Exhibit 4.2
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NCO GROUP, INC.
4.75% Convertible Subordinated Notes
Due 2006
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INDENTURE
Dated as of April 4, 2001
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BANKERS TRUST COMPANY,
as Trustee
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TABLE OF CONTENTS(1)
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.........................................................................................1
Section 1.2. Other Definitions...................................................................................6
Section 1.3. Incorporation by Reference of Trust Indenture Act...................................................7
Section 1.4. Rules of Construction...............................................................................7
ARTICLE 2.
THE SECURITIES
Section 2.1. Designation, Form and Dating........................................................................8
Section 2.2. Execution and Authentication........................................................................8
Section 2.3. Registrar, Paying Agent and Conversion Agent........................................................9
Section 2.4. Paying Agent To Hold Money in Trust.................................................................9
Section 2.5. Securityholder Lists...............................................................................10
Section 2.6. Transfer and Exchange..............................................................................10
Section 2.7. Replacement Securities.............................................................................17
Section 2.8. Outstanding Securities.............................................................................17
Section 2.9. Treasury Securities................................................................................18
Section 2.10. Temporary Securities...............................................................................18
Section 2.11. Cancellation.......................................................................................18
Section 2.12. CUSIP Numbers......................................................................................19
ARTICLE 3.
REDEMPTION AND REPURCHASE
Section 3.1. Optional Redemption by the Company.................................................................19
Section 3.2. Election To Redeem; Notice to Trustee..............................................................19
Section 3.3. Selection of Securities To Be Redeemed.............................................................19
Section 3.4. Notice of Redemption...............................................................................20
Section 3.5. Deposit of Redemption Price........................................................................20
Section 3.6. Securities Payable on Redemption Date..............................................................21
Section 3.7. Securities Redeemed in Part........................................................................21
Section 3.8. Conversion Arrangement on Call for Redemption......................................................21
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(1) This Table of Contents shall not, for any purpose, be deemed to be part of
this Indenture.
i
Section 3.9. Repurchase of Securities at Option of the Holder upon Change in Control............................22
Section 3.10. Notice; Method of Exercising Repurchase Right......................................................23
Section 3.11. Effect of Repurchase Notice........................................................................25
Section 3.12. Deposit of Repurchase Price........................................................................26
Section 3.13. Securities Repurchased in Part.....................................................................26
Section 3.14. Compliance with Securities Laws upon Repurchase of Securities......................................26
Section 3.15. Repayment to the Company...........................................................................26
ARTICLE 4.
CONVERSION
Section 4.1. Conversion Privilege...............................................................................27
Section 4.2. Conversion Procedure...............................................................................27
Section 4.3. Adjustments Below Par Value........................................................................28
Section 4.4. Taxes on Conversion................................................................................29
Section 4.5. Company To Provide Stock...........................................................................29
Section 4.6. Adjustment of Conversion Price.....................................................................30
Section 4.7. No Adjustment......................................................................................33
Section 4.8. Equivalent Adjustments.............................................................................33
Section 4.9. Adjustment for Tax Purposes........................................................................33
Section 4.10. Notice of Adjustment...............................................................................34
Section 4.11. Notice of Certain Transactions.....................................................................34
Section 4.12. Effect of Reclassification, Consolidation, Merger or Sale on Conversion Privilege..................35
Section 4.13. Trustee's Disclaimer...............................................................................35
Section 4.14. Voluntary Reduction................................................................................36
ARTICLE 5.
SUBORDINATION
Section 5.1. Securities Subordinated to Senior Indebtedness.....................................................36
Section 5.2. Securities Subordinated to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation,
Reorganization, Etc., of the Company...............................................................37
Section 5.3. Securityholders To Be Subrogated to Right of Holders of Senior Indebtedness........................38
Section 5.4. Obligations of the Company Unconditional...........................................................38
Section 5.5. Company Not To Make Payment with Respect to Securities in Certain Circumstances....................39
Section 5.6. Notice to Trustee..................................................................................40
Section 5.7. Application by Trustee of Monies Deposited with It.................................................40
Section 5.8. Subordination Rights Not Impaired by Acts or Omissions of the Company or
Holders of Senior Indebtedness.................................................................... 41
Section 5.9. Trustee To Effectuate Subordination................................................................41
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Section 5.10. Right of Trustee To Hold Senior Indebtedness.......................................................41
Section 5.11. Article 5 Not To Prevent Events of Default.........................................................41
Section 5.12. No Fiduciary Duty Created to Holders of Senior Indebtedness........................................41
Section 5.13. Article Applicable to Paying Agents................................................................42
Section 5.14. Certain Conversion Deemed Payment..................................................................42
ARTICLE 6.
COVENANTS
Section 6.1. Payment of Securities..............................................................................42
Section 6.2. SEC Reports; 144A Information......................................................................43
Section 6.3. Liquidation........................................................................................43
Section 6.4. Compliance Certificates............................................................................44
Section 6.5. Notice of Defaults.................................................................................44
Section 6.6. Payment of Taxes and Other Claims..................................................................45
Section 6.7. Corporate Existence................................................................................45
Section 6.8. Maintenance of Properties..........................................................................45
Section 6.9. Further Instruments and Acts.......................................................................45
Section 6.10. Maintenance of Office or Agency....................................................................45
Section 6.11. Resale of Certain Securities; Reporting Issuer.....................................................46
Section 6.12. Registration Rights................................................................................46
Section 6.13. Additional Interest................................................................................47
Section 6.14. Stay, Extension and Usury Laws.....................................................................47
ARTICLE 7.
SUCCESSOR CORPORATION
Section 7.1. When Company May Merge, Etc........................................................................48
Section 7.2. Successor Corporation Substituted..................................................................48
ARTICLE 8.
DEFAULT AND REMEDIES
Section 8.1. Events of Default..................................................................................49
Section 8.2. Acceleration.......................................................................................50
Section 8.3. Other Remedies.....................................................................................51
Section 8.4. Waiver of Defaults and Events of Default...........................................................51
Section 8.5. Control by Majority................................................................................51
Section 8.6. Limitation on Suits................................................................................52
Section 8.7. Rights of Holders To Receive Payment...............................................................52
Section 8.8. Collection Suit by Trustee.........................................................................52
Section 8.9. Trustee May File Proofs of Claim...................................................................53
Section 8.10. Priorities.........................................................................................53
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Section 8.11. Undertaking for Costs..............................................................................53
Section 8.12. Restoration of Rights and Remedies.................................................................54
Section 8.13. Rights and Remedies Cumulative.....................................................................54
Section 8.14. Delay or Omission Not Waiver.......................................................................54
ARTICLE 9.
TRUSTEE
Section 9.1. Duties of Trustee..................................................................................54
Section 9.2. Rights of Trustee..................................................................................55
Section 9.3. Individual Rights of Trustee.......................................................................57
Section 9.4. Trustee's Disclaimer...............................................................................57
Section 9.5. Notice of Default or Events of Default.............................................................57
Section 9.6. Reports by Trustee to Holders......................................................................57
Section 9.7. Compensation and Indemnity.........................................................................57
Section 9.8. Replacement of Trustee.............................................................................58
Section 9.9. Successor Trustee by Merger, Etc...................................................................59
Section 9.10. Eligibility; Disqualification......................................................................59
Section 9.11. Preferential Collection of Claims Against Company..................................................59
ARTICLE 10.
SATISFACTION AND DISCHARGE OF INDENTURE
Section 10.1. Termination of Company's Obligations...............................................................60
Section 10.2. Application of Trust Money.........................................................................60
Section 10.3. Repayment to Company...............................................................................61
Section 10.4. Reinstatement......................................................................................61
ARTICLE 11.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 11.1. Without Consent of Holders.........................................................................61
Section 11.2. With Consent of Holders............................................................................62
Section 11.3. Compliance with Trust Indenture Act................................................................63
Section 11.4. Revocation and Effect of Consents..................................................................63
Section 11.5. Notation on or Exchange of Securities..............................................................63
Section 11.6. Trustee To Sign Amendments, Etc.; Notices..........................................................63
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ARTICLE 12.
MISCELLANEOUS
Section 12.1. Trust Indenture Act Controls.......................................................................64
Section 12.2. Notices............................................................................................64
Section 12.3. Communications by Holders with Other Holders.......................................................65
Section 12.4. Certificate and Opinion as to Conditions Precedent.................................................65
Section 12.5. Record Date for Vote or Consent of Securityholders.................................................66
Section 12.6. Rules by Trustee, Paying Agent, Registrar..........................................................66
Section 12.7. Legal Holidays.....................................................................................66
Section 12.8. Governing Law......................................................................................66
Section 12.9. No Adverse Interpretation of Other Agreements......................................................66
Section 12.10. No Recourse Against Others.........................................................................67
Section 12.11. Successors.........................................................................................67
Section 12.12. Multiple Counterparts..............................................................................67
Section 12.13. Separability.......................................................................................67
Section 12.14. Table of Contents, Headings, Etc...................................................................67
Signatures..........................................................................................................S-1
Exhibit A...........................................................................................................A-1
v
INDENTURE dated as of April 4, 2001 between NCO Group, Inc., a
Pennsylvania corporation (the "Company"), and Bankers Trust Company, a New York
banking corporation, as trustee (the "Trustee").
Both parties agree as follows for the benefit of the other and for the
equal and ratable benefit of the registered holders of the Company's 4.75%
Convertible Subordinated Notes Due 2006.
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
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The terms defined in this Section 1.1 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.1.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Business Day" means a day that is not a Legal Holiday.
"Cash" or "cash" means such coin or currency of the United States as at
any time of payment is legal tender for the payment of public and private debts.
"Closing Price" with respect to any securities on any day shall mean
the closing sale price regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices,
regular way, in each case on the principal national security exchange or
quotation system on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from time to time
by the Board of Directors for that purpose, or a price determined in good faith
by the Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 4.12, however, shares issuable on conversion of Securities shall
include only shares of Common Stock, no par value per share (which is the class
designated as Common Stock of the Company at the date of this Indenture), or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion to 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 such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"Consolidated Net Worth" means, with respect to any Person, the
consolidated stockholders' equity (excluding any capital stock that by its terms
is, or upon the happening of an event or passage of time would be, required to
be redeemed prior to the maturity of the Securities or is redeemable at the
option of the holder thereof at any time prior to such maturity or is
convertible or exchangeable for debt securities at any time prior to such
maturity at the option of the holder thereof) of such Person and its
consolidated subsidiaries, as determined in accordance with generally accepted
accounting principles.
"Corporate Trust Office" of the Trustee means the office of the Trustee
at which this Indenture is administered, which office initially is located at
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Default" or "default" means any event which is, or after notice or
passage of time, or both, would be, an Event of Default.
"Depositary" means, with respect to the Securities issuable or issued
in whole or in part in global form, The Depository Trust Company as the
Depositary with respect to the Securities, until a successor shall have been
appointed and becomes such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Indebtedness" means (a) the Company's obligations
arising under or out of that certain Fifth Amended and Restated Credit
Agreement, dated as of December 31, 1999, among the Company, Mellon Bank, N.A.
as Administrative Agent, and the Lenders party thereto, as previously amended
and as the same may be amended, restated, modified, supplemented or refinanced
from time to time and each instrument and agreement entered into in connection
therewith and (b) the Company's obligations under any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof, or related agreements or documents to which the
Company is party, expressly provides that such Indebtedness shall be "Designated
Senior Indebtedness" for purposes of this Indenture. The instrument, agreement
or other document evidencing any Designated Senior Indebtedness may place
limitations or conditions on the right of such Senior Indebtedness to exercise
the rights of Designated Senior Indebtedness provided under this Indenture.
2
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Purchaser" means Deutsche Banc Alex. ▇▇▇▇▇ Inc., as initial
purchaser under the Purchase Agreement.
"Instrument" means any agreement, indenture, instrument or other
document under which any obligation is evidenced, assumed, guaranteed or
secured.
"Market Capitalization" means an amount determined by multiplying the
number of shares of Common Stock outstanding on the applicable date by the
current market price of the Common Stock (determined as provided in Section
4.6(e)) as of such date.
"Non-U.S. Person" means a Person that is not a U.S. Person.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Executive Officer, the Chief Financial Officer, the General
Counsel, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers of
the Company; provided, however, that for purposes of Section 6.4 "Officers'
Certificate" means a certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.
"Payment Dates" means April 15 and October 15, the payment dates of the
Securities.
"Payment Default" means any default in the payment of Senior
Indebtedness.
"Payment in full" or "paid in full" means payment in full in cash.
"Person" or "person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.
3
"PORTAL Market" means the Private Offerings, Resales and Trading
through Automated Linkages Market operated by the National Association of
Securities Dealers, Inc. or any successor thereto.
"Principal" or "principal" of a debt security, including the
Securities, means the principal of the security plus, when appropriate, the
premium, if any, on the security.
"Purchase Agreement" means the Purchase Agreement dated March 29, 2001
between the Company and the Initial Purchaser.
"QIB" means a "Qualified Institutional Buyer" as that term is defined
in Rule 144A.
"Record Dates" means April 1 and October 1, the record dates of the
Securities.
"Redemption Date" or "redemption date," when used with respect to any
Security to be redeemed, means the date fixed for such redemption pursuant to
this Indenture, as set forth in the form of Security annexed as Exhibit A
hereto.
"Redemption Price" or "redemption price," when used with respect to any
Security to be redeemed, means the price fixed for such redemption pursuant to
this Indenture, as set forth in the form of Security annexed as Exhibit A
hereto.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the date hereof between the Company and the Initial Purchaser and
certain permitted assigns.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Reorganization Securities" means securities of the Company or any
other corporation provided for by a plan of reorganization or readjustment of
the Company (a) which are equity securities that do not provide for any
mandatory payments to holders thereof, including by way of dividends or
mandatory redemption; or (b) the payment of which is subordinated, at least to
the extent provided in Article 5 with respect to the Securities, to the payment
of all Senior Indebtedness which may at the time be outstanding.
"Responsible Officer" shall mean, when used with respect to the
Trustee, any officer in the Corporate Trust Office of the Trustee, including any
principal, vice president, managing director, assistant vice president,
assistant secretary, assistant treasurer, or any other officer customarily
performing functions similar to those performed by any of the above-designated
officers who shall, in any case, be responsible for the administration of this
Indenture or have familiarity with it, and also means, with respect to a
particular corporate matter, any other officer of the Trustee to whom corporate
trust matters are referred because of his knowledge of and familiarity with the
particular subject.
"Representative" means the indenture trustee or other trustee, agent or
representative for any class of Senior Indebtedness.
"Rule 144" means Rule 144 as promulgated under the Securities Act.
4
"Rule 144A" means Rule 144A as promulgated under the Securities Act.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities" means the 4.75% Convertible Subordinated Notes Due 2006 or
any of them (each a "Security"), as amended or supplemented from time to time,
that are issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Agent" means, on any date, the Representative of the class of
Senior Indebtedness having the highest principal amount (including all revolving
credit, letter of credit and other working capital commitments) then
outstanding.
"Senior Indebtedness" means the following, whether outstanding upon
issuance of the Securities or thereafter incurred or created: (a) 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 indebtedness or obligations of the Company to any Person for
money borrowed that is evidenced by a note, bond, debenture, loan agreement, or
similar instrument or agreement; (b) commitment or standby fees due and payable
to lending institutions with respect to credit facilities available to the
Company; (c) all obligations of the Company (i) for the reimbursement of any
obligor on any letter of credit, banker's acceptance, or similar credit
transaction, (ii) under interest rate swaps, caps, collars, options, and similar
arrangements, and (iii) under any foreign exchange contract, currency swap
agreement, futures contract, currency option contract, or other foreign currency
hedge; (d) all obligations of the Company for the payment of money relating to
capitalized lease obligations; (e) any liabilities of others described in the
preceding clauses that the Company has guaranteed or which are otherwise its
legal liability; and (f) renewals, extensions, refundings, refinancings,
restructurings, amendments, and modifications of any such indebtedness or
guarantee; other than any indebtedness or other obligation of the Company that
by its terms is not superior in right of payment to the Securities.
"Significant Subsidiary" means a "significant subsidiary" as defined in
Reg. ss.210.1-02(w) of Regulation S-X under the Exchange Act.
"Subsidiary" means any corporation, association or other business
entity of which at least a majority of the total capital stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by the Company or one or more of the Company's other
Subsidiaries or a combination thereof.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 and as in effect on the date of this Indenture,
except as provided in Section 11.3, and except to the extent any amendment to
the Trust Indenture Act expressly provides for application of the Trust
Indenture Act as in effect on another date.
5
"Transfer Restricted Security" means securities that bear or are
required to bear the legend set forth in Section 2.6(c) or (d).
"Trustee" means Bankers Trust Company until a successor replaces it in
accordance with the provisions of this Indenture and thereafter means the
successor.
"U.S. Person" has the meaning specified in Regulation S.
Section 1.2. Other Definitions.
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Defined
Term in Section
---- ----------
"Additional Interest"............................................ 6.12(a)
"Aggregate Market Premium"....................................... 4.6(d)
"Bankruptcy Law"................................................. 8.1
"beneficial owner"............................................... 3.9
"Change in Control".............................................. 3.9
"Clearstream".................................................... 2.6(c)
"Company Notice"................................................. 3.10(a)
"Company Order".................................................. 2.2
"Continuing Directors"........................................... 3.9
"Conversion Agent"............................................... 2.3
"Conversion Price"............................................... 4.6
"Conversion Shares".............................................. 4.1
"Custodian"...................................................... 8.1
"Euroclear"...................................................... 2.6(c)
"Event of Default"............................................... 8.1
"Global Note".................................................... 2.6(a)
"Group".......................................................... 3.9(1)
"Legal Holiday".................................................. 12.7
"Notice Date".................................................... 3.1
"Optional Redemption"............................................ 3.1
"Paying Agent"................................................... 2.3
"Payment Blockage Period"........................................ 5.5
"Payment of the Securities"...................................... 5.5
"Registrar"...................................................... 2.3
"Registration Default"........................................... 6.12(a)
"Registration Statement"......................................... 6.12(a)
"Repurchase Date"................................................ 3.9
"Repurchase Price"............................................... 3.9
"Repurchase Notice".............................................. 3.10(b)
"Restricted Securities".......................................... 2.6(c)
"Trading Days"................................................... 4.6(e)
"Trigger Event".................................................. 4.6(f)
"U.S. Government Obligations".................................... 10.1
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Section 1.3. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
This Indenture is hereby made subject to, incorporates by reference,
and shall be governed by, the provisions of the TIA required to be part of and
to govern indentures qualified under the TIA. The following TIA terms used in
this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other terms used in this Indenture that are defined in the TIA,
defined by a TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.4. Rules of Construction.
----------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in effect on
the date hereof, and any other reference in this Indenture to "generally
accepted accounting principles" refers to generally accepted accounting
principles in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
7
ARTICLE 2.
THE SECURITIES
Section 2.1. Designation, Form and Dating.
-----------------------------
The Securities shall be designated as the "4.75% Convertible
Subordinated Notes Due 2006." Other than as provided in Section 2.6, the
Securities and the Trustee's certificate of authentication to be borne by the
Securities shall be substantially in the form of Exhibit A attached hereto,
which is incorporated in and made part of this Indenture. The Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
the terms and provisions of the Securities and to be bound thereby. In addition
to such legends as may be required pursuant to Section 2.6, any of the
Securities may have imprinted thereon such legends or 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 stock
exchange on which the Securities may be listed or any trading system in which
the Securities may be admitted, or to conform to usage. Each Security shall be
dated the date of its authentication.
Section 2.2. Execution and Authentication.
-----------------------------
Two Officers of the Company shall sign the Securities for the Company
by manual or facsimile signature. If an Officer whose signature is on a Security
no longer holds that office at the time the Trustee authenticates the Security,
the Security shall be valid nevertheless. A Security shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Security. The signature shall be conclusive evidence that
the Security has been authenticated under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities for original issue in the aggregate principal amount of up to
$125,000,000, upon a written order or orders of the Company signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company (a "Company Order"). The Company Order shall specify the amount of
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated. The aggregate principal amount of Securities
outstanding under this Indenture at any time may not exceed $125,000,000, except
as provided in Section 2.7.
The Trustee shall act as the initial authenticating agent. Thereafter,
the Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
The Securities shall be issuable only in registered form without
coupons only in denominations of $1,000 and any integral multiple thereof.
8
Section 2.3. Registrar, Paying Agent and Conversion Agent.
---------------------------------------------
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar"), an
office or agency where Securities may be presented for payment (the "Paying
Agent"), an office or agency where Securities may be presented for conversion
(the "Conversion Agent") and an office or agency for service of notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Registrar shall keep a register of the Securities 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 "Registrar" includes any co-Registrar, the term "Paying Agent" includes
any additional Paying Agent and the term "Conversion Agent" includes any
additional Conversion Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. 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 Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent or a Conversion Agent
or fails to give the foregoing notice, the Trustee shall act as such. The
Company or any Affiliate of the Company may act as Paying Agent (except for the
purposes of Section 6.3 and Article 10), Registrar or Conversion Agent.
The Company initially appoints the Trustee as Registrar, Paying Agent
and Conversion Agent in connection with the Securities.
Section 2.4. Paying Agent To Hold Money in Trust.
------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of and premium, if any, or interest
(together with any Additional Interest in respect thereof) on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal of, premium, if any, or interest
on any of the Securities (together with any Additional Interest in respect
thereof) so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of
and premium, if any, or interest (together with any Additional Interest in
respect thereof) on any Securities, deposit with a Paying Agent a sum sufficient
to pay such amount, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium, if any, or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 2.4,
that such Paying Agent will, subject to Section 5.7:
9
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee written notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company in trust for the payment of the principal of, and premium, if
any, or interest (together with any Additional Interest in respect thereof) on
any Security and remaining unclaimed for two years after such principal and
premium, if any, or interest has become due and payable shall be paid, subject
to applicable escheatment laws, to the Company on written request of the
Company, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper selected by the Company and published in the English language,
customarily published on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 2.5. Securityholder Lists.
---------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least five Business Days prior to each semi-annual interest
Payment Date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
Section 2.6. Transfer and Exchange.
----------------------
(a) Upon surrender for registration of transfer of any Security to the
Registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.6, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of any authorized denominations and
of a like aggregate principal amount and bearing such restrictive legends as may
be required by this Indenture.
10
Securities may be exchanged for other Securities of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at any such office or agency maintained by the
Company pursuant to Section 6.10. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Securityholder making the exchange is entitled
to receive bearing registration numbers not contemporaneously outstanding.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
All Securities presented or surrendered for registration of transfer or
for exchange, redemption or conversion shall (if so required by the Company or
the Registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Securities
shall be duly executed by the Securityholder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax, assessment or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities.
Neither the Company nor the Trustee nor any Registrar or any Company
registrar shall be required to exchange or register a transfer of (a) any
Securities for a period of fifteen (15) days next preceding any selection of
Securities to be redeemed or (b) any Securities or portions thereof called for
redemption pursuant to Section 3.4 or (c) any Securities or portion thereof
surrendered for conversion pursuant to Article 4.
So long as the Securities are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all Securities that upon
initial issuance are beneficially owned by QIBs and all Securities that are
beneficially owned by Non-U.S. Persons who acquired such Securities in
accordance with Regulation S will be represented by a Security in global form
registered in the name of the Depositary or the nominee of the Depositary (the
"Global Note"). The transfer and exchange of beneficial interests in the Global
Note shall be effected through the Depositary in accordance with this Indenture
and the procedures of the Depositary therefor. The Trustee shall make
appropriate endorsements to reflect increases or decreases in the principal
amounts of the Global Note as set forth on the face of the Security to reflect
any such transfers. Except as provided below, beneficial owners of the Global
Note shall not be entitled to have certificates registered in their names, will
not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered holders of such Securities in global
form.
(b) Any Security in global form may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Securities to be tradable on The PORTAL Market or as may be required for the
Securities to be tradable on any other market developed for trading of
securities pursuant to Rule 144A or Regulation S or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
any securities exchange or automated quotation system upon which the Securities
may be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Securities are subject.
11
(c) Every Security that bears or is required under this Section 2.6(c)
to bear the legend set forth in this Section 2.6(c) (together with any Common
Stock issued upon conversion of the Securities and required to bear the legend
set forth in Section 2.6(d), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.6(c)
(including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the Holder of each such Transfer Restricted Security, by such Holder's
acceptance thereof, agrees to be bound by all such restrictions on transfer. As
used in Sections 2.6(c) and 2.6(d), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision) and
provided that the holder has not been an Affiliate of the Company at any time
during the three-month period preceding such date, any certificate evidencing
such Security (and all securities issued in exchange therefor or substitution
thereof, other than Common Stock, if any, issued upon conversion thereof, which
shall bear the legend set forth in Section 2.6(d), if applicable) shall bear a
legend in substantially the following form, unless such Security has been sold
pursuant to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such
transfer), or unless otherwise agreed by the Company in writing, with written
notice thereof to the Trustee:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY
MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD UNDER RULE 144(k) (OR ANY SUCCESSOR
THERETO) UNDER THE SECURITIES ACT WHICH IS APPLICABLE TO THIS SECURITY
OR (Y) BY ANY HOLDER THAT WAS AN "AFFILIATE" (WITHIN THE MEANING OF
RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING
THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE,
OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (4) TO AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
12
UNDER THE SECURITIES ACT ("INSTITUTIONAL ACCREDITED INVESTOR") THAT IS
ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE COMPANY
AND THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY
EVIDENCED HEREBY (THE FORM OF WHICH LETTER MAY BE OBTAINED FROM THE
TRUSTEE) (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE
SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. PRIOR TO
A TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
(6) ABOVE), THE HOLDER OF THIS SECURITY MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH CERTIFICATES AND
OTHER INFORMATION AND, IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (5)
ABOVE, A LEGAL OPINION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT
ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER, (2) AN INSTITUTIONAL ACCREDITED INVESTOR
AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT
FOR DISTRIBUTION OR (3) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS
OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
EXCEPT AS PERMITTED BY THE SECURITIES ACT.
Any Security (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the foregoing legend
set forth therein have been satisfied may, upon surrender of such Security for
exchange to the Registrar in accordance with the provisions of this Section 2.6,
be exchanged for a new Security or Securities, of like tenor and aggregate
principal amount, which shall not bear the restrictive legend required by this
Section 2.6(c).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in Section 2.6(b) and in this Section 2.6(c)), the Global
Note may not be transferred as a whole or in part except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
13
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Note. Initially, the Global Note shall be
issued to the Depositary, registered in the name of Cede & Co., as the nominee
of the Depositary, and deposited with the Custodian for Cede & Co. The Global
Note, to the extent that it represents the interests of Non-U.S. Persons, will
be held by Cede & Co. for the accounts of designated agents on behalf of the
Euroclear System ("Euroclear") and Clearstream Banking, Societe Anonyme
("Clearstream"). Non-U.S. Persons holding beneficial interests in the Global
Note may do so only through Euroclear or Clearstream, and any resale or transfer
of any such interest to a U.S. Person shall only be permitted if such Person is
a QIB or is the Company or an Affiliate of the Company.
If at any time the Depositary for the Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for such Global Note,
the Company may appoint a successor Depositary with respect to such Global Note.
If a successor Depositary is not appointed by the Company within ninety (90)
days after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Securities, will authenticate and deliver, Securities in
certificated form, in aggregate principal amount equal to the principal amount
of the Global Note, in exchange for such Global Note.
If a Security in certificated form is issued in exchange for any
portion of the Global Note after the close of business at the office or agency
where such exchange occurs on any record date and before the opening of business
at such office or agency on the next succeeding interest payment date, interest
will not be payable on such interest payment date in respect of such Security,
but will be payable on such interest payment date, subject to the provisions of
paragraphs 1 and 2 of the Security, only to the person to whom interest in
respect of such portion of the Global Note is payable in accordance with the
provisions of this Indenture and the Securities.
Securities in certificated form issued in exchange for all or a part of
the Global Note pursuant to this Section 2.6 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such
Securities in certificated form to the persons in whose names such Securities in
certificated form are so registered.
At such time as all interests in the Global Note have been redeemed,
converted, canceled, exchanged for Securities in certificated form, or
transferred to a transferee who receives Securities in certificated form
thereof, such Global Note shall, upon receipt thereof, be canceled by the
Trustee in accordance with standing procedures and instructions existing between
the Depositary and the Custodian. At any time prior to such cancellation, if any
interest in the Global Note is redeemed, converted, repurchased or canceled, the
principal amount of the Global Note shall, in accordance with the standing
procedures and instructions existing between the Depositary and the Custodian,
be appropriately reduced and an endorsement shall be made on such Global Note,
by the Trustee or the Custodian, at the direction of the Trustee, to reflect
such reduction.
14
(d) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of such
Security shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or such Common Stock has been issued upon
conversion of Securities that have been transferred pursuant to a registration
statement that has been declared effective under the Securities Act, or unless
otherwise agreed by the Company in writing with written notice thereof to the
transfer agent:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY
MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD UNDER RULE 144(k) (OR ANY SUCCESSOR
THERETO) UNDER THE SECURITIES ACT WHICH IS APPLICABLE TO THIS SECURITY
OR (Y) BY ANY HOLDER THAT WAS AN "AFFILIATE" (WITHIN THE MEANING OF
RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING
THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE,
OTHER THAN (1) TO THE COMPANY, (2) IN AN OFFSHORE TRANSACTION (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPLICABLE TO THIS
SECURITY, THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRANSFER AGENT), (3) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
("INSTITUTIONAL ACCREDITED INVESTOR") (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPLICABLE TO THIS
SECURITY, THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRANSFER AGENT) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION, AND THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO
THE COMPANY AND THE TRANSFER AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER MAY BE
OBTAINED FROM THE COMPANY OR THE TRANSFER AGENT), (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 (IF APPLICABLE) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER APPLICABLE TO
THIS SECURITY, THE FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY OR
15
THE TRANSFER AGENT) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. PRIOR TO
A TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
(5) ABOVE), THE HOLDER OF THIS SECURITY MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH CERTIFICATES AND
OTHER INFORMATION AND, IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (4)
ABOVE, A LEGAL OPINION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT
ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (2) NOT A U.S. PERSON
AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF
WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION
WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.6(d).
(e) Any Security or Common Stock issued upon the conversion or exchange
of a Security that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Securities or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
(f) Each Holder of a Security agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States Federal or state securities law.
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
16
in any Security (including any transfers between or among Depositary
Participants or beneficial owners of interests in the 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.
Section 2.7. Replacement Securities.
-----------------------
If any mutilated Security is surrendered to the Company or the Trustee,
or the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such Security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute, and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be redeemed by the
Company pursuant to Article 3, the Company in its discretion may, instead of
issuing a new Security, pay or redeem such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.7, 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) in connection
therewith.
Every new Security issued pursuant to this Section 2.7 in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.8. Outstanding Securities.
-----------------------
Securities outstanding at any time are all Securities authenticated by
the Trustee, except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.8 as not outstanding.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on a redemption date, repurchase date or maturity date money
sufficient to pay the principal of, premium, if any, and accrued interest on
Securities payable on that date, then on and after that date such Securities
cease to be outstanding and interest on them ceases to accrue.
17
Subject to the restrictions contained in Section 2.9, a Security does
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Security.
Section 2.9. Treasury Securities.
--------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Securities which
the Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to the Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
Section 2.10. Temporary Securities.
---------------------
Until definitive Securities are ready for delivery, the Company may
prepare and execute, and, upon the order of the Company, the Trustee shall
authenticate and deliver temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company with the consent of the Trustee considers appropriate for temporary
Securities. Every such temporary Security shall be executed by the Company and
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with the same effect, as the definitive Securities. Without
unreasonable delay the Company will execute and deliver to the Trustee
definitive Securities and thereupon any or all temporary Securities may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 6.10 and the Trustee shall authenticate and deliver
in exchange for such temporary Securities an equal aggregate principal amount at
maturity of definitive Securities. Such exchange shall be made by the Company at
its own expense and without any charge therefor. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities authenticated and delivered
hereunder.
Section 2.11. Cancellation.
-------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange, payment or conversion. The Trustee and no one else shall cancel all
Securities surrendered for transfer, exchange, payment (including redemption or
repurchase), conversion or cancellation and shall dispose of cancelled
Securities in accordance with its procedures for the disposition of cancelled
Securities in effect as of the date of such disposition and thereupon deliver a
certificate of cancellation to the Company. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or which have been converted.
18
Section 2.12. CUSIP Numbers.
--------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), 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 Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, 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.
ARTICLE 3.
REDEMPTION AND REPURCHASE
Section 3.1. Optional Redemption by the Company.
-----------------------------------
The Company may, at its option, redeem all or from time to time any
part of the Securities on any date on or after April 22, 2004 and prior to
maturity (an "Optional Redemption") if the Closing Price of the Company's Common
Stock for 20 Trading Days in a period of 30 consecutive Trading Days ending on
the Trading Day prior to the date of mailing of the provisional notice of
redemption (the "Notice Date") exceeds 120% of the Conversion Price (as defined
in Section 4.6) of the Securities, upon notice as set forth in Section 3.4, and
at the redemption prices set forth in paragraph 5 of the form of Security
attached hereto as Exhibit A, together with accrued interest to the date of
redemption.
Section 3.2. Election To Redeem; Notice to Trustee.
--------------------------------------
If the Company elects to redeem Securities pursuant to paragraph 5 of
the Securities, it shall notify the Trustee at least 45 days prior to the
redemption date as fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee) of the redemption date and the principal amount of
Securities to be redeemed. If fewer than all of the Securities are to be
redeemed, the record date relating to such redemption shall be selected by the
Company and given to the Trustee, which record date shall not be less than 10
days after the date of notice to the Trustee.
Section 3.3. Selection of Securities To Be Redeemed.
---------------------------------------
If less than all of the Securities are to be redeemed, the Trustee
shall, not more than 45 days prior to the redemption date, select the Securities
to be redeemed by lot, pro rata or by another method the Trustee considers fair
and appropriate; provided that such method is not prohibited by any stock
exchange or market on which the Securities are then listed. The Trustee shall
make the selection from the Securities outstanding and not previously called for
redemption. Securities in denominations of $1,000 may only be redeemed in whole.
The Trustee may select for redemption portions (equal to $1,000 or any multiple
thereof) of the principal of Securities that have denominations larger than
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
19
Section 3.4. Notice of Redemption.
---------------------
Notice of redemption shall be given at least 30 days prior to the
redemption date in the case of an Optional Redemption. In each case, the Company
shall mail or cause to be mailed a notice of redemption by first-class mail to
each Holder of Securities to be redeemed at such Holder's address as it appears
on the Registrar's books.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price, plus accrued interest, if any;
(3) the then-current Conversion Price;
(4) the name and address of the Paying Agent and the Conversion Agent;
(5) that Securities called for redemption must be presented and
surrendered to the Paying Agent to collect the redemption price;
(6) that the Securities called for redemption may be converted at any
time before the close of business on the Business Day immediately preceding the
redemption date;
(7) that Holders who wish to convert Securities must satisfy the
requirements in paragraph 8 of the Securities;
(8) that, unless the Company defaults in making the redemption payment,
interest on Securities called for redemption ceases to accrue on and after the
redemption date and the only remaining right of the Holder is to receive payment
of the redemption price upon presentation and surrender to the Paying Agent of
the Securities;
(9) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the redemption
date, upon presentation and surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will be
issued; and
(10) subject to Section 2.12, the CUSIP number of the Securities called
for redemption.
At the Company's written request delivered at least 15 days prior to
the date of the mailing of the notice of redemption, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense.
Section 3.5. Deposit of Redemption Price.
----------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an interest
payment date) accrued interest on, all the Securities which are to be redeemed
on that date other than any Securities called for redemption on that date which
have been converted prior to the date of such deposit; provided that if such
payment is made on the Redemption Date, it must be received by the Trustee or
Paying Agent, as the case may be, by 10:00 a.m. New York City time on such date.
20
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any predecessor security to receive interest) be paid to the
Company as soon as practicable upon written request by the Company or, if then
held by the Company, shall be released from such trust.
Section 3.6. Securities Payable on Redemption Date.
--------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities shall cease to bear or accrue any interest.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest to (but not including) the Redemption Date;
provided, however, that installments of interest whose stated maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities
registered as such at the close of business on the relevant Record Dates
according to their terms.
If the Company shall fail to deposit the Redemption Price with the
Trustee and any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear and accrue interest from the Redemption Date at the rate borne
by the Security.
Section 3.7. Securities Redeemed in Part.
----------------------------
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney-in-fact duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
amount of the Security so surrendered.
Section 3.8. Conversion Arrangement on Call for Redemption.
----------------------------------------------
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities by an agreement with
one or more investment bankers or other purchasers to purchase such Securities
by paying to the Trustee in trust for the Holders, on or before the Redemption
Date, an amount not less than the applicable Redemption Price of such
Securities, together with interest accrued to the Redemption Date.
Notwithstanding anything to the contrary contained in this Article 3, the
21
obligation of the Company to pay the Redemption Price of such Securities,
together with interest accrued to, but excluding, the Redemption Date shall be
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, a copy of which shall be
filed with the Trustee prior to the Redemption Date, any Securities 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 4) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the Redemption Date (and the right
to convert any such Securities shall be deemed to have been extended through
such time), subject to payment of the above amount as aforesaid. At the written
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Securities. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities 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. Nothing in
the preceding sentence shall be deemed to limit the rights and protections
afforded to the Trustee in Article 9, including, but not limited to, the right
to the indemnification pursuant to Section 9.7.
Section 3.9. Repurchase of Securities at Option of the Holder upon Change in
Control.
---------------------------------------------------------------
If at any time that Securities remain outstanding there shall have
occurred a Change in Control (as hereinafter defined), Securities shall be
repurchased by the Company at the option of the Holder thereof, at a purchase
price (the "Repurchase Price") equal to the principal amount thereof plus
accrued interest up to and including the Repurchase Date (as hereinafter
defined), on the date (the "Repurchase Date") fixed by the Company that is not
less than 45 days nor more than 60 days after the date of the Company Notice (as
hereinafter defined), subject to satisfaction by or on behalf of the Holder of
the requirements set forth in Section 3.10(b).
Whenever in this Indenture there is a reference to the principal of any
Security as of any time, such reference shall be deemed to include reference to
the Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Repurchase Price in those provisions of this
Indenture when such express mention is not made.
Any rights of Holders, contractual or otherwise, arising under or
pursuant to any offer to repurchase Securities made by the Company under this
Section 3.9 shall be subordinated in right of payment to all Senior Indebtedness
to the same extent as the Securities are subordinated to Senior Indebtedness
22
under the provisions of Article 5 and such offer to repurchase shall provide
that, if at the time the Securities are required to be repurchased pursuant to
such offer, payment of the Securities is not permitted pursuant to the
provisions of Article 5, the Company shall use its reasonable best efforts to
obtain all necessary waivers from, or to repay in full, the holders of Senior
Indebtedness in order to permit such repurchase. Notwithstanding the foregoing,
any failure by the Company to comply with this Section 3.9 to offer to
repurchase, or to repurchase, the Securities shall be a default in the
performance by the Company hereunder.
A "Change in Control" shall be deemed to have occurred at such time
after the original issuance of the Securities as any of the following occur:
(1) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets of
the Company and its subsidiaries, taken as a whole, to any person or group of
related persons, as defined in Section 13(d) of the Exchange Act (a "Group");
(2) the approval by the holders of capital stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company (whether or
not otherwise in compliance with the provisions of the applicable indenture);
(3) any person or Group shall become the owner, directly or indirectly,
beneficially or of record, of shares representing more than 50% of the aggregate
ordinary voting power represented by the Company's issued and outstanding voting
stock or of any successor to all or substantially all of the Company's assets;
or
(4) the first day on which a majority of the members of the Company's
Board of Directors are not Continuing Directors.
"Beneficial owner" shall be determined in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act, as in effect on the date of
execution of this Indenture, except that a person shall be deemed to be the
"beneficial owner" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of time.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of the original issuance of the Securities or
(ii) was nominated for election or elected to the Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination or election.
Section 3.10. Notice; Method of Exercising Repurchase Right.
----------------------------------------------
(a) Within 30 days after the occurrence of a Change in Control, the
Company shall mail a written notice (the "Company Notice") by first-class mail
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include the form of a Repurchase Notice (as
defined below) to be completed by the Holder and shall state:
23
(1) the date of such Change in Control and, briefly, the events causing
such Change in Control;
(2) the date by which the Repurchase Notice pursuant to this Section
3.10 must be given;
(3) the Repurchase Date;
(4) the Repurchase Price;
(5) briefly, the conversion rights of the Securities including, without
limitation, the current Conversion Price and any adjustments thereto;
(6) the name and address of the Paying Agent and the Conversion Agent;
(7) whether the holders of Senior Indebtedness will permit the payment
of the Repurchase Price;
(8) that Securities as to which a Repurchase Notice has been given may
be converted into Common Stock only to the extent that the Repurchase Notice has
been withdrawn in accordance with the terms of this Indenture;
(9) the procedures that the Holder must follow to exercise rights under
Section 3.9;
(10) the procedures for withdrawing a Repurchase Notice, including a
form of notice of withdrawal;
(11) that the Holder must satisfy the requirements set forth in the
Securities in order to convert the Securities; and
(12) the CUSIP number of the Securities as to which a Repurchase Notice
has been given.
(b) A Holder may exercise its rights specified in Section 3.9 upon
delivery of a written notice of the exercise of such rights (a "Repurchase
Notice") to the Paying Agent at any time prior to the close of business on the
third Business Day prior to the Repurchase Date, stating:
(1) the certificate number of each Security that the Holder will
deliver to be repurchased;
(2) the portion of the principal amount of each Security that the
Holder will deliver to be repurchased, which portion must be $1,000 or an
integral multiple thereof; and
(3) that such Security shall be repurchased pursuant to the terms and
conditions specified in this Indenture.
The delivery of such Security to the Paying Agent (together with all
necessary endorsements), together with the Repurchase Notice as provided above,
at the office of the Paying Agent shall be a condition to the receipt by the
Holder of the Repurchase Price therefor; provided, however, that such Repurchase
Price shall be so paid pursuant to Section 3.9 only if the Security so delivered
to the Paying Agent shall conform in all respects to the description thereof set
forth in the related Repurchase Notice.
24
The Company shall repurchase from the Holder thereof, pursuant to
Section 3.9, a portion of a Security 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 repurchase of all of a Security pursuant to Sections 3.9 through
3.15 also apply to the repurchase of such portion of such Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Repurchase Notice contemplated by this Section 3.10(b)
shall have the right to withdraw such Repurchase Notice in whole or in a portion
thereof that is $1,000 or an integral multiple thereof at any time prior to the
close of business on the Business Day prior to the 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 Repurchase Notice or written withdrawal thereof.
Section 3.11. Effect of Repurchase Notice.
----------------------------
Upon receipt by the Paying Agent of the Repurchase Notice specified in
Section 3.10(b), the Holder of the Security in respect of which such Repurchase
Notice was given shall (unless such Repurchase Notice is withdrawn as specified
below) thereafter be entitled to receive solely the Repurchase Price with
respect to such Security. Such Repurchase Price shall be paid to such Holder
promptly following the later of (i) the Repurchase Date with respect to such
Security (provided the conditions in Section 3.10(b) have been satisfied) and
(ii) the time of delivery of such Security to the Paying Agent by the Holder
thereof in the manner required by Section 3.10(b). Securities in respect of
which a Repurchase Notice has been given by the Holder thereof may not be
converted into shares of Common Stock on or after the date of the delivery of
such Repurchase Notice unless such Repurchase Notice has first been validly
withdrawn.
A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered by the Holder, with such Holder's signature guaranteed in a
manner satisfactory to the Paying Agent, to the office of the Paying Agent at
any time prior to the close of business on the Business Day prior to the
Repurchase Date to which it relates, specifying:
(1) the certificate number of each Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security or portion thereof with
respect to which such notice of withdrawal is being submitted, which portion
must be $1,000 or an integral multiple thereof; and
(3) the principal amount, if any, of such Security that remains subject
to the original Repurchase Notice and that has been or will be delivered for
repurchase by the Company.
25
Section 3.12. Deposit of Repurchase Price.
----------------------------
On or before the Repurchase Date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company is acting as the Paying
Agent, shall segregate and hold in trust as provided in Section 2.4) an amount
of money sufficient to pay the aggregate Repurchase Price of all the Securities
or portions thereof that are to be repurchased as of such Repurchase Date. The
manner in which the deposit required by this Section 3.12 is made by the Company
shall be at the option of the Company; provided that such deposit shall be made
in a manner such that the Trustee or the Paying Agent shall have immediately
available funds on the Repurchase Date; provided further, that if such payment
is made on the Repurchase Date it must be received by the Trustee or Paying
Agent, as the case may be, by 10:00 a.m., New York City time, on such date.
If the Paying Agent holds, in accordance with the terms hereof, money
sufficient to pay the Repurchase Price of any Security tendered for repurchase
on the Business Day prior to the Repurchase Date, then, on and after the
Repurchase Date, such Security will cease to be outstanding and interest on such
Security will cease to accrue and will be deemed paid, whether or not such
Security is delivered to the Paying Agent, and all other rights of the Holder in
respect thereof shall terminate (other than the right to receive the Repurchase
Price upon delivery of such Security).
Section 3.13. Securities Repurchased in Part.
-------------------------------
Any Security that is to be repurchased only in part shall be
surrendered at the office of the Paying Agent (with 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 Holder's attorney duly
authorized in writing), and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, or such authorized denomination or denominations
as may be requested by such Holder, in aggregate principal amount equal to, and
in exchange for, the portion of the principal amount of the Security so
surrendered that is not repurchased.
Section 3.14. Compliance with Securities Laws upon Repurchase of Securities.
--------------------------------------------------------------
In connection with any offer to repurchase or repurchase of Securities
under Section 3.9 hereof (provided that such offer or repurchase constitutes an
"issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein,
includes any successor provision thereto) at the time of such offer or
repurchase), the Company shall, to the extent applicable, (i) comply with Rule
13e-4 and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule
13E-4 (or any successor schedule, form or report) under the Exchange Act, and
(iii) otherwise comply with all federal and state securities laws so as to
permit the rights of the Holders and obligations of the Company under Sections
3.9 through 3.14 to be exercised in the time and in the manner specified
therein.
Section 3.15. Repayment to the Company.
-------------------------
Subject to the provisions of Section 5.7, to the extent that the
aggregate amount of cash deposited by the Company pursuant to Section 3.12
exceeds the aggregate Repurchase Price of the Securities or portions thereof to
be repurchased, then, promptly after the Business Day following the Repurchase
Date, the Trustee or the Paying Agent, as the case may be, shall return any such
excess to the Company.
26
ARTICLE 4.
CONVERSION
Section 4.1. Conversion Privilege.
---------------------
At any time after 90 days following the latest date of original
issuance of the Securities and prior to the close of business on the Business
Day immediately preceding April 15, 2006, a Holder of a Security may convert
such Security into Common Stock (the shares of Common Stock issuable upon such
conversion, the "Conversion Shares"), at the Conversion Price then in effect,
together with those rights, warrants or options specified in the first sentence
of Section 4.6(f) hereof, to the extent applicable; provided that, if such
Security is called for redemption pursuant to Article 3, such conversion right
shall terminate at the close of business on the Business Day before the
redemption date for such Security (unless the Company shall default in making
the redemption payment then due, in which case the conversion right shall
terminate on the date such default is cured and such Security is redeemed). The
number of shares of Common Stock issuable upon conversion of a Security shall be
determined by dividing the principal amount of the Security or portion thereof
surrendered for conversion by the Conversion Price in effect on the conversion
date. The initial Conversion Price is set forth in paragraph 8 of the Securities
and is subject to adjustment as provided in this Article 4.
A Holder may convert a portion of a Security equal to $1,000 or any
integral multiple thereof. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of a Security.
A Security in respect of which a Holder has delivered a Repurchase
Notice pursuant to Section 3.10(b) exercising the option of such Holder to
require the Company to repurchase such Security may be converted only if such
Repurchase Notice is withdrawn by a written notice of withdrawal delivered to
the Paying Agent prior to the close of business on the Business Day prior to the
Repurchase Date in accordance with Section 3.11.
A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted his Securities into Common Stock
and, upon such conversion, only to the extent such Securities are deemed to have
been converted into Common Stock pursuant to this Article 4.
Section 4.2. Conversion Procedure.
---------------------
To convert a Security, a Holder must (i) complete and manually sign the
conversion notice on the back of the Security and deliver such notice to the
Conversion Agent, (ii) surrender the Security to the Conversion Agent, (iii)
furnish appropriate endorsements and transfer documents to the Registrar or the
Conversion Agent, (iv) pay any transfer or other tax, if required by Section 4.4
and (v) if the Security is held in book-entry form, complete and deliver to the
27
Depositary appropriate instructions pursuant to the Depositary's book-entry
conversion programs. The date on which the Holder satisfies all of the foregoing
requirements is the conversion date. As soon as practicable after the conversion
date, the Company shall deliver to the Holder through the Conversion Agent a
certificate for the number of whole shares of Common Stock issuable upon the
conversion and cash in lieu of any fractional shares pursuant to Section 4.5.
The person in whose name the certificate is registered shall be deemed
to be a stockholder of record on the conversion date; provided, however, that no
surrender of a Security on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the person or persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; provided, further, that such conversion shall be at the Conversion
Price in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of a Security, such person shall no longer be a Holder of such
Security.
No payment or adjustment will be made for accrued interest on a
converted Security or for dividends or distributions on shares of Common Stock
issued upon conversion of a Security, but if any Holder surrenders a Security
for conversion between the close of business on any record date for the payment
of an installment of interest and the opening of business on the next interest
payment date, then, notwithstanding such conversion, the interest payable on
such interest payment date shall be paid to the Holder of such Security on such
record date. In such event, such Security, when surrendered for conversion, must
be accompanied by delivery of a check payable to the Conversion Agent in an
amount equal to the interest payable on such interest payment date on the
portion so converted. If such payment does not accompany such Security, the
Security shall not be converted; provided, however, that no such check shall be
required if such Security has been called for redemption on a redemption date
within the period between and including such record date and such interest
payment date, or if such Security is surrendered for conversion after the
opening of business on the interest payment date. If the Company defaults in the
payment of interest payable on the interest payment date, the Conversion Agent
shall repay such funds to the Holder.
If a Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the aggregate principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security equal in principal amount to the unconverted portion of the
Security surrendered.
Section 4.3. Adjustments Below Par Value.
----------------------------
Before taking any action which would cause an adjustment decreasing the
Conversion Price so that the shares of Common Stock issuable upon conversion of
the Securities would be issued for less than the par value of such Common Stock,
the Company will take all corporate action which may be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares of
such Common Stock at such adjusted Conversion Price.
28
Section 4.4. Taxes on Conversion.
--------------------
If a Holder converts a Security, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common
Stock upon such conversion. However, the Holder shall pay any such tax which is
due because the Holder requests the shares to be issued in a name other than the
Holder's name. The Conversion Agent may refuse to deliver the certificates
representing the Common Stock being issued in a name other than the Holder's
name until the Conversion Agent receives a sum sufficient to pay any tax which
will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by law
or regulations.
Section 4.5. Company To Provide Stock.
-------------------------
The Company shall, prior to issuance of any Securities hereunder, and
from time to time as may be necessary, reserve, out of its authorized but
unissued Common Stock a sufficient number of shares of Common Stock to permit
the conversion of all outstanding Securities for shares of Common Stock. The
shares of Common Stock or other securities issued upon conversion of the
Securities shall bear any legend required in accordance with Section 2.6(d).
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Securities. If more than one Security
shall be surrendered for conversion at one time by the same holder, the number
of full shares which shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof to the extent permitted hereby) so surrendered. If any fractional share
of Common Stock would be issuable upon the conversion of any Security or
Securities, the Company shall make an adjustment thereof in cash at the current
market value thereof. For these purposes, the current market value of a share of
Common Stock shall be the Closing Price on the first day (which is not a Legal
Holiday) immediately preceding the day on which the Securities (or specified
portions thereof) are deemed to have been converted.
The Company covenants that all shares of Common Stock delivered upon
conversion of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and non-assessable and
shall be free from preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.
29
Section 4.6. Adjustment of Conversion Price.
-------------------------------
The conversion price (the "Conversion Price") shall be that price set
forth in paragraph 8 of the form of Security attached hereto as Exhibit A and
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend or other distribution
in shares of Common Stock to holders of Common Stock, (ii) subdivide its
outstanding Common Stock into a greater number of shares, (iii) combine its
outstanding Common Stock into a smaller number of shares or (iv) reclassify its
outstanding Common Stock, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock which it would have owned or have been entitled to receive had such
Security been converted immediately prior to the happening of such event. An
adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of
subdivision, combination or reclassification.
(b) In case the Company shall issue to all or substantially all holders
of its Common Stock, rights, warrants or options entitling such holders (for a
period commencing no earlier than the record date described below and expiring
not more than 45 days after such record date) to subscribe for or purchase
shares of Common Stock (or securities convertible into Common Stock) at a price
per share less than the current market price per share of Common Stock (as
determined in accordance with subsection (e) below) at the record date for the
determination of stockholders entitled to receive such rights, warrants or
options, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the Conversion Price shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of shares which the
aggregate subscription or purchase price for the total number of shares of
Common Stock offered by the rights, warrants or options so issued (or the
aggregate conversion price of the convertible securities offered by such rights,
warrants or options) would purchase at such current market price, and the
denominator of which shall be the number of shares of Common Stock outstanding
on such record date plus the number of additional shares of Common Stock offered
by such rights, warrants or options (or into which the convertible securities so
offered by such rights, warrants or options are convertible). Such adjustment
shall be made successively whenever any such rights, warrants or options are
issued, and shall become effective immediately after such record date. If at the
end of the period during which such rights, warrants or options are exercisable
not all rights, warrants or options shall have been exercised, the adjusted
Conversion Price shall be immediately readjusted to what it would have been upon
application of the foregoing adjustment substituting the number of additional
shares of Common Stock actually issued (or the number of shares of Common Stock
issuable upon conversion of convertible securities actually issued) for the
total number of shares of Common Stock offered (or the convertible securities
offered).
(c) In case the Company shall distribute to all or substantially all
holders of its Common Stock any shares of capital stock of the Company (other
than Common Stock) or evidences of its indebtedness, cash, other securities or
other assets, or shall distribute to all or substantially all holders of its
Common Stock, rights, warrants or options to subscribe for or purchase any of
30
its securities (excluding (i) rights, options and warrants referred to in
subsection (b) above or (f) below; (ii) those dividends, distributions,
subdivisions, combinations and reclassifications referred to in subsection (a)
above; and (iii) dividends and distributions paid in cash in an aggregate amount
that, combined together with (A) all other such cash distributions made within
the preceding 12 months in respect of which no adjustment has been made under
this Section 4.6 and (B) the fair market value of consideration payable in
respect of any repurchases (by way of tender offers or exchange offers) by the
Company or any of its Subsidiaries, of Common Stock concluded within the
preceding 12 months, in each case in respect of which no adjustment has been
made under this Section 4.6, does not exceed 10% of Market Capitalization as of
the record date for such distribution), then in each such case 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 the date of such
distribution by a fraction, the numerator of which shall be the current market
price per share (as defined in subsection (e) below) of the Common Stock on the
record date mentioned below less the fair market value on such record date (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive evidence of such fair market value) of the portion of the capital
stock or evidences of indebtedness, securities or assets so distributed or of
such rights, warrants or options, in each case as applicable to one share of
Common Stock, and the denominator of which shall be the current market price per
share (as defined in subsection (e) below) of the Common Stock on such record
date. Such adjustment shall become effective immediately after the record date
for the determination of stockholders entitled to receive such distribution.
(d) In case the Company or any of its Subsidiaries shall repurchase (by
way of tender offer or exchange offer) shares of Common Stock, and the fair
market value of the sum of (i) the aggregate consideration paid for such Common
Stock, (ii) the aggregate fair market value of cash dividends and distributions
of the type described in clause (iii) of the preceding paragraph (c) paid within
the twelve (12) months preceding the date of purchase of such shares of Common
Stock in respect of which no adjustment pursuant to this Section 4.6 previously
has been made, and (iii) the aggregate fair market value of any amounts
previously paid for the repurchase of Common Stock of a type described in this
paragraph (d) within the twelve (12) months preceding the date of purchase of
such shares of Common Stock in respect of which no adjustment pursuant to this
Section 4.6 previously has been made, exceeds 10% of Market Capitalization on
the date of, and after giving effect to, such repurchase, then 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 the date of such
purchase by a fraction, the numerator of which shall be the current market price
per share (as defined in subsection (e) below) of the Common Stock on the date
of such repurchase, less the quotient obtained by dividing the Aggregate Market
Premium involved in such repurchase (as defined hereinafter) by the difference
between the number of shares of Common Stock outstanding before such repurchase
and the number of shares of Common Stock the subject of such repurchase, and the
denominator of which shall be the current market price per share (as defined in
subsection (e) below) of the Common Stock on the date of such repurchase. Such
adjustment shall become effective immediately after the date of such repurchase.
For purposes of this subsection (d), the "Aggregate Market Premium" is the
excess, if any, of the aggregate repurchase price paid for all such Common Stock
over the aggregate current market value per share (as defined in subsection (e)
below) of all such repurchased stock, determined with respect to each share
involved in each such repurchase as of the date of repurchase with respect to
such share.
31
(e) For the purpose of any computation under subsections (b), (c) and
(d) above, the current market price per share of Common Stock on any date shall
be deemed to be the average of the Closing Prices for 20 consecutive Trading
Days commencing 30 Trading Days before the record date with respect to any
distribution, issuance or other event requiring such computation. The Closing
Price for each day shall be (i) the last sale price, or the average of the
closing bid and asked prices if no sale occurred of such class of stock on the
principal securities exchange on which such class of stock is listed, if the
Common Stock is listed or admitted for trading on any national securities
exchange, (ii) the last reported sale price of Common Stock on The Nasdaq Stock
Market, or any similar system of automated dissemination of quotations of
securities prices then in common use, if so quoted, or (iii) if not quoted as
described in clause (i), the mean between the high bid and low asked quotations
for Common Stock as reported by the National Quotation Bureau Incorporated if at
least two securities dealers have inserted both bid and asked quotations for
such class of stock on at least 5 of the 10 preceding days. If the Common Stock
is quoted on a national securities or central market system, in lieu of a market
or quotation system described above, the Closing Price shall be determined in
the manner set forth in clause (iii) of the preceding sentence if bid and asked
quotations are reported but actual transactions are not, and in the manner set
forth in clause (ii) of the preceding sentence if actual transactions are
reported. If none of the conditions set forth above is met, the Closing Price of
Common Stock on any day or the average of such last reported sale prices for any
period shall be the fair market value of such class of stock as determined by a
member firm of the New York Stock Exchange, Inc. selected by the Company. As
used herein the term "Trading Days" with respect to Common Stock means (i) if
the Common Stock is listed or admitted for trading on any national securities
exchange, days on which such national securities exchange is open for business
or (ii) if the Common Stock is quoted on The Nasdaq Stock Market or any similar
system of automated dissemination of quotations of securities prices, days on
which trades may be made on such system.
(f) If the Company implements a Stockholder Rights Plan (as defined
below), the Company agrees that such Stockholder Rights Plan will provide that
upon any conversion of the Securities by any Holder prior to a Trigger Event (as
defined below), the holders of the Common Stock into which the Securities have
been converted shall receive the rights, warrants or options issued under such
plan. Rights, warrants or options 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, warrants or options, until the occurrence of a
specified event or events (a "Trigger Event"):
(i) are deemed to be transferred with such shares of Common
Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of Common
Stock,
(a "Stockholder Rights Plan") shall not be deemed distributed for purposes of
this Section 4.6 and no adjustment to the Conversion Price shall be required to
be made until the occurrence of the earliest Trigger Event. In addition, in the
event of any Trigger Event with respect thereto, that shall have resulted in an
adjustment to the Conversion Price under this Section 4.6, (1) in the case of
any such rights, warrants or options 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
32
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights, warrants or options
(assuming such holder had retained such rights, warrants or options), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of any such rights, warrants or options all of which shall have
expired without exercise by any holder thereof, the Conversion Price shall be
readjusted as if such issuance had not occurred.
In any case in which this Section 4.6 shall require that an adjustment
be made immediately following a record date established for purposes of Section
4.6, the Company may elect to defer (but only until five Business Days following
the filing by the Company with the Trustee of the certificate described in
Section 4.10) issuing to the holder of any Security converted after such record
date the shares of Common Stock and other capital stock of the Company issuable
upon such conversion over and above the shares of Common Stock and other capital
stock of the Company issuable upon such conversion only on the basis of the
Conversion Price prior to adjustment; and, in lieu of the shares the issuance of
which is so deferred, the Company shall issue or cause its transfer agents to
issue due bills or other appropriate evidence of the right to receive such
shares.
Section 4.7. No Adjustment.
--------------
No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 4.7 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 4 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 rights to purchase Common Stock or
issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.
No adjustment need be made for a change in the par value or a change to
no par value of the Common Stock.
To the extent that the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
Section 4.8. Equivalent Adjustments.
-----------------------
In the event that, as a result of an adjustment made pursuant to
Section 4.6 above, the holder of any Security thereafter surrendered for
conversion shall become entitled to receive any shares of capital stock of the
Company other than shares of its Common Stock, thereafter the Conversion Price
of such other shares so receivable upon conversion of any Securities shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in this Article 4.
Section 4.9. Adjustment for Tax Purposes.
----------------------------
The Company shall be entitled to make such reductions in the Conversion
Price, in addition to those required by Section 4.6, as it in its discretion
shall determine to be advisable in order that any stock dividends, subdivision
of shares, distribution of rights to purchase stock or securities, or a
distribution of securities convertible into or exchangeable for stock hereafter
made by the Company to its stockholders shall not be taxable.
33
Section 4.10. Notice of Adjustment.
---------------------
Whenever the Conversion Price is adjusted, or Securityholders become
entitled to other securities or due bills, the Company shall promptly mail to
Securityholders a notice of the adjustment and file with the Trustee an
Officers' Certificate briefly stating the facts requiring the adjustment and the
manner of computing it. The certificate shall be conclusive evidence of the
correctness of such adjustment and the Trustee may conclusively assume that,
unless and until such certificate is received by it, no such adjustment is
required.
Section 4.11. Notice of Certain Transactions.
-------------------------------
In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock (other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, warrants or options to subscribe for or purchase any
share of any class or any other rights, warrants or options; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company; the Company shall cause to be filed with the Trustee
and to be mailed to each holder of Securities at its address appearing on the
list provided for in Section 2.5, as promptly as possible but in any event at
least ten days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights, warrants or options, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are to be determined, or (y)
the date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
34
Section 4.12. Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege.
------------------------------------------------------------
If any of the following shall occur, namely: (i) any reclassification
or change of outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination); (ii) any consolidation,
combination or merger to which the Company is a party other than a merger in
which the Company is the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or 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) in, outstanding shares of Common Stock;
or (iii) any sale or conveyance of all or substantially all of the assets of the
Company, then the Company, or such successor or purchasing corporation, as the
case may be, shall, as a condition precedent to such reclassification, change,
consolidation, merger, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
outstanding shall have the right to convert such Security into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock deliverable upon
conversion of such Security immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such supplemental indenture shall
provide for adjustments of the Conversion Price which shall be as nearly
equivalent as may be practicable to the adjustments of the Conversion Price
provided for in this Article 4. If, in the case of any such consolidation,
merger, sale or conveyance, the stock or other securities and property
(including cash) receivable thereupon by a holder of Common Stock includes
shares of stock or other securities and property of a corporation other than the
successor or purchasing corporation, as the case may be, in such consolidation,
merger, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders of the Securities as the Board of
Directors of the Company shall reasonably consider necessary by reason of the
foregoing. The provision of this Section 4.12 shall similarly apply to
successive consolidations, mergers, sales or conveyances. Notwithstanding the
foregoing, a distribution by the Company to all or substantially all holders of
its Common Stock for which an adjustment to the Conversion Price or provision
for conversion of the Securities may be made pursuant to Section 4.6 shall not
be deemed to be a sale or conveyance of all or substantially all of the assets
of the Company for purposes of this Section 4.12.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 4.12, the Company shall promptly file with the Trustee
an Opinion of Counsel stating that such supplemental indenture is authorized or
permitted by this Indenture and an Officers' Certificate briefly stating the
reasons therefor, the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders of the Securities upon the
conversion of their Securities after any such reclassification, change,
consolidation, merger, sale or conveyance, any adjustment to be made with
respect thereto and that all conditions precedent have been complied with.
Section 4.13. Trustee's Disclaimer.
---------------------
The Trustee has no duty to determine when an adjustment under this
Article 4 should be made, how it should be made or what such adjustment should
be made, but may accept as conclusive evidence of the correctness of any such
35
adjustment, and shall be protected in relying upon, the Officers' Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 4.10. The Trustee shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities, and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article 4. Each
Conversion Agent (other than the Company or an Affiliate of the Company) shall
have the same protection under this Section 4.13 as the Trustee.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.12.
Section 4.14. Voluntary Reduction.
--------------------
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 or such longer
period as may be required by law and if the reduction is irrevocable during the
period; provided that in no event may the Conversion Price be less than the par
value of a share of Common Stock.
ARTICLE 5.
SUBORDINATION
Section 5.1. Securities Subordinated to Senior Indebtedness.
-----------------------------------------------
The Company covenants and agrees, and each Holder of Securities by his
acceptance thereof likewise covenants and agrees, that all Securities are
subject to the provisions of this Article 5; and each Person holding any
Security, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions and acknowledges that such
provisions are for the benefit of, and shall be enforceable directly by, the
holders of Senior Indebtedness.
Each Holder of Securities authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holders of Securities
and the holders of Senior Indebtedness as provided in this Article and appoints
the Trustee as such Holder's attorney-in-fact for any and all such purposes.
The payment of the principal of, premium, if any, and interest on and
any other payment due pursuant to this Indenture or any Securities issued
hereunder (including, without limitation, the payment or deposit of the
Redemption Price or Repurchase Price pursuant to Article 3 and any deposit
pursuant to Section 6.3) shall, to the extent and in the manner hereinafter set
forth, be subordinated and subject in right of payment to the prior payment in
full of all Senior Indebtedness, whether outstanding at the date of this
Indenture or thereafter created, incurred, assumed or guaranteed.
36
Section 5.2. Securities Subordinated to Prior Payment of All Senior Indebtedness
on Dissolution, Liquidation, Reorganization, Etc., of the Company.
-------------------------------------------------------------------
Upon any payment or distribution of the assets of the Company of any
kind or character, whether in cash, property or securities (including any
collateral at any time securing the Securities), to creditors upon any
dissolution, winding-up, total or partial liquidation, or reorganization of the
Company (whether voluntary or involuntary, or in bankruptcy, insolvency,
reorganization, liquidation, or receivership proceedings, or upon an assignment
for the benefit of creditors, or any marshalling of the assets and liabilities
of the Company, or otherwise), then in such event:
(a) all Senior Indebtedness (including without limitation principal
thereof and interest thereon) shall first be paid in full before any Payment of
the Securities (as defined in Section 5.5) is made;
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (including any collateral at
any time securing the Securities) (other than Reorganization Securities), to
which the Holders or the Trustee on behalf of the Holders would be entitled
except for the provisions of this Article 5, including any such payment or
distribution which may be payable or deliverable by reason of the payment of
another debt of the Company being subordinated to the payment of the Securities,
shall be paid or delivered by any debtor, Custodian or other person making such
payment or distribution, directly to the holders of the Senior Indebtedness or
their Representative or Representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness held or represented by
each, for application to payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full after giving effect
to any concurrent payment or distribution, or provision therefor, to the holders
of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of this
Section 5.2, any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Reorganization
Securities), shall be received by the Trustee or the Holders before all Senior
Indebtedness is paid in full, such payment or distribution (subject to the
provisions of Sections 5.6 and 5.7) shall be held in trust for the benefit of,
and shall be immediately paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of Senior Indebtedness remaining unpaid, or
their Representative or Representatives, ratably according to the aggregate
amounts remaining unpaid on account of the principal of and interest on the
Senior Indebtedness held or represented by each, for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of such Senior
Indebtedness.
The Company shall give prompt notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
37
Upon any distribution of assets of the Company referred to in this
Article 5, the Trustee, subject to the provisions of Sections 9.1 and 9.2, and
the Holders shall be entitled to conclusively rely upon any order or decree by
any court of competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceeding is pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the Holders, for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 5; provided that the foregoing shall apply only if
such court, trustee, liquidating trustee or other person has been fully apprised
of the provisions of this Article.
In the event that the Trustee or any holder of Notes does not file a
proper claim or proof of debt in the form required in any proceeding referred to
above prior to 30 days before the expiration of the time to file such claim in
such proceeding, then the holder of any Senior Indebtedness (or its
Representative) is hereby authorized, and has the right, to file an appropriate
claim or claims for or on behalf of such holder of Notes.
Section 5.3. Securityholders To Be Subrogated to Right of Holders of Senior
Indebtedness.
--------------------------------------------------------------
Subject to the prior payment in full of all Senior Indebtedness, the
Holders shall be subrogated (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the Securities
are subordinated and is entitled to like rights of subrogation) to the rights of
the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until the principal
of and interest on the Securities shall be paid in full, and for purposes of
such subrogation, no payments or distributions to the holders of Senior
Indebtedness of assets, whether in cash, property or securities, distributable
to the holders of Senior Indebtedness under the provisions hereof to which the
Holders would be entitled except for the provisions of this Article 5, and no
payment pursuant to the provisions of this Article 5 to the holders of Senior
Indebtedness by the Holders shall, as among the Company, its creditors other
than the holders of Senior Indebtedness, and the Holders, be deemed to be a
payment by the Company to or on account of Senior Indebtedness, it being
understood that the provisions of this Article 5 are, and are intended, solely
for the purpose of defining the relative rights of the Holders, on the one hand,
and the holders of Senior Indebtedness, on the other hand.
Section 5.4. Obligations of the Company Unconditional.
-----------------------------------------
Nothing contained in this Article 5 or elsewhere in this Indenture or
in any Security is intended to or shall impair the obligation of the Company,
which is absolute and unconditional, to pay to the Holders the principal of and
interest on the Securities, as and when the same shall become due and payable in
accordance with the terms of the Securities, or to affect the relative rights of
the Holders and other creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
the happening of an Event of Default under this Indenture, subject to the
provisions of Article 8, and the rights, if any, under this Article 5 of the
holders of Senior Indebtedness in respect of assets, whether in cash, property
or securities, of the Company received upon the exercise of any such remedy.
38
Section 5.5. Company Not To Make Payment with Respect to Securities in Certain
Circumstances.
-----------------------------------------------------------------
Upon the occurrence of a Payment Default, unless and until the amount
of Designated Senior Indebtedness affected by such Payment Default then due
shall have been paid in full, or such default shall have been cured or waived or
shall have ceased to exist, the Company shall not pay principal of, premium, if
any, or interest on the Securities or any other amount due pursuant to this
Indenture or any Securities or make any deposit pursuant to Article 3 or Section
6.3 or 10.1 and shall not repurchase, redeem or otherwise retire any Securities
(collectively, "Payment of the Securities").
Unless Section 5.2 shall be applicable, upon (1) the occurrence of a
default on Designated Senior Indebtedness (other than a Payment Default) that
occurs and is continuing that permits the holders of such Designated Senior
Indebtedness (or their Representative or Representatives) to accelerate its
maturity and (2) receipt by the Company and the Trustee from the Senior Agent of
written notice of such occurrence and the imposition of a Payment Blockage
Period hereunder, then the Company shall not make any Payment of the Securities
for a period (the "Payment Blockage Period") commencing on the earlier of the
date of receipt by the Company or the Trustee of such notice from the Senior
Agent and ending on the earlier of (subject to any blockage of payments that may
then be in effect under this Section 5.5) (x) the date 179 days after such date,
(y) the date such default shall have been cured or waived in writing or shall
have ceased to exist or such Senior Indebtedness shall have been discharged, or
(z) the date such Payment Blockage Period shall have been terminated by written
notice to the Company or the Trustee from the Senior Agent, after which, in case
of clause (x), (y) or (z), as the case may be, the Company shall resume making
any and all required payments. Notwithstanding any other provision of this
Agreement, only one Payment Blockage Period may be commenced within any
consecutive 365-day period, and no event of default with respect to any
Designated Senior Indebtedness which existed or was continuing on the date of
the commencement of any Payment Blockage Period with respect to such Designated
Senior Indebtedness shall be, or can be made, the basis for the commencement of
a second Payment Blockage Period whether or not within a period of 365
consecutive days unless such event of default shall have been cured or waived
for a period of not less than 90 consecutive days. In no event will a Payment
Blockage Period extend beyond 179 days.
In the event that, notwithstanding the foregoing provisions of this
Section 5.5, any Payment of the Securities shall be made by or on behalf of the
Company and received by the Trustee, any Holder or any Paying Agent (or, if the
Company is acting as its own Paying Agent, money for any such payment shall be
segregated and held in trust), which payment was prohibited by this Section 5.5,
then, unless and until the amount of Designated Senior Indebtedness then due, as
to which a default shall have occurred, shall have been paid in full, or such
default shall have been cured or waived, such payment (subject, in each case, to
the provisions of Sections 5.6 and 5.7) shall be held in trust for the benefit
of, and shall be immediately paid over to, the holders of Designated Senior
Indebtedness or their Representative or Representatives, ratably according to
the aggregate amounts remaining unpaid on account of the principal of and
interest on the Designated Senior Indebtedness held or represented by each, for
application to the payment of all Designated Senior Indebtedness remaining
unpaid to the extent necessary to pay all Designated Senior Indebtedness in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of Designated Senior
Indebtedness. The Company shall give prompt written notice to the Trustee of any
default under any Designated Senior Indebtedness or under any agreement pursuant
to which Designated Senior Indebtedness may have been issued.
39
Section 5.6. Notice to Trustee.
------------------
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article 5 or any other provision of this Indenture, the Trustee shall not at any
time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee, unless and until the
Trustee shall have received written notice thereof from the Company or from the
holder or holders of Senior Indebtedness or from their Representative or
Representatives; and, prior to the receipt of any such notice, the Trustee,
subject to the provisions of Sections 9.1 and 9.2, shall be entitled to assume
conclusively that no such facts exist.
This provision shall not affect the obligations of the Holders under
Sections 5.2, 5.5 or elsewhere in this Indenture.
The Trustee shall be entitled to conclusively rely on the delivery to
it of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a Representative of such holder) to establish that such notice
has been given by a holder of Senior Indebtedness or a Representative of any
such holder. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 5, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
each Person under this Article 5, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 5.7. Application by Trustee of Monies Deposited with It.
---------------------------------------------------
Money or U.S. Government Obligations deposited in trust with the
Trustee pursuant to Sections 6.3 and 10.1 and not in violation of this Article 5
shall be for the sole benefit of Securityholders and shall thereafter not be
subject to the subordination provisions of this Article 5. Otherwise, any
deposit of monies by the Company with the Trustee or any Paying Agent (whether
or not in trust) for the payment of the principal of or interest on any
Securities shall be subject to the provisions of Sections 5.1, 5.2, 5.3 and 5.5;
except that, if at least three Business Days prior to the date on which by the
terms of this Indenture any such monies may become payable for any purpose
(including, without limitation, the payment of either the principal of or
interest on any Security), a Responsible Officer of the Trustee shall not have
received with respect to such monies the notice provided for in Section 5.6,
then the Trustee or any Paying Agent shall have full power and authority to
receive such monies and to apply such monies to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to or after such date. This
Section 5.7 shall be construed solely for the benefit of the Trustee and the
Paying Agent and shall not otherwise affect the rights that holders of Senior
Indebtedness may have to recover any such payments from the Holders in
accordance with the provisions of this Article 5.
40
Section 5.8. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
--------------------------------------------------------------
No right of any present or future holders of any Senior Indebtedness to
enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of any Senior Indebtedness may extend,
renew, modify or amend the terms of such Senior Indebtedness or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company, all without affecting the liabilities and obligations of the
parties to this Indenture or the Holders. No amendment of this Article 5 or any
defined terms used herein or any other Sections referred to in this Article 5
which adversely affects the rights hereunder of holders of Senior Indebtedness,
shall be effective unless the holders of such Senior Indebtedness (required
pursuant to the terms of such Senior Indebtedness to give such consent) have
consented thereto.
Section 5.9. Trustee To Effectuate Subordination.
------------------------------------
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee in his behalf to take such action as may be necessary or
appropriate to acknowledge and effectuate the subordination provided in this
Article 5 and appoints the Trustee his attorney-in-fact for any and all such
purposes.
Section 5.10. Right of Trustee To Hold Senior Indebtedness.
---------------------------------------------
The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article 5 in respect of any Senior Indebtedness at
any time held by it to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder. Nothing in this Article 5 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
9.7.
Section 5.11. Article 5 Not To Prevent Events of Default.
-------------------------------------------
The failure to make a Payment of the Securities by reason of any
provision in this Article 5 shall not be construed as preventing the occurrence
of an Event of Default under Section 8.1.
Section 5.12. No Fiduciary Duty Created to Holders of Senior Indebtedness.
------------------------------------------------------------
Notwithstanding any other provision in this Article 5, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness by virtue of the provisions of this Article 5 or otherwise. With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform
or to observe only such of its covenants or obligations as are specifically set
forth in this Article 5 and no implied covenants or obligations with respect to
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee.
41
Section 5.13. Article Applicable to Paying Agents.
------------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 5 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article 5 in addition to or in place of the Trustee; provided, however,
that Sections 5.6, 5.10 and 5.12 shall not apply to the Company if it acts as
Paying Agent.
Section 5.14. Certain Conversion Deemed Payment.
----------------------------------
For the purposes of this Article only, (1) the issuance and delivery of
junior securities upon conversion of Securities in accordance with Article 4
shall not be deemed to constitute a payment or distribution on account of the
principal of or premium or interest on Securities or on account of the purchase
or other acquisition of Securities, and (2) the payment, issuance or delivery of
cash, property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of principal of such
Security. For the purposes of this Section, the term "junior securities" means
(a) shares of any stock of any class of the Company and (b) securities of the
Company which are subordinated in right of payment to all Senior Indebtedness
which may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the right, which is absolute and
unconditional, of the Holder of any Security to convert such Security in
accordance with Article 4.
ARTICLE 6.
COVENANTS
Section 6.1. Payment of Securities.
----------------------
The Company covenants and agrees that it will duly and punctually pay
or cause to be paid the principal amount at maturity, Redemption Price,
Repurchase Price and interest, in respect of each of the Securities at the
places, at the respective times and in the manner provided herein and in the
Securities. Each installment of interest on the Securities may be paid by
mailing checks for the interest payable to or upon the written order of the
Holders of Securities entitled thereto as they shall appear on the registry
books of the Company; provided that with respect to any Holder of Securities
with an aggregate principal amount equal to or in excess of $5 million, at the
request of such Holder in writing the Company shall pay interest on such
Holder's Securities by wire transfer in immediately available funds.
42
Section 6.2. SEC Reports; 144A Information.
------------------------------
The Company shall file all reports and other information and documents
which it is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, and within 15 days after it files them with the SEC, the Company
shall file copies of all such reports, information and other documents with the
Trustee. The Company will cause any quarterly and annual reports which it mails
to its stockholders to be mailed to the Holders of the Securities.
In the event the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will prepare, for the first three quarters of each fiscal year, quarterly
financial statements substantially equivalent to the financial statements
required to be included in a report on Form 10-Q under the Exchange Act. The
Company will also prepare, on an annual basis, complete audited consolidated
financial statements including, but not limited to, a balance sheet, a statement
of income and retained earnings, a statement of cash flows and all appropriate
notes. All such financial statements will be prepared in accordance with
generally accepted accounting principles consistently applied, except for
changes with which the Company's independent accountants concur, and except that
quarterly statements may be subject to year-end adjustments. The Company will
cause a copy of such financial statements to be filed with the Trustee and
mailed to the Holders of the Securities within 60 days after the close for each
of the first three quarters of each fiscal year and within 105 days after the
close of each fiscal year. The Company will also comply with the other
provisions of TIA 314(a).
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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 beneficial owner of a
Security, the Company will promptly furnish or cause to be furnished Rule 144A
Information (as defined below) to such Holder, to such beneficial owner or to a
prospective purchaser designated by such Securityholder or beneficial owner, as
the case may be, in order to permit compliance by such Securityholder or
beneficial owner with Rule 144A under the Securities Act in connection with the
resale of such Security by such Securityholder or beneficial owner; provided,
however, the Company shall not be required to furnish such information in
connection with any request made on or after the date which is two years from
the later of (i) the date such Security (or any predecessor Security) was
acquired from the Company or (ii) the date such Security (or any predecessor
Security) was last acquired from an "affiliate" of the Company within the
meaning of Rule 144 under the Securities Act. "Rule 144A Information" shall be
such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
Section 6.3. Liquidation.
------------
Subject to the provisions of Article 5, insofar as they may be
applicable hereto, the Board of Directors or the stockholders of the Company may
not adopt a plan of liquidation which plan provides for, contemplates, or the
effectuation of which is preceded by (a) the sale, lease, conveyance or other
43
disposition of all or substantially all of the assets of the Company otherwise
than substantially as an entirety (Article 7 being the Article which governs any
such sale, lease, conveyance or other disposition substantially as an entirety),
and (b) the distribution of all or substantially all of the proceeds of such
sale, lease, conveyance or other disposition and of the remaining assets of the
Company to the holders of the capital stock of the Company, unless the Company
shall in connection with the adoption of such plan make provision for, or agree
that prior to making any liquidating distributions to the holders of capital
stock of the Company it will make provision for, the satisfaction of the
Company's obligations hereunder and under the Securities as to the payment of
principal and interest. The Company shall be deemed to have made provision for
such payments only if (1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations maturing as to principal and
interest in such amounts and at such times as are sufficient, without
consideration of any reinvestment of such interest, to pay the principal of and
interest on the Securities then outstanding to maturity and to pay all other
sums payable by it hereunder, or (2) there is an express assumption of the due
and punctual payment of the Company's obligations hereunder and under the
Securities and the performance and observance of all covenants and conditions to
be performed by the Company hereunder, by the execution and delivery of a
supplemental indenture in form reasonably satisfactory to the Trustee by a
person who acquires, or will acquire (otherwise than pursuant to a lease) a
portion of the assets of the Company, and which person will have Consolidated
Net Worth (immediately after the acquisition) equal to not less than the
Consolidated Net Worth of the Company (immediately preceding such acquisition),
and which is a corporation organized under the laws of the United States, any
State thereof or the District of Columbia; provided, however, that the Company
shall not make any liquidating distribution to the holders of capital stock of
the Company described in the first sentence of this Section 6.3 until after the
Company shall have certified to the Trustee with an Officers' Certificate at
least five days prior to the making of any liquidating distribution that it has
complied with the provisions of this Section 6.3.
Section 6.4. Compliance Certificates.
------------------------
The Company shall deliver to the Trustee within 105 days after the end
of each fiscal year of the Company, an Officers' Certificate as to the signer's
knowledge of the Company's compliance with all conditions and covenants on its
part contained in this Indenture and stating whether or not the signer knows of
any default or Event of Default. If such signer knows of such a default or Event
of Default, the Certificate shall describe the default or Event of Default and
the efforts to remedy the same. For the purposes of this Section 6.4, compliance
shall be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
Section 6.5. Notice of Defaults.
-------------------
The Company will give notice to the Trustee, promptly, and in any event
within five days, upon becoming aware thereof, of the existence of any Event of
Default or an event which, with notice or the lapse of time or both would
constitute an Event of Default hereunder.
44
Section 6.6. Payment of Taxes and Other Claims.
----------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company, directly or by reason
of its ownership of any Subsidiary or upon the income, profits or property of
the Company; and (2) all material lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a lien upon the property of the
Company; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which adequate provision has been made.
Section 6.7. Corporate Existence.
--------------------
Subject to Section 6.3 and Article 7, the Company will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any right if the Company shall
determine that the preservation is no longer desirable in the conduct of the
Company's business and that the loss thereof is not, and will not be, adverse in
any material respect to the Holders.
Section 6.8. Maintenance of Properties.
--------------------------
Subject to Section 6.3, the Company will cause all material properties
owned, leased or licensed in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof and thereto, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times
while any Securities are outstanding; provided, however, that nothing in this
Section 6.8 shall prevent the Company from doing otherwise if, in the judgment
of the Company, the same is desirable in the conduct of the Company's business
and is not, and will not be, adverse in any material respect to the Holders.
Section 6.9. Further Instruments and Acts.
-----------------------------
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
Section 6.10. Maintenance of Office or Agency.
--------------------------------
The Company will maintain in The City of New York an office or agency
where Securities may be presented or surrendered for payment or repurchase,
where Securities may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The office of the agent of the Trustee in The
City of New York shall be such office or agency of the Company, unless the
Company shall designate and maintain some other office or agency for one or more
of such purposes. The Company will give prompt written notice to the Trustee of
any change in the location of any such office or agency. If at any time the
45
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designation; 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 City of New
York for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such office or agency.
Section 6.11. Resale of Certain Securities; Reporting Issuer.
-----------------------------------------------
During the period beginning on the last date of original issuance of
the Securities and ending on the date that is two years from such date, the
Company will not, and will use all reasonable efforts not to permit any of its
"affiliates" (as defined under Rule 144 under the Securities Act or any
successor provision thereto) to, resell (x) any Securities which constitute
"restricted securities" under Rule 144 or (y) any securities into which the
Securities have been converted under this Indenture which constitute "restricted
securities" under Rule 144, that in either case have been reacquired by any of
them, except pursuant to an effective registration statement under the
Securities Act or pursuant to an applicable exemption from the Securities Act.
The Trustee shall have no responsibility in respect of the Company's performance
of its agreement in the preceding sentence.
Section 6.12. Registration Rights.
--------------------
(a) The Company agrees that the Holders (and any Person that has a beneficial
interest in a Security) from time to time of Registrable Securities (as such
term is defined in the Registration Rights Agreement) are entitled to the
benefits of the Registration Rights Agreement. Pursuant to the Registration
Rights Agreement, the Company has agreed for the benefit of the Holders from
time to time of Registrable Securities, at the Company's expense, (i) to file
within 90 days after the first date of original issuance of the Securities, a
registration statement (the "Registration Statement") with the Commission with
respect to resales of the Restricted Securities, (ii) to use all reasonable
efforts to cause such Registration Statement to be declared effective by the
Commission not later than 180 days after the first date of original issuance of
the Securities, and (iii) to use all reasonable efforts to maintain such
Registration Statement continuously effective under the Securities Act subject
to and in accordance with the terms of the Registration Rights Agreement.
Additional interest (the "Additional Interest") with respect to the
Securities shall be assessed if a Registration Default (as defined in the
Registration Rights Agreement) occurs. Additional Interest shall accrue on the
Securities over and above the interest set forth in the title of the Securities
from and including the date on which any such Registration Default shall occur,
to but excluding the date on which such Registration Default has been cured (in
the manner described in the Registration Rights Agreement), at a rate of 0.50%
per annum. Additional Interest shall be payable only to holders of Registrable
Securities (as defined in the Registration Rights Agreement).
46
(b) Any amounts of Additional Interest due pursuant to clause (a) of
this Section 6.12 shall be payable in cash on the regular interest Payment
Dates. The amount of Additional Interest shall be determined by multiplying the
applicable Additional Interest rate by the principal amount of the Securities,
multiplied by a fraction, the numerator of such period (determined on the basis
of a 360-day year comprised of twelve 30-day months), and the denominator of
which is 360.
Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of, premium, if any, or interest on, or in respect of,
any Security, such mention shall be deemed to include mention of the payment of
Additional Interest provided for in this Section to the extent that, in such
context, Additional Interest are, were or would be payable in respect thereof
pursuant to the provisions of this Section 6.12 and express mention of the
payment of Additional Interest (if applicable) in any provisions hereof shall
not be construed as excluding Additional Interest in those provisions hereof
where such express mention is not made.
In the event of a conflict between the terms of the Registration Rights
Agreement and this Indenture as to the calculation or payment of Additional
Interest, the provisions of the Registration Rights Agreement shall be
controlling.
Section 6.13. Additional Interest.
--------------------
If Additional Interest is payable pursuant to the Registration Rights
Agreement, the Company shall deliver to the Trustee a certificate to that effect
stating (i) the amount of such Additional Interest that is payable and (ii) the
date on which such interest is payable. Unless and until a Responsible Officer
receives at the Corporate Trust Office such a certificate, the Trustee may
assume without inquiry that no such interest is payable. If the Company has paid
Additional Interest directly to the Persons entitled to it, the Company shall
deliver to the Trustee a certificate setting forth the particulars of such
payment.
Section 6.14. Stay, Extension and Usury Laws.
-------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
47
ARTICLE 7.
SUCCESSOR CORPORATION
Section 7.1. When Company May Merge, Etc.
----------------------------
The Company shall not consolidate with or merge into any other Person,
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and shall not permit any Person (other than a Subsidiary
wholly-owned by the Company) to consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an entirety
to the Company, unless:
(a) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership, limited liability company or
trust, shall be organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental thereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all the
Securities and the performance or observance of every covenant of this Indenture
on the part of the Company to be performed or observed and shall have provided
for conversion rights in accordance with Section 4.12;
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
Section 7.2. Successor Corporation Substituted.
----------------------------------
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 7.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
48
ARTICLE 8.
DEFAULT AND REMEDIES
Section 8.1. Events of Default.
------------------
An "Event of Default" occurs if:
(1) the Company defaults in the payment of any interest upon any of the
Securities when due and payable and the default continues for a period of 30
days whether or not such payment is prevented by Article 5;
(2) the Company defaults in the payment of the principal of and
premium, if any, on any of the Securities when due, including on a redemption
date, whether or not such payment is prevented by Article 5;
(3) the Company fails to pay when due the principal of or interest on
indebtedness for money borrowed by the Company or its subsidiaries in excess of
$20.0 million, or the acceleration of that indebtedness that is not withdrawn
within 15 days after the date of written notice to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in principal
amount of the outstanding Securities;
(4) a default by the Company in the performance, or breach, of any of
the Company's other covenants in this Indenture which are not remedied by the
end of a period of 60 days after written notice to the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
outstanding Securities;
(5) the Company or any Significant Subsidiary pursuant to 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;
C. consents to the appointment of a Custodian of it or for all
or substantially all of its assets;
D. makes a general assignment for the benefit of its
creditors; or
(6) 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 in an involuntary case or proceeding;
49
B. appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the assets of any of
them; or
C. orders the liquidation of the Company or any Significant
Subsidiary;
and in each case the order or decree remains unstayed and in effect for
60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. For purposes of this Section
8.1, the term "Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
A default under clause (4) is not an Event of Default until the Trustee
notifies the Company or the Holders of at least 25% in principal amount of the
Securities then outstanding notify the Company and the Trustee, of the default,
and the Company does not cure the default within 60 days after receipt of such
notice. The notice given pursuant to this Section 8.1 must specify the default,
demand that it be remedied and state that the notice is a "Notice of Default."
When a default is cured, it ceases.
Subject to the provisions of Sections 9.1 and 9.2, the Trustee shall
not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to a Responsible Officer at the Corporate Trust
Office of the Trustee by the Company, the Paying Agent, any Holder or an agent
of any Holder. Within 90 days after a default, the Trustee must give to the
registered Holders of Securities notice of all uncured defaults known to it.
Section 8.2. Acceleration.
-------------
If an Event of Default (other than an Event of Default specified in
Section 8.1(5) or (6)) occurs and is continuing, the Trustee may, by notice to
the Company, or the Holders of at least 25% in principal amount of the
Securities then outstanding may, by notice to the Company and the Trustee, and
the Trustee shall, upon the request of such Holders, declare all unpaid
principal of and accrued interest to the date of acceleration on the Securities
then outstanding (if not then due and payable) to be due and payable upon any
such declaration, and the same shall become and be immediately due and payable.
If an Event of Default specified in Section 8.1(5) or (6) occurs, all unpaid
principal of and accrued interest on the Securities then outstanding shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholder.
The Holders of a majority in principal amount of the Securities then
outstanding by notice to the Trustee may rescind an acceleration and its
consequences if (i) all existing Events of Default, other than the nonpayment of
the principal of and accrued interest on the Securities which has become due
solely by such declaration of acceleration, have been cured or waived; (ii) the
Company has paid or deposited with the Trustee a sum sufficient to pay (a) all
overdue interest on the Securities, (b) the principal of any Security which has
become due otherwise then by such declaration of acceleration, and (c) to the
extent the payment of such interest is lawful, interest on overdue installments
of interest and overdue principal, which has become due otherwise than by such
declaration of acceleration; (iii) the rescission would not conflict with any
50
judgment or decree of a court of competent jurisdiction; and (iv) all payments
due to the Trustee and any predecessor Trustee under Section 9.7 have been made.
No such rescission shall affect any subsequent default or impair any right
consequent thereon. Anything herein contained to the contrary notwithstanding,
in the event of any acceleration pursuant to this Section 8.2, the Company shall
not be obligated to pay any premium which it would have had to pay if it had
then elected to redeem the Securities pursuant to paragraph 5 of the Securities,
except in the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium which it would have had to pay
if it had then elected to redeem the Securities pursuant to paragraph 5 of the
form of Security attached hereto as Exhibit A, in which case an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law.
Section 8.3. Other Remedies.
---------------
In case of an Event of Default hereunder, the Trustee may proceed to
protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either by suit in equity or by action at
law or by proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder 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 to the
extent permitted by law.
Section 8.4. Waiver of Defaults and Events of Default.
-----------------------------------------
Subject to Section 8.7, the Holders of a majority in principal amount
of the Securities then outstanding by notice to the Trustee may waive an
existing default or Event of Default and its consequences, except a default in
the payment of the principal of (or premium, if any) or interest on any Security
as specified in clauses (1) and (2) of Section 8.1, or a default in respect of a
covenant or provision hereof which cannot be modified or amended pursuant to
Section 11.2 without the consent of the Holder of each Security affected
thereby. When a default or Event of Default is waived, it is cured and ceases.
Section 8.5. Control by Majority.
--------------------
The Holders of a majority in principal amount of the Securities then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture; provided that the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction.
51
Section 8.6. Limitation on Suits.
--------------------
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities (except actions for payment of overdue principal or
interest or for the conversion of the Securities pursuant to Article 4) unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
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 the request and the offer of indemnity; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Securities then outstanding.
A Securityholder may not use any provision of this Indenture to
prejudice the rights of another Securityholder or to obtain a preference or
priority over such other Securityholder, or to enforce any rights under this
Indenture other than in the manner herein provided and for the equal and ratable
benefit of all the Securityholders.
Section 8.7. Rights of Holders To Receive Payment.
-------------------------------------
Notwithstanding any other provision of this Indenture (but subject to
Article 5), the right of any Holder of a Security to receive payment of
principal of (and premium, if any) and interest on the Security, on or after the
respective dates on which such payments are due as expressed in the Security, or
to convert the Security, or to bring suit for the enforcement of any such
payment on or after such respective dates, is absolute and unconditional and
shall not be impaired or affected without the consent of the Holder.
Section 8.8. Collection Suit by Trustee.
---------------------------
If an Event of Default in the payment of principal or interest
specified in Section 8.1(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 or another obligor on the Securities for the whole amount of principal
and accrued interest remaining unpaid, together with interest on overdue
principal and, to the extent that payment of such interest is lawful, interest
on overdue installments of interest, in each case at the rate per annum borne by
the Securities and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
52
Section 8.9. Trustee May File Proofs of Claim.
---------------------------------
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor on the Securities), its creditors or its property and shall be entitled
and empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder 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 Securityholders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 9.7, and to the extent that such payment
of the reasonable compensation, expenses, disbursements and advances in any such
proceedings shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
monies, securities and other property which the Securityholders may be entitled
to receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or the Trustee to
authorize or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
Section 8.10. Priorities.
-----------
Subject to Article 5, if the Trustee collects any money pursuant to
this Article 8, it shall pay out the money in the following order:
First, to the Trustee for amounts due under Section 9.7;
Second, to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Third, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 8.10.
Section 8.11. 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 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, 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 8.11 does not apply to a suit made by the Trustee, a suit by a
Holder pursuant to Section 8.7, or a suit by any Holder, or group of Holders, of
more than 10% in principal amount of the Securities then outstanding.
53
Section 8.12. Restoration of Rights and Remedies.
-----------------------------------
If the Trustee or any Securityholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Securityholder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the
Securityholders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Securityholders shall continue as though no such proceeding had been
instituted.
Section 8.13. Rights and Remedies Cumulative.
-------------------------------
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 2.7, no right or remedy herein conferred upon or reserved to the Trustee
or to the Securityholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 8.14. Delay or Omission Not Waiver.
-----------------------------
No delay or omission of the Trustee or of any Securityholder to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Securityholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Securityholders, as
the case may be.
ARTICLE 9.
TRUSTEE
Section 9.1. Duties of Trustee.
------------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
54
(1) the Trustee need perform only those duties as are specifically set
forth in this Indenture and no others and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. The Trustee,
however, shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).
(c) The Trustee may not be relieved, and no provision of this Indenture
shall be construed to relieve the Trustee, from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 9.1;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 8.5; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity reasonably satisfactory to it against any
loss, liability, expense or fee.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 9.1.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 9.2. Rights of Trustee.
------------------
Subject to Section 9.1:
(a) The Trustee may conclusively rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
55
(b) Whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, it may require an Officers'
Certificate or an Opinion of Counsel, which shall conform to Section 12.4(b).
The Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Certificate or Opinion.
(c) The Trustee may act through its agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes in good faith to be authorized or within
its rights or powers.
(e) The Trustee may consult with counsel of its selection and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a written Company request or Officers' Certificate and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(h) The Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture.
(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture.
(j) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.
56
(k) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of Officers of
the Company authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded.
Section 9.3. Individual Rights of Trustee.
-----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 9.10 and 9.11.
Section 9.4. Trustee's Disclaimer.
---------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for the
recitals contained herein or any statement in the Securities other than its
certificate of authentication.
Section 9.5. Notice of Default or Events of Default.
---------------------------------------
If a default or an Event of Default occurs and is continuing and if it
is actually known to the Trustee, the Trustee shall mail to each Securityholder
notice of the default or Event of Default within 90 days after it occurs. Except
in the case of a default or an Event of Default in payment of the principal of
or interest on any Security, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interest of Securityholders.
Section 9.6. Reports by Trustee to Holders.
------------------------------
If such report is required by TIA 313, within 60 days after each June
30, beginning with the June 30 following the date of this Indenture, the Trustee
shall mail to each Securityholder a brief report dated as of such June 30 that
complies with TIA 313(a). The Trustee also shall comply with TIA 313(b)(2) and
(c).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed. The Company shall notify the Trustee
whenever the Securities become listed on or delisted from any stock exchange and
any changes in the stock exchanges on which the Securities are listed.
Section 9.7. Compensation and Indemnity.
---------------------------
The Company shall pay to the Trustee from time to time such
compensation for its services hereunder as the Company and the Trustee shall
from time to time agree in writing (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses may
include the reasonable compensation, disbursements and expenses of Trustee's
agents and counsel.
57
The Company shall indemnify the Trustee or any predecessor Trustee and
their agents for, and hold them harmless against, any loss, liability or expense
incurred by it in connection with its duties under this Indenture or any action
or failure to act as authorized or within the discretion or rights or powers
conferred upon the Trustee hereunder, including the costs and expenses of
defending itself against any claim (whether asserted by the Company, or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. The Trustee shall have the option of undertaking the defense of
such claims at the Company's expense and may have separate counsel. The
reasonable fees and expenses of such counsel shall be paid by the Company. The
Company need not pay for any settlement without its written consent, which
consent shall not be unreasonably withheld or delayed.
The Company need not reimburse the Trustee for any expense or indemnify
it against any loss or liability incurred by it through its own negligent
action, negligent failure to act or willful misconduct.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.1(5) or (6) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 9.7 shall survive the termination of
this Indenture and the resignation or removal of the Trustee.
Section 9.8. Replacement of Trustee.
-----------------------
The Trustee may resign by so notifying the Company; provided, however,
no such resignation shall be effective until a successor Trustee has accepted
its appointment pursuant to this Section 9.8. The Holders of a majority in
principal amount of the Securities then outstanding may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee with the Company's
written consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting as trustee.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the Company's
expense), the Company or the Holders of 10% in principal amount of the
Securities then outstanding may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
58
If the Trustee fails to comply with Section 9.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee and be released from its obligations (exclusive of any
liabilities Trustee may have incurred while acting as Trustee) hereunder, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Securityholder.
Notwithstanding replacement of the Trustee pursuant to this Section
9.8, the Company's obligations under Section 9.7 shall continue for the benefit
of the retiring Trustee.
Section 9.9. Successor Trustee by Merger, Etc.
---------------------------------
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets (including the
administration of this Indenture) to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee; provided such transferee corporation shall qualify and be
eligible under Section 9.10.
Section 9.10. Eligibility; Disqualification.
------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust process, having (together with any Person
directly or indirectly controlling the Trustee) a combined capital and surplus
of at least $25,000,000, subject to supervision or examination by federal or
state authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 9.10, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 9.10, it shall resign immediately in the
manner and with the effect specified above in this Article 9.
Section 9.11. Preferential Collection of Claims Against Company.
--------------------------------------------------
The Trustee shall comply with TIA 311(a), excluding any creditor
relationship listed in TIA 311(b). A trustee who has resigned or been removed
shall be subject to TIA 311(a) with respect to the Government Obligations in
accordance with Section 10.1; provided, however, that if the Company has made
any payment of the principal of or premium, if any, or interest on any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive any such
payment from the money or U.S. Government Obligations held by the Trustee or the
Paying Agent.
59
ARTICLE 10.
SATISFACTION AND DISCHARGE OF INDENTURE
Section 10.1. Termination of Company's Obligations.
-------------------------------------
The Company may terminate all of its obligations under the Securities
and this Indenture (except those obligations referred to in the immediately
succeeding paragraph) if all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been replaced or
paid or Securities for whose payment money has theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 10.3) have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if the Company irrevocably deposits in trust with
the Trustee money or U.S. Government Obligations maturing as to principal and
interest in such amounts and at such times as are sufficient, without
consideration of any reinvestment of such interest, to pay the principal of and
premium, if any, and interest on the Securities then outstanding to maturity or
to the date fixed for redemption and to pay all other sums payable by it
hereunder. The Company may make an irrevocable deposit pursuant to this Section
10.1 only if at such time it is not prohibited from doing so under the
provisions of Article 5 and the Company shall have delivered to the Trustee and
any such Paying Agent an Officers' Certificate and Opinion of Counsel to that
effect and that all other conditions to such deposit have been complied with.
The Company's obligations in paragraphs 8 and 12 of the Securities, in
Sections 6.1, 6.2, 9.7, 9.8 and 10.4, and in Articles 2 and 4 shall survive
until the Securities are no longer outstanding. Thereafter, the Company's
obligations in such paragraph 12 and in Section 9.7 shall survive.
After such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture, except for those surviving obligations specified
above.
"U.S. Government Obligations" means direct non-callable obligations of,
or non-callable obligations guaranteed by, the United States of America for the
payment of which guarantee or obligation the full faith and credit of the United
States is pledged.
Section 10.2. Application of Trust Money.
---------------------------
The Trustee or the Paying Agent shall hold in trust, for the benefit of
the Holders, money or U.S. Government Obligations deposited with it pursuant to
Section 10.1, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of the
principal of, premium, if any, and interest on the Securities. Money and U.S.
Government Obligations so held in trust and deposited in compliance with Section
10.1 and Article 5 shall not be subject to the subordination provisions of
Article 5.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 10.1 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of outstanding Securities.
60
Section 10.3. Repayment to Company.
---------------------
Subject to Section 10.1, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or U.S. Government
Obligations held by them at any time.
The Trustee and the Paying Agent shall pay, subject to applicable
escheatment laws, to the Company upon request any money held by them for the
payment of principal, premium, if any, or interest that remains unclaimed for
two years after a right to such money has matured; provided, however, that the
Trustee or such Paying Agent, before being required to make any such payment,
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that after a date
specified therein, which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company. After that, Holders entitled to money must look to the
Company for payment unless an abandoned property law designates another person.
Section 10.4. Reinstatement.
--------------
If the Trustee or the Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 10.1 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 10.1 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 10.1; provided, however,
that if the Company has made any payment of the principal of or premium or
interest on any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive any such payment from the money or U.S. Government Obligations held by
the Trustee or the Paying Agent.
ARTICLE 11.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 11.1. Without Consent of Holders.
---------------------------
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to or consent of any Securityholder:
(a) to comply with Sections 4.12, 6.3 and 7.1;
(b) to cure any ambiguity, omission, defect or inconsistency, or to
make any other change that does not adversely affect the rights of any
Securityholder;
61
(c) to make provisions with respect to the conversion right of the
Holders pursuant to Section 4.6;
(d) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities; or
(e) to comply with the provisions of the TIA or with any requirement of
the SEC arising solely as a result of the qualification of this Indenture under
the TIA.
Section 11.2. With Consent of Holders.
------------------------
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to any Securityholder but with the written consent
of the Holders of a majority in aggregate principal amount of the Securities
then outstanding. The Holders of a majority in aggregate principal amount of the
Securities then outstanding may waive compliance by the Company with restrictive
provisions of this Indenture other than as set forth in this Section 11.2 below;
and waive any past default under this Indenture and its consequences, except a
default in the payment of the principal of or any premium or interest on any
Security or in respect of a provision which under this Indenture cannot be
modified or amended without the consent of the Holder of each outstanding
Security affected.
Subject to Section 11.4, without the written consent of each
Securityholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 8.4, may not:
(a) change the stated maturity date of the principal of, or any
installment of interest on, any Security;
(b) reduce the principal amount of, or the rate of interest on, or any
premium payable on, any Security, whether upon acceleration, redemption or
otherwise;
(c) change the currency for payment of principal of, or premium or
interest (including Additional Interest) on any Security;
(d) impair the right to institute suit for the enforcement of any
payment of principal of, or premium or interest on any Security when due;
(e) adversely affect the conversion rights provided in Article 4;
(f) modify the provisions of Article 5 with respect to the
subordination of the Securities in a manner adverse to the Holders of the
Securities;
(g) modify the provisions of this Indenture requiring the Company to
make an offer to repurchase Securities upon a Change in Control in a manner
adverse to the Holders of the Securities;
(h) reduce the percentage of principal amount of the outstanding
Securities necessary to modify or amend this Indenture or to consent to any
waiver provided for in this Indenture;
62
(i) waive a default in the payment of the principal of or premium or
interest (including Additional Interest) on any Security; or
(j) make any changes in Section 8.4, 8.7 or this sentence.
It shall not be necessary for the consent of the Holders under this
Section 11.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
An amendment under this Section 11.2 may not make any change that
adversely affects the rights under Article 5 of any holder of an issue of Senior
Indebtedness unless the holders of that issue, pursuant to its terms, consent to
the change.
Section 11.3. Compliance with Trust Indenture Act.
------------------------------------
Every amendment to or supplement of this Indenture or the Securities
shall comply with TIA as in effect at the date of such amendment or supplement.
Section 11.4. Revocation and Effect of Consents.
----------------------------------
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(a) through (j) of Section 11.2. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
Section 11.5. Notation on or Exchange of Securities.
--------------------------------------
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Section 11.6. Trustee To Sign Amendments, Etc.; Notices.
------------------------------------------
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article 11 if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing or refusing to sign such amendment
or supplement, the Trustee shall be entitled to receive and, subject to Section
9.1, shall be fully protected in relying upon, an Officer's Certificate, board
63
resolutions and an Opinion of Counsel stating that such amendment or supplement
is authorized or permitted by this Indenture. The Company may not sign an
amendment or supplement until the Board of Directors approves it.
After an amendment, supplement or waiver under this Article 11 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
ARTICLE 12.
MISCELLANEOUS
Section 12.1. Trust Indenture Act Controls.
-----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the TIA through
operation of Section 318(c) thereof, upon qualification of this Indenture
thereunder such imposed duties shall control.
Section 12.2. Notices.
--------
Any notice or communication shall be given in writing and delivered by
facsimile (with original to follow), in person, by overnight delivery or mailed
by first class mail, postage prepaid, addressed as follows:
If to the Company:
NCO Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Blank Rome ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
64
If to the Trustee:
Bankers Trust Company
Corporate Trust and Agency Services
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇/6961
Attention: Corporate Market Services
Such notices or communications shall be effective when received.
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notice or communications.
Any notice or communication mailed to a Securityholder shall be mailed
by first class mail to him at his address shown on the register kept by the
Registrar.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication to a Securityholder is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
Section 12.3. Communications by Holders with Other Holders.
---------------------------------------------
Securityholders may communicate pursuant to TIA 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA 312(c).
Section 12.4. Certificate and Opinion as to Conditions Precedent.
---------------------------------------------------
(a) 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
at the request of the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent (including any covenants compliance with which
constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent (including any covenants compliance with which
constitutes a condition precedent) have been complied with.
(b) Each Officers' Certificate and Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture (other
than annual certificates provided pursuant to Section 6.4) shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
65
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on Officers'
Certificates or certificates of public officials.
Section 12.5. Record Date for Vote or Consent of Securityholders.
---------------------------------------------------
The Company (or, in the event deposits have been made pursuant to
Section 6.3 or 10.1, the Trustee) may set a record date for purposes of
determining the identity of Securityholders entitled to vote or consent to any
action by vote or consent authorized or permitted under this Indenture, which
record date shall be the later of 10 days prior to the first solicitation of
such vote or consent or the date of the most recent list of Securityholders
furnished to the Trustee pursuant to Section 2.5 prior to such solicitation. If
a record date is fixed, those persons who were Holders of Securities at such
record date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any vote or consent
previously given, whether or not such persons continue to be Holders after such
record date.
Section 12.6. Rules by Trustee, Paying Agent, Registrar.
------------------------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or the Paying Agent may make reasonable rules for its
functions.
Section 12.7. Legal Holidays.
---------------
A "Legal Holiday" is a Saturday, or a Sunday or a day on which state or
federally chartered banking institutions in New York (or, if the Trustee is not
located in New York, the state where the Trust Office of the Trustee is located)
are not required to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
Section 12.8. Governing Law.
--------------
The laws of the State of New York shall govern this Indenture and the
Securities without regard to principles of conflicts of law.
Section 12.9. No Adverse Interpretation of Other Agreements.
----------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
66
Section 12.10. No Recourse Against Others.
---------------------------
All liability described in paragraph 17 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
Section 12.11. Successors.
-----------
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 12.12. Multiple Counterparts.
----------------------
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
Section 12.13. Separability.
-------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 12.14. Table of Contents, Headings, Etc.
---------------------------------
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
67
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the 4th day of April, 2001.
NCO GROUP, INC.
By:
--------------------------------------
Name:
Title:
BANKERS TRUST COMPANY
as Trustee
By:
--------------------------------------
Name:
Title:
S-1
EXHIBIT A
---------
FORM OF SECURITY
[GLOBAL NOTE LEGEND:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO NCO GROUP, INC.
(THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFER IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.]
A-1
[RESTRICTED SECURITIES LEGEND:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD UNDER RULE 144(k) (OR ANY SUCCESSOR THERETO) UNDER THE SECURITIES ACT
WHICH IS APPLICABLE TO THIS SECURITY OR (Y) BY ANY HOLDER THAT WAS AN
"AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE
COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER,
IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4) TO
AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT ("INSTITUTIONAL ACCREDITED INVESTOR")
THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE COMPANY AND THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER MAY BE OBTAINED FROM THE TRUSTEE), (5) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. PRIOR TO A
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (6) ABOVE),
THE HOLDER OF THIS SECURITY MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY
AND THE TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AND, IN THE CASE
OF A TRANSFER PURSUANT TO CLAUSE (5) ABOVE, A LEGAL OPINION AS THEY MAY
REASONABLY REQUIRED TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES
WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER, (2) AN INSTITUTIONAL ACCREDITED INVESTOR AND THAT IT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3)
NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS
PERMITTED BY THE SECURITIES ACT.]
A-2
[FORM OF FACE OF SECURITY]
NCO GROUP, INC.
Number 1 CUSIP 628858 AC 6
4.75% Convertible Subordinated Note Due 2006
NCO Group, Inc., a Pennsylvania corporation (the "Company"), promises
to pay to Cede & Co. or registered assigns, the principal sum of One Hundred
Twenty Five Million Dollars ($125,000,000) on April 15, 2006 and to pay interest
on the principal amount of this Note beginning the most recent date to which
interest has been paid or, if no interest has been paid, beginning April 4, 2001
at the rate of 4.75% per annum.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
This Note is convertible at such times and as specified on the other
side of this Note. Additional provisions of this Note are set forth on the other
side of this Note.
A-3
IN WITNESS WHEREOF, the Company has caused this 4.75% Convertible
Subordinated Note due 2006 to be signed by its duly authorized officers.
Dated: April 4, 2001 NCO GROUP, INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
Trustee's Certificate of
Authentication:
Dated:
-------------------
This is one of the Securities
referred to in the within mentioned
Indenture.
Bankers Trust Company,
as Trustee
By:
---------------------------------------
Authorized Signatory
A-4
[FORM OF REVERSE SIDE OF SECURITY]
NCO Group, Inc.
4.75% Convertible Subordinated Note Due 2006
1. Interest.
--------
NCO Group, Inc., a Pennsylvania corporation (the "Company"), promises
to pay interest on the principal amount of this Note at the rate per annum shown
above. The Company shall pay interest semi-annually on April 15 and October 15
of each year, commencing October 15, 2001. Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from April 4, 2001. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated April 4, 2001, between the Company and Deutsche Banc
Alex. ▇▇▇▇▇ Inc.
2. Method of Payment.
-----------------
The Company will pay interest on this Note (except defaulted interest)
to the person who is the registered Holder of this Note at the close of business
on the April 1 and October 1 next preceding the interest payment date. The
Holder must surrender this Note to the Paying Agent to collect payment of
principal. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. The Company, however, may pay principal and interest by its check
payable in such money. It may mail an interest check to the Holder's registered
address.
3. Paying Agent, Registrar and Conversion Agent.
--------------------------------------------
Initially, Bankers Trust Company (the "Trustee") will act as Paying
Agent, Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar or Conversion Agent without notice to the Holder. The Company or any
of its Subsidiaries may act as Paying Agent, Registrar or Conversion Agent.
4. Indenture; Limitations.
----------------------
This Note is one of a duly authorized issue of Notes of the Company
designated as its 4.75% Convertible Subordinated Notes Due 2006 (the "Notes"),
issued under an Indenture dated as of April 4, 2001 (the "Indenture"), between
the Company and the Trustee. The terms of this Note include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇. 77aaa-77bbbb), as amended by the Trust
Indenture Reform Act of 1990, as in effect on the date hereof or, from and after
the date that the Indenture shall be qualified thereunder, as in effect on such
date. This Note is subject to all such terms, and the holder of this Note is
referred to the Indenture and said Act for a statement of them.
A-5
The Notes are subordinated unsecured obligations of the Company limited
to up to $125,000,000 aggregate principal amount.
5. Optional Redemption.
-------------------
The Notes may be redeemed at the Company's option, in whole or in part,
at any time and from time to time on and after April 22, 2004 (an "Optional
Redemption") if the Closing Price of the Company's Common Stock for 20 Trading
Days (as defined in the Indenture) in a period of 30 consecutive Trading Days
ending on the Trading Day prior to the date of mailing of the provisional notice
of redemption exceeds 120% of the Conversion Price (as defined below) of the
Notes. The redemption price for the Notes, expressed as a percentage of the
principal amount, is as follows for the 12-month periods set forth below:
|----------------------------------------------------------|
| Redemption Period Percentage |
| -------------------------------------------------------- |
| April 22, 2004 through April 14, 2005...........102.0% |
| April 15, 2005 through April 14, 2006...........101.0% |
|----------------------------------------------------------|
together in the case of any such redemption with accrued and unpaid interest to
the date of redemption, but any interest payment that is due and payable on or
prior to such date of redemption will be payable to the Holders of such Notes,
or one or more predecessor Notes, of record at the close of business on the
relevant record dates referred to on the face hereof, all as provided in the
Indenture.
6. Notice of Redemption.
--------------------
Notice of redemption will be mailed by first class mail at least 30
days prior to the redemption date in the case of an Optional Redemption to each
Holder of Notes to be redeemed at his registered address. Notes in denominations
larger than $1,000 may be redeemed in part, but only in whole multiples of
$1,000. On and after the redemption date, subject to the deposit with the Paying
Agent of funds sufficient to pay the redemption price, interest ceases to accrue
on Notes or portions of them called for redemption.
7. Repurchase of Notes at Option of Holder upon a Change in Control.
----------------------------------------------------------------
If at any time that Notes remain outstanding there shall have occurred
a Change in Control (as defined in the Indenture), at the option of the Holder
and subject to the terms and conditions of the Indenture, the Company shall
become obligated to repurchase all or any part specified by the Holder (so long
as the principal amount of such part is $1,000 or an integral multiple thereof)
of the Notes held by such Holder on the Repurchase Date. The Holder shall have
the right to withdraw any Repurchase Notice by delivering a written notice of
withdrawal to the Paying Agent in accordance with the terms of the Indenture.
The Repurchase Price is payable in cash.
8. Conversion.
----------
At any time after 90 days following the latest date of original
issuance of the Notes and prior to the close of business on the Business Day
immediately preceding April 15, 2006, a Holder of a Note may convert such Note
into shares of Common Stock of the Company; provided, however, that if the Note
A-6
is called for redemption, the conversion right will terminate at the close of
business on the Business Day before the redemption date of such Note (unless the
Company shall default in making the redemption payment when due, in which case
the conversion right shall terminate at the close of business on the date such
default is cured and such Note is redeemed). The initial conversion price is
$32.92 per share, subject to adjustment under certain circumstances as described
in the Indenture (the "Conversion Price"). The number of shares issuable upon
conversion of a Note is determined by dividing the principal amount converted by
the Conversion Price in effect on the conversion date. Upon conversion, no
adjustment for interest or dividends will be made. No fractional shares will be
issued upon conversion; in lieu thereof, an amount will be paid in cash based
upon the current market price (as defined in the Indenture) of the Common Stock
on the last trading day prior to the date of conversion.
To convert a Note, a Holder must (a) complete and sign the conversion
notice set forth below and deliver such notice to the Conversion Agent, (b)
surrender the Note to the Conversion Agent, (c) furnish appropriate endorsements
and transfer documents if required by the Registrar or the Conversion Agent, (d)
pay any transfer or similar tax, if required and (e) if the Note is held in
book-entry form, complete and deliver to the Depositary appropriate instructions
pursuant to the Depositary's book-entry conversion programs. If a Holder
surrenders a Note for conversion between the close of business on any record
date for the payment of an installment of interest and the opening of business
on the next interest payment date, the Note must be accompanied by payment of an
amount equal to the interest payable on such interest payment date on the
principal amount of the Note or portion thereof then converted; provided,
however, that no such payment shall be required if such Note has been called for
redemption on a redemption date within the period between and including such
record date and such interest payment date, or if such Note is surrendered for
conversion after the opening of business on the interest payment date. A Holder
may convert a portion of a Note equal to $1,000 or any integral multiple
thereof.
A Note in respect of which a Holder had delivered a Repurchase Notice
exercising the option of such Holder to require the Company to repurchase such
Note may be converted only if the notice of exercise is withdrawn as provided
above and in accordance with the terms of the Indenture.
9. Subordination.
-------------
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness of the Company, as defined
in the Indenture. Any Holder by accepting this Note agrees to and shall be bound
by such subordination provisions and authorizes the Trustee to give them effect.
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any terms of any instrument relating to the
Senior Indebtedness or any extension or renewal of the Senior Indebtedness.
A-7
10. Denominations, Transfer, Exchange.
---------------------------------
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. A Holder may register the transfer of 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 or other governmental charges that may be imposed
by law or permitted by the Indenture.
[Global Note Insert:
The aggregate principal amount of the Note in global form represented
hereby may from time to time be reduced to reflect conversions or
redemptions of a part of this Note in global form or cancellations of a
part of this Note in global form, in each case, and in any such case,
by means of notations on the Global Note Transfer Schedule on the last
page hereof. Notwithstanding any provision of this Note to the
contrary, conversions or redemptions of a part of this Note in global
form and cancellations of a part of this Note in global form, may be
effected without the surrendering of this Note in global form, provided
that appropriate notations on the Schedule of Exchanges, Conversions,
Redemptions, Cancellations and Transfers are made by the Trustee, or
the Custodian at the direction of the Trustee, to reflect the
appropriate reduction or increase, as the case may be, in the aggregate
principal amount of this Note in a global form resulting therefrom or
as a consequence thereof.]
11. Persons Deemed Owners.
---------------------
The registered holder of a Note may be treated as the owner of it for
all purposes.
12. Unclaimed Money.
---------------
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee or Paying Agent will pay, subject
to applicable escheatment laws, the money back to the Company at its request.
After that, Holders entitled to money must look to the Company for payment
unless an abandoned property law designates another person.
13. Amendment, Supplement, Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of a majority in
aggregate principal amount of the Notes then outstanding and any past default or
compliance with any provision may be waived in a particular instance with the
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without the consent of or notice to any Holder, the Company
and the Trustee may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, omission, defect or inconsistency or make any
other change that does not adversely affect the rights of any Holder.
A-8
14. Successor Corporation.
---------------------
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor corporation will
be released from those obligations.
15. Defaults and Remedies.
---------------------
An Event of Default is: default for 30 days in payment of interest on
the Notes; default in payment of principal on the Notes when due; failure by the
Company for 60 days after appropriate notice to it to comply with any of its
other agreements contained in the Indenture or the Notes; default by the Company
or any Subsidiary with respect to its obligation to pay principal of or interest
on indebtedness for borrowed money aggregating more than $20.0 million or the
acceleration of such indebtedness if not withdrawn within 15 days after the date
of appropriate notice to it; and certain events of bankruptcy, insolvency or
reorganization of the Company or any of its Significant Subsidiaries. If an
Event of Default (other than as a result of certain events of bankruptcy,
insolvency or reorganization) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding may
declare all unpaid principal of and accrued interest to the date of acceleration
on the Notes then outstanding to be due and payable immediately, all as and to
the extent provided in the Indenture. If an Event of Default occurs as a result
of certain events of bankruptcy, insolvency or reorganization, all unpaid
principal of and accrued interest on the Notes then outstanding shall become due
and payable immediately without any declaration or other act on the part of the
Trustee or any Holder, all as and to the extent provided in the Indenture.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company is required to file periodic reports with the Trustee as
to the absence of default.
16. Trustee Dealings with the Company.
---------------------------------
Bankers Trust Company, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the 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 or by reason of, such
obligations or their creation. The Holder of this Note by accepting this Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of this Note.
A-9
18. Discharge Prior to Maturity.
---------------------------
If the Company deposits with the Trustee or the Paying Agent money or
U.S. Government Obligations sufficient to pay the principal of and interest on
the Notes to maturity as provided in the Indenture, the Company will be
discharged from the Indenture except for certain Sections thereof.
19. Authentication.
--------------
This Note shall not be valid until the Trustee or an authenticating
agent signs the certificate of authentication on the other side of this Note.
20. Abbreviations and Definitions.
-----------------------------
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
All capitalized terms used in this Note and not specifically defined
herein are defined in the Indenture and are used herein as so defined.
21. Indenture to Control.
--------------------
In the case of any conflict between the provisions of this Note and the
Indenture, the provisions of the Indenture shall control.
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to: NCO Group,
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel.
A-10
TRANSFER NOTICE
This Transfer Notice relates to $__________ principal amount of the 4.75%
Convertible Subordinated Notes Due 2006 of NCO Group, Inc., a Pennsylvania
corporation, held by _____________________ (the "Transferor").
(I) or (we) assign and transfer this Convertible Note to
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
-----------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
and irrevocably appoint _______________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Convertible Note)
Date:
--------------------
Signature Guarantee(2)
------------------------------
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the date that is two years after the later of the
date of original issuance of such Notes and the last date, if any, on which such
Notes were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Notes are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to NCO Group, Inc.; or
(2) [ ] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) [ ] pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
(4) [ ] pursuant to another available exemption from the registration
requirements of the Securities Act of 1933; or
--------
(2) Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange using the Medallion signature
guarantee.
A-11
(5) [ ] pursuant to an effective registration statement under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the
name of any person other than the registered holder thereof;
provided, however, that if box (2), (3) or (4) is checked, the
Trustee may require, prior to registering any such transfer of
the Notes such legal opinions, certifications and other
information as the Company has reasonably requested 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 of 1933, such as the
exemption provided by Rule 144 under such Act.
Unless the box below is checked, the undersigned confirms that
such Note is not being transferred to an "affiliate" of the
Company as defined in Rule 144 under the Securities Act of
1933, as amended (an "Affiliate"):
(6) [ ] The transferee is an Affiliate of the Company.
----------------------------------------
Signature
----------------------------------------
Date
----------------------------------------
Signature Guarantee(3)
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
--------
(3) Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange using the Medallion signature
guarantee.
A-12
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
--------------- -------------------------------------------------
[Signature of executive officer of purchaser]
Name:
Title:
A-13
CONVERSION NOTICE
To NCO Group, Inc.:
The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion below designated, into Common Stock
of NCO Group, Inc. in accordance with the terms of the Indenture referred to in
this Note, and directs that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be issued in the name
of and delivered to the undersigned, unless a different name has been indicated
in the assignment below. If shares are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
Any holder of Notes, upon exercise of its conversion rights in
accordance with the terms of the Indenture and the Security, agrees to be bound
by the terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the Notes.
[ ] Convert whole [ ] Convert in part
Amount of Note to be converted
($1,000 or integral multiples
thereof):
$-----------------------------
---------------------------------------
Signature (sign exactly as name appears
on the other side of this Note)
---------------------------------------
Signature Guarantee:(4)
--------
(4) Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange using the Medallion signature
guarantee.
A-14
If you want the stock certificate made out in another person's name,
complete the following for such person:
-------------------------------------------------------
Name
-------------------------------------------------------
Social Security or Taxpayer Identification Number
-------------------------------------------------------
Street Address
-------------------------------------------------------
City, State and Zip Code
A-15
OPTION OF HOLDER TO ELECT REPURCHASE
If you want to elect to have this Note repurchased by the Company
pursuant to Section 3.9 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Note repurchased by the
Company pursuant to Section 3.9 of the Indenture, state the principal amount
(which shall be $1,000 or a multiple thereof) to be repurchased:
$__________________
Dated:
---------------------- ----------------------------------------
Signature (sign exactly as name appears
on the other side of this Note)
--------------------------------------------------
Signature Guarantee:(5)
--------
(5) Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange using the Medallion signature
guarantee.
A-16
[Schedule A to Exhibit A
Global Note Transfer Schedule
Changes to Principal Amount of Global Security
|=============|=====================================|====================================|=======================|
| | Principal Amount of Securities by | Remaining Principal Amount of this | Authorized Signature |
| | which this Global Security Is to | Global Security | of officer of Trustee |
| Date | Be Reduced and Reason for Reduction | (following decrease) | or Note Custodian |
|-------------|-------------------------------------|------------------------------------|-----------------------|
| | | | |
|-------------|-------------------------------------|------------------------------------|-----------------------|
| | | | |
|-------------|-------------------------------------|------------------------------------|-----------------------|
| | | | |
|-------------|-------------------------------------|------------------------------------|-----------------------|
| | | | |
|-------------|-------------------------------------|------------------------------------|-----------------------|
| | | | |
|-------------|-------------------------------------|------------------------------------|-----------------------|
| | | | |
|-------------|-------------------------------------|------------------------------------|-----------------------|
| | | | |
|-------------|-------------------------------------|------------------------------------|-----------------------|
| | | | |
|=============|=====================================|====================================|=======================|
Schedule to be maintained by Depositary in cooperation with Trustee.]
A-17