.08 Conflicting Interests. If the Trustee has or shall acquire a
conflicting interest within the meaning of the TIA, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the TIA.
SECTION 7.09 Persons Eligible for Appointment as Trustee. The Trustee shall
at all times be a corporation or banking association having a combined capital
and surplus of at least $10,000,000. If such corporation or banking association
files reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then, for the
purposes of this Section 7.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so filed. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.09, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
SECTION 7.10 Resignation and Removal; Appointment of Successor Trustee. (a)
The Trustee, or any trustee or trustees hereafter appointed, may at any time
resign with respect to one or more or all series of Notes by giving written
notice of resignation to the Company and by mailing notice thereof by first
class mail to the Holders of Notes at their last addresses as they shall appear
on the Note register. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee or trustees by written instrument in
duplicate, executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee or trustees. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the mailing of such
notice of resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Noteholder who
has been a bona fide Holder of a Note for at least six months may, subject to
the provisions of Section 7.11, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
7.08 with respect to any Notes after written request therefor by the
Company or by any Noteholder who has been a bona fide Holder of a Note for
at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any Noteholder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation; or
48
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 7.11, any Noteholder who has been a bona
fide Holder of a Note for at least six months may on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee. If no successor trustee
shall have been appointed and have accepted appointment within 30 days after a
notice of removal has been given, the removed trustee may petition a court of
competent jurisdiction for the appointment of a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may at any time remove the Trustee and appoint a successor
trustee by delivering to the Trustee so removed, to the successor trustee so
appointed and to the Company the evidence provided for in Section 1.05 of the
action in that regard taken by the Noteholders.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 7.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.11.
SECTION 7.11 Acceptance of Appointment by Successor Trustee. Any successor
trustee appointed as provided in Section 7.10 shall execute and deliver to the
Company and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee hereunder; but, nevertheless, on the written request of the
Company or of the successor trustee, upon payment of its charges then unpaid,
the trustee ceasing to act shall pay over to the successor trustee all moneys at
the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any
trustee ceasing to act shall, nevertheless, retain a prior claim upon all
property or funds held or collected by such trustee to secure any amounts then
due it pursuant to the provisions of Section 7.06.
No successor trustee shall accept appointment as provided in this Section
7.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09.
Upon acceptance of appointment by any successor trustee as provided in this
Section 7.11, the Company shall mail notice thereof by first class mail to the
Holders of Notes at their last addresses as they shall appear in the register.
If the acceptance of appointment is substantially contemporaneous with the
resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 7.10. If the Company fails to
49
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business of
Trustee. Any corporation or banking association into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation or
banking association resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation or banking association
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation or banking association shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case at the
time such successor to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor Trustee and deliver such Notes so authenticated; and, in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force and effect that this Indenture provides
for the certificate of authentication of the Trustee; provided, that the right
to adopt the certificate of authentication of any predecessor Trustee or to
authenticate Notes in the name of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.
SECTION 7.13 Preferential Collection of Claims Against the Company. The
Trustee shall comply with the provisions of Section 311 of the TIA.
SECTION 7.14 Reports by the Trustee. (a) The Trustee shall transmit to
Holders and other persons such reports concerning the Trustee and its actions
under this Indenture, but only as may be required pursuant to the TIA, on or
before July 15 in each year that such report is required, such reports to be
dated as of the immediately preceding May 15.
(b) A copy of each such report shall, at the time of such transmission to
Noteholders, be furnished to the Company and be filed by the Trustee with each
stock exchange upon which the Notes are listed and also with the SEC. The
Company agrees to notify the Trustee when and as the Notes become admitted to
trading on any national securities exchange.
SECTION 7.15 Trustee to Give Notice of Default, But May Withhold in Certain
Circumstances. The Trustee shall transmit to the Noteholders, as the names and
addresses of such Holders appear on the Note register, notice by mail of all
Defaults which have occurred, such notice to be transmitted within 90 days after
the occurrence thereof, unless such defaults shall have been cured before the
giving of such notice; provided that, except in the case of Default in the
payment of the principal of, interest on, or other similar obligation with
respect to, any of the Notes, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
50
trust committee of directors or trustees and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
best interests of the Noteholders.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Notes. When (i) the Company delivers
to the Trustee all outstanding Notes (other than Notes replaced pursuant to
Section 2.07) for cancellation or (ii) all outstanding Notes will become due and
payable within one year of their Stated Maturity or (iii) all outstanding Notes
are scheduled for redemption within one year and, in all cases, the Company
deposits with the Trustee cash or, if expressly permitted by the terms of the
Notes, Common Stock sufficient to pay all amounts due and owing on all
outstanding Notes (other than Notes replaced pursuant to Section 2.07), and if
in any case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 7.06, cease to be of further
effect. The Trustee shall join in the execution of a document prepared by the
Company acknowledging satisfaction and discharge of this Indenture on demand of
the Company accompanied by an Officers' Certificate and Opinion of Counsel and
at the cost and expense of the Company.
SECTION 8.02 Repayment of the Company. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to the Notes that remains
unclaimed for two years, subject to applicable unclaimed property law. After
return to the Company, Holders entitled to the money or securities must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person and the Trustee and the Paying Agent
shall have no further liability to the Noteholders with respect to such money or
securities for that period commencing after the return thereof.
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders. The Company and the Trustee may
amend this Indenture or the Notes without the consent of any Noteholder for the
purposes of, among other things:
(1) adding to the Company's covenants for the benefit of the Holders;
(2) surrendering any right or power conferred upon the Company;
(3) providing for conversion rights of Holders if any reclassification
or change of Common Stock or any consolidation, merger or sale of all or
substantially all of the Company's assets occurs;
(4) reducing the Conversion Price, provided that the reduction will
not adversely affect the interests of Holders in any material respect;
51
(5) complying with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(6) making any changes or modifications to this Indenture necessary in
connection with the registration of the Notes under the Securities Act as
contemplated by the Registration Rights Agreement, provided that this
action does not adversely affect the interests of the Holders in any
material respect;
(7) curing any ambiguity, omission, inconsistency or correcting or
supplementing any defective provision contained in this Indenture; provided
that such modification or amendment does not, in the good faith opinion of
the Board of Directors of the Trustee, adversely affect the interests of
the Holders;
(8) adding or modifying any other provisions which the Company and the
Trustee may deem necessary or desirable and which will not adversely affect
the interests of the Holders;
(9) complying with Article 5; or
(10) providing for uncertificated Notes in addition to the
Certificated Notes so long as such uncertificated Notes are in registered
form for purposes of the Internal Revenue Code of 1986, as amended.
SECTION 9.02 With Consent of Holders. With the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes at the
time outstanding, the Company and the Trustee may amend this Indenture or the
Notes. However, without the consent of each Noteholder affected, an amendment to
this Indenture or the Notes may not:
(1) change the maturity of the principal of or any installment of
interest on any Note (including any payment of liquidated damages);
(2) reduce the principal amount of, or premium, if any, or interest on
(including any payment of liquidated damages), any Note;
(3) reduce the Interest Rate or interest (including liquidated
damages) on any Note;
(4) change the currency of payment of principal of, premium, if any,
or interest of any Note;
(5) impair the right to institute suit for the enforcement of any
payment on or with respect to, or conversion of, any Note;
(6) except as otherwise permitted or contemplated by provisions of
this Indenture concerning corporate reorganizations, adversely affect the
repurchase option of Holders upon a Change in Control or the conversion
rights of Holders;
52
(7) modify the subordination provisions of the Notes in a manner
adverse to the Holders; or
(8) reduce the percentage in aggregate principal amount of Notes
outstanding necessary to modify or amend this Indenture or to waive any
past default.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions. Until
an amendment, waiver or other action by Holders becomes effective, a consent
thereto by a Holder of a Note hereunder is a continuing consent by the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same obligation as the consenting Holder's Note, even if notation of the
consent, waiver or action is not made on the Note. However, any such Holder or
subsequent Holder may revoke the consent, waiver or action as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment, waiver or action becomes effective. After an
amendment, waiver or action becomes effective, it shall bind every Noteholder.
SECTION 9.05 Notation on or Exchange of Notes. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Notes so modified as to
conform, in the opinion of the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for outstanding Notes.
SECTION 9.06 Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not, in the good faith opinion of the Trustee,
adversely affect the rights, duties, liabilities, protections, privileges,
indemnities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign such supplemental indenture. In signing such supplemental indenture
the Trustee shall be entitled to receive, and (subject to the provisions of
Section 7.01) shall be fully protected in relying upon, an Officers' Certificate
and an Opinion of Counsel stating that such amendment is authorized or permitted
by this Indenture and complies with the TIA.
SECTION 9.07 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
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accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
ARTICLE 10
CONVERSION
SECTION 10.01 Conversion Right and Conversion Price. Subject to and upon
compliance with the provisions of this Article, at the option of the Holder
thereof, any Note or any portion of the principal amount thereof which is $1,000
or an integral multiple of $1,000 may be converted at the principal amount
thereof, or of such portion thereof, into duly authorized, fully paid and
nonassessable shares of Common Stock, at the Conversion Price, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall expire at the close of business on November 26, 2006.
In case a Note or portion thereof is called for redemption, such conversion
right in respect of the Note or the portion so called, shall expire at the close
of business on the Business Day preceding the Redemption Date, unless the
Company defaults in making the payment due upon redemption. In the case of a
Change in Control for which the Holder exercises its repurchase right with
respect to a Note or portion thereof, such conversion right in respect of the
Note or portion thereof shall expire at the close of business on the Business
Day immediately preceding the Change in Control Repurchase Date.
The price at which shares of Common Stock shall be delivered upon
conversion (the "Conversion Price") shall be initially equal to $7.74 per share
of Common Stock. The Conversion Price shall be adjusted in certain instances as
provided in paragraphs (a), (b), (c), (d), (e), (f), (h) and (i) of Section
10.04 and Section 10.12 hereof.
SECTION 10.02 Exercise of Conversion Right. To exercise the conversion
right, the Holder of any Note to be converted shall surrender such Note duly
endorsed or assigned to the Company or in blank, at the office of any Conversion
Agent, accompanied by a duly signed conversion notice substantially in the form
attached to the Note to the Company stating that the Holder elects to convert
such Note or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted.
Notes surrendered for conversion during the period from the close of
business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date shall be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest to be received on such Interest Payment Date on the principal
amount of Notes being surrendered for conversion. No such payment shall be
required upon surrender for conversion if the Notes so surrendered have been
called for redemption with a Redemption Date that occurs during the period from
the close of business on any Regular Record Date to the close of business on the
third Business Day after the Interest Payment Date next succeeding such Regular
Record Date.
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Notes shall be deemed to have been converted immediately prior to the close
of business on the day of surrender of such Notes for conversion in accordance
with the foregoing provisions, and at such time the rights of the Holders of
such Notes as Holders shall cease, and the Person or Persons entitled to receive
the Common Stock issuable upon conversion shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As promptly as
practicable on or after the conversion date, the Company shall cause to be
issued and delivered to such Conversion Agent a certificate or certificates for
the number of full shares of Common Stock issuable upon conversion, together
with payment in lieu of any fraction of a share as provided in Section 10.03
hereof.
In the case of any Note which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Note or
Notes of authorized denominations in aggregate principal amount equal to the
unconverted portion of the principal amount of such Notes.
If shares of Common Stock to be issued upon conversion of a Restricted
Note, or securities to be issued upon conversion of a Restricted Note in part
only, are to be registered in a name other than that of the Holder of such
Restricted Note, such Holder must deliver to the Conversion Agent a certificate
in substantially the form set forth in the form of Note set forth in Exhibit A
annexed hereto, dated the date of surrender of such Restricted Note and signed
by such Holder, as to compliance with the restrictions on transfer applicable to
such Restricted Note. Neither the Trustee nor any Conversion Agent, Registrar or
Transfer Agent shall be required to register in a name other than that of the
Holder shares of Common Stock or Notes issued upon conversion of any such
Restricted Note not so accompanied by a properly completed certificate.
The Company hereby initially appoints the Trustee as the Conversion Agent.
SECTION 10.03 Fractions of Shares. No fractional shares of Common Stock
shall be issued upon conversion of any Note or Notes. If more than one Note
shall be surrendered for conversion at one time by the same Holder, the number
of full shares which shall be issued upon conversion thereof shall be computed
on the basis of the aggregate principal amount of the Notes (or specified
portions thereof) so surrendered. Instead of any fractional share of Common
Stock which would otherwise be issued upon conversion of any Note or Notes (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction (calculated to the nearest one-100th of a share) in an amount
equal to the same fraction of the quoted price of the Common Stock as of the
Trading Day preceding the date of conversion.
SECTION 10.04 Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustments, calculated by the Company, from time to time as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction:
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(1) the numerator of which shall be the number of shares of Common
Stock outstanding at the close of business on the Record Date (as defined
in Section 10.4(g)) fixed for such determination, and
(2) the denominator of which shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution.
Such reduction shall become effective immediately after the opening of
business on the day following the Record Date. If any dividend or
distribution of the type described in this Section 10.04(a) is declared but
not so paid or made, the Conversion Price shall again be adjusted to the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(c) In case the Company shall issue rights or warrants (other than
pursuant to the Rights Plan) and other than any rights or warrants referred
to in Section 10.04(d)) to all holders of its outstanding shares of Common
Stock entitling them to subscribe for or purchase shares of Common Stock
(or securities convertible into Common Stock) at a price per share (or
having a conversion price per share) less than the Current Market Price (as
defined in Section 10.04(g)) on the Record Date fixed for the determination
of stockholders entitled to receive such rights or warrants, the Conversion
Price shall be adjusted so that the same shall equal the price determined
by multiplying the Conversion Price in effect at the opening of business on
the date after such Record Date by a fraction:
(1) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date
plus the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase (or the
aggregate conversion price of the convertible securities so offered)
would purchase at such Current Market Price, and
(2) the denominator of which shall be the number of shares of
Common Stock outstanding on the close of business on the Record Date
plus the total number of additional shares of Common Stock so offered
for subscription or purchase (or into which the convertible securities
so offered are convertible).
56
Such adjustment shall become effective immediately after the opening of
business on the day following the Record Date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent
that shares of Common Stock (or securities convertible into Common Stock)
are not delivered pursuant to such rights or warrants, upon the expiration
or termination of such rights or warrants the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on
the basis of the delivery of only the number of shares of Common Stock (or
securities convertible into Common Stock) actually delivered. In the event
that such rights or warrants are not so issued, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect
if such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether
any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received for such
rights or warrants, the value of such consideration if other than cash, to
be determined by the Board of Directors.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company or the capital stock of any Subsidiary of the Company (other than
any dividends or distributions to which Section 10.04(a) applies) or
evidences of its indebtedness or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section 10.04(c), (2)
any dividends or distributions in connection with a reclassification,
change, merger, consolidation, statutory share exchange, combination, sale
or conveyance to which Section 10.11 hereof applies and (3) dividends and
distributions paid exclusively in cash (the securities described in
foregoing clauses (1), (2) and (3) hereinafter in this Section 10.04(d)
called the "excluded securities"), then, in each such case, subject to the
second succeeding paragraph of this Section 10.04(d), the Conversion Price
shall be adjusted so that the same shall be equal to the price determined
by multiplying the Conversion Price in effect immediately prior to the
close of business on the Record Date (as defined in Section 10.04(g)) with
respect to such distribution by a fraction:
(1) the numerator of which shall be the Current Market Price
(determined as provided in Section 10.04(g)) on such date less the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board Resolution)
on such date of the portion of the securities so distributed (other
than excluded securities) applicable to one share of Common Stock
(determined on the basis of the number of shares of the Common Stock
outstanding on the Record Date), and
(2) the denominator of which shall be such Current Market Price.
Such reduction shall become effective immediately prior to the opening of
business on the day following the Record Date. However, in the event that the
then fair market value (as so determined) of the portion of the securities so
distributed (other than excluded securities) applicable to one share of Common
57
Stock is equal to or greater than the Current Market Price on the Record Date,
in lieu of the foregoing adjustment, adequate provision shall be made so that
each Holder shall have the right to receive upon conversion of a Note (or any
portion thereof) the amount of securities so distributed (other than excluded
securities) such Holder would have received had such Holder converted such Note
(or portion thereof) immediately prior to such Record Date. In the event that
such dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared.
If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 10.04(d) by reference to the actual or
when issued trading market for any securities comprising all or part of such
distribution (other than excluded securities), it must in doing so consider the
prices in such market over the same period (the "Reference Period") used in
computing the Current Market Price pursuant to Section 10.04(g) to the extent
possible, unless the Board of Directors in a Board Resolution determines in good
faith that determining the fair market value during the Reference Period would
not be in the best interest of the Holder.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):
(i) are deemed to be transferred with such shares of Common Stock;
(i) are not exercisable; and
(ii) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this Section
10.04(d) (and no adjustment to the Conversion Price under this Section 10.04(d)
will be required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of which
such right or warrant shall become exercisable to purchase different securities,
evidences of indebtedness or other assets or entitle the holder to purchase a
different number or amount of the foregoing or to purchase any of the foregoing
at a different purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to a new right or
warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Price under
this Section 10.04(d):
(1) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder of Common Stock with
58
respect to such rights or warrant (assuming such holder had retained such
rights or warrants), made to all holders of Common Stock as of the date of
such redemption or repurchase, and
(2) in the case of such rights or warrants all of which shall have
expired or been terminated without exercise, the Conversion Price shall be
readjusted as if such rights and warrants had never been issued.
For purposes of this Section 10.04(d) and Sections 10.04(a), 10.04(b) and
10.04(c), any dividend or distribution to which this Section 10.04(d) is
applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 10.04(b) applies, or rights or
warrants to subscribe for or purchase shares of Common Stock to which Section
10.04(c) applies (or any combination thereof), shall be deemed instead to be:
(3) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants other than such shares
of Common Stock, such subdivision or combination or such rights or warrants
to which Sections 10.04(a), 10.04(b) and 10.04(c) apply, respectively (and
any Conversion Price reduction required by this Section 10.04(d) with
respect to such dividend or distribution shall then be made), immediately
followed by
(4) a dividend or distribution of such shares of Common Stock, such
subdivision or combination or such rights or warrants (and any further
Conversion Price reduction required by Sections 10.04(a), 10.04(b) and
10.04(c) with respect to such dividend or distribution shall then be made),
except:
(A) the Record Date of such dividend or distribution shall be
substituted as (x) "the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution",
"Record Date fixed for such determinations" and "Record Date" within
the meaning of Section 10.04(a), (y) "the day upon which such
subdivision becomes effective" and "the day upon which such
combination becomes effective" within the meaning of Section 10.04(b),
and (z) as "the date fixed for the determination of stockholders
entitled to receive such rights or warrants", "the Record Date fixed
for the determination of the stockholders entitled to receive such
rights or warrants" and such "Record Date" within the meaning of
Section 10.04(c), and
(B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business
on the date fixed for such determination" within the meaning of
Section 10.04(a) and any reduction or increase in the number of shares
of Common Stock resulting from such subdivision or combination shall
be disregarded in connection with such dividend or distribution.
59
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is
distributed upon a reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance to which Section
10.11 hereof applies or as part of a distribution referred to in Section
10.04(d) hereof), in an aggregate amount that, combined together with: (1)
the aggregate amount of any other such distributions to all holders of
Common Stock made exclusively in cash within the 12 months preceding the
date of payment of such distribution, and in respect of which no adjustment
pursuant to this Section 10.04(e) has been made, and (2) the aggregate of
any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution) of consideration payable in respect of any tender offer or
exchange offer by the Company or any of its Subsidiaries for all or any
portion of the Common Stock concluded within the 12 months preceding the
date of such distribution, and in respect of which no adjustment pursuant
to Section 10.04(f) hereof has been made, exceeds 10% of the product of the
Current Market Price (determined as provided in Section 10.04(g)) on the
Record Date with respect to such distribution times the number of shares of
Common Stock outstanding on such date, then and in each such case,
immediately after the close of business on such date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on such Record Date by a fraction:
(i) the numerator of which shall be equal to the Current Market
Price on the Record Date less an amount equal to the quotient of (x)
the excess of such combined amount over such 10% and (y) the number of
shares of Common Stock outstanding on the Record Date, and
(ii) the denominator of which shall be equal to the Current
Market Price on such date.
However, in the event that the then fair market value (as so determined) of the
portion of the securities so distributed (other than excluded securities)
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion of a Note (or any portion thereof) the amount of cash such Holder
would have received had such Holder converted such Note (or portion thereof)
immediately prior to such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(f) In case a tender offer or exchange offer made by the Company or
any of its Subsidiaries for all or any portion of the Common Stock shall
expire and such tender offer or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based on the
acceptance (up to any maximum specified in the terms of the tender offer or
exchange offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution) that combined together with:
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(1) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution), as of the expiration of
such tender offer or exchange offer, of consideration payable in respect of
any other tender offers or exchange offers, by the Company or any of its
Subsidiaries for all or any portion of the Common Stock expiring within the
12 months preceding the expiration of such tender offer or exchange offer
and in respect of which no adjustment pursuant to this Section 10.04(f) has
been made, and
(2) the aggregate amount of any distributions to all holders of the
Company's Common Stock made exclusively in cash within 12 months preceding
the expiration of such tender offer or exchange offer and in respect of
which no adjustment pursuant to Section 10.04(e) has been made, exceeds 10%
of the product of the Current Market Price (determined as provided in
Section 10.04(g)) as of the last time (the "Expiration Time") tenders or
exchanges could have been made pursuant to such tender offer or exchange
offer (as it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares or exchanged shares) on the
Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to close of business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time,
and
(ii) the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified
in the terms of the tender offer or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time.
Such reduction (if any) shall become effective immediately prior to the opening
of business on the day following the Expiration Time. In the event that the
Company is obligated to purchase shares pursuant to any such tender offer or
61
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such tender offer or exchange offer had not been made. If the
application of this Section 10.04(f) to any tender offer or exchange offer would
result in an increase in the Conversion Price, no adjustment shall be made for
such tender offer or exchange offer under this Section 10.04(f).
(g) For purposes of this Section 10.04, the following terms shall have
the meanings indicated:
(1) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive
Trading Days immediately prior to the date in question; provided,
however, that if:
(i) the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 10.04(a), (b), (c), (d), (e) or (f) occurs
during such ten consecutive Trading Days, the Closing Price for
each Trading Day prior to the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event;
(ii) the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 10.04(a),
(b), (c), (d), (e) or (f) occurs on or after the "ex" date for
the issuance or distribution requiring such computation and prior
to the day in question, the Closing Price for each Trading Day on
and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a
result of such other event; and
(iii) the "ex" date for the issuance or distribution
requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause
(i) or (ii) of this proviso, the Closing Price for each Trading
Day on or after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market value (as
determined by the Board of Directors in a manner consistent with
any determination of such value for purposes of Section 10.04(d)
or (f), whose determination shall be conclusive and set forth in
a Board Resolution) of the evidences of indebtedness, shares of
capital stock or assets being distributed applicable to one share
of Common Stock as of the close of business on the day before
such "ex" date.
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For purposes of any computation under Section 10.04(f), the Current Market Price
of the Common Stock on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the next two
succeeding Trading Days; provided, however, that if the "ex" date for any event
(other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 10.04(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, when used:
(A) with respect to any issuance or distribution, means the first date
on which the Common Stock trades regular way on the relevant exchange or in
the relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution;
(B) with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades regular way on
such exchange or in such market after the time at which such subdivision or
combination becomes effective, and
(C) with respect to any tender or exchange offer, means the first date
on which the Common Stock trades regular way on such exchange or in such
market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Price are called for pursuant to this Section 10.04, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 10.04 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
(2) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction.
(3) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of stockholders entitled to receive such
cash, securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Section 10.04(a), (b), (c), (d), (e) or (f),
as the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.
63
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days and the reduction is irrevocable during the period
and the Board of Directors determines in good faith that such reduction would be
in the best interests of the Company, which determination shall be conclusive
and set forth in a Board Resolution. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to the Trustee and
each Holder at the address of such Holder as it appears in the Register a notice
of the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Price then in effect; provided, however, that any adjustments
which by reason of this Section 10.04(i) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Article 10 shall be made by the Company and shall
be made to the nearest cent or to the nearest one hundredth of a share, as
the case may be. No adjustment need be made for a change in the par value
or no par value of the Common Stock.
(j) In any case in which this Section 10.04 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the Holder of any Note converted after such Record Date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash
in lieu of any fraction pursuant to Section 10.03 hereof.
(k) For purposes of this Section 10.04, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury
of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(l) If the distribution date for the rights provided in the Rights
Plan occurs prior to the date a Note is converted, the Holder of the Note
who converts such Note after the distribution date is not entitled to
receive the rights that would otherwise be attached (but for the date of
conversion) to the shares of Common Stock received upon such conversion;
provided, however, that an adjustment shall be made to the Conversion Price
pursuant to Section 10.04(b) as if the rights were being distributed to the
common stockholders of the Company immediately prior to such conversion. If
such an adjustment is made and the rights are later redeemed, invalidated
or terminated, then a corresponding reversing adjustment shall be made to
the Conversion Price, on an equitable basis, to take account of such event.
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SECTION 10.05 Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided (other than in the case of an
adjustment pursuant to the second paragraph of Section 10.04(h) for which the
notice required by such paragraph has been provided), the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an
Officers' Certificate setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based. Promptly after
delivery of such Officers' Certificate, the Company shall prepare a notice
stating that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective, and shall mail such notice to each Holder at the address of such
Holder as it appears in the Register within 20 days of the effective date of
such adjustment. Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.
SECTION 10.06 Notice Prior to Certain Actions. In case at any time after
the date hereof:
(1) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its capital
surplus or its consolidated retained earnings;
(2) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class (or of securities convertible into shares of
capital stock of any class) or of any other rights;
(3) there shall occur any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, a change in par value, a change from par value to no par value or a
change from no par value to par value), or any merger, consolidation,
statutory share exchange or combination to which the Company is a party and
for which approval of any shareholders of the Company is required, or the
sale, transfer or conveyance of all or substantially all of the assets of
the Company; or
(4) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of Notes pursuant to Section 4.05 hereof, and shall cause
to be provided to the Trustee and all Holders in accordance with Section 12.02
hereof, at least 20 days (or 10 days in any case specified in clause (1) or (2)
above) prior to the applicable record or effective date hereinafter specified, a
notice stating:
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(A) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined, or
(B) the date on which such reclassification, merger, consolidation,
statutory share exchange, combination, sale, transfer, conveyance,
dissolution, liquidation or winding up is expected to become effective, and
the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification, merger,
consolidation, statutory share exchange, sale, transfer, dissolution,
liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall affect
the legality or validity of the proceedings or actions described in clauses (1)
through (4) of this Section 10.06.
SECTION 10.07 Company to Reserve Common Stock. The Company shall at all
times use its best efforts to reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock, for the purpose of
effecting the conversion of Notes, the full number of shares of fully paid and
nonassessable Common Stock then issuable upon the conversion of all Notes
outstanding.
SECTION 10.08 Taxes on Conversions. Except as provided in the next
sentence, the Company will pay any and all taxes (other than taxes on income)
and duties that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Notes pursuant hereto. A Holder delivering a Note
for conversion shall be liable for and will be required to pay any tax or duty
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Note or Notes to be converted, and no such issue or delivery shall be made
unless the Person requesting such issue has paid to the Company the amount of
any such tax or duty, or has established to the satisfaction of the Company that
such tax or duty has been paid.
SECTION 10.09 Covenant as to Common Stock. The Company covenants that all
shares of Common Stock which may be issued upon conversion of Notes will upon
issue be fully paid and nonassessable and, except as provided in Section 10.08,
the Company will pay all taxes, liens and charges with respect to the issue
thereof.
SECTION 10.10 Cancellation of Converted Notes. All Notes delivered for
conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
2.10.
SECTION 10.11 Effect of Reclassification, Consolidation, Merger or Sale. If
any of following events occur, namely:
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(1) any reclassification or change of the outstanding shares of Common
Stock (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination),
(2) any merger, consolidation, statutory share exchange or combination
of the Company with another corporation as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock or
(3) any sale or conveyance of the properties and assets of the Company
as, or substantially as, an entirety to any other corporation as a result
of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or
in exchange for such Common Stock,
the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the TIA as in force at the date of execution of such supplemental indenture if
such supplemental indenture is then required to so comply) providing that such
Note shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) which such Holder would have
been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Notes been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance is not the same for each share
of Common Stock in respect of which such rights of election shall not have been
exercised ("Non-Electing Share"), then for the purposes of this Section 10.11
the kind and amount of securities, cash or other property receivable upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance for each Non-Electing Share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
Non-Electing Shares). Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 10. If, in the case of any such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of shares of Common Stock includes shares of stock or other securities
and assets of a corporation other than the successor or purchasing corporation,
as the case may be, in such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Notes as the Board of Directors shall reasonably consider necessary by
reason of the foregoing, including to the extent practicable the provisions
providing for the repurchase rights set forth in Section 3.10 hereof.
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The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Register, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section 10.11 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 10.11 applies to any event or occurrence, Section 10.04
hereof shall not apply.
SECTION 10.12 Adjustment for Other Distributions. If, after the Issue Date
of the Securities, the Company pays a dividend or makes a distribution to all
holders of its Common Stock consisting of Capital Stock of any class or series,
or similar equity interests, of or relating to a Subsidiary or other business
unit of the Company, the Conversion Price shall be adjusted in accordance with
the formula:
P' = P x 1/(1 + F/M)
where:
P' = the adjusted Conversion Price.
P = the current Conversion Price.
M = the average of the Post-Distribution Prices of the Common Stock for the
10 trading days commencing on and including the fifth trading day after the date
on which "ex-dividend trading" commences for such dividend or distribution on
the principal United States exchange or market which such securities are then
listed or quoted (the "Ex-Dividend Date").
F = the fair market value of the securities distributed in respect of each
share of Common Stock shall mean the number of securities distributed in respect
of each share of Common Stock multiplied by the average of the Post-Distribution
Prices of those securities distributed for the 10 trading days commencing on and
including the fifth trading day after the Ex-Dividend Date.
"Post-Distribution Price" of Capital Stock or any similar equity interest
on any date means the closing per unit sale price (or, if no closing sale price
is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on such
date for trading of such units on a "when issued" basis without due bills (or
similar concept) as reported in the composite transactions for the principal
United States securities exchange or market on which such Capital Stock or
equity interest is traded or, if the Capital Stock or equity interest, as the
case may be, is not listed on a United States national or regional securities
exchange or market, as reported by the National Association of Securities
Dealers Automated Quotation System or by the National Quotation Bureau
Incorporated; provided that if on any date such units have not traded on a "when
issued" basis, the Post-Distribution Price shall be the closing per unit sale
price (or, if no closing sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and
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the average ask prices) on such date for trading of such units on a "regular
way" basis without due bills (or similar concept) as reported in the composite
transactions for the principal United States securities exchange on which such
Capital Stock or equity interest is traded or, if the Capital Stock or equity
interest, as the case may be, is not listed on a United States national or
regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation System or by the National Quotation
Bureau Incorporated. In the absence of such quotation, the Company shall be
entitled to determine the Post-Distribution Price on the basis of such
quotations, which reflect the post-distribution value of the Capital Stock or
equity interests as it considers appropriate.
SECTION 10.13 Responsibility of Trustee for Conversion Provisions. The
Trustee, subject to the provisions of Section 7.01 hereof, and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder of
Notes to determine whether any facts exist which may require any adjustment of
the Conversion Price, or with respect to the nature or intent of any such
adjustments 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, subject to the provisions of Section 7.01 hereof, nor any
Conversion Agent shall be accountable with respect to the validity or value (of
the kind or amount) of any Common Stock, or of any other securities or property,
which may at any time be issued or delivered upon the conversion of any Note;
and it or they do not make any representation with respect thereto. Neither the
Trustee, subject to the provisions of Section 7.01 hereof, nor any Conversion
Agent shall be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Note for
the purpose of conversion; and the Trustee, subject to the provisions of Section
7.01 hereof, and any Conversion Agent shall not be responsible or liable for any
failure of the Company to comply with any of the covenants of the Company
contained in this Article.
ARTICLE 11
SUBORDINATION
SECTION 11.01 Agreement to Subordinate. The Company agrees, and each Holder
by accepting a Note agrees, that the Indebtedness, interest and other
obligations of any kind (including the obligation to pay any liquidated damages
upon the occurrence of a Registration Default) evidenced by the Notes and this
Indenture are subordinated in right of payment, to the extent and in the manner
provided in this Article 11, to the prior payment in full in cash or cash
equivalents of all Senior Indebtedness (whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Indebtedness.
SECTION 11.02 Liquidation; Dissolution; Bankruptcy. In the event of any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relating to the Company or to its assets, or any liquidation, dissolution or
other winding-up of the Company, whether voluntary or involuntary, or any
assignment for the benefit of creditors or other marshaling of assets or
69
liabilities of the Company (except in connection with the consolidation or
merger of the Company or its liquidation or dissolution following the
conveyance, transfer or lease of its properties and assets substantially upon
the terms and conditions described in Article 5), the holders of Senior
Indebtedness will be entitled to receive payment in full in cash or cash
equivalents of all Senior Indebtedness, before the Noteholders will be entitled
to receive any payment or distribution of any kind or character (other than any
payment or distribution in the form of equity securities or subordinated
securities of the Company or any successor obligor that, in the case of any such
subordinated securities, are subordinated in right of payment to all Senior
Indebtedness that may at the time be outstanding to at least the same extent as
the Notes are so subordinated (such equity securities or subordinated securities
hereinafter being "Permitted Junior Securities")) on account of principal of, or
premium, if any, or additional interest, if any, or interest on the Notes; and
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than a payment or distribution in
the form of Permitted Junior Securities), by set-off or otherwise, to which the
Noteholders or the Trustee would be entitled but for the provisions of this
Article 11 shall be paid by the liquidating trustee or agent or other person
making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of Senior
Indebtedness or their representative or representatives ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any current payment or distribution to the
holders of such Senior Indebtedness.
SECTION 11.03 Default on Designated Senior Indebtedness. (a) No payment or
distribution of any assets of the Company of any kind or character, whether in
cash, property or securities (other than Permitted Junior Securities), may be
made by or on behalf of the Company on account of principal of, premium, if any,
or interest on the Notes or on account of the purchase, redemption or other
acquisition of Notes upon the occurrence of any Payment Default until such
Payment Default shall have been cured or waived in writing or shall have ceased
to exist or such Designated Senior Indebtedness shall have been discharged or
paid in full in cash or cash equivalents. "Payment Default" shall mean a default
in payment, whether at scheduled maturity, upon scheduled installment, by
acceleration or otherwise, of principal of, or premium, if any, or interest on
Designated Senior Indebtedness beyond any applicable grace period.
(b) No payment or distribution of any assets of the Company of any kind or
character, whether in cash, property or securities (other than Permitted Junior
Securities), may be made by or on behalf of the Company on account of principal
of, premium, if any, or interest on the Notes or on account of the purchase,
redemption or other acquisition of Notes during a Payment Blockage Period (as
defined below), upon the occurrence of any default or event of default with
respect to any Designated Senior Indebtedness other than any Payment Default on
such Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated (a "Non-Payment Default") and receipt by the Trustee of written
notice thereof from the trustee or other representative of holders of Designated
Senior Indebtedness, or any default with respect to such Designated Senior
Indebtedness other than a Payment Default.
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The Payment Blockage Period shall mean the period (each, a "Payment
Blockage Period") that will commence upon the date of receipt by the Trustee of
written notice from the trustee or such other representative of the holders of
the Designated Senior Indebtedness in respect of which the Non-Payment Default
exists and shall end on the earliest of:
(i) 179 days thereafter provided that any Designated Senior
Indebtedness as to which notice was given shall not theretofore have been
accelerated;
(ii) the date on which such Non-Payment Default is cured, waived or
ceases to exist;
(iii) the date on which such Designated Senior Indebtedness is
discharged or paid in full in cash or cash equivalents; or
(iv) the date on which such Payment Blockage Period shall have been
terminated by written notice to the Trustee or the Company from the trustee
or such other representative initiating such Payment Blockage Period,
after which the Company will resume making any and all required payments in
respect of the Notes, including any missed payments. In any event, not more than
one Payment Blockage Period may be commenced during any period of 365
consecutive days. No Non-Payment Default that existed or was continuing on the
date of the commencement of any Payment Blockage Period will be, or can be made,
the basis for the commencement of a subsequent Payment Blockage Period, unless
such Non-Payment Default has been cured or waived for a period of not less than
90 consecutive days subsequent to the commencement of such initial Payment
Blockage Period.
SECTION 11.04 Acceleration of Notes. If payment of the Notes is accelerated
because of an Event of Default, the Company shall promptly notify holders of
Senior Indebtedness of the acceleration.
SECTION 11.05 When Distribution Must Be Paid Over. In the event that,
notwithstanding the provisions of Sections 11.02 and 11.03, any payment or
distribution of any kind or character, whether in cash, property or securities,
shall be received by the Trustee or any Noteholder which is prohibited by such
provisions, then such payment shall be held in trust for the benefit of, and
shall be paid over and delivered by such Trustee or Noteholder to, the trustee
or any other representative of holders of Senior Indebtedness, as their interest
may appear, for application to Senior Indebtedness remaining unpaid until all
such Senior Indebtedness has been paid in full in cash or cash equivalents after
giving effect to any concurrent distribution to or for the holders of Senior
Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 11, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness, and shall not be liable to any such
71
holders if the Trustee shall pay over or distribute to or on behalf of
Noteholders or the Company or any other Person money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article 11,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 11.06 Notice by the Company. The Company shall promptly notify the
Trustee and the Paying Agent of any facts known to the Company that would cause
a payment of any obligations with respect to the Notes to violate this Article
11, but failure to give such notice shall not affect the subordination of the
Notes to the Senior Indebtedness as provided in this Article 11.
SECTION 11.07 Subrogation. After all Senior Indebtedness is paid in full
and until the Notes are paid in full, Noteholders shall be subrogated (equally
and ratably with all other Indebtedness that is equal in right of payment to the
Notes) to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to the Noteholders have been applied to the payment of Senior
Indebtedness. A distribution made under this Article 11 to holders of Senior
Indebtedness that otherwise would have been made to Noteholders is not, as
between the Company and Noteholders, a payment by the Company of the Notes.
SECTION 11.08 Relative Rights. This Article 11 defines the relative rights
of Holders and holders of Senior Indebtedness. Nothing in this Indenture shall:
(i) impair, as between the Company and Holders, the obligation of the Company,
which is absolute and unconditional, to pay principal of and interest on the
Notes in accordance with their terms; (ii) affect the relative rights of Holders
and creditors of Holdings other than their rights in relation to holders of
Senior Indebtedness; or (iii) prevent the Trustee or any Holder from exercising
its available remedies upon a Default or Event of Default, subject to the rights
of holders and owners of Senior Indebtedness to receive distributions and
payments otherwise payable to Holders of Notes. If the Company fails because of
this Article 11 to pay principal of or interest on a Note on the Stated Maturity
date, the failure is still a Default or Event of Default.
SECTION 11.09 Subordination May Not Be Impaired by the Company. No right of
any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
Without in any way limiting the generality of this Section 11.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Trustee or the Holders and without impairing or releasing
the subordination provided in this Article 11 or the obligations hereunder of
the Holders to the holders of Senior Indebtedness, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding or secured; (b) sell, exchange, release, foreclose against or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Senior Indebtedness; and (d) exercise or refrain from exercising any rights
against the Company, and Subsidiary thereof or any other Person.
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SECTION 11.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of any Senior
Indebtedness, the distribution may be made and the notice given to their trustee
or representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the Holders of Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such representative(s) or 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, all 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
11.
SECTION 11.11 Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article 11 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
a Responsible Officer of the Trustee shall have received at its Corporate Trust
Office at least three Business Days prior to the date of such payment written
notice of facts that would cause the payment of any obligations with respect to
the Notes to violate this Article 11. Only the Company or its representative may
give such notice. Nothing in this Article 11 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.06.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 12.02 Notices. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in person or mailed
by first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
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if to the Company:
The Profit Recovery Group International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
SunTrust Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
**▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Division
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Noteholder shall be mailed to the
Noteholder, by first-class mail, postage prepaid, at the Noteholder's address as
it appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Noteholders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
co-registrar.
SECTION 12.03 Communication by Holders with Other Holders. Noteholders may
communicate pursuant to TIA Section 312(b) with other Noteholders with respect
to their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar, the Paying Agent, the Conversion Agent and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.04 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 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
74
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.05 Statements Required in Certificate or Opinion. Each Officers'
Certificate or Opinion of Counsel with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that each person making such Officers' Certificate or
Opinion of Counsel 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
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
SECTION 12.06 Separability Clause. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.07 Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Noteholders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
SECTION 12.08 Legal Holidays. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including a date for giving notice or
making a payment or a purchase) is a Legal Holiday, the action shall be taken on
the next succeeding day that is not a Legal Holiday, and, if the action to be
taken on such date is a payment in respect of the Notes, no interest, if any,
shall accrue for the intervening period.
SECTION 12.09 GOVERNING LAW. THIS INDENTURE AND THE NOTES WILL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 12.10 No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Noteholder shall waive and release all such liability.
The waiver and release shall be part of the consideration for the issue of the
Notes.
75
SECTION 12.11 Successors. All agreements of the Company in this Indenture
and the Notes shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 12.12 Multiple Originals. The parties may sign any number of copies
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
76
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
SUNTRUST BANK,
as Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
EXHIBIT A-1
[FORM OF FACE OF GLOBAL NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
BY ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS (A) A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THIS NOTE 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; (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS TWO
YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE
SECURITIES ACT) AFTER THE LATER OF THE INITIAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY AND THE LAST DATE ON WHICH THE PROFIT RECOVERY GROUP INTERNATIONAL, INC,
(THE "COMPANY") OR ANY "AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES
ACT) OF THE COMPANY WAS THE OWNER OF THE NOTE (THE "RESTRICTION TERMINATION
DATE") RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON
STOCK ISSUED UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER 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, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
A-1-1
WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER
THE SECURITIES ACT THAT IS ACQUIRING A MINIMUM OF $100,000 AGGREGATE PRINCIPAL
AMOUNT OF THE NOTES 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, (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
REGISTRATION PROVIDED UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THE NOTE EVIDENCED HEREBY BEFORE THE RESTRICTION TERMINATION
DATE (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS NOTE TO SUNTRUST BANK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE). THE HOLDER MUST, PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), FURNISH TO SUNTRUST BANK,
AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED UPON ANY TRANSFER OF THE NOTE EVIDENCED HEREBY
PURSUANT TO CLAUSE 2(E) ABOVE OR UPON OR AFTER THE RESTRICTION TERMINATION DATE.
A-1-2
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
43/4% Convertible Subordinated Notes due 2006
CUSIP NO. ▇▇▇▇▇▇▇▇▇
No.: 1
Issue Date: November 26, 2001
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. a Georgia corporation,
promises to pay to Cede & Co. or registered assigns, the principal sum of
[_______________] DOLLARS ($[_____________]) on November 26, 2006.
This Note shall bear interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note.
Additional provisions of this Note are set forth on the other side of this
Note.
Dated: November 26, 2001 THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
By: ___________________________________
Name:
Title:
[SEAL]
Attest:
--------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
SunTrust Bank,
as Trustee, certifies that this
is one of the Notes referred to
in the within-mentioned Indenture (as
defined on the other side of this Note).
By_____________________________
Authorized Signatory
Dated: ________________________
A-1-3
[FORM OF REVERSE SIDE OF NOTE]
43/4% Convertible Subordinated Note due 2006
Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture unless otherwise indicated.
1. Cash Interest.
The Company promises to pay interest at the Interest Rate in cash on the
principal amount of this Note. The Company will pay cash interest semi-annually
in arrears on May 26 and November 26 of each year (each an "Interest Payment
Date"), beginning on May 26, 2002, to Holders of record at the close of business
on the preceding May 11 or November 11 (whether or not a business day) (each a
"Regular Record Date"), as the case may be, immediately preceding such Interest
Payment Date. Cash interest on the Notes will accrue from the most recent date
to which interest has been paid or duly provided or, if no interest has been
paid, from the Issue Date. Cash interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay cash interest on
overdue principal, or if shares of Common Stock (or cash in lieu of fractional
shares) in respect of a conversion of this Note in accordance with the terms of
Article 10 of the Indenture are not delivered when due, at the rate borne by the
Notes, and it shall pay interest in cash on overdue installments of cash
interest at the same rate to the extent lawful. All such overdue cash interest
shall be payable on demand.
In accordance with the terms of the Registration Rights Agreement, during
the first 90 days following a Registration Default (as defined in the
Registration Rights Agreement), the Interest Rate borne by the Notes shall be
increased by 0.25% on:
(A) the 61st day after the earliest date of original issuance of any of
the Notes, if the Shelf Registration Statement is not filed with the
SEC; or
(B) the 151st day following the earliest date of original issuance of any
of the Notes, if the Shelf Registration Statement is not declared
effective; or
(C) the day after the fifth business day after the Shelf Registration
Statement, previously declared effective, ceases to be effective or
fails to be usable, if a post-effective amendment (or report filed
with the Exchange Act) that cures the Shelf Registration Statement is
not filed during such five Business Day period; or
(D) the day after the 45th or 90th day, as the case may be, of any period
that the prospectus contained in the Shelf Registration Statement has
been suspended, if such suspension has not been terminated.
From and after the 91st day following such Registration Default, the Interest
Rate borne by the Notes shall be increased by 0.50%. In no event shall the
Interest Rate borne by the Notes be increased by more than 0.50%
A-1-4
Any amount of additional interest will be payable in cash semi-annually, in
arrears, on each Interest Payment Date and will cease to accrue on the date the
Registration Default is cured. The Holder of this Security is entitled to the
benefits of the Registration Rights Agreement.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of the principal of, premium, if any, and cash interest on
this Note and in respect of Redemption Prices and Change in Control Repurchase
Prices to Holders who surrender Notes to a Paying Agent to collect such payments
in respect of the Notes. The Company will pay cash amounts in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may make such cash payments by check
payable in such money. A Holder with an aggregate principal amount of Notes in
excess of $5,000,000 will be paid by wire transfer in immediately available
funds at the written election of such ▇▇▇▇▇▇ received by the Paying Agent and
containing all relevant information necessary to make such wire transfer. Any
such election shall remain in full force and effect unless rescinded or
otherwise modified in writing. Any payment required to be made on any day that
is not a Business Day will be made on the next succeeding Business Day.
3. Paying Agent, Conversion Agent and Registrar.
Initially, SunTrust Bank (the "Trustee"), will act as Paying Agent,
Conversion Agent and Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or co-registrar without notice, other than
notice to the Trustee except that the Company will maintain at least one Paying
Agent in the State of New York, City of New York, Borough of Manhattan, which
shall initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.
4. Indenture.
The Company issued the Notes under an Indenture dated as of November 26,
2001 (the Indenture"), between the Company and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Notes are subject to
all such terms, and Noteholders are referred to the Indenture and the TIA for a
statement of those terms.
The Notes are general unsecured obligations of the Company initially
limited to $110,000,000 aggregate principal amount (subject to Section 2.07 of
the Indenture and the Issuer's right to reopen the series of Notes pursuant
Section 2.02 of the Indenture). The Indenture does not limit other indebtedness
of the Company, secured or unsecured.
A-1-5
5. Optional Redemption.
This Note is not redeemable prior to November 26, 2004. This Note may be
redeemed in whole or in part, upon not less than 30 nor more than 60 days
notice, at any time and from time to time on or after November 26, 2004 and
prior to Stated Maturity, at the option of the Company, at the redemption price
of $1,000 per $1,000 principal amount of Notes plus any interest accrued but not
paid prior to (but not including) the Optional Redemption Date, if the Closing
Price of the Common Stock has exceeded 140% of the Conversion Price (as defined
in the Indenture and as such may be adjusted from time to time) then in effect
for at least 20 Trading Days in any consecutive 30 Trading Day period ending on
the Trading Day prior to the date of mailing of the notice of optional
redemption pursuant to Section 3.05 of the Indenture.
If fewer than all the Notes are to be redeemed, the Trustee shall select
the particular Notes to be redeemed from the outstanding Notes by the methods as
provided in the Indenture. If any Note selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Note so selected, the converted portion of such Note shall be
deemed to be the portion selected for redemption (provided, however, that the
Holder of such Note so converted and deemed redeemed shall not be entitled to
any additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Note). Notes which have been converted during a selection of Notes to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection.
On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price and accrued and unpaid interest.
Notice of redemption will be given by the Company to the Holders as
provided in the Indenture.
No sinking fund is provided for the Notes.
6. Repurchase by the Company at the Option of the Holder.
If a Change in Control occurs, the Holder, at the Holder's option, shall
have the right, in accordance with the provisions of the Indenture, to require
the Company to repurchase the Notes (or any portion of the principal amount
hereof that is at least $1,000 or an integral multiple thereof, provided that
the portion of the principal amount of this Note to be outstanding after such
repurchase is at least equal to $1,000) at the Change in Control Repurchase
Price in cash or Common Stock or a combination thereof, plus any interest
accrued and unpaid to, but excluding, the Change in Control Repurchase Date.
Subject to the conditions provided in the Indenture, the Company may elect
to pay the Change in Control Repurchase Price (to the extent not paid in cash)
by delivering a number of shares of Common Stock equal to (i) the Change in
Control Repurchase Price divided by (ii) 95% of the average of the Closing
Prices per share for the five consecutive Trading Days immediately preceding and
including the third Trading Day prior to the Change in Control Repurchase Date.
A-1-6
No fractional shares of Common Stock will be issued upon repurchase of any
Notes. Instead of any fractional share of Common Stock which would otherwise be
issued upon conversion of such Notes, the Company shall pay a cash adjustment as
provided in the Indenture.
A Change in Control Repurchase Notice will be given by the Company to the
Holders as provided in the Indenture. To exercise a repurchase right, a Holder
must deliver to the Trustee a written notice as provided in the Indenture.
Holders have the right to withdraw any Change in Control Repurchase Notice
by delivering to the Paying Agent a written notice of withdrawal in accordance
with the provisions of the Indenture.
7. Notice of Redemption.
Notice of an optional redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at the Holder's registered address. If money sufficient to pay the
Redemption Price of all Notes (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date, immediately after such Redemption Date interest ceases to accrue on such
Notes or portions thereof. Notes in denominations larger than $1,000 of
principal amount may be redeemed in part but only in integral multiples of
$1,000 of principal amount.
8. Conversion.
Subject to the next two succeeding sentences, a Holder of a Note may
convert it into Common Stock of the Company at any time before the close of
business on November 26, 2006. If the Note is called for redemption, the Holder
may convert it at any time before the close of business on the Business Day
preceding the Redemption Date. A Note in respect of which a Holder has delivered
a Change in Control Repurchase Notice exercising the option of such Holder to
require the Company to purchase such Note may be converted only if such notice
of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Price shall be equal to $7.74 per share of Common
Stock, subject to adjustment in certain events described in the Indenture. The
Company shall pay a cash adjustment as provided in the Indenture in lieu of any
fractional share of Common Stock.
To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the Note
to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Company or the Trustee and
(4) pay any transfer or similar tax, if required.
9. Conversion Arrangement on Call for Redemption.
Any Notes called for redemption, unless surrendered for conversion before
the close of business on the Business Day preceding the Redemption Date, may be
deemed to be purchased from the Holders of such Notes at an amount not less than
the Redemption Price, by one or more investment bankers or other purchasers who
A-1-7
may agree with the Company to purchase such Notes from the Holders, to convert
them into Common Stock of the Company and to make payment for such Notes to the
Trustee in trust for such Holders.
10. Denominations; Transfer; Exchange.
The Notes are in fully registered form, without coupons, in denominations
of $1,000 of principal amount and integral multiples of $1,000. A Holder may
transfer or exchange Notes 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 transfer or exchange any Notes selected
for redemption (except, in the case of a Note to be redeemed in part, the
portion of the Note not to be redeemed) or any Notes in respect of which a
Change in Control Repurchase Notice has been given and not withdrawn (except, in
the case of a Note to be purchased in part, the portion of the Note not to be
purchased) or any Notes for a period of 15 days before the mailing of a notice
of redemption of Notes to be redeemed.
11. Persons Deemed Owners.
The registered Holder of this Note may be treated as the owner of this Note
for all purposes.
12. Unclaimed Money or Notes.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or Notes held by them for the payment of any amount with
respect to the Notes that remains unclaimed for two years, subject to applicable
unclaimed property law. After return to the Company, Holders entitled to the
money or Notes must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another person.
13. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Notes may be amended with the written consent of the Holders of at least
a majority in aggregate principal amount of the Notes at the time outstanding
and (ii) certain Defaults may be waived with the written consent of the Holders
of a majority in aggregate principal amount of the Notes at the time
outstanding. Subject to certain exceptions set forth in the Indenture, without
the consent of any Noteholder, the Company and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with Article 5 of the Indenture, to provide for uncertificated
Notes in addition to or in place of certificated Notes or to make any change
that does not adversely affect the rights of any Noteholder, or to comply with
any requirement of the SEC in connection with the qualification of the Indenture
under the TIA.
14. Defaults and Remedies.
Under the Indenture, Events of Default include (1) the Company fails to pay
when due the principal of or premium, if any, on any of the Notes at maturity,
upon redemption or exercise of a repurchase right or otherwise, whether or not
such payment is prohibited by Article 11 of the Indenture; (2) the Company fails
A-1-8
to pay an installment of interest (including liquidated damages, if any) on any
of the Notes that continues for 30 days after the date when due, whether or not
such payment is prohibited by Article 11 of the Indenture; (3) the Company fails
to deliver shares of Common Stock, together with cash in lieu of fractional
shares, when such Common Stock or cash in lieu of fractional shares is required
to be delivered upon conversion of a Note and such failure continues for 10 days
after such delivery date; (4) the Company fails to perform or observe any other
term, covenant or agreement contained in the Notes or the Indenture for a period
of 30 days after written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding; (5) the Company fails to give or cause the Trustee
to give all Noteholders notice of the occurrence of a Change in Control in
accordance with the provisions of Section 3.10(c) of the Indenture; (6) (A) one
or more defaults in the payment of principal of or premium, if any, on any of
the Company's Indebtedness aggregating $5,000,000 or more, when the same becomes
due and payable at the scheduled maturity thereof, and such default or defaults
shall have continued after any applicable grace period and shall not have been
cured or waived within a 30-day period after the date of such default or (B) any
of the Company's Indebtedness aggregating $5,000,000 or more shall have been
accelerated or otherwise declared due and payable, or required to be prepaid or
repurchased (other than by regularly scheduled required prepayment) prior to the
scheduled maturity thereof and such acceleration is not rescinded or annulled
within a 30-day period after the date of such acceleration; and (7) if
unsatisfied judgements not covered by insurance aggregating in excess of
$5,000,000 rendered against the Company or any of its Affiliates and not stayed,
bonded or discharged within 60 days; and (8) certain events of bankruptcy,
insolvency or reorganization with respect to the Company or any Significant
Subsidiary or any Subsidiaries of the Company which in the aggregate would
constitute a Significant Subsidiary. If an Event of Default (other than an Event
of Default specified in clause (8) or (9) of Section 6.01 of the Indenture)
occurs and is continuing, the Trustee, or the Holders of at least 25% in
aggregate principal amount of the Notes at the time outstanding, may declare all
the Notes to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes becoming due and
payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Noteholders notice of any continuing
Default (except a Default in payment of amounts specified in clause (1) or (2)
above) if it determines that withholding notice is in their interests.
15. Subordination
The payment of principal of, premium, if any, and interest on the Notes
will be subordinated in right of payment, as set forth in the Indenture, to the
prior payment in full in cash or cash equivalents of all Senior Indebtedness
whether outstanding on the date of the Indenture or thereafter incurred.
A-1-9
16. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
18. Authentication.
This Note shall not be valid until an authorized signatory of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Note.
19. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder 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 Gift to Minors
Act).
20. GOVERNING LAW.
THE INDENTURE AND THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
-----------------
The Company will furnish to any Noteholder upon written request and without
charge a copy of the Indenture which has in it the text of this Note in larger
type. Requests may be made to:
The Profit Recovery Group International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-8426
Attention: Chief Financial Officer
A-1-10
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Note, fill in the form below: To convert this Note into Common Stock of the
Company, check the box:
I or we assign and transfer this Note to [ ]
------------------------------------------------------------ To convert only part of this Note, state the
principal amount to be converted (which must be
$1,000 or an integral multiple of $1,000):
------------------------------------------------------------
(Insert assignee's social sec. or tax ID no.)
$--------------------------
If you want the stock certificate made out in
another person's name, fill in the form below:
------------------------------------------------------------
------------------------------------------------------------
(Print or type assignee's name, address and zip code)
-----------------------------------------------------
-----------------------------------------------------
(Insert other person's social sec. or tax ID no.)
And irrevocably appoint
A-1-11
_____________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to
act for him.
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
(Print or type other person's name, address and zip
code)
---------------------------------------------------------------- -----------------------------------------------------
Date: Your Signature:
----------------------------------------------------------- --------------------------------------
(Sign exactly as your name appears on the other side of this Note)
A-1-12
EXHIBIT A-2
[Form of Certificated Note]
THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE, THE SHARES
OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL,
OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE PROFIT RECOVERY GROUP INTERNATIONAL,
INC. (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE
(OR ANY PREDECESSOR OF SUCH NOTE) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS NOTE ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, 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 WHICH NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHTS PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE 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.
[THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.]
A-2-1
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
43/4% Convertible Subordinated Notes due 2006
CUSIP NO. 743168 AA4
No.:
Issue Date:
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC., a Georgia corporation,
promises to pay to Cede & Co. or registered assigns, the principal sum of
[___________] DOLLARS ($[__________]) on November 26, 2006.
This Note shall bear interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note.
Additional provisions of this Note are set forth on the other side of this
Note.
Dated: November 26, 2001 THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC.
By:
--------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
SunTrust Bank, as Trustee,
certifies that this is one of
the Notes referred to in the
within-mentioned Indenture (as
defined on the other side of this Note).
By:
----------------------------------------
Authorized Signatory
Dated:
-------------------------------------
A-2-2
[Text of Reverse Side of Note]
Use Exhibit A-1 Text
A-2-3
EXHIBIT B-1
Transfer Certificate
In connection with any transfer of any of the Notes within the period prior
to the expiration of the holding period applicable to the sales thereof under
Rule 144(k) under the Securities Act of 1933, as amended (the "Securities Act")
(or any successor provision), the undersigned registered owner of this Note
hereby certifies with respect to $____________ principal amount of the
above-captioned Notes presented or surrendered on the date hereof (the
"Surrendered Notes") for registration of transfer, or for exchange or conversion
where the Notes issuable upon such exchange or conversion are to be registered
in a name other than that of the undersigned registered owner (each such
transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Notes for the reason
checked below:
[] A transfer of the Surrendered Notes is made to the Company or any
Subsidiaries; or
[] The transfer of the Surrendered Notes is being made to a qualified
institutional buyer (as defined in Rule 144A promulgated under the
U.S. Securities Act of 1933, as amended (the "Securities Act")) and
otherwise complies with complies with Rule 144A; or
[] The transfer of Surrendered Notes in a minimum aggregate principal
amount of $100,000 is being made to an institutional investor which is
an "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act) and otherwise complies
with complies with Regulation D; or
[] The transfer of the Surrendered Notes is pursuant to an effective
registration statement under the Securities Act; or
[] The transfer of the Surrendered Notes is pursuant to another available
exemption from the registration requirement of the Securities Act.
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Notes are not being transferred to an "affiliate"
of the Company as defined in Rule 144 under the Securities Act (an "Affiliate").
[] The transferee is an Affiliate of the Company.
DATE: Signature(s)
(If the registered owner is a corporation, partnership or
fiduciary, the title of the Person signing on behalf of
such registered owner must be stated.)
A-2-4
EXHIBIT C-1
[Form of Accredited Investor Representation Letter]
The Profit Recovery Group International, Inc.
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Dear Sirs and Mesdames:
We are delivering this letter in connection with the proposed transfer of
$_____________ principal amount of the 43/4% Convertible Subordinated Notes due
2006 (the "Notes") of The Profit Recovery Group International, Inc. (the
"Company"), which are convertible into shares of the Company's Common Stock, no
par value per share (the "Common Stock").
We hereby confirm that:
(i) we are an institutional "accredited investor" within the meaning
of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
of 1933, as amended (the "Securities Act") (an "Institutional Accredited
Investor");
(ii) any purchase of the securities by us will be for our own account
or for the account of one or more other institutional accredited investors
for which we exercise sole investment discretion;
(iii) in the event that we purchase any of the securities, we will
acquire securities having a minimum principal amount of not less than
$100,000 for our own account or for any separate account for which we are
acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing the securities;
(v) we are not acquiring the securities with a view to distribution
thereof or with any present intention of offering or selling any of the
securities, except inside the United States in accordance with Rule 144A
under the Securities Act, as provided below; provided that the disposition
of our property and the property of any accounts for which we are acquiring
securities shall remain at all times within our control; and
(vi) we have received a copy of the offering memorandum relating to
the offering of the securities and acknowledge that we have had access to
such financial and other information, and have been afforded the
C-1-1
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 securities.
We understand that the Notes were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Notes and the shares of Common
Stock (the "Notes") issuable upon conversion thereof have not been registered
under the Securities Act, and we agree, on our own behalf and on behalf of each
account for which we acquire any Notes, that if in the future we decide to
resell or otherwise transfer such Notes prior to the date (the "Resale
Restriction Termination Date") which is two years after the later of the
original issuance of the Notes and the last date on which the Company or an
affiliate of the Company was the owner of the Note, such Notes may be resold or
otherwise transferred only (i) to the Company or any subsidiary thereof, or (ii)
for as long as the Notes are eligible for resale pursuant to Rule 144A, 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 which notice is given that the
transfer is being made in reliance on Rule 144A, or (iii) to an Institutional
Accredited Investor that is acquiring the Note for its own account, or for the
account of such 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 (iv) pursuant to another available exemption
from registration under the Securities Act (if applicable), or (v) pursuant to a
registration statement which has been declared effective under the Securities
Act and, in each case, in accordance with any applicable securities laws of any
State of the United States or any other applicable jurisdiction and in
accordance with the legends set forth on the Notes. We further agree to provide
any person purchasing any of the Notes other than pursuant to clause (v) above
from us a notice advising such purchaser that resales of such Notes are
restricted as stated herein. We understand that the trustee or the transfer
agent, as the case may be, for the Notes will not be required to accept for
registration of transfer any Notes pursuant to (iii) or (iv) above except upon
presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that any
Notes will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph other
than certificates representing Notes transferred pursuant to clause (v) above.
We acknowledge that you and others will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
Date:
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(Name of Purchaser)
By:
---------------------------------
Name:
Title:
Address:
C-1-2
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