SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): November 26, 2001
Commission file number: 1-12215
QUEST DIAGNOSTICS INCORPORATED
One Malcolm Avenue
Teterboro, NJ 07608
(201) 393-5000
DELAWARE
(State of Incorporation)
16-1387862
(I.R.S. Employer Identification Number)
On November 26, 2001, Quest Diagnostics Incorporated (the "Company") completed its previously announced public offering of $250 million of 1.75% contingent convertible debentures due 2021, which included the exercise by the Underwriters of the $25 million overallotment option. The Company will use the net proceeds from the offering, together with cash on hand, to repay amounts outstanding under its receivables credit facility. After this repayment, we will retain all of the secured borrowing capacity under our receivables credit facility, which will be available for working capital and other general corporate purposes and for the acquisition of businesses.
The proceeds from the debentures offering aggregated approximately $245 million after payment of the underwriting fee and bond discount, but before the payment of expenses related to the offering. The debentures offering was registered under the Securities Act of 1933, as amended, and was issued from the Company's existing shelf registration statements on Form S-3. The debentures were issued under an Indenture dated as of June 27, 2001, as supplemented by the First Supplemental Indenture dated as of June 27, 2001, and as further supplemented by the Second Supplemental Indenture dated as of November 26, 2001, in each case, among the Company, the Subsidiary Guarantors, and The Bank of New York, as trustee (the "Trustee"). The Indenture and the First Supplemental Indenture were filed as Exhibits 4.3 and 4.4, respectively, to the Company's Current Report or Form 8-K dated July 3, 2001, and the Second Supplemental Indenture is being filed as Exhibit 4.1 hereto. The Subsidiary Guarantors of the debentures are the same subsidiaries that guarantee the Company's 6-3/4% senior notes due 2006 and 7-1/2% senior notes due 2011. The "Subsidiary Guarantors" are Quest Diagnostics Holdings Incorporated, Quest Diagnostics Clinical Laboratories, Inc., Quest Diagnostics Incorporated (CA), Quest Diagnostics Incorporated (MD), Quest Diagnostics LLC, Quest Diagnostics Incorporated (MI), Quest Diagnostics Incorporated (CT), Quest Diagnostics Incorporated (MA), Quest Diagnostics of Pennsylvania Inc., MetWest Inc., Nichols Institute Diagnostics, DPD Holdings, Inc., Diagnostics Reference Services Inc., Laboratory Holdings Incorporated, Pathology Building Partnership, Quest Diagnostics Investments Incorporated and Quest Diagnostics Finance Incorporated. The debentures were sold pursuant to an underwriting agreement dated November 26, 2001 among the Company, the Subsidiary Guarantors and Banc of America Securities LLC, First Union Securities, Inc. and Credit Lyonnais Securities (USA) Inc. (the "Underwriters"). The Underwriting Agreement and the Second Supplemental Indenture are attached hereto as Exhibits 1.1 and 4.1, respectively.
(c) The following exhibits are filed as part of this report on Form 8-K:
1.1 Underwriting Agreement, dated November 19, 2001, among the Company, the Subsidiary Guarantors, and the Underwriters.
4.1 Second Supplemental Indenture, dated as of November 26, 2001, among the Company, the Subsidiary Guarantors, and the Trustee, which includes the form of the 1.75% contingent convertible debentures due 2021.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
QUEST DIAGNOSTICS INCORPORATED
Date: November 27, 2001 By: /s/ Leo C. Farrenkopf, Jr.
-----------------------------------
Name: Leo C. Farrenkopf, Jr.
Title: Vice President, Secretary,
and Deputy General Counsel
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EXHIBIT INDEX
Exhibit No. Description
---------- -----------
1.1 Underwriting Agreement, dated November 19, 2001,
among the Company, the Subsidiary Guarantors, and the
Underwriters.
4.1 Second Supplemental Indenture, dated as of November
26, 2001, among the Company, the Subsidiary
Guarantors, and the Trustee, which includes the form
of the 1.75% contingent convertible debentures due
2021.
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Exhibit 1.1
QUEST DIAGNOSTICS INCORPORATED
(a Delaware corporation)
1.75% Contingent Convertible Debentures due 2021
UNDERWRITING AGREEMENT
Dated: November 19, 2001
Table of Contents
Page
----
Section 1. Representations and Warranties..................................................................3
(a) Representations and Warranties by the Company and the Guarantors................................3
(i) Compliance with Registration Requirements............................................3
(ii) Incorporated Documents...............................................................4
(iii) Independent Accountants..............................................................4
(iv) Financial Statements.................................................................4
(v) No Material Adverse Change in Business...............................................5
(vi) Good Standing of the Company.........................................................5
(vii) Good Standing of Subsidiaries........................................................5
(viii) Authorization of Agreement...........................................................6
(ix) Authorization and Description of the Indenture.......................................6
(x) Authorization and Description of Securities and Guarantees...........................6
(xi) Capitalization; Authorization of Common Stock Issuable upon Conversion...............7
(xii) Non-Guarantor Subsidiaries...........................................................7
(xiii) Absence of Defaults and Conflicts....................................................7
(xiv) Absence of Labor Disputes............................................................8
(xv) Absence of Proceedings...............................................................8
(xvi) Accuracy of Exhibits.................................................................9
(xvii) Possession of Intellectual Property..................................................9
(xviii) Absence of Further Requirements......................................................9
(xix) Possession of Licenses and Permits...................................................9
(xx) Licensing and Accreditation of Laboratories.........................................10
(xxi) Title to Property...................................................................10
(xxii) Insurance...........................................................................10
(xxiii) Solvency............................................................................10
(xxiv) Stabilization or Manipulation.......................................................11
(xxv) Environmental Laws..................................................................11
(xxvi) Registration Rights.................................................................12
(xxvii) Accounting Controls.................................................................12
(xxviii) Investment Company Act..............................................................12
(b) Officer's Certificates.........................................................................12
Section 2. Sale and Delivery to Underwriters; Closing.....................................................12
(a) Initial Underwritten Securities................................................................12
(b) Initial Closing Time...........................................................................12
(c) Option Underwritten Securities; Additional Closing Time........................................13
(d) Payment........................................................................................13
(e) Denominations; Registration....................................................................14
Section 3. Covenants of the Company and the Guarantors....................................................14
(a) Compliance with Securities Regulations and Commission Requests.................................14
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(b) Filing of Amendments...........................................................................14
(c) Delivery of Registration Statements............................................................14
(d) Delivery of Prospectuses.......................................................................15
(e) Continued Compliance with Securities Laws......................................................15
(f) Blue Sky Qualifications........................................................................15
(g) Rule 158.......................................................................................15
(h) Use of Proceeds................................................................................16
(i) Restriction on Sale of Securities..............................................................16
(j) Reporting Requirements.........................................................................16
(k) Interim Financial Statements...................................................................17
(l) Rating of Securities...........................................................................17
(m) DTC Clearance..................................................................................17
(n) Reservation of Common Stock....................................................................17
Section 4. Payment of Expenses............................................................................17
(a) Expenses.......................................................................................17
(b) Termination of Agreement.......................................................................18
Section 5. Conditions of Underwriters' Obligations........................................................18
(a) Effectiveness of Registration Statement........................................................18
(b) Opinion of Counsel for the Company.............................................................18
(c) Opinion of Deputy General Counsel of the Company...............................................18
(d) Opinion of Counsel for the Underwriters........................................................18
(e) Officers' Certificate..........................................................................19
(f) Accountant's Comfort Letters and Consent.......................................................19
(g) Bring-down Comfort Letters.....................................................................19
(h) No Objection...................................................................................19
(i) Maintenance of Rating..........................................................................19
(j) Lock-Up Agreement from Certain Securityholders of the Company..................................20
(k) Additional Documents...........................................................................20
(l) Termination of Agreement.......................................................................20
Section 6. Indemnification................................................................................20
(a) Indemnification of the Underwriters............................................................20
(b) Indemnification of Company, Guarantors, Directors and Officers.................................21
(c) Actions against Parties; Notification..........................................................21
(d) Settlement without Consent if Failure to Reimburse.............................................22
Section 7. Contribution...................................................................................22
Section 8. Representations, Warranties and Agreements to Survive Delivery.................................24
Section 9. Termination of Agreement.......................................................................24
(a) Termination; General...........................................................................24
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(b) Liabilities....................................................................................24
Section 10. Default by One or More of the Underwriters.....................................................25
Section 11. Default by the Company and the Guarantors......................................................25
Section 12. Notices........................................................................................25
Section 13. Parties........................................................................................25
Section 14. Governing Law and Time.........................................................................26
Section 15. Effect of Headings.............................................................................26
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Schedule A - Underwriters
Schedule B - Pricing Information
Schedule C - Guarantors
Schedule D - Subsidiaries
Exhibit A - Form of Opinion of Deputy General Counsel of the Company Exhibit B - Form of Opinion of Shearman & Sterling Exhibit C - Form of Lock-up Agreement
QUEST DIAGNOSTICS INCORPORATED
(a Delaware corporation)
$225,000,000 1.75% Contingent Convertible Debentures due 2021
November 19, 2001
Banc of America Securities LLC
First Union Securities, Inc.
Credit Lyonnais Securities (USA) Inc.
c/o Banc of America Securities LLC
9 West 57th Street
New York, New York 10019
Ladies and Gentlemen:
Quest Diagnostics Incorporated, a Delaware corporation (the "Company"), and each of the Guarantors listed on Schedule C hereto (the "Guarantors"), confirm their respective agreements with Banc of America Securities LLC, First Union Securities, Inc. and Credit Lyonnais Securities (USA) Inc. (the "Underwriters," which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Banc of America Securities LLC is acting as representative (in such capacity, the "Representative"), with respect to (i) the issue and sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the principal amount set forth in said Schedule B of $225,000,000 aggregate principal amount of the Company's 1.75% Contingent Convertible Debentures due 2021 (the "Initial Underwritten Securities"), (ii) the granting by the Company to the Underwriters of an option to purchase an additional $25,000,000 aggregate principal amount of the Company's 1.75% Contingent Convertible Debentures due 2021 solely to cover over-allotments, if any, as described herein (the "Option Underwritten Securities," and together with the Initial Underwritten Securities, the "Securities") and (iii) the issue and sale by the Guarantors and the purchase by the Underwriters, acting severally and not jointly, of the senior guarantees (the "Guarantees") of the Company's obligations under the Securities. The Securities and the Guarantees are to be issued pursuant to an indenture dated as of June 27, 2001 (the "Base Indenture") among the Company, the Guarantors and The Bank of New York, as trustee (the "Trustee"), as supplemented by the First Supplemental Indenture dated as of June 27, 2001 (the "First Supplemental Indenture") and as supplemented by the Second Supplemental Indenture, to be dated as of November 26, 2001, among the Company, the Guarantors and the Trustee (the "Second Supplemental Indenture"), establishing the form and terms of the Securities. The Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture are herein, collectively, called the "Indenture."
The Securities will be convertible into shares of common stock, par value $0.01 per share, of the Company (the "Common Stock") in accordance with the terms of the Securities and the Indenture. On the third, fourth, seventh, eleventh and fifteenth anniversaries of the original issuance date of the Securities, each holder of Securities may require the Company to purchase such
Securities for a price to be paid, at the Company's option, in cash or (subject to certain limitations) shares of Common Stock, or any combination thereof, at a purchase price equal to the principal amount of the Securities plus any accrued and unpaid interest, if any, to the date of purchase.
The Securities and the Guarantees are being issued to repay, together with cash on hand, all, or substantially all, of the Company's outstanding indebtedness under the Receivables Credit Facility dated as of July 21, 2000 among the Company and the lenders as parties thereto (the "Receivables Credit Facility").
The Company understands that the Underwriters propose to make a public offering of the Securities and the Guarantees as soon as the Representative deems advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-64806) covering the registration of the Securities and the Guarantees under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statement was declared effective by the Commission on July 12, 2001 and the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Promptly after execution and delivery of this Agreement, the Company will either (i) prepare and file a final prospectus and final prospectus supplement in accordance with the provisions of paragraph (b) of Rule 424 of the rules and regulations of the Commission or (ii) if the Company has elected to rely upon Rule 434 of the 1933 Act Regulations, prepare and file a term sheet or abbreviated term sheet (the "Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The aforementioned registration statement (as amended from time to time), including the exhibits thereto, schedules thereto, if any, and the documents incorporated by reference therein, including the information, if any, deemed to be a part thereof pursuant to Rule 430A of the 1933 Act Regulations (the "Rule 430A Information") or Rule 434 of the 1933 Act Regulations (the "Rule 434 Information"), is referred to herein as the "Registration Statement;" and the final prospectus and the final prospectus supplement relating to the offering of the Securities and the Guarantees, in the form furnished to the Underwriters by the Company for use in connection with the offering of the Securities and the Guarantees, are collectively referred to herein as the "Prospectus;" provided, however, that all references to the "Registration Statement" and the "Prospectus" shall also be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of this Agreement. Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b) Registration Statement," and after such filing the term "Registration Statement" shall include the Rule 462(b) Registration Statement. If the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then all references to the "Prospectus" shall also be deemed to include the final or preliminary prospectus and the applicable Term Sheet in the form first furnished to the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all references in this Agreement to the date of the Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus" shall be deemed to refer to any prospectus and any amendment or supplement thereto that omitted, as applicable, the Rule 430A Information, the Rule 434 Information or other information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used after the effectiveness of the Registration
Statement and prior to the execution and delivery of this Agreement. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any amendment or supplement to any of the foregoing shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" (or other references of like import) in the Registration Statement, any preliminary prospectus or the Prospectus or any amendment or supplement thereto shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus or any amendment or supplement thereto, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be.
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Company and the Guarantors. The Company and each of the Guarantors, jointly and severally, represent and warrant to each Underwriter, as of the date hereof and as of the applicable Closing Time referred to in Section 2 hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets the requirements for use of Form S-3 under the 1933 Act. The Registration Statement (including any Rule 462(b) Registration Statement) has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement (or such Rule 462(b) Registration Statement) has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with. The Indenture has been duly qualified under the 1939 Act. All of the Guarantors are registrants under the Registration Statement.
At the respective times the Registration Statement (including any Rule 462(b) Registration Statement) and any post-effective amendments thereto became effective and at the applicable Closing Time, the Registration Statement, (any Rule 462(b) Registration Statement) and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Neither the Prospectus nor any amendments or supplements thereto, at the time the Prospectus or any such amendment or supplement was issued and at the applicable Closing Time, included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If Rule 434 is used, the Company will comply with the requirements of Rule 434. The representations and
warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective, at the time the Prospectus was issued and at the applicable Closing Time, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the audited financial statements and supporting schedule included in the Registration Statement are independent public accountants as required by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations.
(iv) Financial Statements. The financial statements (other than the pro forma financial statements) included or incorporated by reference in the Registration Statement and the Prospectus, together with the related schedule and notes, present fairly (A) the financial position of the Company and its Subsidiaries (as defined below) on a consolidated basis and SmithKline Beecham Clinical Laboratories, Inc. and certain related affiliates, respectively, at the dates indicated and (B) the statements of operations, stockholders' equity and cash flows of the Company and its Subsidiaries on a consolidated basis and of SmithKline Beecham Clinical Laboratories, Inc. and certain related affiliates on a consolidated basis, respectively, for the periods specified. Such financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement. The pro forma or as adjusted information included or incorporated by reference in the Registration Statement and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial information and have been properly
compiled on the basis described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. There are no historical or pro forma financial statements which are required by the 1933 Act, the 1933 Act Regulations and Regulation S-X to be included in the Registration Statement and the Prospectus which are not included as required. The financial information regarding the Guarantors included or incorporated by reference in the Registration Statement and the Prospectus complies with the requirements of Rule 3-10 of Regulation S-X.
(v) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein or contemplated thereby, (A) there has been no material adverse change in the business, financial condition, operations, cash flow or business prospects of the Company and its Subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its Subsidiaries, other than those described or contemplated by the Registration Statement and the Prospectus or in the ordinary course of business, which are material with respect to the Company and its Subsidiaries considered as one enterprise, and (C) other than the two-for-one stock split effected by the Company on May 31, 2001, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock except for the payment of dividends on the Company's voting cumulative preferred stock.
(vi) Good Standing of the Company. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement, the Indenture, the Securities; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the Company (each a "Subsidiary" and collectively the "Subsidiaries") has been duly organized and is validly existing as a corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its incorporation or existence, has corporate or partnership power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation or partnership to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. Except as otherwise disclosed in the Prospectus, all of the outstanding capital stock or partnership interests of each Subsidiary have been duly authorized and validly issued or created, are fully paid and non-assessable and except as described in Schedule D are owned by the Company, directly or through the Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim; none of the outstanding shares of capital stock or partnership interests of the Subsidiaries was issued in violation of any preemptive or similar rights arising by operation of law, or under the charter, by-laws or other charter documents of any Subsidiary or under any agreement to which the Company or any Subsidiary is a party. All of the Subsidiaries of the Company are listed on Schedule D attached hereto.
(viii) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors.
(ix) Authorization and Description of the Indenture. Each of the Base Indenture and the First Supplemental Indenture has been duly authorized, executed and delivered by the Company and each of the Guarantors and is duly qualified under the 1939 Act and constitutes a valid and binding agreement of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Second Supplemental Indenture has been duly authorized by the Company and each of the Guarantors and, when duly executed and delivered by the Company and each of the Guarantors, will constitute a valid and binding agreement of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Indenture will conform in all material respects to the statements relating thereto contained in the Prospectus.
(x) Authorization and Description of Securities and Guarantees. The Securities to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, at the applicable Closing Time, will have been duly executed by the Company and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture. The Guarantees have been duly authorized by the Guarantors and, when executed and delivered in the manner provided for in the Indenture, will constitute valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture. The Securities and the Guarantees will conform in all material respects to the statements relating thereto contained in the Prospectus.
(xi) Capitalization; Authorization of Common Stock Issuable upon Conversion. The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. The shares of Common Stock issuable upon conversion of the Securities have been duly and validly authorized and reserved for issuance upon such conversion by all necessary corporate action and such shares, when issued and delivered in accordance with the provisions of the Securities and the Indenture, will be duly and validly issued, fully paid and non-assessable; the issuance of such shares upon conversion will not be subject to preemptive or other similar rights of any shareholder of the Company arising by operation of law, under the charter of by-laws of the Company or under any agreement to which the Company or any of its Subsidiaries is a party; and the shares of Common Stock so issuable will conform to the description of the Common Stock contained in the Prospectus.
(xii) Non-Guarantor Subsidiaries. Each Subsidiary that is a guarantor under the Credit Agreement among Quest Diagnostics Incorporated, certain of the Subsidiaries, Bank of America, N.A., UBS AG, Stamford Branch, Merrill Lynch Capital Corporation, Credit Suisse First Boston, The Bank of New York, Wachovia Bank, N.A., and other lenders, dated June 27, 2001, is a Guarantor. All Subsidiaries that are not Guarantors (other than Quest Diagnostics Receivables Incorporated) did not collectively (a) own more than 10% of the Company's consolidated assets at December 31, 2000 or (b) account for more than 5% of the Company's consolidated revenues for the year ended December 31, 2000.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor any of the Subsidiaries is in violation of its charter or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject (collectively, "Agreements and Instruments") or has violated or is in violation of any of the laws, rules and regulations administered by the United States Health Care Financing Administration (the "HCFA"), the United States Food and Drug Administration (the "FDA"), the Substance Abuse and Mental Health Services Administration (the "SAMHSA") and the Drug Enforcement Administration (the "DEA"), or any other applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of the Subsidiaries or any of their assets or properties, except in each case for such defaults or violations that have been disclosed or that would not singly or in the aggregate result in a Material Adverse Effect. Assuming the execution, delivery and performance of this Agreement, the Indenture, the Securities, the Guarantees, and any other
agreement or instrument entered into or issued or to be entered into or issued by the Company or any of the Guarantors in connection with the consummation of the transactions contemplated by this Agreement and in the Registration Statement and the Prospectus (including the issuance and sale of the Securities and the Guarantees, the use of the proceeds from the sale of the Securities and the Guarantees as described in the Prospectus under the caption "Use of Proceeds") and compliance by the Company and the Guarantors with their respective obligations under this Agreement, the Indenture, the Securities, and the Guarantees have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or a default or a Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to the Agreements and Instruments (except for such conflicts, breaches or defaults or liens, charges or encumbrances that, singly or in the aggregate, would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any of the Subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of the Subsidiaries or any of their assets, properties or operations. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of the Subsidiaries.
(xiv) Absence of Labor Disputes. No labor dispute with the employees of the Company or any of the Subsidiaries exists or, to the knowledge of the Company and the Guarantors, is imminent, which may reasonably be expected to result in a Material Adverse Effect.
(xv) Absence of Proceedings. Except as disclosed in the Prospectus there is not pending or, to the knowledge of the Company or any Guarantor, threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any Subsidiary is a party, or to which the property of the Company or any Subsidiary is subject, before or brought by any domestic or foreign court or governmental agency or body, affecting (i) the possession by any of them of any Governmental License (as defined herein) currently held by any them, (ii) the accreditation of any of their respective laboratories with the College of American Pathologists ("CAP"), (iii) any of their qualification to perform services for and receive reimbursement from, Medicaid or Medicare, (iv) any of their ability to conduct their clinical testing business in any state or (v) any of them in any other way, which in the case of any of the foregoing, might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the properties or assets of the Company and the Subsidiaries considered as one enterprise or the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder or under the Indenture, Securities or Guarantees. The aggregate of all pending legal or governmental proceedings to which the Company or any Subsidiary thereof is a party or of which any of their respective property or assets is the subject which are not described in the Prospectus, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect. All of the
descriptions set forth in the Prospectus of the legal and governmental proceedings by or before any court, governmental agency or body are true and accurate in all material respects.
(xvi) Accuracy of Exhibits. There are no contracts or documents which are required to be described in the Registration Statement, the Prospectuses or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required.
(xvii) Possession of Intellectual Property. The Company and the Subsidiaries own, possess or license, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them, and neither the Company nor any of the Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property (including Intellectual Property which is licensed) or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of the Subsidiaries therein, and which infringement or conflict or invalidity or inadequacy, singly or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required (i) for the performance by the Company
or any of the Guarantors of their respective obligations hereunder,
(ii) in connection with the offering, issuance or sale of the
Securities under this Agreement, the issuance of Common Stock upon
conversion of Securities and the Guarantees or the consummation of the
transactions contemplated by this Agreement or (iii) for the due
execution, delivery or performance by the Company or any of the
Guarantors of this Agreement, the Indenture, the Securities, the
Guarantees, or any other agreement or instrument entered into or issued
or to be entered into or issued by the Company or any of the
Subsidiaries in connection with the consummation of the transactions
contemplated herein and in the Registration Statement and the
Prospectus (including the issuance and sale of the Securities and the
use of proceeds from the sale of the Securities as described in the
Registration Statement under the caption "Use of Proceeds"), except
such as have been already obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws and except
such where the failure to obtain would not result in a Material Adverse
Effect.
(xix) Possession of Licenses and Permits. The Company and the Subsidiaries possess all governmental permits, licenses, approvals, consents, certificates and other authorizations required (i) under the federal Medicare program, (ii) under the Clinical Laboratories Improvement Act of 1967, as amended (the "CLIA"), (iii) by the SAMHSA and (iv) as otherwise necessary to conduct the business now operated by them respectively, issued by the HCFA, the FDA, the SAMHSA and each other appropriate federal, state, local or foreign regulatory agencies or bodies including, but not limited to, any foreign regulatory authorities performing functions similar to their respective functions ("Governmental
Licenses") except where failure to obtain such Governmental Licenses would not singly or in the aggregate, result in a Material Adverse Effect; the Company and the Subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses and with the rules and regulations of the regulatory authorities and governing bodies having jurisdiction with respect thereto, except where the failure so to comply would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses, nor are there, to the knowledge of the Company or any Guarantor, pending or threatened actions, suits, claims or proceedings against the Company or any Subsidiary before any court, governmental agency or body including, but not limited to, the HCFA, the FDA, and the SAMHSA or otherwise that would reasonably be expected to limit, revoke, cancel, suspend or cause not to be renewed any Governmental License, in each case, which, singly or in the aggregate, would result in a Material Adverse Effect.
(xx) Licensing and Accreditation of Laboratories. All of the regional laboratories of the Company and the Subsidiaries are eligible for accreditation by CAP and are so accredited, and all of the laboratories of the Company and the Subsidiaries are in compliance, in all material respects, with the standards required by CLIA.
(xxi) Title to Property. The Company and the Subsidiaries have valid title to all real property owned by the Company and the Subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (a) are described in the Prospectus and reflected in the financial statements included therein; or (b) do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of the Subsidiaries; and all of the leases and subleases material to the business of the Company and the Subsidiaries, considered as one enterprise, and under which the Company or any of the Subsidiaries holds properties described in the Prospectus, are in full force and effect. Except as described in the Prospectus, neither the Company nor any of the Subsidiaries has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of the Subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or any Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease, which, singly or in the aggregate, would result in a Material Adverse Effect.
(xxii) Insurance. The Company and the Subsidiaries carry or are entitled to the benefits of insurance, including, without limitation, professional liability insurance, with financially sound and reputable insurers, in such amounts, containing such deductibles and covering such risks as is reasonable and prudent.
(xxiii) Solvency. The Company and each of the Guarantors are, and immediately after the Closing will be, Solvent. As used herein, the term "Solvent" means, with respect to
the Company and each Guarantor, as the case may be, on a particular date, that on such date (A) the fair market value of the assets of the Company or such Guarantor is greater than the total amount of liabilities (including, without limitation, contingent liabilities) of the Company or such Guarantor, (B) the present fair salable value of the assets of the Company or such Guarantor is not less than the amount that will be required to pay the probable liability of the Company or such Guarantor on its debts as they become absolute and matured, (C) the Company or such Guarantor does not intend to, and does not believe that it will, incur debts and liabilities beyond the Company's or such Guarantor's ability to pay as such debts and liabilities mature and (D) the Company or such Guarantor is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which the Company's or such Guarantor's assets would constitute unreasonably small capital.
(xxiv) Stabilization or Manipulation. Neither the Company nor
any Guarantor nor any of their respective officers, directors or
controlling persons has taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company or any
Guarantor in order to facilitate the sale or resale of the Securities
or the Guarantees. The Company and the Guarantors have not distributed
and, prior to the later to occur of (i) the applicable Closing Time and
(ii) completion of the distribution of the Securities and the
Guarantees, will not distribute any offering material in connection
with the offering and sale of the Securities and the Guarantees other
than the Prospectus or other materials, if any, permitted by the 1933
Act and approved by the Representative.
(xxv) Environmental Laws. Except for such matters as would
not, singly or in the aggregate, result in a Material Adverse Effect,
(A) neither the Company nor any of the Subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, medical specimens, petroleum or
petroleum products or nuclear or radioactive material (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and the
Subsidiaries have all permits, licenses, authorizations and approvals
currently required for their respective businesses under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of the
Subsidiaries and (D) there are no events, facts or circumstances that
might reasonably be expected to form the basis of any liability or
obligation of the Company or any of the Subsidiaries, including,
without limitation, any order, decree, plan or agreement requiring
clean-up or remediation, or any action, suit or proceeding by any
private party or
governmental body or agency, against or affecting the Company or any of the Subsidiaries relating to any Hazardous Materials or Environmental Laws.
(xxvi) Registration Rights. Except as disclosed in the Prospectus, there are no holders of securities (debt or equity) of the Company, or holders of rights (including, without limitation, preemptive rights), warrants or options to obtain securities of the Company, who in connection with the issuance, sale and delivery of the Securities and the Guarantees, and the execution, delivery and performance of this Agreement, have the right to request the Company to register securities held by them under the 1933 Act.
(xxvii) Accounting Controls. The Company and its consolidated Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management's general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management's general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(xxviii) Investment Company Act. The Company and each of the Guarantors are not, and will not be as a result of the sale of the Securities and the Guarantees pursuant to this Agreement, an investment company within the meaning of the Investment Company Act of 1940, as amended.
(b) Officer's Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries, as the case may be, delivered to the Representative or to counsel for the Underwriters shall be deemed a representation and warranty by the Company or any of the Subsidiaries to each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Underwritten Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company and the Guarantors agree to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the prices set forth in Schedule B, the aggregate principal amount of Initial Underwritten Securities (including the Guarantees) set forth in Schedule A opposite the name of such Underwriter, plus any additional principal amount of Initial Underwritten Securities (including the Guarantees) which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Initial Closing Time. Payment of the purchase price for, and delivery of certificates for, the Initial Underwritten Securities (including the Guarantees) shall be made at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or at such other place as shall be agreed upon by the Representative, the Company and the Guarantors at 9:00 A.M. (New York Time) on November 26, 2001 (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the
Representative, the Company and the Guarantors (such time and date of payment and delivery being herein called the "Initial Closing Time").
(c) Option Underwritten Securities; Additional Closing Time. In
addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Company and the Guarantors agree to grant an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
$25,000,000 Option Underwritten Securities (including the Guarantees) from the
Company and the Guarantors at the purchase price per share to be paid by the
Underwriters for the Option Underwritten Securities (including the Guarantees),
provided that the option granted hereunder may be used by the Underwriters
solely for the purpose of covering any over-allotments of Securities subscribed
for simultaneously with the subscription of the Initial Underwritten Securities
(including the Guarantees). The option granted hereunder may be exercised at any
time, and from time to time, upon notice by the Representative to the Company,
which notice may be given at any time within 30 days from the date of this
Agreement. Such notice shall set forth (i) the aggregate number of Option
Underwritten Securities as to which the Underwriters are exercising the option,
(ii) the names and denominations in which the certificates for the Option
Underwritten Securities are to be registered and (iii) the time, date and place
at which such certificates will be delivered (which time and date may be
simultaneous with, but not earlier than, the Initial Closing Time; and in such
case the term "Initial Closing Time" shall refer to the time and date of
delivery of certificates for the Initial Underwritten Securities and the Option
Underwritten Securities). Each such time and date of delivery is called, if
subsequent to the Initial Closing Time, the "Additional Closing Time" and shall
be determined by the Representative, the Company and the Guarantors and shall
not be earlier than three nor later than five full business days after delivery
of such notice of exercise, unless otherwise agreed. The payment of the purchase
price for, and delivery of, such Option Underwritten Securities (including the
Guarantees) shall be made at the office mentioned in Section 2(b) hereof, or at
such other place as shall be agreed upon by the Representative, the Company and
the Guarantors. The Initial Closing Time and any Additional Closing Time are
sometimes each referred to as a "Closing Time." If any Option Underwritten
Securities (including the Guarantees) are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Option Underwritten
Securities (including the Guarantees) (subject to such adjustments to eliminate
fractional shares as the Representative may determine) that bears the same
proportion to the total number of Option Underwritten Securities (including the
Guarantees) to be purchased as the number of the Initial Underwritten Securities
set forth on Schedule A opposite the name of such Underwriter bears to the total
number of the Initial Underwritten Securities. The Representative may cancel the
option at any time prior to its expiration by giving written notice of such
cancellation to the Company.
(d) Payment. Payment shall be made to the Company and the Guarantors by wire transfer of immediately available funds to bank accounts designated by the Company against delivery to the Representative for the respective accounts of the Underwriters of certificates for the Securities and the Guarantees to be purchased by them. It is understood that each Underwriter has authorized the Representative, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Securities and the Guarantees which it has agreed to purchase. Banc of America Securities LLC, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Securities and the Guarantees
to be purchased by any Underwriter whose funds have not been received by the applicable Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder.
(e) Denominations; Registration. Certificates for the Securities (including the Guarantees), shall be in such denominations and registered in such names as the Representative may request in writing at least one full business day before the applicable Closing Time. The certificates for the Securities (including the Guarantees) will be made available for examination by the Representative in The City of New York not later than 9:00 A.M. (New York Time) on the business day prior to the applicable Closing Time.
Section 3. Covenants of the Company and the Guarantors. The Company and the Guarantors, jointly and severally, covenant with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The Company and the Guarantors, subject to Section 3(b), will comply with the requirements of Rule 415, Rule 430A and/or Rule 434, as applicable, and will notify the Representative immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Securities and the Guarantees for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes. The Company and the Guarantors will promptly effect the filings necessary pursuant to Rule 424(b) and will take such steps as they deem necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, they will promptly file such prospectus. The Company and the Guarantors will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company and the Guarantors will give the Representative notice of their intention to file or prepare any amendment to the Registration Statement (including any filing under Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Representative with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company and the Guarantors have furnished or will deliver to the Representative and counsel for the Underwriters, without charge, one copy of the manually signed and as many conformed copies as the Underwriters may reasonably request of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and signed copies of all consents and certificates
of experts, and will also deliver to the Representative, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company and the Guarantors will furnish to each Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company and the Guarantors will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Securities and the Guarantees as contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities and the Guarantees, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company and the Guarantors, to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company and the Guarantors will promptly prepare and file with the Commission, subject to Section 3(b), and such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company and the Guarantors will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company and the Guarantors will use their reasonable best efforts, in cooperation with the Underwriters, to qualify the Securities and the Guarantees for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect as long as required for the sale of the Securities and the Guarantees; provided, however, that the Company and the Guarantors shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which they are not so qualified or to subject themselves to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
(g) Rule 158. The Company and the Guarantors will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to their securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company and the Guarantors will use the net proceeds received by them from the sale of the Securities and the Guarantees in the manner specified in the Prospectus under "Use of Proceeds".
(i) Restriction on Sale of Securities. Except as otherwise contemplated in the Prospectus, during the period commencing on the date of the Prospectus and ending on the 60th day following the date of the Prospectus, the Company and the Guarantors will not, without the prior written consent of the Representative, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any shares of Common Stock or any debt securities or guarantees of debt securities of the Company or any Guarantor or any securities convertible into or exercisable or exchangeable for any Common Stock or any debt securities or guarantees of debt securities of the Company or any Guarantor or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership the Common Stock or of any debt securities or guarantees of debt securities of the Company or any Guarantor, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or any debt securities or guarantees of debt securities of the Company or any Guarantor or such other securities, in cash or otherwise. The foregoing sentence shall not apply to:
(A) The Securities and the Guarantees to be sold hereunder, or the Common Stock to be delivered upon the conversion thereof;
(B) Any options (or other securities convertible into or exercisable or exchangeable for Common Stock) granted or shares of Common Stock issued upon the exercise of any options (or such other securities) granted or to be granted under the Company's employee stock option plans or other employee benefit plans as described in the Prospectus;
(C) Any options (or other securities convertible into or exercisable or exchangeable for Common Stock) granted or shares of Common Stock issued in connection with negotiated employment arrangements or strategic relationship arrangements;
(D) Any options (or other securities convertible into or exercisable or exchangeable for Common Stock) granted or shares of Common Stock issued or issuable as consideration for any acquisition (including, without limitation, by way of merger or consolidation) by the Company or any of its subsidiaries in an amount not greater than 2% of total outstanding Common Stock on a fully diluted basis; and
(E) Shares of Common Stock granted under the Company's Supplemental Deferred Compensation Plan and Employee Stock Ownership Plan.
(j) Reporting Requirements. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file all documents required to be
filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations.
(k) Interim Financial Statements. Prior to the applicable Closing Time, the Company and the Guarantors shall furnish to the Representative copies of any unaudited interim financial statements of the Company, promptly after they have been completed, for any periods subsequent to the periods covered by the financial statements appearing in the Prospectus.
(l) Rating of Securities. The Company and the Guarantors shall take all reasonable action necessary to enable Standard & Poor's Corporation ("S&P") and Moody's Investors Service, Inc. ("Moody's"), to provide their respective credit ratings of the Securities and the Guarantees.
(m) DTC Clearance. The Company and the Guarantors will use all reasonable efforts in cooperation with the Underwriters to permit the Securities and the Guarantees to be eligible for clearance and settlement through The Depository Trust Company ("DTC").
(n) Reservation of Common Stock. The Company will reserve and keep available at all times, free of preemptive or other similar rights, a sufficient number of Common Stock for the purpose of enabling the Company to satisfy any obligations to issue the Common Stock issuable upon conversion of the Securities in accordance with the terms of the Securities and the Indenture.
Section 4. Payment of Expenses.
(a) Expenses. The Company and the Guarantors, jointly and severally, will pay all expenses incident to the performance of their respective obligations under this Agreement, including (i) the preparation, printing and any filing of the Registration Statement (including financial statements and any schedules or exhibits) and of each amendment or supplement thereto, including the preliminary prospectus and the prospectus to be contained in the Registration Statement, (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any Agreement among Underwriters, the Indenture and such other documents as may be required in connection with the offering, purchase, sale and delivery of the Securities and the Guarantees, (iii) the preparation, issuance and delivery of the certificates for the Securities and the Guarantees to the Underwriters, (iv) the fees and disbursements of the Company's and the Guarantors' counsel, accountants and other advisors, (v) the qualification of the Securities and the Guarantees under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Term Sheets and of the Prospectus and any amendments or supplements thereto, (vii) the preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture, the Securities and the Guarantees, (ix) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review by the National Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Securities and the Guarantees, if any, and (x) any fees payable in connection with the rating of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section
9(a)(i), 9(a)(ii) or Section 11 hereof, the Company and the Guarantors, jointly
and severally, shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
Section 5. Conditions of Underwriters' Obligations. The respective
obligations of the several Underwriters hereunder are subject to the accuracy,
when made as of the date hereof and on each applicable Closing Time, of the
representations and warranties of the Company and the Guarantors contained in
Section 1 hereof or in certificates of any officer of the Company or any of the
Subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company and the Guarantors of their covenants and other obligations
hereunder and to the following further conditions at each applicable Closing
Time:
(a) Effectiveness of Registration Statement. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and at each applicable Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Underwriters. A prospectus containing the Rule 430A Information shall have been filed with the Commission in accordance with Rule 424(b) (or a post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A) or, if the Company and the Guarantors have elected to rely upon Rule 434, a Term Sheet shall have been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for the Company. At each Closing Time, the Representative shall have received the favorable opinion, dated as of the applicable Closing Time, of Shearman & Sterling, counsel for the Company, in form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letters for each of the other Underwriters to the effect set forth in Exhibit B hereto.
(c) Opinion of Deputy General Counsel of the Company. At each Closing Time, the Representative shall have received the favorable opinion, dated as of the applicable Closing Time, of Leo C. Farrenkopf, Jr., Deputy General Counsel of the Company, in form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letters for each of the other Underwriters to the effect set forth in Exhibit A hereto.
(d) Opinion of Counsel for the Underwriters. At each Closing Time, the Representative shall have received the favorable opinion, dated as of the applicable Closing Time, of Fried, Frank, Harris, Shriver & Jacobson, counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Representative. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and the Subsidiaries and certificates of public officials.
(e) Officers' Certificate. At each Closing Time, (i) the Prospectus, as it may then be amended or supplemented, including the documents incorporated by reference therein, shall not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) there shall not have been, since the respective dates as of which information is given in the Prospectus, any material adverse change in the business, financial condition, operations, cash flow or business prospects of the Company and of the Subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business; (iii) the Company and the Guarantors shall have complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the applicable Closing Time; and (iv) the representations and warranties of the Company and the Guarantors in Section 1(a) shall be accurate and true and correct as though expressly made at and as of the applicable Closing Time. The Representative shall have received a certificate of Robert A. Hagemann, Vice President and Chief Financial Officer of the Company and Joseph Manory, Vice President and Treasurer of the Company, dated as of the applicable Closing Time, to such effect and to the effect that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or are contemplated by the Commission.
(f) Accountant's Comfort Letters and Consent. At the time of the execution of this Agreement, the Representative shall have received from PricewaterhouseCoopers LLP letters with respect to the Company dated such date, in form and substance satisfactory to the Representative or to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters, containing statements and information of the type ordinarily included in accountants' "comfort letters" to Underwriters with respect to the financial statements and certain financial information contained in the Registration Statement.
(g) Bring-down Comfort Letters. At each Closing Time, the Representative shall have received from PricewaterhouseCoopers LLP, letters dated as of the applicable Closing Time, to the effect that they reaffirm the statements made in the letters furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the applicable Closing Time.
(h) No Objection. The NASD has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
(i) Maintenance of Rating. At each Closing Time, the Securities (including the Guarantees) shall be rated at least Ba1 by Moody's and BBB- by S&P, and the Company and the Guarantors shall have delivered to the Representative a letter dated the applicable Closing Time, from each such rating agency, or other evidence satisfactory to the Representative, confirming that the Securities and the Guarantees have such ratings; and since the date of this Agreement, there shall not have occurred a downgrading in, or withdrawal of, the rating assigned to the Securities and the Guarantees or any of the Company's and the Guarantors' other debt securities or debt instruments by any "nationally recognized statistical rating agency," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such organization shall have publicly announced that it has under surveillance or review its rating of the Securities and the Guarantees or any of the Company's and the Guarantors' other debt securities or debt instruments.
(j) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to the date hereof, the Company shall have furnished to the Representative an agreement in the form of Exhibit C hereto from Kenneth Freeman, Surya Mohapatra, Richard Bevan, Julie Clarkson, Kenneth Finnegan, Robert Hagemann, Gerald Marrone, Michael Prevoznik, Kenneth Brody, William Buelher, Van Campbell, Mary Cirillo, William Grant, Dan Stanzione, Gail Wilensky, and John Ziegler, and such agreement shall be in full force and effect on each applicable Closing Time.
(k) Additional Documents. At each Closing Time, counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require (including any consents under any agreements to which the Company is a party) for the purpose of enabling them to pass upon the issuance and sale of the Securities and the Guarantees as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and the Guarantors in connection with the issuance and sale of the Securities and the Guarantees as herein contemplated shall be satisfactory in form and substance to the Representative and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative by notice to the Company at
any time at or prior to the applicable Closing Time, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
Section 6. Indemnification.
(a) Indemnification of the Underwriters. The Company and each of the Guarantors, jointly and severally, agree to indemnify and hold harmless each Underwriter, its officers and employees, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the extent and in the manner set forth in clauses (i), (ii) and (iii) below, as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto) including the Rule 430A Information and the Rule 434 Information, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Banc of America Securities LLC), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company or the Guarantors by any Underwriter through the Representative expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430A Information and Rule 434 Information, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto); provided further that the Company and the Guarantors will not be liable to any Underwriter or any person controlling such Underwriter with respect to any such untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary prospectus to the extent that the Company and the Guarantors shall sustain the burden of proving that any such loss, liability, claim, damage or expense resulted from the fact that the Underwriter sold Securities and Guarantees to a person to whom such Underwriter failed to send or give, at or prior to the written confirmation of the sale of such Securities and Guarantees, a copy of the Prospectus (as amended or supplemented) if the Company has previously furnished copies thereof to the Underwriter (sufficiently in advance of the applicable Closing Time to allow for distribution of the Prospectus in a timely manner) and complied with their obligations hereunder and the loss, liability, claim, damage or expense of the Underwriter resulted from an untrue statement or omission or alleged untrue statement or omission of a material fact contained in or omitted from such preliminary prospectus (as amended or supplemented) which was corrected in the Prospectus (as amended or supplemented). The indemnity agreement set forth in this Section 6(a) shall be in addition to any liabilities that the Company or the Guarantors may otherwise have.
(b) Indemnification of Company, Guarantors, Directors and Officers.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Guarantors, their directors, each of their officers
who signed the Registration Statement, and each person, if any, who controls the
Company or any Guarantor within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company and the Guarantors by such
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto).
(c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to such indemnified parties shall be selected by the Representative, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to such indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party for the indemnified party's reasonable fees and expenses of
counsel in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement effected without its consent if such
indemnifying party (A) reimburses such indemnified party in accordance with such
request to the extent it considers such request to be reasonable and (B)
provides written notice to the indemnified party disputing the unpaid balance in
good faith and substantiating the unpaid balance as unreasonable, in each case
prior to the date of such settlement, subject to provision of notice by the
indemnified party in accordance with (i) and (ii) above.
Section 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Underwriters
on the other hand from the offering of the Securities and the Guarantees pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors on the one hand and of the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Guarantors on the one hand and the Underwriters on the other hand in connection with the offering of the Securities and the Guarantees pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities and the Guarantees pursuant to this Agreement (before deducting expenses) received by the Company and the Guarantors and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to the aggregate initial offering prices of the Securities (including the Guarantees) as set forth on such cover.
The relative fault of the Company and the Guarantors on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Guarantors, or by the Underwriters, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities (including the Guarantees) underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, (a) each officer and employee of an Underwriter and each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and (b)
each director of the Company and each Guarantor, and each person, if any, who controls the Company and each Guarantor, as the case may be, within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company and each Guarantor. The Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the principal amount of Securities (including the Guarantees) set forth opposite their respective names in Schedule A hereto and not joint.
Section 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of the Subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company or any Guarantor, and shall survive delivery of the Securities (including the Guarantees) to the Underwriters.
Section 9. Termination of Agreement.
(a) Termination; General. At or prior to the Initial Closing Time, this Agreement may be terminated by the Representative by notice given to the Company if at any time (i) trading or quotation in any of the Company's securities shall have been suspended or limited by the Commission or by the New York Stock Exchange, or trading in securities generally on the Nasdaq National Market System, the New York Stock Exchange or the American Stock Exchange shall have been suspended or limited, or minimum or maximum prices for trading have been fixed on any of such stock exchanges by the order of Commission or the National Association of Securities Dealers, Inc. or any governmental authority, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States; (ii) a general banking moratorium shall have been declared by either federal or New York authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States' or international political, financial or economic conditions, as in the judgment of the Representative is material and adverse and makes it impracticable to market the Securities and the Guarantees in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of the Securities and the Guarantees; (iv) there shall have occurred any Material Adverse Effect; or (v) if there shall have occurred a downgrading in the rating assigned to the Securities or the Guarantees or any of the Company's or any Guarantors' other debt securities by any nationally recognized securities rating agency, or if such securities rating agency shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of the Securities, the Guarantees or any of the Company's or Guarantors' other debt securities or guarantees of debt securities.
(b) Liabilities. Any termination pursuant to this Section 9 shall be without liability on the part of (i) the Company to any Underwriter, except that the Company shall be obligated to reimburse the expenses of the Underwriters pursuant to Sections 4 hereof, (ii) any Underwriter to the Company or (iii) of any party hereto to any other party except that the provisions of Sections 1, 6, 7 and 8 shall at all times be effective and shall survive such termination.
Section 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail, at the applicable Closing Time, to purchase the Securities (including the Guarantees) which it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the Representative shall have the right, but not the obligation, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representative shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal amount of the Securities (including the Guarantees) to be purchased hereunder, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective obligations hereunder bear to the obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the Securities (including the Guarantees) to be purchased hereunder, this Agreement shall terminate without liability on the part of any non-defaulting Underwriters.
No action taken pursuant to this Section shall relieve any defaulting Underwriters from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either (i) the Representative or (ii) the Company shall have
the right to postpone the applicable Closing Time for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements. As used herein, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 10.
Section 11. Default by the Company and the Guarantors. If the Company and the Guarantors shall fail at the applicable Closing Time to sell the number of Securities (including the Guarantees) that they are obligated to sell hereunder, then this Agreement shall terminate without any liability on the part of any non-defaulting party; provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect. No action taken pursuant to this Section shall relieve the Company or the Guarantors from liability, if any, in respect of such default.
Section 12. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to Bank of America Securities LLC, 9 West 57th Street, New York, New York 10019, Attention: Derek Dillon, with a copy to Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York 10004, attention of Stuart Gelfond, Esq.; and notices to the Company shall be directed to it at One Malcolm Avenue, Teterboro, New Jersey 07608, attention of General Counsel, with a copy to Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, attention of Stephen T. Giove, Esq.
Section 13. Parties. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Company and the Guarantors and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the Guarantors and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company and the Guarantors and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities and Guarantees from any Underwriters shall be deemed to be a successor by reason merely of such purchase.
Section 14. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE ITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY HEREIN REFER TO NEW YORK CITY TIME.
Section 15. Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company and the Guarantors a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters, the Company and the Guarantors in accordance with its terms.
Very truly yours,
QUEST DIAGNOSTICS INCORPORATED
By: /s/ Joseph P. Manory ------------------------------------- Name: Joseph P. Manory Title: Vice President and Treasurer |
QUEST DIAGNOSTICS INCORPORATED (CA)
QUEST DIAGNOSTICS INCORPORATED (CT)
QUEST DIAGNOSTICS INCORPORATED (MA)
QUEST DIAGNOSTICS INCORPORATED (MD)
QUEST DIAGNOSTICS INCORPORATED (MI)
QUEST DIAGNOSTICS OF PENNSYLVANIA INC.
LABORATORY HOLDINGS INCORPORATED
DIAGNOSTIC REFERENCE SERVICES INC.
DPD HOLDINGS, INC.
METWEST INC.
NICHOLS INSTITUTE DIAGNOSTICS
QUEST DIAGNOSTICS LLC
QUEST DIAGNOSTICS CLINICAL
LABORATORIES, INC.
QUEST DIAGNOSTICS HOLDINGS
INCORPORATED
By: /s/ Joseph P. Manory ------------------------------------- Name: Joseph P. Manory Title: Vice President and Treasurer |
PATHOLOGY BUILDING PARTNERSHIP
By: Quest Diagnostics Incorporated (MD)
as General Partner
By: /s/ Joseph P. Manory ------------------------------------- Name: Joseph P. Manory Title: Vice President and Treasurer |
QUEST DIAGNOSTICS INVESTMENTS
INCORPORATED
By: /s/ Peter C. Fulweiler ------------------------------------- Name: Peter C. Fulweiler Title: President |
QUEST DIAGNOSTICS FINANCE
INCORPORATED
By: /s/ Peter C. Fulweiler ------------------------------------- Name: Peter C. Fulweiter Title: President |
CONFIRMED AND ACCEPTED,
as of the date first above written:
BANC OF AMERICA SECURITIES LLC
By: /s/ Derek Dillion
-----------------------------------
Authorized Signatory
|
For itself and the other Underwriters
named in Schedule A hereto.
Principal Amount
of 1.75% Contingent
Convertible Debentures due
Name of Underwriter 2021 to be Purchased
------------------- --------------------
Banc of America Securities LLC $198,000,000
First Union Securities, Inc. $18,000,000
Credit Lyonnais Securities (USA) Inc. $9,000,000
Total: $225,000,000
|
QUEST DIAGNOSTICS INCORPORATED
$225,000,000 1.75% Contingent Convertible Debentures due 2021
1. The initial public offering price of the Securities, determined as provided in Section 2, shall be 99% of the principal amount thereof, plus accrued interest, if any, from the date of issuance.
2. The purchase price to be paid by the Underwriters for the Securities shall be 98% of the principal amount thereof.
3. The interest rate on the Securities shall be 1.75% per annum.
4. Prior to November 30, 2004, the Securities will not be redeemable. Beginning on November 30, 2004, the Securities may be redeemed for cash at any time as a whole, or from time to time in part, at a redemption price equal to 100% of the principal amount of the Securities to be redeemed, plus any accrued and unpaid interest, including contingent interest, if any, to the date of redemption.
The Company will give at least 30 days, but not more than 60 days, notice of redemption by mail to holders of the Securities. The Securities or portions of the Securities called for redemption will be convertible by the holder until the close of business on the second business day prior to the redemption date.
-------------------------------------------------------------------------------------------------------------------
Guarantor Ownership Place of Incorporation or
Formation
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Holdings Quest Diagnostics Incorporated (DE) Delaware
Incorporated
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Clinical Quest Diagnostics Holdings Incorporated Delaware
Laboratories, Inc.
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (CA) Quest Holdings Incorporated (DE) California
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (MD) Quest Holdings Incorporated (DE) Maryland
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics LLC Quest Diagnostics Incorporated (DE) Illinois
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (MI) Quest Diagnostics Incorporated (DE) Michigan
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (CT) Laboratory Holdings Incorporated (MA) Connecticut
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (MA) Laboratory Holdings Incorporated (MA) Massachusetts
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics of Pennsylvania Inc. Quest Diagnostics Incorporated (DE) Delaware
-------------------------------------------------------------------------------------------------------------------
MetWest Inc. DPD Holdings, Inc. (DE) Delaware
-------------------------------------------------------------------------------------------------------------------
Nichols Institute Diagnostics Quest Diagnostics Incorporated (DE) California
-------------------------------------------------------------------------------------------------------------------
DPD Holdings, Inc. Quest Diagnostics Incorporated (DE) Delaware
-------------------------------------------------------------------------------------------------------------------
Diagnostics Reference Services Inc. Quest Diagnostics Incorporated (MD) Maryland
-------------------------------------------------------------------------------------------------------------------
Laboratory Holdings Incorporated Quest Diagnostics Incorporated (DE) Massachusetts
-------------------------------------------------------------------------------------------------------------------
Pathology Building Partnership Diagnostic Reference Services Inc. (MD) Maryland
- 50%; Quest Diagnostics Incorporated
(MD) - 50%
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Investments Quest Diagnostics Incorporated (DE) Delaware
Incorporated
-------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Finance Incorporated Quest Diagnostics Investments Delaware
Incorporated (DE)
-------------------------------------------------------------------------------------------------------------------
|
100% Quest Diagnostics Holdings Incorporated (f/k/a SBCL, Inc.) (DE) 100% Quest Diagnostics Clinical Laboratories, Inc.
(f/k/a SmithKline Beecham Clinical Laboratories, Inc.) (DE)
(100%) Quest Diagnostics Clinical Laboratories of Missouri
LLC (MO)
[Expected to merge into Quest Diagnostics Clinical
Laboratories in 2001]
(33-l/3%) Compunet Clinical Laboratories (OH)
(44%) Mid America Clinical Laboratories (IN)
(51%) Diagnostic Laboratory of Oklahoma LLC (OK)
100% DPD Holdings, Inc. (DE)
100% MetWest Inc. (DE)
49% Sonora Quest Laboratories LLC (AZ)
100% Laboratory Holdings Incorporated (MA)
100% Quest Diagnostics Incorporated (CT)
100% Quest Diagnostics Incorporated (MA)
100% Quest Diagnostics Incorporated (MD)
100% Diagnostic Reference Services Inc. (MD)
50% Pathology Building Partnership (MD) (gnl pshp)
100% Quest Diagnostics Incorporated (CA)
100% Quest Diagnostics LLC (IL)
100% Quest Diagnostics Incorporated (MI)
100% Quest Diagnostics of Pennsylvania Inc. (DE)
51% Quest Diagnostics Venture LLC (PA)
53.5% Associated Clinical Laboratories (PA) (gen pshp)
50% Surgical Eye Enterprise L.P. (PA) (ltd pshp)
50% Surgical Eye Institute L.P. (PA) (ltd pshp)
100% Quest Diagnostics Ventures LLC (DE)
100% Quest Diagnostics Receivables Inc. (DE)
100% Quest Diagnostics Investments Incorporated (DE)
100% Quest Diagnostics Finance Incorporated (DE)(i)
----------
1 Certain joint ventures and partnerships are included that may not meet
the definition of Subsidiary.
i Inc. 6/4/99; EIN 51-0390719.
|
100% Quest Diagnostics Nucor Inc. (DE)
100% Nichols Institute Diagnostics (CA)
100% Nichols Institute Sales Corporation (U.S.V.I.)
100% Nichols Institute Diagnostics Limited (U.K.)
100% Nichols Institute Diagnostics Trading S.A. (Switzerland)
100% Nichols Institute Diagnostika GMBH (Germany)
100% Nichols Institute Diagnostika GMBH (Austria)
100% Nichols Institute International Holding B.V. (Netherlands)
100% Nichols Institute Diagnostics B.V. (Netherlands)
100% Nichols Institute Diagnostics SARL (France)
100% Quest Diagnostics do Brasil Ltda. S.C. (Brazil)
100% Quest Diagnostics Limited (UK)
100% The Pathology Partnership plc
100% Nomad-Massachusetts, Inc. (MA)
|
100% Quest Diagnostics, S.A. de C.V. (Mexico) 100% Analisis, S.A. (Mexico) 100% Laboratorios Clinicos de Mexico, S.A. de C.V. (Mexico) 100% Servicios de Laboratorio, S.A. de C.V. (Mexico) 100% Laboratorios de Frontera Polanco, S.A. de C.V. (Mexico) 100% Laboratorio de Analisis Biomedicos, S.A. (Mexico)
100% MedPlus, Inc. (OH)
100% Universal Document Management Systems, Inc. (OH)
100% ChartMaxx, Inc. (OH)
100% Synergis Acquisition Inc. (OH)
100% FutureCore Inc. (OH)
100% DiaLogos Incorporated (DE)
100% Valcor Associates Inc. (PA)
Exhibit A
FORM OF OPINION OF DEPUTY GENERAL COUNSEL OF THE COMPANY
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, and has corporate power and authority to own, lease and operate its properties, and to enter into and perform its obligations under the Underwriting Agreement, the Indenture, and the Securities.
(ii) The Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or be in good standing would not, individually or in the aggregate, have a Material Adverse Effect.
(iii) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. The shares of Common Stock issuable upon conversion of the Securities have been duly and validly authorized and reserved for issuance upon such conversion by all necessary corporate action and, assuming no change in applicable law, such shares, when issued and delivered in accordance with the provisions of the Securities and the Indenture, will be duly and validly issued, fully paid and non-assesssable; the issuance of such shares upon conversion will not be subject to any preemptive rights under the charter or by-laws of the Company or, to my knowledge, other similar rights of any security holder of the Company or under any agreement to which the Company or any of its Subsidiaries is a party.
(iv) Each of the Delaware Guarantors has been duly incorporated or organized and is validly existing as a corporation, partnership or limited liability company in good standing under the laws of the jurisdiction of its organization and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under the Underwriting Agreement, the Indenture, and the Guarantees issued by it.
(v) Each Delaware Guarantor is duly qualified as a foreign corporation, partnership or limited liability company for the transaction of business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not, individually or in the aggregate, have a Material Adverse Effect.
(vi) All of the issued and outstanding capital stock, partnership or membership interests of each Guarantor has been duly authorized and validly issued, is fully paid and non-assessable (other than general partnership interest) and, to the best of my knowledge, except for directors' qualifying shares and except as otherwise set forth in the Prospectus, is owned by the
Company, directly or through subsidiaries, free and clear of all liens, encumbrances, equities or claims.
(vii) The Underwriting Agreement has been duly authorized, executed and delivered by the Company and each of the Delaware Guarantors.
(viii) Each of the Base Indenture and First Supplemental Indenture has been duly authorized, executed and delivered by the Company and each of the Delaware Guarantors.
(ix) The Second Supplemental Indenture has been duly authorized, executed and delivered by the Company and each of the Delaware Guarantors.
(x) The Securities have been duly authorized and executed by the Company.
(xi) The Guarantees issued by each of the Delaware Guarantors have been duly authorized and executed by each of the Delaware Guarantors.
(xii) The statements in the Prospectus under "Risk Factors--If we fail to comply with extensive laws and regulations we could suffer penalties or be required to make significant changes to our operations," "Risk Factors--Professional liability litigation could have an adverse impact on our client base and reputation," "Business--Quality Assurance," "Business--Regulation of Clinical Laboratory Operations," "Business--Regulation of Reimbursement for Clinical Laboratory Services" and "Business--Government Investigations and Related Claims," as included or incorporated by reference in the Prospectus, insofar as they purport to describe the provisions of the laws, legal proceedings and documents referred to therein, fairly present the information disclosed therein in all material respects.
(xiii) To the best of my knowledge after due inquiry and except as disclosed in the Prospectus, there is no action, suit or proceeding (including qui tam proceedings) pending before or by any government, governmental or regulatory instrumentality or agency or court or any suit, action or proceeding (including qui tam proceedings) threatened against or affecting the Company or any of its subsidiaries that could reasonably be expected to have a Material Adverse Effect, or could reasonably be expected to materially adversely affect the consummation of the transactions contemplated in the Underwriting Agreement or the performance by the Company or the Guarantors of their respective obligations under the Underwriting Agreement, the Indenture, the Securities, and the Guarantees.
(xiv) None of the Company, any Guarantor, or any of their respective subsidiaries is in violation of its certificate of incorporation or by-laws or similar constituent documents and, to the best of my knowledge, no default by the Company, any Guarantor or any of their respective subsidiaries exists in the due performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Prospectus or any document incorporated by reference therein, in each case of the foregoing, that singly or in the aggregate, have a Material Adverse Effect.
(xv) Each of the Guarantors is not, and will not be, as a result of the sale of the Guarantees, pursuant to the Underwriting Agreement, an investment company within the meaning of the Investment Company Act of 1940, as amended.
(xvi) No authorization, approval, consent, license, order, registration, qualification or decree of any state or U.S. federal court or governmental authority or agency that regulates health care is necessary or required and, in the case of the Delaware Guarantors only, no authorization, approval, consent, license, order, registration, qualification or decree of any U.S. federal court or governmental authority or agency (other than such as may be required under applicable federal and state securities laws of the various jurisdictions in which the Securities or the Guarantees issued by the Delaware Guarantors, as the case may be, will be offered or sold, as to which I express no opinion) is necessary or required (i) for the performance by the Company or any of the Delaware Guarantors of their respective obligations under the Underwriting Agreement, (ii) in connection with the offering, issuance or sale of the Securities or the Guarantees issued by the Delaware Guarantors, as the case may be, under the Underwriting Agreement or (iii) for the due execution, delivery or performance of and the consummation of the transactions contemplated by the Underwriting Agreement, the Indenture, the Securities, the Guarantees issued by the Delaware Guarantors, as the case may be, except (A) such authorizations, approvals, consents, licenses, orders, registrations, qualifications or decrees the failure so to obtain would not, individually or in the aggregate, have a Material Adverse Effect, and (B) such as have been made or can be made after the Closing Time without having a Material Adverse Effect.
(xvii) Assuming the execution, delivery and performance of the Underwriting Agreement, the Indenture, the Securities, the Guarantees issued by the Delaware Guarantors and the consummation of the transactions contemplated in the Underwriting Agreement, and compliance by each of the Company and the Delaware Guarantors with their respective obligations under the Underwriting Agreement, the Indenture, the Securities, the Guarantees issued by the Delaware Guarantors do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or a Repayment Event (as defined below) with respect to the Company or any of the Delaware Guarantors under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, any Delaware Guarantor pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument known to me to which the Company or any Delaware Guarantor is a party, nor will such action result in any violation of the certificate of incorporation or by-laws of the Delaware Guarantors or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any state or U.S. federal government, government instrumentality or court having jurisdiction over the Company or any Delaware Guarantor or any of their assets or properties except for such conflicts, breaches or liens, charges or encumbrances that singly or in the aggregate, would not result in a Material Adverse Effect. As used herein, a "Repayment Event" means with respect to any person, any event or condition that gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) issued by such person the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by such person.
(xviii) To the best of my knowledge, no authorization, approval, consent, license, order, registration, qualification or decree of any state or U.S. federal court or governmental authority or agency that regulates health care is necessary or required and no authorization, approval, consent, license, order, registration, qualification or decree of any U.S. federal court or governmental authority or agency (other than such as may be required under applicable federal and state securities laws of the various jurisdictions in which the Guarantees issued by the Non-Delaware Guarantors will be offered or sold, as to which I express no opinion) is necessary or required (i) for the performance by the Non-Delaware Guarantors of their respective obligations under the Underwriting Agreement, (ii) in connection with the offering, issuance or sale of the Guarantees issued by the Non-Delaware Guarantors under the Underwriting Agreement or (iii) for the due execution, delivery or performance by the Non-Delaware Guarantors of and the consummation of the transactions contemplated by the Underwriting Agreement, the Indenture, the Guarantees issued by the Non-Delaware Guarantors, except (A) such authorizations, approvals, consents, licenses, orders, registrations or qualifications the failure so to obtain would not, individually or in the aggregate, have a Material Adverse Effect and (B) such as have been made or can be made after the Closing Time without having a Material Adverse Effect.
(xix) To the best of my knowledge, assuming the execution, delivery and performance of the Underwriting Agreement, the Indenture, the Securities, the Guarantees issued by the Non-Delaware Guarantors, the consummation of the transactions contemplated in the Underwriting Agreement, and compliance by each of the Non-Delaware Guarantors with their respective obligations under the Underwriting Agreement, the Indenture, the Securities, the Guarantees issued by the Non-Delaware Guarantors and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or a Repayment Event with respect to the Non-Delaware Guarantors under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any Non-Delaware Guarantor pursuant to, any contract indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument known to me to which any Non-Delaware Guarantor is a party, nor will such action result in any violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any state or U.S. federal government, government instrumentality or court having jurisdiction over any Non-Delaware Guarantor or any of its assets or properties except for such conflicts, breaches or liens, charges or encumbrances that singly or in the aggregate, would not result in a Material Adverse Effect.
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL TO
BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus, to enter into and perform its obligations under the Underwriting Agreement, the Indenture, and the Securities.
(ii) Each of the California Guarantors has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of California and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus, and to enter into and perform its respective obligations under the Underwriting Agreement, the Indenture, and the Guarantees issued by it.
(iii) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable.
(iv) The Underwriting Agreement has been duly authorized, executed and delivered by the Company and each of the California Guarantors.
(v) Each of the Base Indenture and the First Supplemental Indenture has been duly authorized, executed and delivered by the Company and each of the California Guarantors, and assuming the Non-California Guarantor Assumptions and the due authorization, execution and delivery thereof by the Trustee, the Base Indenture constitutes a valid and binding obligation of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, and the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Base Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended.
(vi) The Second Supplemental Indenture has been duly authorized, executed and delivered by the Company and each of the California Guarantors, and assuming the Non-California Guarantor Assumptions and the due authorization, execution and delivery thereof by the Trustee, the Second Supplemental Indenture constitutes a valid and binding obligation of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, and the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).
(vii) The Securities have been duly authorized and executed by the Company and when authenticated by the Trustee in accordance with the provisions of the Indenture and delivered by the Company to and paid for by you in accordance with the terms of the Underwriting Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, and the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be entitled to the benefits of the Indenture.
(viii) The Guarantees issued by each of the California Guarantors have been duly authorized and executed by each of the California Guarantors and assuming the Non-California Guarantor Assumptions, the Guarantees issued by each Guarantor, when authenticated by the Trustee in accordance with the provisions of the Indenture and delivered by the Guarantors to and paid for by you in accordance with the terms of the Underwriting Agreement, will constitute valid and binding obligations of the Guarantor which issued such Guarantees, enforceable against such Guarantor in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, or the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be entitled to the benefits of the Indenture.
(ix) The statements in the Prospectus under "Description of the Debentures," and "Description of Other Indebtedness," insofar as such statements purport to constitute a summary of the legal matters and documents referred to therein, fairly summarize in all material respects the matters and documents referred to therein.
(x) The statements in the Prospectus under "United States Federal Income Tax Considerations," insofar as such section purports to summarize provisions of federal law of the United States referred to thereunder, fairly summarizes, subject to the limitations stated therein, such provisions in all material respects.
(xi) No authorization, approval, consent, license, order, registration,
qualification or decree of any U.S. federal court or governmental authority or
agency (other than such as may be required under the applicable federal and
state securities laws of the various jurisdictions in which the Securities will
be offered or sold, as to which we express no opinion) is necessary or required
(i) for the performance by the Company of its obligations under the Underwriting
Agreement, (ii) in connection with the offering, issuance or sale of the
Securities under the Underwriting Agreement or (iii) for the due execution,
delivery or performance of and the consummation of the transactions contemplated
by the Underwriting Agreement, the Indenture or the Securities, except (A) such
authorizations, approvals, consents, licenses, orders, registrations or
qualifications the failure so to obtain would not, individually or in the
aggregate, have a Material Adverse Effect, and (B) such as have been made or can
be made after the Closing Time without having a Material Adverse Effect, it
being understood that we express no opinion with respect to any law, rule or
regulation relating to health care.
(xii) The execution, delivery and performance of the Underwriting Agreement, the Indenture, and the Securities, the consummation of the transactions contemplated in the Underwriting Agreement, and compliance by the Company with its obligations under the Underwriting Agreement, the Indenture, the Securities, do not and will not result in any violation of the certificate of incorporation or by-laws of the Company or, to our knowledge, any applicable law, statute, rule or regulation of any federal or New York State government or government instrumentality having jurisdiction over the Company or any of its assets or properties, it being understood that we express no opinion with respect to the laws, statutes, rules or regulations relating to health care.
(xiii) The Company is not, and will not be, as a result of the sale of the Securities pursuant to the Underwriting Agreement, an investment company within the meaning of the Investment Company Act of 1940, as amended.
(xiv) The Registration Statement and the Prospectus, as amended or supplemented (except for Exhibit 12 to the Registration Statement and other than the financial statements and other accounting information contained therein, or omitted therefrom, and the Statement of Eligibility on form T-1 of the Trustee, as to which we are not expressing an opinion), excluding the documents incorporated or deemed incorporated by reference therein, as of their respective effective or issue dates, appeared on their face to have been appropriately responsive in all material respects to the requirements of the Securities Act and the rules and regulations of the Commission thereunder.
(xv) Each document filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated or deemed incorporated by reference in the Registration Statement or the Prospectus, as amended or supplemented (except for the financial statements and other accounting information contained therein or incorporated or deemed incorporated by reference therein, or omitted therefrom, as to which we are not expressing an opinion), when so filed with the Commission, appeared on its face to have been appropriately responsive in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder.
Exhibit C
FORM OF LOCK-UP AGREEMENT
November ___, 2001
Banc of America Securities LLC
First Union Securities, Inc.
Credit Lyonnais Securities (USA) Inc.
c/o Banc of America Securities LLC
9 West 57th Street
New York, NY 10019
Proposed Offering by Quest Diagnostics Incorporated of Contingent Convertible Debentures due 2021
Ladies and Gentlemen:
The undersigned, an officer and/or director of Quest Diagnostics Incorporated, a Delaware corporation (the "Company"), understands that Banc of America Securities LLC, First Union Securities, Inc. and Credit Lyonnais Securities (USA) Inc. (collectively, the "Underwriters") have entered into an Underwriting Agreement with the Company dated as of November ___, 2001 (the "Underwriting Agreement") providing for the offering of the Company's Contingent Convertible Debentures due 2021 (the "Initial Underwritten Securities") and the grant by the Company to the Underwriters of the option to purchase additional Securities to cover over-allotments, if any (the "Option Underwritten Securities"). The Initial Underwritten Securities, together with the Option Underwritten Securities, are collectively the "Securities."
In recognition of the benefit that such an offering will confer upon the undersigned as an officer and/or director of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with the Underwriters that, during a period of 60 days from the date of the Underwriting Agreement, the undersigned will not, without the prior written consent of Banc of America Securities LLC, directly or indirectly,
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), or any securities convertible into or exchangeable or exercisable for Common Stock (other than options or shares of Common Stock issuable upon exercise of options which expire during such 60 day period), whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition, or file any registration statement under the Securities Act of 1933, as amended, with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of Common Stock or any securities convertible into or exchangeable for Common Stock, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise;
provided, however, that this agreement shall not apply to
(a) the transfer of shares of Common Stock (i) up to an amount equal to 5% of the undersigned's direct or indirect holdings of Common Stock on a fully diluted basis and (ii) pursuant to any Rule 10b5-1 plan of the undersigned,
(b) the transfer of shares of Common Stock by the undersigned to the Company to satisfy the exercise price for any securities convertible into or exercisable or exchangeable for Common Stock (and any tax liability arising therefrom),
(c) the transfer of shares of Common Stock or options (including any other securities convertible into or exercisable or exchangeable for Common Stock) to purchase shares of Common Stock made as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound by the restrictions of the lock-up,
(d) the transfer of shares of Common Stock or options (including any other securities convertible into or exercisable or exchangeable for Common Stock) to purchase shares of Common Stock made to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound by the restrictions of the lock-up and that any such transfer shall not involve a disposition for value, and
(e) the transfer of shares of Common Stock or options (including any other securities convertible into or exercisable or exchangeable for Common Stock) to purchase shares of Common Stock made to a third party transferee or transferees, provided that the transferee or transferees thereof agree to be bound by the restrictions of the lock-up.
Very truly yours,
Exhibit 4.1
QUEST DIAGNOSTICS INCORPORATED,
as Issuer
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
as Subsidiary Guarantors
and
THE BANK OF NEW YORK,
as Trustee
Second Supplemental Indenture
Dated as of November 26, 2001
TABLE OF CONTENTS
Page
Article I DEFINITIONS...........................................................................................3
SECTION 1.1 Certain Terms Defined in the Indenture.......................................................3
SECTION 1.2 Definitions..................................................................................3
Article II FORM AND TERMS OF THE DEBENTURES.......................................................................5
SECTION 2.1 Form and Dating..............................................................................5
SECTION 2.2 Terms of the Debentures......................................................................6
SECTION 2.3 Payment of Interest; Interest Rights Reserved...............................................11
SECTION 2.4 Events of Default...........................................................................11
SECTION 2.5 Unconditional Right of Holders to Receive Principal, Premium and Interest...................12
SECTION 2.6 Selection by Trustee of Securities to be Redeemed...........................................12
SECTION 2.7 Conversion Arrangement on Call for Redemption...............................................13
SECTION 2.8 Purchase at the Option of Holders...........................................................14
SECTION 2.9 Application of the Article of the Indenture Regarding Defeasance and Covenant Defeasance....25
SECTION 2.10 Release of Guarantees......................................................................25
SECTION 2.11 Conversions................................................................................25
Article III MISCELLANEOUS........................................................................................40
SECTION 3.1 Governing Law...............................................................................40
SECTION 3.2 Separability................................................................................40
SECTION 3.3 Counterparts................................................................................40
SECTION 3.4 Ratification................................................................................41
SECTION 3.5 Effectiveness...............................................................................41
EXHIBITS
--------
EXHIBIT A--Form of 1.75% Contingent Convertible Debenture due 2021..............................................A-1
EXHIBIT B--Form of Additional Subsidiary Guarantee..............................................................B-1
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SECOND SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Second Supplemental Indenture"), dated as of November 26, 2001 among QUEST DIAGNOSTICS INCORPORATED, a Delaware corporation (the "Company"), THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee"), and the Subsidiary Guarantors (as defined in the First Supplemental Indenture defined below).
RECITALS OF THE COMPANY
WHEREAS, the Company, the Trustee and the Initial Subsidiary Guarantors executed and delivered an Indenture, dated as of June 27, 2001 (the "Base Indenture"), as supplemented by the first Supplemental Indenture as of June 27, 2001 (the "First Supplemental Indenture"), and as further supplemented by this Second Supplemental Indenture (collectively, the "Indenture"), to provide for the issuance by the Company from time to time of Securities to be issued in one or mores series as provided in the Indenture;
WHEREAS, the issuance and sale of $250,000,000 aggregate principal amount of a new series of the Company's 1.75% Contingent Convertible Debentures due November 30, 2021 guaranteed by the Subsidiary Guarantors (the "Debentures") has been authorized by resolutions adopted by the Board of Directors of the Company and the Subsidiary Guarantors;
WHEREAS, the Company desires to issue and sell $250,000,000 aggregate principal amount of the Debentures on the date hereof;
WHEREAS, Sections 901(2), 901(3), 901(7), and 901(9) of the Indenture provide that without the consent of Holders of the Securities of any series issued under the Indenture, the Company and the Subsidiary Guarantors, when authorized by a Board Resolution, and the Trustee may enter into one or more indentures supplemental to the Base Indenture to, among other things, (a) add additional Events of Default for the benefit of the Holders of all or any series of Securities, (b) establish the form and terms of any series of Securities and (c) cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or make any other provisions with respect to matters or questions arising under the Base Indenture;
WHEREAS, the Company and the Subsidiary Guarantors desire to
(a) add additional Events of Default for the benefit of the Holders of all
series of Securities, including the Debentures (except as may be provided in a
future supplemental indenture to the Indenture (a "Future Supplemental
Indenture")), (b) establish the form and terms of the Debentures and (c) provide
whether certain Articles of the Indenture will apply to all series of
Securities, including the Debentures (except as may be provided in a Future
Supplement Indenture); and
WHEREAS, all things necessary to make this Second Supplemental Indenture a valid supplement to the Indenture according to its terms and the terms of the Indenture have been done;
NOW, THEREFORE, for and in consideration of the premises stated herein and the purchase of the Debentures by the Holders thereof, the parties hereto herby enter into this Second Supplemental Indenture, for the equal and proportionate benefit of all Holders of the Debentures, as follows:
Article I
DEFINITIONS
SECTION 1.1 Certain Terms Defined in the Indenture.
All capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Indenture, as amended hereby.
SECTION 1.2 Definitions.
(a) Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of all Securities, including the Debentures, Section 101 of the Indenture shall be amended by adding the following new definitions:
"Capital Stock" for any Person means any and all shares, interests, partnership interests, rights, warrants, options, participations or other equivalents of or interests in (however designated) equity issued by that Person.
"Common Stock" shall mean the Common Stock, $0.01 par value per share, of the Company existing on the date of this Indenture or any other shares of Capital Stock of the Company into which such Common Stock shall be reclassified or changed.
"NYSE" means The New York Stock Exchange, Inc.
"Officer" means the Chairman of the Board, the President or any Vice President, the Treasurer, the Comptroller or an Assistant Comptroller, or the Secretary or an Assistant Secretary of the Company or any Subsidiary Guarantor, as the case may be.
"Purchase Date" means the Repayment Date.
"Purchase Price" means the Repayment Price.
"Trading Day" means a day during which trading in securities generally occurs on the NYSE or, if the Common Stock is not listed on the NYSE, on the principal other national or regional securities exchange on which the Common Stock then is listed or, if the Common Stock is not listed on a national or regional securities exchange, on the National Association of Securities Dealers Automated Quotation System or, if the Common Stock is not quoted on the National Association of Securities Dealers Automated Quotation System, on the principal other market on which the Common Stock is then traded.
(b) Definitions of the following terms in this Second Supplemental Indenture may be found in the Sections indicated as follows:
Term Defined in Section ---- ------------------ "Applicable Stock" Section 1302(b) "Base Indenture" Recitals "beneficial owner" Section 1302(a) |
"Bid Solicitation Agent" Section 2.2(e) "cash" Section 1303(a) "Cash Distribution Excess Amount" Section 1703(e) "Change of Control" Section 1302(a) "Change of Control Purchase Date" Section 1302(a) "Change of Control Purchase Notice" Section 1302(b) "Change of Control Purchase Price" Section 1302(a) "Company Notice" Section 1303(d) "Contingent Interest Period" Section 2.2(d)(ii) "Continuing Director" Section 1302(a) "Conversion Agent" Section 2.2(e) "Conversion Price" Section 2.2(i) "Conversion Rate" Section 1701(b) "Current Market Price" Section 1703(g) "Debenture Market Price" Section 2.2(d)(ii) "Debentures" Recitals "Depository" Section 2.1(a) "Ex-dividend Time" Section 1701(b) "Expiration Time" Section 1703(f) "Fair Market Value" Section 1703(g) "First Supplemental Indenture" Recitals "Five Trading Day Period" Section 2.2(d)(ii) "Global Debenture" Section 2.1(a) "Indenture" Recitals "Market Price" Section 1303(c) "Non-Electing Share" Section 1704 |
"Paying Agent" Section 2.2(e) "Purchase Date" Section 1301(a) "Purchase Notice" Section 1301(a) "Purchase Price" Section 1301(a) "Record Date" Section 1703(g) "Reference Period" Section 1703(d) "Regular Cash Dividend" Section 2.2(d)(ii) "Sale Price" Section 1303(c) "Second Supplemental Indenture" Recitals "Spin-Off" Section 1703(d) "Tender Offer Excess Amount" Section 1703(f) "Trigger Event" Section 1703(d) |
Article II
FORM AND TERMS OF THE debentures
SECTION 2.1 Form and Dating.
The Debentures, the applicable Subsidiary Guarantees and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A attached hereto. The Debentures shall be executed on behalf of the Company by its Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced thereon. The Debentures may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Debenture shall be dated the date of its authentication. The Debentures and any beneficial interest in the Debentures shall be in denominations of $1,000 and integral multiples thereof.
The terms and notations contained in the Debentures shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.
(a) Global Debentures. The Debentures shall be issued initially in the form of one or more fully registered global debentures (the "Global Debentures"), which shall be deposited on behalf of the purchasers of the Debentures represented thereby with The Depository Trust Company, New York, New York (the "Depository") and registered in the name of Cede & Co., the Depository's nominee, duly executed by the Company, authenticated by the Trustee and with guarantees endorsed thereon as hereinafter provided. The aggregate principal amount of outstanding Debentures may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.
The Global Debentures may not be transferred except by the Depository, in whole and not in part, to another nominee of the Depository or to a successor of the Depository or its nominee. If at any time (i) the Depository notifies the Company that the Depository is unwilling or unable to continue as Depository for the Global Debentures or if at any time the Depository ceases to be a clearing agency registered under the Exchange Act and a successor Depository for the Global Debentures is not appointed by the Company within 90 days after delivery of such notice, (ii) the Company in its sole discretion determines that the Global Debentures will be exchangeable or (iii) there shall have occurred and be continuing an event of default with respect to the Debentures under the Indenture, then the Company shall execute, and the Trustee shall, upon receipt of a Company Order for authentication, authenticate and deliver, definitive Debentures in an aggregate principal amount equal to the principal amount of the Global Debentures in exchange for such Global Debentures.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to the Global Debentures deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver the Global Debentures that shall be registered in the name of the Depository or the nominee of the Depository and shall be delivered by the Trustee to the Depository or pursuant to the Depository's instructions.
Depository Participants shall have no rights either under this Indenture or with respect to any Global Debentures held on their behalf by the Depository or under such Global Debentures. The Depository shall be treated by the Company, the Subsidiary Guarantors, the Trustee and any agent of the Company, the Subsidiary Guarantors or the Trustee as the absolute owner of such Global Debenture for all purposes under this Indenture. Notwithstanding the foregoing, nothing herein shall prevent the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and the Depository Participants, the operation of customary practices of such Depository governing the exercise of the rights of an owner of a beneficial interest in the Global Debentures.
(c) Definitive Debentures. Debentures issued in certificated form shall be substantially in the form of Exhibit A attached hereto, but without including the text referred to therein as applying only to Global Debentures. Except as provided above in subsection (a), owners of beneficial interests in the Global Debentures will not be entitled to receive physical delivery of definitive Debentures.
(d) Transfer and Exchange of the Debentures. The transfer and exchange of beneficial interests in the Global Debentures shall be effected through the Depository, in accordance with this Indenture and the procedures of the Depository therefor. Beneficial interests in the Global Debentures may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the Global Debentures.
SECTION 2.2 Terms of the Debentures.
The following terms relating to the Debentures are hereby established:
(a) Title. The Debentures shall constitute a series of Securities having the title "1.75% Contingent Convertible Debentures due 2021."
(b) Principal Amount. The aggregate principal amount of the Debentures that may be authenticated and delivered under the Indenture (except for Debentures authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Debentures pursuant to Sections 304, 305, 306, 906 or 1107 of the Indenture) shall be $250,000,000.
(c) Stated Maturity. The entire outstanding principal of the Debentures shall be due and payable, unless accelerated, redeemed or required to be repurchased pursuant to the Indenture, on November 30, 2021.
(d) Interest and Contingent Interest
(i) The rate at which the Debentures shall bear interest shall be 1.75% per annum; the date from which interest shall accrue on the Debentures shall be November 26, 2001, or the most recent Interest Payment Date to which interest has been paid or provided for; the Interest Payment Dates for the Debentures shall be November 30 and May 31 of each year, beginning May 31, 2002; the interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will be paid, in immediately available funds, to the Persons in whose names the Debentures (or one or more Predecessor Securities) are registered at the close of business on the Regular Record Date for such interest, which shall be the May 15 or November 15, as the case may be, next preceding such Interest Payment Date. Any such interest not punctually paid or duly provided for shall forthwith cease to be payable to the respective Holders on such Regular Record Date, and such Defaulted Interest, may be paid to the Persons in whose names the Debentures (or one or more Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Debentures not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with requirements of any securities exchange on which the Debentures may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.
(ii) In addition, subject to the accrual and record date provisions hereinafter specified, the Company shall pay contingent interest to the Holders during any six-month period (a "Contingent Interest Period") from December 1 to May 31 and from June 1 to November 30, commencing December 1, 2004, if the average Debenture Market Price of a Debenture for the Five Trading Day Period with respect to such Contingent Interest Period equals $1,200 or more.
The amount of contingent interest payable per $1,000 principal amount of Debentures in respect of any Contingent Interest Period shall equal the greater of (1) 0.25% of the average Debenture Market Price of a Debenture for the Five Trading Day Period and (2) the sum of all Regular Cash Dividends, if any, paid by the Company per share of Common Stock during that Contingent Interest Period multiplied by the Conversion Rate in effect on the date on each such payment date.
Contingent interest, if any, will accrue and be payable to Holders as of the 15th day preceding the last day of the relevant Contingent Interest Period or, if the Company pays a Regular Cash Dividend during the relevant Contingent Interest Period, to Holders as of the record date for the related Regular Cash Dividend. Such payments will be paid on the last day of the relevant Contingent Interest Period or, if the Company pays a Regular Cash Dividend during the relevant Contingent Interest Period, on the payment
date of the related Regular Cash Dividend. Regular cash interest will continue to accrue at the rate of 1.75% per year on the principal amount of the Debentures whether or not contingent interest is paid.
"Five Trading Day Period" means, with respect to any Contingent Interest Period, the five trading days ending on the second trading day immediately preceding the first day of such Contingent Interest Period; provided, however, if the Company shall have declared a Regular Cash Dividend on its Common Stock that is payable during such Contingent Interest Period but for which the record date for determining stockholders entitled thereto precedes the first day of such Contingent Interest Period, then "Five Trading Day Period" shall mean, with respect to such Contingent Interest Period, the five trading days ending on the second trading day immediately preceding such record date.
"Regular Cash Dividends" means quarterly or other periodic cash dividends on the Company's Common Stock as declared by the Company's Board of Directors as part of its cash dividend payment practices and that are not designated by such Board of Directors as extraordinary or special or other nonrecurring dividends.
"Debenture Market Price" means, as of any date of determination, the average of the secondary market bid quotations per $1,000 principal amount of Debentures obtained by the Bid Solicitation Agent for $10 million principal amount of Debentures at approximately 4:00 p.m., New York City time, on such determination date from three recognized securities dealers in The City of New York (none of which shall be an Affiliate of the Company) selected by the Company; provided, however, if (a) at least three such bids are not obtained by the Bid Solicitation Agent or (b) in the Company's reasonable judgment, the bid quotations are not indicative of the secondary market value of the Debentures as of such determination date, then the Debenture Market Price for such determination date shall equal (1) the Conversion Rate in effect as of such determination date multiplied by (2) the average Sale Price for the five Trading Days ending on such determination date, appropriately adjusted to take into account the occurrence, during the period commencing on the first of such Trading Days during such five trading day period and ending on such determination date, of any event described in Section 1703 of the Indenture.
Upon a determination by the Company that Holders will be entitled to receive contingent interest which will become payable during a Contingent Interest Period, on or prior to the first day of such Contingent Interest Period, the Company shall issue a press release and publish such information on its web site on the World Wide Web or through such other public medium as the Company may use at that time.
(iii) If the Company elects to redeem, or the Holders elect to require the Company to repurchase, the Debentures on a date that is after the Regular Record Date and prior to the corresponding Interest Payment Date, the Company will pay accrued and unpaid interest, including contingent interest, if any, on the Debentures to, but not including, the applicable Redemption Date, Purchase Date or Change of Control Purchase Date, as the case may be, to the same Holder to whom the Company pays the principal of the Debentures being redeemed or repurchased, as the case may be.
Except as provided below, if any Debentures are surrendered for conversion on any date other than an Interest Payment Date, the Holder of such Debentures will not be
entitled to receive any interest, including contingent interest, if any, that has accrued on such Debentures since the prior Interest Payment Date. By delivery to the Holder of the number of shares of Common Stock or other consideration issuable upon conversion in accordance with Article 17 of the Indenture, any accrued and unpaid interest on such Debentures will be deemed to have been paid in full.
If a Holder of Debentures converts on a date after a Regular Record Date for an interest payment but prior to the corresponding Interest Payment Date, the Holder of such Debentures will receive on that Interest Payment Date accrued and unpaid interest on such Debentures, but, at the time the Holder surrenders such Debentures for conversion, the Holder must pay the Company the interest that has accrued and will be paid on such Interest Payment Date. No such payment need be made with respect to Debentures that will be redeemed by the Company after a Regular Record Date but prior to the corresponding Interest Payment Date.
(iv) If the principal amount of or any portion of such principal amount of, or any interest, including contingent interest, if any, on, any Debentures is not paid when due (whether upon acceleration pursuant to Section 6.2 of the Indenture or on the Stated Maturity or on Redemption Date, Repurchase Date or Change of Control Purchase Date), then in each such case the overdue amount shall, to the extent permitted by law, bear interest at the applicable Interest Rate, compounded semi-annually, which interest shall accrue from the date of such overdue amount was originally due to the date of payment of such amount, including interest thereon, has been made or duly provided for. All such interest shall be payable on demand.
(e) Paying Agent, Conversion Agent and Bid Solicitation Agent. The Company shall maintain an office or agency where Debentures may be presented for purchase or payment ("Paying Agent") and an office or agency where Debentures may be presented for conversion ("Conversion Agent"). The Company shall also appoint a bid solicitation agent (the "Bid Solicitation Agent") to act as set forth under the caption "Contingent Interest" in the Debentures. The Company may have one or more additional paying agents and one or more additional conversion agents.
The Company shall enter into an appropriate agency agreement with any Paying Agent, Conversion Agent or Bid Solicitation Agent (other than the Trustee). The agreement shall implement the provisions of this Indenture that relate to such agent. If the Company fails to maintain a Paying Agent, Conversion Agent or Bid Solicitation Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 606 of the Indenture. The Company or any Subsidiary or an Affiliate of either of them may act as Paying Agent or Conversion Agent. None of the Company or any Subsidiary or any Affiliate of either of them may act as Bid Solicitation Agent.
The Company initially appoints the Trustee as Conversion Agent, Paying Agent and Bid Solicitation Agent in connection with the Debentures.
(f) Place of Payment.
(i) The Place of Payment for the Debentures and the place or places where the Debentures may be surrendered for registration of transfer, exchange, repurchase, redemption or conversion and where notices may be given to the Company in respect of the Debentures is at the Corporate Trust Office of the Trustee or such other office or
agency of the Company as may be designated for such purpose. Payment of principal and interest and contingent interest, if any, on the Debentures will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
(ii) The Company will pay principal on (1) Global Debentures to DTC in immediately available funds and (2) any definitive Debentures in immediately available funds at the Company's office or agency in New York City, which initially will be the Corporate Trust Office of the Trustee.
(iii) The Company will pay interest, including contingent interest, if any, on (1) Global Debentures to DTC in immediately available funds, (2) any definitive Debentures having an aggregate principal amount of $5,000,000 or less by check mailed to the Holders of these Debentures, and (3) any definitive Debentures having an aggregate principal amount of more than $5,000,000 by wire transfer in immediately available funds if requested by the Holders of these Debentures. At Stated Maturity the Company will pay interest on any definitive Debentures at the Company's office or agency in New York City, which initially will be the Corporate Trust Office of the Trustee.
(g) Redemption. At any time on or after November 30, 2004, the Company, at its option, may redeem in principal amounts of $1,000 or integral multiples of $1,000 the Debentures for cash as a whole, or from time to time in part, at a Redemption Price equal to 100% of the principal amount of the Debentures to be redeemed, plus accrued and unpaid interest, including contingent interest, if any, to, but excluding, the Redemption Date.
Debentures or portions thereof to be redeemed as of a Redemption Date will be convertible by the Holders of such Debentures until the close of business on the second Business Day prior to the Redemption Date.
(h) Repurchase.
(i) The Debentures shall be repurchased by the Company in accordance with the provisions and at the Repurchase Price set forth under the caption "Repurchase by the Company at the Option of the Holder" in the Debentures and in accordance with the provisions of the Indenture, including, without limitation, Article Thirteen, as amended by Section 2.11 hereof.
(ii) The Debentures shall be purchased by the Company in accordance with the provisions and at the Change of Control Purchase Price set forth under the caption "Purchase of Securities at Option of Holder Upon a Change of Control" in the Debentures and in accordance with the provisions of the Indenture, including, without limitation, Article Thirteen, as amended by Section 2.11 hereof.
(i) Conversion. The Debentures shall be convertible in accordance with the provisions and at the Conversion Rate set forth under the caption "Conversion" in the Debentures and in accordance with the provisions of the Indenture, including, without limitation, Article Seventeen.
"Conversion Price" means initially $87.50, subject to adjustment as set forth in the Indenture.
(j) Guarantees. The Debentures shall be guaranteed by the Subsidiary Guarantors in accordance with Article Sixteen of the Indenture.
SECTION 2.3 Payment of Interest; Interest Rights Reserved.
Except as may be provided in a Future Supplemental Indenture, for the sole benefit of the Holders of the Debentures, Section 307(a) of the Base Indenture, as supplemented by the First Supplemental Indenture, shall be amended by adding the following paragraph before the final paragraph in Section 307(a) thereof:
In the event Securities of any series or a portion thereof is surrendered for conversion during a period (1) after the Regular Record Date immediately preceding any Interest Payment Date and on or prior to such Interest Payment Date or (2) if contingent interest is payable to Holders of Securities during any six-month period, after the record date for such contingent interest and on or prior to the payment date therefor (unless, in either case, such Securities or portion thereof which is being surrendered for conversion has been called for redemption on a Redemption Date within such period), the Company will pay on such Interest Payment Date or payment date, as the case may be, interest or contingent interest due and payable on such Interest Payment Date or payment date, as the case may be, notwithstanding such conversion, and the Company will pay such interest (whether or not punctually paid or duly provided for) to the Person in whose name such Securities (or one or more Predecessor Securities) are registered at the close of business on such Regular Record Date and will pay such contingent interest to the Person in whose name such Securities (or one or more Predecessor Securities) are registered at the close of business on such record date; provided, however, that such payment of interest or contingent interest shall be subject to the payment to the Company by the Holder of such Securities or portion thereof surrendered for conversion (such payment to accompany such surrender) of an amount equal to the amount of such interest or contingent interest, in accordance with Section 1702 hereof. Except as otherwise provided in the immediately preceding sentence, in the case of any Security which is converted, interest or contingent interest due and payable after the date of conversion of such Security shall not be payable.
SECTION 2.4 Events of Default.
Except as may be provided by a Future Supplemental Indenture,
for the benefit of the Holders of all Securities, including the Debentures,
Subsection 501 of the Base Indenture, as supplemented by the First Supplemental
Indenture, shall be amended by deleting Subsections (1), (2) and (9) thereof in
their entirety and replacing such Subsections with new Subsections (1), (2) and
(9) and adding a new Subsection (10) to Section 501 thereof as follows:
(1) default in the payment of any interest, including contingent interest, if any, upon, or any Additional Amount payable in respect of, any Security of that series or of any coupon appertaining thereto, when such interest, including contingent interest, if any, or coupon becomes due and payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any, on), or Redemption Price, Repayment Price or Change of Control Purchase Price of, any Security of that series when it becomes due and payable at its Maturity; or
(9) failure to convert any Security of that series into shares of the Company's Common Stock upon exercise of a Holder's conversion right, unless such failure is cured within five days after written notice of default is given to the Company by the Trustee; or
(10) any other Event of Default provided with respect to Securities of that series.
SECTION 2.5 Unconditional Right of Holders to Receive Principal, Premium and Interest.
Except as may be provided by a Future Supplemental Indenture, for the sole benefit of the Holders of the Debentures, Section 508 of the Base Indenture, as supplemented by the First Supplemental Indenture, shall be amended by replacing that section with the following:
SECTION 508 Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security or coupon shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Sections 305 and 307 hereof) interest and contingent interest, if any, and Additional Amounts, if any, on such Security or payment of such coupon on the respective due dates expressed in such Security or coupon (or in the case of redemption, to receive the Redemption Price and accrued interest and contingent interest, if any, on the Redemption Date, or in the case of a repurchase, to receive the Purchase Price and accrued interest and contingent interest, if any, on the Purchase Date, or in the case of a Change of Control, to receive the Change of Control Purchase Price and accrued interest and contingent interest, if any, on the Change of Control Purchase Date) and to institute suit for the enforcement of any such payment on or after such respective dates, and such rights shall not be impaired without the consent of such Holder.
SECTION 2.6 Selection by Trustee of Securities to be Redeemed.
Except as may be provided by a Future Supplemental Indenture, for the sole benefit of the Holders of the Debentures, Section 1103 of the Base Indenture, as supplemented by the First Supplemental Indenture, shall be amended as follows:
(a) by deleting the words "by such method" in the fifth line thereof and, in their place, adding the words "by lot, on a pro rata basis or such other method;" and
(b) by adding a new sentence at the end thereof as follows:
"If the Trustee selects a portion of a Holder's Securities of any series for partial redemption and the Holder converts a portion of the same Securities, the converted portion will be deemed to be from the portion selected for redemption."
SECTION 2.7 Conversion Arrangement on Call for Redemption.
Except as may be provided by a Future Supplemental Indenture, for the sole benefit of the Holders of the Debentures, a new Section 1108 shall be added to the Base Indenture, as supplemented by the First Supplemental Indenture, as follows:
SECTION 1108 Conversion Arrangement on Call for Redemption.
In connection with the Securities of any series, the Company may arrange for the purchase and conversion of any Securities called for redemption and not surrendered for conversion by an agreement with one or more investment bankers or other purchasers to purchase such Securities by paying to a Paying Agent (other than the Company or any of its Affiliates) in trust for the Holders, on or before 11:00 A.M. New York City time on the Redemption Date, an amount that, together with any amounts deposited with such Paying Agent by the Company for the redemption of such Securities, is not less than the Redemption Price plus any accrued and unpaid interest and contingent interest, if any, with respect to such Securities. Notwithstanding anything to the contrary contained in this Article Eleven, the obligation of the Company to pay the Redemption Price of such Securities, including accrued interest and contingent interest, if any, shall be deemed to be satisfied and discharged to the extent such amount is so paid in trust for the Holders by such investment bankers or other purchasers. If such an agreement is entered into, any Securities called for redemption and not surrendered for conversion by the Holders thereof prior to the close of business on the second Business Day prior to the relevant Redemption Date may, at the option of the Company upon written notice to the Trustee, be deemed, to the fullest extent permitted by law, acquired by such investment bankers or other purchasers from such Holders and (notwithstanding anything to the contrary contained in Article Seventeen) surrendered by such investment bankers or other purchasers for conversion, all as of immediately prior to the close of business on the Business Day immediately prior to the Redemption Date, subject to payment of the above amount as aforesaid. The Paying Agent shall hold and pay to the Holders whose Securities are selected for redemption any such amount paid to it for purchase in the same manner as it would money deposited with it by the Company for the redemption of Securities. Without the Paying Agent's prior written consent, no arrangement between the Company and such investment bankers or other purchasers for the purchase and conversion of any Securities shall increase or otherwise affect any of the powers, duties, responsibilities or obligations of the Paying Agent as set forth in this Indenture, and the Company agrees to indemnify the Paying Agent 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 investment bankers or other purchasers, including the costs and expenses incurred by the Paying Agent in the defense of any claim or liability reasonably incurred without negligence or bad faith on its part arising out of or in connection with the exercise or performance of any of its powers, duties, responsibilities or obligations under this Indenture, in accordance with the indemnity provisions applicable to the Trustee set forth herein.
SECTION 2.8 Purchase at the Option of Holders.
Except as may be provided by a Future Supplemental Indenture, for the sole benefit of the Holders of the Debentures, Article Thirteen of the Base Indenture, as supplemented by the First Supplemental Indenture, shall be replaced in its entirety with the following:
ARTICLE THIRTEEN
PURCHASE AT THE OPTION OF HOLDERS
SECTION 1301 Purchase of Debentures by the Company at Option of the Holder. (a)General. Debentures shall be purchased by the Company pursuant to Section 6 of the Debentures at the option of the Holder on November 30, 2004, 2005, 2008, 2012 and 2016 (each, a "Purchase Date"), at a purchase price equal to the principal amount of those Debentures plus accrued and unpaid interest, including contingent interest, if any, to, but not including, the Purchase Date (the "Purchase Price"), subject to the provisions of Section 1303 hereof. Purchases of Debentures hereunder shall be made, at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent by the Holder of a written notice of purchase (a "Purchase Notice") during the period beginning at any time from the opening of business on the date that is 20 Business Days prior to the relevant Purchase Date until the close of business on the third Business Day prior to such Purchase Date stating:
(A) the certificate number of the Debenture which the Holder will deliver to be purchased or the appropriate Depository procedures if definitive Debentures have not been issued,
(B) the portion of the principal amount of the Debenture which the Holder will deliver to be purchased, which portion must be in principal amounts of $1,000 or a whole multiple of $1,000,
(C) that such Debenture shall be purchased by the Company as of the Purchase Date pursuant to the terms and conditions specified in Section 6 of the Debentures and in this Indenture, and
(D) in the event the Company elects, pursuant to
Section 1303 hereof, to pay the Purchase Price, in whole or in
part, in shares of Common Stock but such portion of the
Purchase Price shall ultimately be paid to such Holder
entirely in cash because any of the conditions to payment of
the Purchase Price in shares of Common Stock is not satisfied
prior to the close of business on the relevant Purchase Date,
as set forth in Section 1303 hereof, whether such Holder
elects (i) to withdraw such Purchase Notice as to some or all
of the Debentures to which such Purchase Notice relates
(stating the principal amount and certificate numbers, if any,
of the Debentures as to which such withdrawal shall relate) or
(ii) to receive cash in respect of the entire Purchase Price
for all Debentures (or portions thereof) to which such
Purchase Notice relates; and
(2) delivery of such Debenture to the Paying Agent at any time after delivery of the Purchase Notice (together with all necessary endorsements) at the offices of the Paying Agent, such delivery being a condition to receipt by the Holder of the Purchase Price therefor; provided, however, that such Purchase Price shall be so paid pursuant to this Section 1301 only if the
Debenture so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice of withdrawal delivered by such Holder pursuant to the terms of Section 1303 hereof, fails to indicate such Holder's choice with respect to the election set forth in Section 1301(a)(1)(D), such Holder shall be deemed to have elected to receive cash in respect of the entire Purchase Price for all Debentures subject to such Purchase Notice in the circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this Section 1301, a portion of a Debenture, if the principal amount of such portion is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to the purchase of all of a Debenture also apply to the purchase of such portion of such Debenture.
Any purchase by the Company contemplated pursuant to the provisions of this Section 1301 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Purchase Date and the time of delivery of the Debenture.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice contemplated by this
Section 1301(a) shall have the right to withdraw such Purchase Notice
at any time prior to the close of business on the Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in
accordance with Section 1304 hereof.
The Paying Agent shall promptly notify the Company of the receipt by it of any Purchase Notice or written notice of withdrawal thereof.
SECTION 1302 Purchase of Debentures at Option of the Holder upon Change of Control. (a)(1) If a Change of Control occurs (subject to certain exceptions set forth below), the Debentures not previously purchased by the Company shall be purchased by the Company, at the option of the Holder thereof, on the date that is 30 days after the date of the Company Notice with respect to a Change of Control given by the Company in accordance with Section 1303(d) hereof (the "Change of Control Purchase Date") at a purchase price equal to the principal amount of those Debentures plus accrued and unpaid interest, including contingent interest, if any, to, but not including, the Change of Control Purchase Date (the "Change of Control Purchase Price"), subject to satisfaction by or on behalf of the Holder of the requirements set forth in Section 1302(b) hereof.
A "Change of Control" will be deemed to have occurred at such time after the Debentures are originally issued when any of the following events shall occur:
(i) the acquisition by any person, including any syndicate or group deemed to be a "person" under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction, or a series of purchase, merger or other acquisition transactions, of shares of the Capital Stock of the Company entitling that person to exercise 50% or more of the total voting power of all shares of the Capital Stock of the Company entitled to vote generally in elections of directors (other than any acquisition by the Company, any of its subsidiaries or any of its employee benefit plans or any acquisition by any underwriter temporarily holding shares of the Capital Stock of the Company pursuant to an offering thereof), except that any of those persons shall be deemed to have beneficial ownership of all shares of the Capital
Stock of the Company it has the right to acquire, whether the right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition; or
(ii) the first day on which a majority of the members of the board of directors of the Company are not Continuing Directors; or
(iii) the Company consolidates or merges with or into any other person, any merger of another person into the Company, or any conveyance, transfer, sale, lease or other disposition of all or substantially all of the Company's properties and assets to another person, other than: (A) any transaction: (1) that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of the Company's Capital Stock; and (2) pursuant to which holders of the Company's Capital Stock immediately prior to the transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all shares of Capital Stock entitled to vote generally in elections of directors of the continuing or surviving Person immediately after giving effect to such transaction; and (B) any merger, share exchange, transfer of assets or similar transaction solely for the purpose of changing the Company's jurisdiction of incorporation and resulting in a reclassification, conversion or exchange of outstanding shares of Common Stock, if at all, solely into shares of common stock, ordinary shares, American Depositary Shares or analogous securities of the surviving Person or a direct or indirect parent of the surviving corporation.
A "Continuing Director" shall mean:
(i) an individual who was a member of the Board of Directors of the Company first elected by the stockholders or by the Board of Directors prior to the date hereof or prior to the time that any person (other than SmithKline Beecham plc) becomes after the date hereof the holder of record of in excess of 20% of the Capital Stock of the Company entitled to vote in the election of directors; or
(ii) an individual designated (before such individual's initial election as a director) as a Continuing Director by a majority of the then Continuing Directors.
(2) Notwithstanding the provisions of Section 1302(a)(1) hereof, the Company shall not be required to purchase the Debentures of the Holders upon a Change of Control pursuant to this Section 1302 if:
(i) the Sale Price per share of Common Stock for any five Trading Days within (1) the period of 10 consecutive Trading Days ending immediately after the later of the Change of Control or the public announcement of the Change of Control, in the case of a Change of Control under clause (i) or (ii) of the definition of Change of Control above, or (2) the period of 10 consecutive Trading Days ending immediately before the Change of Control, in the case of a Change of Control under clause (iii) of the definition of Change of Control above, in each case, equals or exceeds 120% of the Conversion Price of the Debentures in effect on each of those five Trading Days; or
(ii) 100% of the consideration in the transaction or transactions (other than cash payments for fractional shares and cash payments made in respect of dissenters' appraisal rights) constituting a Change of Control consists of shares of common stock, ordinary shares, American Depositary Shares or analogous securities traded or to be traded immediately following a Change of Control on a national securities exchange or
the Nasdaq National Market, and, as a result of the transaction or transactions, the Debentures become convertible into that common stock, ordinary shares, American Depositary Shares or analogous securities (and any rights attached thereto).
For the purposes of this Section 1302, (x) whether a person is a "beneficial owner" shall be determined in accordance with Rule 13d-3 under the Exchange Act and (y) the term "person" includes any syndicate or group that would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act.
(b) A Holder may exercise its rights specified in Section 1302(a) hereof upon delivery of a written notice of purchase (a "Change of Control Purchase Notice") to the Paying Agent at any time on or prior to the close of business on the Business Day immediately preceding the Change of Control Purchase Date stating:
(1) the certificate number of the Debenture which the Holder will deliver to be purchased or the appropriate depositary procedures if definitive Debentures have not been issued;
(2) the portion of the principal amount of the Debenture which the Holder will deliver to be purchased, which portion must be $1,000 or a whole multiple of $1,000;
(3) that such Debenture shall be purchased pursuant to the terms and conditions specified in Section 7 of the Debentures and in this Indenture; and
(4) in the event the Company elects, pursuant to Section 1303 hereof, to pay the Change of Control Purchase Price, in whole or in part, in shares of Applicable Stock but such portion of the Change of Control Purchase Price shall ultimately be paid to such Holder entirely in cash because any of the conditions to payment of the Change of Control Purchase Price in shares of Applicable Stock is not satisfied prior to the close of business on the third Business Day prior to the relevant Change of Control Purchase Date, as set forth in Section 1303 hereof, whether such Holder elects (i) to withdraw such Change of Control Purchase Notice as to some or all of the Debentures to which such Change of Control Purchase Notice relates (stating the principal amount and certificate numbers, if any, of the Debentures as to which such withdrawal shall relate) or (ii) to receive cash in respect of the entire Change of Control Purchase Price for all Debentures (or portions thereof) to which such Change of Control Purchase Notice relates.
"Applicable Stock" means (i) the Common Stock and (ii) in the event of a merger, consolidation or other similar transaction involving the Company that is otherwise permitted hereunder in which the Company is not the surviving corporation, the common stock, ordinary shares, American Depositary Shares or analogous securities (and any rights attached thereto) of such surviving corporation or its direct or indirect parent corporation.
The delivery of such Debenture to the Paying Agent with the Change of Control Purchase Notice (together with all necessary endorsements) at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Change of Control Purchase Price therefor; provided, however, that such Change of Control Purchase Price shall be so paid pursuant to this Section 1302 and Section 1303 hereof only if the Debenture so delivered to the Paying Agent
shall conform in all respects to the description thereof set forth in the related Change of Control Purchase Notice.
If a Holder, in such Holder's Change of Control Purchase Notice and in any written notice of withdrawal delivered by such Holder pursuant to the terms of Section 1304 hereof, fails to indicate such Holder's choice with respect to the election set forth in Section 1302(b)(4) hereof, such Holder shall be deemed to have elected to receive cash in respect of the entire Change of Control Purchase Price for all Debentures subject to such Change of Control Purchase Notice in the circumstances set forth in such Section 1302(b)(4).
The Company shall purchase from the Holder thereof, pursuant to this Section 1302 and Section 1303 hereof, a portion of a Debenture if the principal amount of such portion is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to the purchase of all of a Debenture also apply to the purchase of such portion of such Debenture.
Any purchase by the Company contemplated pursuant to the provisions of this Section 1302 and Section 1303 hereof shall be consummated by the delivery of the consideration to be received by the Holder on the Change of Control Purchase Date.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Change of Control Purchase Notice contemplated by this Section 1302(b) shall have the right to withdraw such Change of Control Purchase Notice at any time prior to the close of business on the last Business Day immediately preceding the Change of Control Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 1305 hereof.
The Paying Agent shall promptly notify the Company of the receipt by it of any Change of Control Purchase Notice or written withdrawal thereof.
SECTION 1303 Company's Right to Elect Manner of Payment of
Purchase Price and Change of Control Purchase Price for Payment. (a)
The Debentures to be purchased on any Purchase Date or Change of
Control Purchase Date, as the case may be, pursuant to Sections 1301(a)
and 1302(a) hereof, respectively, may be paid for, in whole or in part,
at the election of the Company, in U.S. legal tender ("cash") or
Applicable Stock, or in any combination of cash and Applicable Stock,
subject to the conditions set forth in Sections 1303(c) and (d) hereof.
The Company shall designate, in the Company Notice delivered pursuant
to Section 1303(d) hereof, whether the Company will purchase the
Debentures for cash or Applicable Stock, or, if a combination thereof,
the percentages of the Purchase Price or Change of Control Purchase
Price, as the case may be, of Debentures in respect of which it will
pay in cash or Applicable Stock; provided that the Company will pay
cash for fractional interests in Applicable Stock. For purposes of
determining the existence of potential fractional interests, all
Debentures subject to purchase by the Company held by a Holder shall be
considered together (no matter how many separate certificates are to be
presented). Each Holder whose Debentures are purchased pursuant to
Section 1301 or 1302 hereof, as the case may be, shall receive the same
percentage of cash or Applicable Stock in payment of the Purchase Price
or Change of Control Purchase Price, as the case may be, for such
Debentures, except (i) as provided in this Section 1303(a) with regard
to the payment of cash in lieu of fractional Applicable Stock and (ii)
in the event that the Company is unable to purchase the Debentures of a
Holder or Holders for Applicable Stock because any necessary
qualifications or registrations of the Applicable Stock under
applicable state Debentures laws cannot be obtained, the Company shall
purchase the Debentures of such Holder or Holders for cash. The Company
may not change its election with
respect to the consideration (or components or percentages of components thereof) to be paid once the Company has given its Company Notice to Holders except pursuant to Section 1303(b) or 1303(d) hereof in the event of a failure to satisfy, prior to the close of business on the Business Day immediately preceding the Purchase Date or Change of Control Purchase Date, as the case may be, any condition to the payment of the Purchase Price or Change of Control Purchase Price, as the case may be, in whole or in part, in Applicable Stock.
At least three Business Days before the date of the relevant Company Notice given pursuant to Section 1303(d) hereof, the Company shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 1303(d) hereof in the Company Notice,
(iii) if the Company elects to pay the Purchase Price or Change of Control Purchase Price, as the case may be, or a specified percentage thereof, in shares of Applicable Stock, that the conditions to such manner of payment set forth in Section 1303(c) hereof have been or will be complied with, and
(iv) whether the Company desires the Trustee to give the Company Notice required by Section 1303(d) hereof.
(b) Purchase with Cash. At the option of the Company, the Purchase Price or Change of Control Purchase Price of Debentures in respect of which a Purchase Notice pursuant to Section 1301(a) hereof or Change of Control Purchase Notice pursuant to Section 1302(b) hereof, as the case may be, has been given, or a specified percentage thereof, may be paid by the Company with cash equal to the aggregate Purchase Price or Change of Control Purchase Price, as the case may be, of such Debentures.
(c) Payment by Issuance of Shares of Common Stock. At the
option of the Company, the Purchase Price or Change of Control Purchase
Price of Debentures in respect of which a Purchase Notice pursuant to
Section 1301(a) hereof or Change of Control Purchase Notice pursuant to
Section 1302(b) hereof, as the case may be, has been given, or a
specified percentage thereof, may be paid by the Company by the
issuance of a number of shares of Applicable Stock equal to the
quotient obtained by dividing (i) the portion of the Purchase Price or
Change of Control Purchase Price, as the case may be, to be paid in
Applicable Stock by (ii) 100% of the Market Price with respect to the
applicable Purchase Date or Change of Control Purchase Date, as the
case may be, subject to the next succeeding paragraph.
The Company will not issue a fractional share of Applicable Stock in payment of the Purchase Price or Change of Control Purchase Price, as the case may be. Instead, the Company will pay cash based on the Market Price with respect to the applicable Purchase Date or Change of Control Purchase Date, as the case may be, of the fractional share. It is understood that if a Holder elects to have more than one Debenture purchased, the number of shares of Applicable Stock shall be based on the aggregate amount of Debentures to be purchased.
The Company's right to exercise its election to purchase Debentures through the issuance of Applicable Stock shall be conditioned upon:
(i) the Company's not having given its Company Notice of an election to pay entirely in cash and its giving of timely Company Notice of an election to purchase all or a specified percentage of the Debentures with Applicable Stock as provided herein;
(ii) the registration of such shares of Applicable Stock under the securities Act and the Exchange Act, in each case, if required for such shares to be freely tradable;
(iii) the listing of such shares of Applicable Stock on a United States national securities exchange or the quotation of such shares of Applicable Stock in an inter-dealer quotation system of any registered United States national securities association;
(iv) any necessary qualification or registration of such shares of Applicable Stock under applicable state securities laws or the availability of an exemption from such qualification and registration; and
(v) the receipt by the Trustee of an Officer's Certificate and an Opinion of Counsel each stating that (A) the terms of the issuance of the Applicable Stock are in conformity with this Indenture and (B) the Applicable Stock to be issued by the Company in payment of the Purchase Price or Change of Control Purchase Price, as the case may be, in respect of Debentures have been duly authorized and, when issued and delivered pursuant to the terms of this Indenture in payment of the Purchase Price or Change of Control Purchase Price, as the case may be, in respect of the Debentures, will be validly issued, fully paid and non-assessable and, to the best of such counsel's knowledge, free from preemptive rights, and, in the case of such Officer's Certificate, stating that the conditions above and the condition set forth in the second succeeding sentence have been satisfied and, in the case of such Opinion of Counsel, stating that the conditions in clauses (i) through (iv) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of Applicable Stock to be issued for each $1,000 principal amount of Debentures and the Sale Price of a share of Applicable Stock on each Trading Day during the period commencing on the first Trading Day of the period during which the Market Price is calculated and ending on the third day prior to the applicable Purchase Date or Change of Control Date, as the case may be. If the foregoing conditions are not satisfied with respect to a Holder or Holders prior to the close of business on the last day prior to the Purchase Date or Change of Control Purchase Date, as the case may be, and the Company has elected to purchase the Debentures pursuant to this Section 1303 through the issuance of Applicable Stock, the Company shall pay the entire Purchase Price or Change of Control Purchase Price, as the case may be, of the Debentures of such Holder or Holders in cash.
The "Market Price" means the average of the Sale Prices of the Applicable Stock for the five Trading Day period immediately preceding and including the third day prior to the applicable Purchase Date or Change of Control Purchase Date, as the case may be, (if the third day prior to the applicable Purchase Date is a Trading Day, or if not, then on the last Trading Day prior to the third day), appropriately adjusted to take into account the occurrence, during the period commencing on the first of the Trading Days during the five Trading Day period and ending on the Purchase Date or Change of Control Purchase Date, as the case may be, of any event described in Section 1703 or 1704 hereof.
The "Sale Price" of the Applicable Stock on any date means the closing per share sale price (or, if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as
reported on the NYSE or, if the Applicable Stock is not listed on the NYSE, as reported on a national securities exchange, or if not reported on a national securities exchange, as reported by the Nasdaq system. In the absence of such quotations, the Company shall be entitled to determine the Sales Price on the basis of such quotations as it considers appropriate.
(d) Notice of Election. The Company's notice of election to repurchase with cash or Applicable Stock or any combination thereof shall be sent to the Holders in the manner provided in Section 106 of the Indenture (the "Company Notice"). The Company Notice with respect to the Purchase Price shall be sent to Holders (and to beneficial owners as required by applicable law) at least 20 days prior to the relevant Purchase Date. The Company Notice with respect to the Change of Control Purchase Price shall be sent to Holders (and to beneficial owners as required by applicable law) within 30 days after the occurrence of the relevant Change of Control. Such Company Notice shall state the manner of payment elected and shall contain the following information:
In the event the Company has elected to pay the Purchase Price or Change of Control Purchase Price, as the case may be (or a specified percentage thereof), with Applicable Stock, the Company Notice shall:
(1) state that each Holder will receive Applicable Stock with a Market Price equal to such specified percentage of the Purchase Price or Change of Control Purchase Price, as the case may be, of the Debentures held by such Holder (except any cash amount to be paid in lieu of fractional shares);
(2) set forth the method of calculating the Market Price of the Applicable Stock; and
(3) state that because the Market Price of Applicable Stock will be determined prior to the Purchase Date or Change of Control Purchase Date, as the case may be, Holders of the Debentures will bear the market risk with respect to the value of the Applicable Stock to be received from the date such Market Price is determined to the Purchase Date or Change of Control Purchase Date, as the case may be.
In any case, each Company Notice shall include a form of Purchase Notice or Change of Control Purchase Notice, as the case may be, to be completed by a Holder and shall state:
(i) the Purchase Date or Change of Control, as the case may be;
(ii) the Purchase Price or Change of Control Purchase Price, as the case may be, and the Conversion Rate;
(iii) whether the Purchase Price or the Change of Control Purchase Price will be paid in cash or Applicable Stock, or a combination thereof;
(iv) the date by which the Purchase Notice or the Change of Control Purchase Notice, as the case may be, must be delivered to the Paying Agent in order for a Holder to exercise the repurchase rights;
(v) briefly, the events causing a Change of Control and the date of such Change of Control, if any;
(vi) the Conversion Rate and any adjustment thereto;
(vii) the name and address of the Paying Agent and the Conversion Agent;
(viii) that Debentures as to which a Purchase Notice or Change of Control Purchase Notice, as the case may be, has been given may be converted if they are otherwise convertible only in accordance with Article Seventeen hereof and Section 4 of the Debentures if the applicable Purchase Notice or Change of Control Purchase Notice, as the case may be, has been withdrawn in accordance with the terms of this Indenture;
(ix) that Debentures must be surrendered to the Paying Agent to collect payment;
(x) that the Purchase Price or Change of Control Purchase Price, as the case may be, for any Debenture as to which a Purchase Notice or Change of Control Purchase Notice, as the case may be, has been given and not withdrawn will be paid promptly following the later of the Purchase Date or Change of Control Purchase Date, as the case may be, and the time of surrender of such Debenture as described in (ix);
(xi) the procedures the Holder must follow to exercise its purchase rights under Section 1301 or 1302 hereof, as the case may be, and a brief description of those rights;
(xii) briefly, the conversion rights of the Debentures;
(xiii) the procedures for withdrawing a Purchase Notice or Change of Control Purchase Notice, as the case may be (including, without limitation, for a conditional withdrawal pursuant to the terms of Section 1301(a)(1)(D), Section 1302(b)(4) or Section 1304 hereof);
(xiv) that, unless the Company defaults in making payment on Debentures for which a Purchase Notice or Change of Control Purchase Notice, as the case may be, has been submitted, interest and contingent interest, if any, on such Debentures will cease to accrue on the Purchase Date or Change of Control Purchase Date, as the case may be; and
(xv) the CUSIP number of the Debentures.
At the Company's request, the Trustee shall give such Company Notice in the Company's name and at the Company's expense; provided, however, that, in all cases, the text of such Company Notice shall be prepared by the Company.
(e) Covenants of the Company. All shares of Common Stock delivered upon purchase of the Debentures shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim.
(f) Taxes. If a Holder of a purchased Debenture is paid in Applicable Stock, the Company shall pay any documentary, stamp or similar issue or transfer tax due on such issue of Applicable Stock. However, the Holder shall pay any such tax which is due because the Holder requests the Applicable Stock to be issued in a name other than the Holder's name. The Paying Agent may refuse to deliver the certificates representing the shares of Applicable Stock being issued in a name other than the Holder's name until the Paying Agent receives a sum sufficient to pay any tax which will be due because the shares of Applicable Stock are to be issued in a name
other than the Holder's name. Nothing herein shall preclude any income tax withholding required by law or regulations.
SECTION 1304 Effect of Purchase Notice or Change of Control Purchase Notice. Upon receipt by the Paying Agent of the Purchase Notice or Change of Control Purchase Notice specified in Section 1301(a) or Section 1302(b) hereof, as applicable, the Holder of the Debenture in respect of which such Purchase Notice or Change of Control Purchase Notice, as the case may be, was given shall (unless such Purchase Notice or Change of Control Purchase Notice, as the case may be, is withdrawn as specified in the following three paragraphs) thereafter be entitled to receive solely the Purchase Price or Change of Control Purchase Price, as the case may be, with respect to such Debenture. Such Purchase Price or Change of Control Purchase Price shall be paid to such Holder, subject to receipts of funds and/or Debentures by the Paying Agent, promptly following the later of (x) the Purchase Date or the Change of Control Purchase Date, as the case may be, with respect to such Debenture (provided the conditions in Section 1301(a) or Section 1302(b) hereof, as applicable, have been satisfied) and (y) the time of delivery of such Debenture to the Paying Agent by the Holder thereof in the manner required by Section 1301(a) or Section 1302(b) hereof, as applicable. Debentures in respect of which a Purchase Notice or Change of Control Purchase Notice has been given by the Holder thereof may not be converted pursuant to Article Seventeen hereof on or after the date of the delivery of such Purchase Notice or Change of Control Purchase Notice unless such Purchase Notice or Change of Control Purchase Notice has first been validly withdrawn as specified in the following two paragraphs.
A Purchase Notice or Change of Control Purchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent in accordance with the Purchase Notice or Change of Control Purchase Notice, as the case may be, at any time prior to the close of business on the Purchase Date or at any time prior to the close of business on the Business Day immediately preceding the Change of Control Purchase Date, as the case may be, specifying:
(1) the certificate number, if any, of the Debenture in respect of which such notice of withdrawal is being submitted,
(2) the principal amount of the Debenture with respect to which such notice of withdrawal is being submitted, and
(3) the principal amount, if any, of such Debenture which remains subject to the original Purchase Notice or Change of Control Purchase Notice, as the case may be, and which has been or will be delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in
the form set forth in the preceding paragraph or may be in the form of
(i) a conditional withdrawal contained in a Purchase Notice pursuant to
the terms of Section 1301(a)(1)(D) hereof or (ii) a conditional
withdrawal containing the information set forth in Section
1301(a)(1)(D) hereof and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth
in the preceding paragraph.
A written notice of withdrawal of a Change of Control Purchase Notice may be in the form set forth in the preceding paragraph or may be in the form of (i) a conditional withdrawal contained in a Purchase Notice pursuant to the terms of Section 1302(b)(4) hereof or (ii) a conditional withdrawal containing the information set forth in Section 1302(b)(4) hereof and the
preceding paragraph and contained in a written notice of withdrawal delivered to the Paying Agent as set forth in the preceding paragraph.
SECTION 1305 Deposit of Purchase Price or Change of Control Purchase Price. Prior to 10:00 a.m. (New York City Time) on the Business Day following the Purchase Date or the Change of Control Purchase Date, as the case may be, the Company shall deposit with the Trustee or with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 1003 hereof) an amount of cash (in immediately available funds if deposited on such Business Day) and/or Applicable Stock, if permitted hereunder, sufficient to pay the aggregate Purchase Price or Change of Control Purchase Price, as the case may be, of all the Debentures or portions thereof which are to be purchased as of the Purchase Date or Change of Control Purchase Date, as the case may be.
As soon as practicable after the Purchase Date or Change of Control Purchase Date, as the case may be, the Company shall deliver to each Holder entitled to receive Applicable Stock through the Paying Agent, a certificate for the number of full shares of Applicable Stock issuable in payment of the Purchase Price or Change of Control Purchase Price, as the case may be, and cash in lieu of any fractional interests. The person in whose name the certificate for Applicable Stock is registered shall be treated as a holder of record of Applicable Stock on the Business Day following the Purchase Date or Change of Control Purchase Date, as the case may be. Subject to Section 1303(c) hereof, no payment or adjustment will be made for dividends on the Applicable Stock the record date for which occurred on or prior to the Purchase Date or Change of Control Purchase Date, as the case may be.
If a Paying Agent holds, in accordance with the terms hereof, money sufficient to pay the Purchase Price or Change of Control Purchase Price of, and any accrued and unpaid interest, including contingent interest, if any, with respect to, any Debenture for which a Purchase Notice or Change of Control Purchase Notice, as the case may be, has been tendered and not withdrawn in accordance with this Indenture then, on the Purchase Date or Change of Control Purchase Date, as the case may be, such Debenture will cease to be Outstanding and the rights of the Holder in respect thereof shall terminate (other than the right to receive the Purchase Price or Change of Control Purchase Price, as the case may be, and any accrued and unpaid interest, including contingent interest, if any, as aforesaid).
SECTION 1306 Debentures Purchased in Part. Any definitive Debenture which is to be purchased only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Debenture, without service charge, a new Debenture or Debentures, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Debenture so surrendered which is not purchased.
SECTION 1307 Covenant to Comply With Securities Laws Upon Purchase of Debentures. When complying with the provisions of Section 1301 or 1302 hereof (provided that such offer or purchase constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), and subject to any exemptions available under applicable law, the Company shall (i) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the
Exchange Act, (ii) file the related Schedule TO (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 and obligations under Sections 1301 and 1302 hereof to be exercised in the time and in the manner specified in Sections 1301 and 1302 hereof.
SECTION 1308 Repayment to the Company. The Trustee and the
Paying Agent shall return to the Company any cash or Applicable Stock
that remain unclaimed as provided in Section 12 of the Debentures,
together with interest or dividends, if any, thereon (subject to the
provisions of Section 605 hereof), held by them for the payment of the
Purchase Price or Change of Control Purchase Price, as the case may be;
provided, however, that to the extent that the aggregate amount of cash
or shares of Applicable Stock deposited by the Company pursuant to
Section 1305 hereof exceeds the aggregate Purchase Price or Change of
Control Purchase Price, as the case may be, of the Debentures or
portions thereof which the Company is obligated to purchase as of the
Purchase Date or Change of Control Purchase Date, as the case may be,
then, unless otherwise agreed in writing with the Company, promptly
after the Business Day following the Purchase Date or Change of Control
Purchase Date, as the case may be, the Trustee shall return any such
excess to the Company together with interest or dividends, if any,
thereon (subject to the provisions of Section 605 hereof).
SECTION 2.9 Application of the Article of the Indenture Regarding Defeasance and Covenant Defeasance.
The provisions of Article Fourteen of the Base Indenture, as supplemented by the First Supplemental Indenture, including the provisions relating to defeasance and covenant defeasance of the Securities under Sections 1402 and 1403 thereof, respectively, shall not apply to the Debentures.
SECTION 2.10 Release of Guarantees.
For the sole benefit of the Holders of the Debentures, Section 1605(b) of the Base Indenture, as supplemented by the First Supplemental Indenture, shall not apply to the Debentures.
SECTION 2.11 Conversions.
Except as may be provided by a Future Supplemental Indenture, for the sole benefit of the Holders of the Debentures, a new Article Seventeen shall be added to the Base Indenture, as supplemented by the First Supplemental Indenture, as follows:
ARTICLE SEVENTEEN
CONVERSIONS
SECTION 1701 Conversion Privilege. (a) Subject to and upon compliance with the provisions of this Article Seventeen, a Holder of a Debenture shall have the right, at such Holder's option, to convert all or any portion (if the portion to be converted is $1,000 or a whole multiple of $1,000) of such Debenture into shares of Common Stock at the Conversion Price in effect on the date of conversion:
(1) at any time during any fiscal quarter if the Sale Price of the Common Stock was more than 120% of the Conversion Price for at least 20 Trading Days in the 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter;
(2) on any Business Day after July 1, 2021 if the Sale Price of the Common Stock was more than 120% of the Conversion Price for at least one Trading Day after July 1, 2021;
(3) at any time prior to the close of business on the second Business Day preceding the Redemption Date, if such Debenture has been called for redemption pursuant to Article Eleven of the Indenture; or
(4) as provided in Section 1701(b) hereof.
The Company, or such other Person the Company may designate from time to time, shall determine on a daily basis whether the Debentures shall be convertible as a result of the occurrence of an event specified in clause (1) or clause (2) above and, if the Debentures shall be so convertible, the Company or such other Person shall promptly deliver to the Conversion Agent and the Trustee written notice thereof. Whenever the Debentures shall become convertible pursuant to this Section 1701, the Company or, at the Company's request, the Trustee in the name and at the expense of the Company, shall notify the Holders of the event triggering such convertibility in the manner provided in Section 106 hereof, and the Company shall also publicly announce such information and publish it on the Company's web site. Any notice so given shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice.
(b) In addition, in the event that:
(1) (A) the Company distributes to all holders of its Common Stock rights or warrants entitling them (for a period expiring within 60 days of the Record Date for such distribution) to subscribe for or purchase Common Stock, at a price per share less than the Sale Price of the Common Stock on the Business Day immediately preceding the announcement of such distribution, or (B) the Company distributes to all holders of its Common Stock, cash or other assets, debt securities or rights or warrants to purchase its securities, where the Fair Market Value (as determined by the Board of Directors) of such distribution per share of Common Stock exceeds 15% of the Sale Price of the Common Stock on the Business Day immediately preceding the date of declaration of such distribution, then, in either case, the Debentures may be surrendered for conversion at any time on and after the date that the Company gives notice to the Holders of such right, which shall be not less than 20 days prior to the Ex-Dividend Time for such distribution, until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Time or the date the Company announces that such distribution will not take place; provided that, no adjustment to the Conversion Price or the ability of a Holder of a Debenture to convert will be made if the Holder will otherwise participate in such distribution without conversion; or
(2) the Company consolidates with or merges into another corporation, or is a party to a binding share exchange pursuant to which the shares of Common Stock would be converted into cash, securities or other property as set forth in Section 1704 hereof, then the Debentures may be surrendered for conversion at any time from and after the date which is 15 days prior to the date announced by the Company as the anticipated effective date of such transaction until 15 days after the actual effective date of such transaction.
"Ex-Dividend Time" means, with respect to any issuance or distribution on shares of Common Stock, the first date on which the shares of Common Stock trade regular way on the principal securities market on which the shares of Common Stock are then traded without the right to receive such issuance or distribution.
The "Conversion Rate," at any time, shall equal (A) $1,000 divided by (B) the Conversion Price at such time, rounded to four decimal places (rounded up if the fifth decimal place thereof is 5 or more and otherwise rounded down).
SECTION 1702 Conversion Procedure; Fractional Shares.
(a) Each Debenture shall be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares (calculated
to the nearest 1/100th of a share) of Common Stock. The Debenture will
be converted into shares of Common Stock at the Conversion Price
therefor. No payment or adjustment shall be made in respect of
dividends on the Common Stock or accrued interest on a converted
Debenture, except as described in Section 1709 hereof. The Company
shall not issue any fraction of a share of Common Stock in connection
with any conversion of Debentures, but instead shall, subject to
Section 1703(h) hereof, make a cash payment (calculated to the nearest
cent) equal to such fraction multiplied by the Sale Price of the Common
Stock on the last Trading Day prior to the date of conversion.
Notwithstanding the foregoing, a Debenture in respect of which a Holder
has delivered a Purchase Notice or Change of Control Purchase Notice
exercising such Holder's option to require the Company to repurchase
such Debenture may be converted only if such notice of exercise is
withdrawn in accordance with Section 1304 hereof.
(b) Before any Holder of a Debenture shall be entitled to convert the same into Common Stock, such Holder shall, in the case of Debentures issued in global form, comply with the procedures of the Depository in effect at that time, and in the case of definitive Debentures, surrender such Debentures, duly endorsed to the Company or in blank, at the office of the Conversion Agent, and shall give written notice to the Company at said office or place that such Holder elects to convert the same and shall state in writing therein the principal amount of Debentures to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for Common Stock to be issued.
Before any such conversion, a Holder also shall pay all funds
required, if any, relating to interest on the Debentures, as provided
in Section 1709 hereof, and all taxes or duties, if any, as provided in
Section 1708 hereof.
If more than one Debenture shall be surrendered for conversion at one time by the same Holder, the number of full shares of Common Stock which shall be deliverable upon conversion shall be computed on the basis of the aggregate principal amount of the Debentures (or specified portions thereof to the extent permitted thereby) so surrendered. Subject to the next succeeding sentence, the Company will, as soon as practicable thereafter, issue and deliver at said office or place to such Holder of a Debenture, or to such Holder's nominee or nominees, certificates for the number of full shares of Common Stock to which such Holder shall be entitled as aforesaid, together, subject to the penultimate sentence of paragraph (a) above, with cash in lieu of any fraction of a share to which such Holder would otherwise be entitled. The Company shall not be required to deliver certificates for Common Stock while the stock transfer books for such stock or the security register are duly closed for any purpose, but certificates for Common Stock shall be issued and delivered as soon as practicable after the opening of such books or security register.
(c) A Debenture shall be deemed to have been converted immediately prior to the close of business on the date on which all of the requirements in paragraph (b) above have been satisfied, and the person or persons entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record Holder or Holders of such Common Stock as of the close of business on such date.
(d) In case any Debenture shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Debenture so surrendered, without charge to such Holder (subject to the provisions of Section 1708 hereof), a new Debenture or Debentures in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Debentures.
SECTION 1703 Adjustment of Conversion Price for Common Stock.
The Conversion Price shall be adjusted from time to time as follows:
(a) In case the Company shall, at any time or from time to time while any of the Debentures are outstanding, pay a dividend or make a distribution in shares of Common Stock to all holders of its Common Stock, then the Conversion Price in effect immediately prior to the close of business on the Record Date fixed for the determination of stockholders entitled to receive such dividend or distribution shall be adjusted to equal the price determined by multiplying such Conversion Price by a fraction:
(1) the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the Record Date fixed for such determination; and
(2) the denominator of which shall be the sum of the numerator and the total number of shares constituting such dividend or distribution.
Such adjustment shall become effective immediately prior to the opening of business on the day following the Record Date fixed for such determination. If any dividend or distribution of the type described in this Section 1703(a) is declared but not so paid or made, the Conversion Price shall again be adjusted to the Conversion Price which would then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall, at any time or from time to time while any of the Debentures are outstanding, subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, then the Conversion Price in effect immediately prior to the close of business on the day upon which such subdivision becomes effective shall be proportionately reduced, and conversely, in case the Company shall, at any time or from time to time while any of the Debentures are outstanding, combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the Conversion Price in effect immediately prior to the close of business on the day upon which such combination becomes effective shall be proportionately increased.
Such reduction or increase, as the case may be, shall become effective immediately prior to the opening of business on the day following the day upon which such subdivision or combination becomes effective.
(c) In case the Company shall, at any time or from time to time while any of the Debentures are outstanding, issue rights or warrants (other than any rights or warrants referred to in Section 1703(d) hereof) to all holders of its Common Stock entitling them (for a period expiring within 60 days after the record date for such issuance) to subscribe for or purchase Common Stock (or securities convertible into shares of Common Stock) at a price per share (or having a conversion price per share) less than the Sale Price of Common Stock on the Business Day immediately preceding the date of the announcement of such issuance (treating the
conversion price per share of the securities convertible into Common Stock as equal to (x) the sum of (i) the price for a unit of the securities convertible into Common Stock and (ii) any additional consideration initially payable upon the conversion of such security into Common Stock divided by (y) the number of shares of Common Stock initially underlying such convertible securities), then the Conversion Price in effect immediately prior to the close of business on the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants shall be adjusted to equal the price determined by multiplying such Conversion Price by a fraction:
(1) the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the Record Date fixed for such determination, plus the number of shares of Common Stock which the aggregate offering price of the total number of additional shares of Common Stock so offered for subscription or purchase (or the aggregate conversion price of the convertible securities so offered) would purchase at such Sale Price of the Common Stock (as determined in this paragraph (c) above); and
(2) the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the Record Date fixed for such determination, plus the total number of additional shares of Common Stock so offered for subscription or purchase (or into which the convertible securities so offered are convertible);
provided that no adjustment for a transaction referred to in this
Section 1703(c) shall be made if the Holders of the Debentures may
participate in the transaction on a basis and with notice that the
Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of shares of the Company's Common
Stock may participate in the transaction.
Such adjustment shall become effective immediately prior to the opening of business on the day following the Record Date fixed for such determination. To the extent that shares of Common Stock (or securities convertible into shares of Common Stock) are not delivered pursuant to such rights or warrants, upon the expiration or termination of such rights or warrants, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of shares of Common Stock (or securities convertible into shares of Common Stock) actually delivered. In the event that such rights or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Sale Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants, the value of such consideration if other than cash, to be determined by the Board of Directors.
(d) In case the Company shall, at any time or from time to time while any of the Debentures are outstanding, by dividend or otherwise, distribute to all holders of its Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation and the Common Stock is not changed or exchanged), shares of its capital stock (other than any dividends or distributions to which Section 1703(a) hereof applies), evidences of its Indebtedness or other assets, including securities, but excluding (i) any rights or warrants referred to in Section 1703(c) hereof, (ii)
dividends or distributions of stock, securities or other property or assets (including cash) in connection with a reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance to which Section 1704 hereof applies and (iii) dividends and distributions paid exclusively in cash (such capital stock, evidence of its indebtedness, cash, other assets or securities being distributed hereinafter in this Section 1703(d) called the "distributed assets"), then, in each such case, subject to the third and fourth succeeding paragraphs, the Conversion Price in effect immediately prior to the close of business on the Record Date with respect to such distribution shall be adjusted to equal the price determined by multiplying such Conversion Price by a fraction:
(1) the numerator of which shall be the Current Market Price on the Record Date with respect to such distribution, less the Fair Market Value on such Record Date of the portion of the distributed assets so distributed applicable to one share of Common Stock (determined on the basis of the number of shares of Common Stock outstanding on such Record Date); and
(2) the denominator of which shall be such Current Market Price;
provided that no adjustment for a transaction referred to in this
Section 1703(d) shall be made if all Holders of the Debentures may
participate in the transaction.
Such adjustment shall become effective immediately prior to the opening of business on the day following the Record Date for such distribution. In the event that such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such dividend or distribution had not been declared.
Except as provided in the next paragraph, if the Board of Directors determines the Fair Market Value of any distribution for purposes of this Section 1703(d) by reference to the actual or when issued trading market for any distributed assets comprising all or part of such distribution, it must in doing so consider the prices in such market over the same period (the "Reference Period") used in computing the Current Market Price pursuant to Section 1703(g) hereof to the extent possible, unless the Board of Directors determines in good faith that determining the Fair Market Value during the Reference Period would not be in the best interest of the Holders.
In the event any such distribution consists of shares of capital stock of, or similar equity interests in, one or more of the Company's Subsidiaries (a "Spin-Off"), the Fair Market Value of the securities to be distributed shall equal the average of the closing sale prices of such securities on the principal securities market on which such securities are traded for the five consecutive Trading Days commencing on and including the sixth day of trading of those securities after the effectiveness of the Spin-Off, and the Current Market Price shall be measured for the same period. In the event, however, that an underwritten initial public offering of the securities in the Spin-Off occurs simultaneously with the Spin-Off, the Fair Market Value of the securities distributed in the Spin-Off shall mean the initial public offering price of such securities and the Current Market Price shall mean the Sale Price for the Common Stock on the same Trading Day.
Rights or warrants distributed by the Company to all holders of its Common Stock entitling them to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("Trigger Event"), (i) are deemed to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of shares of
Common Stock (including the shares to be issued upon conversion of the Debentures), shall be deemed not to have been distributed for purposes of this Section 1703(d) (and no adjustment to the Conversion Price under this Section 1703(d) will be required) until the occurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent events, upon the occurrence of which such right or warrant shall become exercisable to purchase different distributed assets, or entitle the holder to purchase a different number or amount of the foregoing or to purchase any of the foregoing at a different purchase price, then the occurrence of each such event shall be deemed to be the date of issuance and Record Date with respect to a new right or warrant (and a termination or expiration of the existing right or warrant without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto, that resulted in an adjustment to the Conversion Price under this Section 1703(d):
(1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase; and
(2) in the case of such rights or warrants which shall have expired or been terminated without exercise, the Conversion Price shall be readjusted as if such rights and warrants had never been issued.
For purposes of this Section 1703(d) and Sections 1703(a),
1703(b) and 1703(c) hereof, any dividend or distribution to which this
Section 1703(d) is applicable that also includes (i) shares of Common
Stock to which Section 1703(a) hereof applies, (ii) a subdivision or
combination of shares of Common Stock to which Section 1703(b) hereof
applies or (iii) rights or warrants to subscribe for or purchase shares
of Common Stock to which Section 1703(c) hereof applies (or any
combination thereof), shall be deemed instead to be:
(1) a dividend or distribution of the distributed assets, other than such shares of Common Stock, such subdivision or combination or such rights or warrants to which Sections 1703(a), 1703(b) and 1703(c) hereof apply, respectively (and any Conversion Price adjustment required by this Section 1703(d) with respect to such dividend or distribution shall then be made), immediately followed by
(2) a dividend or distribution of such shares of Common Stock, such subdivision or combination or such rights or warrants (and any further Conversion Price adjustment required by Sections 1703(a), 1703(b) and 1703(c) hereof with respect to such dividend or distribution shall then be made), except:
(A) the Record Date of such dividend or distribution shall be substituted as (i) "the record date fixed for the determination of stockholders entitled to receive such dividend or distribution," "Record Date fixed for such determination" and "Record Date" within the meaning of Section 1703(a) hereof, (ii) "the day upon which such subdivision becomes effective" and "the day upon which such combination becomes effective" within the meaning of
Section 1703(b) hereof, and (iii) as "the date fixed for the determination of stockholders entitled to receive such rights or warrants," "the Record Date fixed for such determination" and "Record Date" within the meaning of Section 1703(c) hereof; and
(B) any shares of Common Stock included in
such dividend or distribution shall not be deemed
"outstanding at the close of business on the date
fixed for such determination" within the meaning of
Section 1703(a) hereof and any reduction or increase
in the number of shares of Common Stock resulting
from such subdivision or combination shall be
disregarded in connection with such dividend or
distribution.
(e) In case the Company shall, at any time or from time to time while any of the Debentures are outstanding, by dividend or otherwise, distribute to all holders of its Common Stock, cash (excluding any cash that is distributed upon a reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance to which Section 1704 hereof applies or as part of a distribution referred to in Section 1703(d) hereof), in an aggregate amount that, combined together with:
(1) the aggregate amount of any other such distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the date of such distribution, and in respect of which no adjustment pursuant to this Section 1703(e) has been made; and
(2) the aggregate amount of any cash, plus the Fair Market Value (as determined by the Board of Directors) of consideration paid in respect of any tender offer by the Company or any of its Subsidiaries for all or any portion of the shares of Common Stock concluded within the 12 months preceding the date of such distribution, and in respect of which no adjustment pursuant to Section 1703(f) hereof has been made;
exceeds 15% of the product of the Current Market Price of the Common Stock on the Record Date with respect to such distribution times the number of shares of Common Stock outstanding on such Record Date (such excess, the "Cash Distribution Excess Amount"), then the Conversion Price in effect immediately prior to the close of business on the Record Date with respect to such distribution shall be adjusted to equal the price determined by multiplying such Conversion Price by a fraction:
(1) the numerator of which shall be equal to the Current Market Price of the Common Stock on the Record Date for such distribution less an amount equal to the quotient of (x) the Cash Distribution Excess Amount into (y) the number of shares of Common Stock outstanding on such Record Date; and
(2) the denominator of which shall be such Current Market Price.
Such adjustment (if any) shall become effective immediately prior to the opening of business on the day following the Record Date for such distribution. In the event that such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such dividend or distribution had not been declared.
(f) In case a tender offer made by the Company or any of its Subsidiaries for all or any portion of the shares of Common Stock shall expire and such tender offer (as amended upon the expiration thereof) shall require the payment to all holders of its Common Stock (based on the acceptance (up to any maximum specified in the terms of the tender offer) of shares tendered) of an aggregate consideration having a Fair Market Value (as determined by the Board of Directors as of the Expiration Time (as defined below)) that combined together with:
(1) the aggregate amount of any cash plus the Fair Market Value (as determined by the Board of Directors as of the expiration of the relevant tender offer) of consideration payable in respect of any other tender offers by the Company or any of its Subsidiaries for all or any portion of the shares of Common Stock concluded within the 12 months preceding the expiration of such tender offer and in respect of which no adjustment pursuant to this Section 1703(f) has been made; and
(2) the aggregate amount of any distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the expiration of such tender offer and in respect of which no adjustment pursuant to Section 1703(e) hereof has been made;
exceeds 15% of the product of the Current Market Price of the Common Stock as of the last time (the "Expiration Time") tenders could have been made pursuant to such tender offer (as it may be amended) times the number of shares of Common Stock outstanding (including any tendered shares) on the Expiration Time (such excess, the "Tender Offer Excess Amount"), then the Conversion Price in effect immediately prior to the close of business on the date of the Expiration Time shall be adjusted to equal the price determined by multiplying such Conversion Price by a fraction:
(1) the numerator of which shall equal to the Current Market Price of the Common Stock at the Expiration Time less an amount equal to the quotient of (x) the Tender Offer Excess Amount into (y) the number of shares of Common Stock outstanding at the Expiration Time; and
(2) the denominator of which shall be such Current Market Price.
Such adjustment (if any) shall become effective immediately prior to the opening of business on the day following the Expiration Time. In the event that the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all or a portion of such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such (or such portion of the) tender offer had not been made. If the application of this Section 1703(f) to any tender offer would result in an increase in the Conversion Price, no adjustment shall be made for such tender offer under this Section 1703(f).
Pursuant to rights issued under the Company's shareholder rights plan, if holders of the Debentures exercising the right of conversion attaching thereto after the date the rights separate from the underlying Common Stock are not entitled to receive the rights that would otherwise be attributable (but for the date of conversion) to the shares of Common Stock received upon conversion, the Conversion Price will be adjusted as though the rights were being distributed to holders of Common Stock on the date of such separation. If such an adjustment is made and the rights are later redeemed, invalidated or terminated, then a corresponding reversing adjustment will be made to the conversion price on an equitable basis.
(g) For purposes of this Article Seventeen, the following terms shall have the meanings indicated:
"Current Market Price" on any date means the average of the daily Sales Price per share of Common Stock for the 10 consecutive Trading Days immediately prior to such date; provided, however, that if:
(1) the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 1703(a), (b), (c), (d), (e) or (f) hereof occurs during such 10 consecutive Trading Days, the Sale Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by dividing such Sale Price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other event;
(2) the "ex" date for any event (other than the
issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to
Section 1703(a), (b), (c), (d), (e) or (f) hereof occurs on or
after the "ex" date for the issuance or distribution requiring
such computation and prior to the day in question, the Sale
Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by dividing such Sale Price by
the reciprocal of the fraction by which the Conversion Price
is so required to be adjusted as a result of such other event;
and
(3) the "ex" date for the issuance or distribution requiring such computation is prior to the day in question, after taking into account any adjustment required pursuant to clause (1) or (2) of this proviso, the Sale Price for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the Fair Market Value (as determined by the Board of Directors in a manner consistent with any determination of such value for purposes of Section 1703(d), (e) or (f) hereof) of the evidences of Indebtedness, shares of capital stock or assets being distributed applicable to one share of Common Stock as of the close of business on the day before such "ex" date.
For purposes of any computation under Section 1703(f) hereof, if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 1703(a), (b), (c), (d), (e) or (f) hereof occurs on or after the Expiration Time for the tender or exchange offer requiring such computation and prior to the day in question, the Sale Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by dividing such Sale Price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event. For purposes of this paragraph, the term "ex" date, when used:
(1) with respect to any issuance or distribution, means the first date on which the shares of Common Stock trade regular way on the relevant exchange or in the relevant market from which the Sale Price was obtained without the right to receive such issuance or distribution;
(2) with respect to any subdivision or combination of shares of Common Stock, means the first date on which the shares of Common Stock trade regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective; and
(3) with respect to any tender or exchange offer, means the first date on which the shares of Common Stock trade regular way on such exchange or in such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the Conversion Price are called for pursuant to this Section 1703, such adjustments shall be made to the Current Market Price as may be necessary or appropriate to effectuate the intent of this Section 1703 and to avoid unjust or inequitable results as determined in good faith by the Board of Directors.
"Fair Market Value" shall mean the amount which a willing buyer would pay a willing seller in an arm's length transaction (as determined by the Board of Directors, whose determination shall be conclusive).
"Record Date" shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the shares of Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).
(h) The Company shall be entitled to make such additional reduction in the Conversion Price, in addition to those required by Sections 1703(a), (b), (c), (d), (e) and (f) hereof, as shall be necessary, as determined by the Board of Directors, in order that any dividend or distribution of Common Stock, any subdivision, reclassification or combination of shares of Common Stock or any issuance of rights or warrants referred to above shall not be taxable to the holders of Common Stock for United States Federal income tax purposes.
(i) To the extent permitted by applicable law, the Company may, from time to time, reduce the Conversion Price by any amount for any period of time, if such period is at least 20 days and the reduction is irrevocable during the period. Whenever the Conversion Price is reduced pursuant to the preceding sentence, the Company shall mail to the Trustee and each Holder at the address of such Holder as it appears in the register of the Debentures maintained by the Security Registrar, at least 10 days prior to the date the reduced Conversion Price takes effect, a notice of the reduction stating the reduced Conversion Price and the period during which it will be in effect.
(j) In any case in which this Section 1703 shall require that
any adjustment be made effective as of or retroactively immediately
following a Record Date, the Company may elect to defer (but only for
five Trading Days following the filing of the statement referred to in
Section 1705 hereof) issuing to the Holder of any Debentures converted
after such Record Date the shares of Common Stock issuable upon such
conversion over and above the shares of Common Stock issuable upon such
conversion on the basis of the Conversion Price prior to adjustment;
provided, however, that the Company shall deliver -------- ------- to
such Holder a due bill or other appropriate instrument evidencing such
Holder's right to receive such additional shares upon the occurrence of
the event requiring such adjustment.
(k) All calculations under this Section 1703 shall be made to the nearest cent or one-hundredth of a share, with one-half cent and 0.005 of a share, respectively, being rounded upward. Notwithstanding any other provision of this Section 1703, the Company shall not be required to make any adjustment of the Conversion Price unless such adjustment would require an increase or decrease of at least 1% of such price. Any lesser adjustment shall be carried
forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to an increase or decrease of at least 1% in such price. Any adjustments under this Section 1703 shall be made successively whenever an event requiring such an adjustment occurs.
(l) In the event that at any time, as a result of an adjustment made pursuant to this Section 1703, the Holder of any Debentures thereafter surrendered for conversion shall become entitled to receive any shares of stock of the Company other than shares of Common Stock into which the Debentures originally were convertible, the Conversion Price of such other shares so receivable upon conversion of any such Debenture 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 subparagraphs (a) through (k) of this Section 1703, and the provision of Sections 1701, 1702 and 1704 through 1709 hereof with respect to the Common Stock shall apply on like or similar terms to any such other shares and the determination of the Board of Directors as to any such adjustment shall be conclusive.
(m) No adjustment shall be made pursuant to this Section 1703
(i) if the effect thereof would be to reduce the Conversion Price below
the par value (if any) of the Common Stock or (ii) if the Holders of
the Debentures may participate without conversion in the transaction
that would otherwise give rise to an adjustment pursuant to this
Section 1703.
SECTION 1704 Consolidation or Merger of the Company.
If any of the following events occurs, namely:
(1) any reclassification or change of the outstanding Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination);
(2) any merger, consolidation, statutory share exchange or combination of the Company with another corporation as a result of which holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) or any combination thereof with respect to or in exchange for such Common Stock; or
(3) any sale or conveyance of all or substantially all of the properties and assets of the Company to any other corporation as a result of which holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) or any combination thereof with respect to or in exchange for such Common Stock;
then the Company or the successor or purchasing corporation, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture, if such supplemental indenture is then required to so comply) providing that such Debentures shall be convertible into the kind and amount of stock, securities or other property or assets (including cash) or any combination thereof which such Holder would have been entitled to receive upon such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance had such Debentures been converted into Common Stock immediately prior to such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance assuming such holder of Common Stock did not exercise its rights of election, if any, as to the kind or amount of stock, securities or other property or assets (including cash) or any combination thereof receivable upon such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance (provided, that if the kind or amount of securities, cash or other property receivable upon such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised ("Non-Electing Share"), then for the purposes of this Section 1704, the kind and amount of stock, securities or other property or assets (including cash) or any combination thereof receivable upon such merger, consolidation, statutory share exchange, sale or conveyance for each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-Electing Shares). Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article Seventeen. If, in the case of any such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance, the stock or other securities and assets receivable thereupon by a holder of Common Stock includes stock, securities or other property or assets (including cash) or any combination thereof of a corporation other than the successor or purchasing corporation, as the case may be, in such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the Holders of the Debentures as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including to the extent practicable the provisions providing for the repurchase rights set forth in Article Thirteen hereof.
The Company shall cause notice of the execution of such supplemental indenture to be mailed to each Holder, at the address of such Holder as it appears on the register of the Debentures maintained by the Security Registrar, within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.
The above provisions of this Section 1704 shall similarly apply to successive reclassifications, changes, mergers, consolidations, statutory share exchanges, combinations, sales and conveyances.
If this Section 1704 applies to any event or occurrence,
Section 1703 hereof shall not apply.
SECTION 1705 Notice of Adjustment.
Whenever an adjustment in the Conversion Price with respect to the Debentures is required:
(1) the Company shall forthwith place on file with the Trustee and any Conversion Agent for such Debentures a certificate of the Treasurer of the Company, stating the adjusted Conversion Price determined as provided herein and setting forth in reasonable detail such facts as shall be necessary to show the reason for and the manner of computing such adjustment; and
(2) a notice stating that the Conversion Price has been adjusted and setting forth the adjusted Conversion Price shall forthwith be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company, to each Holder in the manner provided in Section 106 hereof. Any notice so given shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice.
SECTION 1706 Notice in Certain Events.
In case:
(1) of a 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 conveyance to another Person or entity or group of Persons or entities acting in concert as a partnership, limited partnership, syndicate or other group (within the meaning of Rule 13d-3 under the Exchange Act) of all or substantially all of the property and assets of the Company; or
(2) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion Price referred to in clauses (x) or (y) below;
then, in each case, the Company shall cause to be filed with the Trustee and the Conversion Agent, and shall cause to be given, to the Holders of the Debentures in the manner provided in Section 106 hereof, at least 15 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 any distribution or grant of rights or warrants triggering an adjustment to the Conversion Price pursuant to this Article Seventeen, or, if a record is not to be taken, the date as of which the holders of record of Common Stock entitled to such distribution, rights or warrants are to be determined, or (y) the date on which any reclassification, consolidation, merger, sale, conveyance, dissolution, liquidation or winding up triggering an adjustment to the Conversion Price pursuant to this Article Seventeen is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger sale, conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not
affect the legality or validity of the proceedings described in clause
(1), (2) or (3) of this Section 1706.
SECTION 1707 Company To Reserve Stock: Registration; Listing.
(a) The Company shall, in accordance with the laws of
the State of Delaware, at all times reserve and keep
available, free from preemptive rights, out of its authorized
but unissued shares of Common Stock, for the purpose of
effecting the conversion of the Debentures, such number of its
duly authorized shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all Debentures
then Outstanding into such Common Stock at any time (assuming
that, at the time of the computation of such number of shares
of Common Stock, all such Debentures would be held by a single
Holder); provided, however, that nothing contained herein
shall preclude the Company from satisfying its obligations in
respect of the conversion of the Debentures by delivery of
purchased shares of Common Stock which are then held in the
treasury of the Company. The Company covenants that all shares
of Common Stock which may be issued upon conversion of
Debentures will upon issue be fully paid and nonassessable and
free from all liens and charges and, except as provided in
Section 1708 hereof, taxes with respect to the issue thereof.
(b) If any shares of Common Stock which would be issuable upon conversion of Debentures hereunder require registration with or approval of any governmental authority before such shares of Common Stock may be issued upon such conversion, the Company will in good faith and as expeditiously as possible endeavor to cause such shares or securities to be duly registered or approved, as the case may be. The Company further covenants that so long as the Common Stock shall be listed on the NYSE, the Company will, if permitted by the rules of such exchange, list and keep listed all Common Stock issuable upon conversion of the Debentures, and the Company will endeavor to list the shares of Common Stock required to be delivered upon conversion of the Debentures prior to such delivery upon any other national securities exchange upon which the outstanding Common Stock is listed at the time of such delivery.
SECTION 1708 Taxes on Conversion.
The issue of stock certificates on conversion of Debentures shall be made without charge to the converting Holder for any documentary, stamp or similar issue or transfer taxes in respect of the issue thereof, and the Company shall pay any and all documentary, stamp or similar issue or transfer taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Debentures pursuant hereto. The Company shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock or the portion, if any, of the Debentures which are not so converted in a name other than that in which the Debentures so converted were registered, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of such tax or has established to the satisfaction of the Company that such tax has been paid.
SECTION 1709 Conversion After Record Date.
Except as provided below, if any Debentures are surrendered for conversion on any day other than an Interest Payment Date, the Holder of such Debentures shall not be entitled to receive any interest, including contingent interest, if any, that has accrued on such Debentures since the prior Interest Payment Date. By delivery to the Holder of the number of shares of Common Stock or other consideration issuable upon conversion in accordance with this Article Seventeen, any accrued and unpaid interest, including contingent interest, if any, on such Debentures will be deemed to have been paid in full.
If any Debentures are surrendered for conversion subsequent to the Record Date preceding an Interest Payment Date but on or prior to such Interest Payment Date, the Holder of such Debentures at the close of business on such Record Date shall receive the interest, including contingent interest, if any, payable on such Debentures on such Interest Payment Date notwithstanding the conversion thereof. Debentures surrendered for conversion during the period from the close of business on any Record Date preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of Debentures which have been called for redemption on a Redemption Date within such period) be accompanied by payment by Holders, for the account of the Company, in New York Clearing House funds or other funds of an amount equal to the interest, including contingent interest, if any, payable on such Interest Payment Date on the Debentures being surrendered for conversion. Except as provided in this Section 1709, no adjustments in respect of payments of interest, including contingent interest, if any, on Debentures surrendered for conversion or any dividends or distributions or interest on the Common Stock issued upon conversion shall be made upon the conversion of any Debentures.
SECTION 1710 Company Determination Final.
Any determination that the Company or the Board of Directors must make pursuant to this Article Seventeen shall be conclusive if made in good faith and in accordance with the provisions of this Article, absent manifest error, and set forth in a Board Resolution.
SECTION 1711 Responsibility of Trustee for Conversion Provisions.
The Trustee has no duty to determine when an adjustment under this Article Seventeen should be made, how it should be made or what it should be. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Debentures. The Trustee shall not be responsible for any failure of the Company to comply with this Article Seventeen. Each Conversion Agent other than the Company shall have the same protection under this Section 1711 as the Trustee.
The rights, privileges, protections, immunities and benefits given to the Trustee under the Indenture, including, without limitation, its rights to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each Paying Agent or Conversion Agent acting hereunder.
SECTION 1712 Unconditional Right of Holders to Convert.
Notwithstanding any other provision in this Indenture, the Holder of any Debenture shall have the right, which is absolute and unconditional, to convert its Debenture in accordance with this Article Seventeen and to bring an action for the enforcement of any such right to convert, and such rights shall not be impaired or affected without the consent of such Holder.
Article III
MISCELLANEOUS
SECTION 3.1 Governing Law.
This Second Supplemental Indenture and the Debentures shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. This Second Supplemental Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions.
SECTION 3.2 Separability.
In case any provision in this Second Supplemental Indenture or in any Securities, including the Debentures, 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 3.3 Counterparts.
This Second Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Supplemental Indenture.
SECTION 3.4 Ratification.
The Base Indenture, as supplemented and amended by the First Supplemental Indenture and this Second Supplemental Indenture, is in all respects ratified and confirmed, and the Base Indenture, the First Supplemental Indenture and this Second Supplemental Indenture shall be read, taken and construed as one and the same instrument. All provisions included in this Second Supplemental Indenture supersede any conflicting provisions included in the Base Indenture or the First Supplemental Indenture unless not permitted by law. The Trustee accepts the trusts created by the Indenture, as supplemented by the First Supplemental Indenture and this Second Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by the First Supplemental Indenture and this Second Supplemental Indenture.
SECTION 3.5 Effectiveness.
The provisions of this Second Supplemental Indenture shall become effective as of the date hereof.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the date first above written.
THE BANK OF NEW YORK,
as Trustee
By: /s/ Marie E. Trimboli ------------------------------------- Name: Marie E. Trimboli Title: Assistant Vice President |
QUEST DIAGNOSTICS INCORPORATED
By: /s/ Joseph P. Manory ------------------------------------- Name: Joseph P. Manory Title: Vice President and Treasurer |
QUEST DIAGNOSTICS INCORPORATED (CA)
QUEST DIAGNOSTICS INCORPORATED (CT)
QUEST DIAGNOSTICS INCORPORATED (MA)
QUEST DIAGNOSTICS INCORPORATED (MD)
QUEST DIAGNOSTICS INCORPORATED (MI)
QUEST DIAGNOSTICS OF PENNSYLVANIA INC.
LABORATORY HOLDINGS INCORPORATED
DIAGNOSTIC REFERENCE SERVICES INC.
DPD HOLDINGS, INC.
METWEST INC.
NICHOLS INSTITUTE DIAGNOSTICS
QUEST DIAGNOSTICS LLC
QUEST DIAGNOSTICS CLINICAL
LABORATORIES, INC.
QUEST DIAGNOSTICS HOLDINGS
INCORPORATED
By: /s/ Joseph P. Manory ------------------------------------- Name: Joseph P. Manory Title: Vice President and Treasurer |
PATHOLOGY BUILDING PARTNERSHIP
By: Quest Diagnostics Incorporated (MD)
as General Partner
By: /s/ Joseph P. Manory ------------------------------------- Name: Joseph P. Manory Title: Vice President and Treasurer |
QUEST DIAGNOSTICS INVESTMENTS
INCORPORATED
By: /s/ Peter C. Fulweiler ------------------------------------- Name: Peter C. Fulweiler Title: President |
QUEST DIAGNOSTICS FINANCE
INCORPORATED
By: /s/ Peter C. Fulweiler ------------------------------------- Name: Peter C. Fulweiler Title: President |
EXHIBIT A
Form of 1.75% Contingent Convertible Debenture due 2021
[The following legends apply only if the Debenture is a Global Debenture:
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF THIS SECURITY IS $990.00 PER DEBENTURE AND THIS SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS NOVEMBER 26, 2001, AND THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES IS 7.00% PER ANNUM, COMPOUNDED SEMIANNUALLY.
THIS DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS DEBENTURE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A DEBENTURE REGISTERED, AND NO TRANSFER OF THIS DEBENTURE IN WHOLE OR IN
PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR
ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND SUCH CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
QUEST DIAGNOSTICS INCORPORATED
1.75% Contingent Convertible Debenture due 2021
Unconditionally guaranteed as to payment of
principal of and interest by
the Subsidiary Guarantors
No. 0 (Specimen) $250,000,000
CUSIP: 74834LAF7
Quest Diagnostics Incorporated, a Delaware corporation (herein
|
called the "Company," which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of $250,000,000 on November 30, 2021 (the "Stated Maturity") (except to the extent redeemed or repaid prior to the Stated Maturity) and to pay interest thereon from November 26, 2001 or from the most recent Interest Payment Date to which interest has been paid or duly provided for semi-annually at the rate of 1.75% per annum, on May 31 and November 30 of each year, commencing May 31, 2002, on the Stated Maturity and on any Redemption Date (each such date, an "Interest Payment Date") until the principal hereof is paid or made available for payment.
1. Payment of Interest. The interest so payable, and punctually paid or made available for payment, on any Interest Payment Date, will, as provided in the Indenture, be paid, in immediately available funds, to the Person in whose name this Debenture (or one or more Predecessor Securities) is registered at the close of business May 15 or November 15 (whether or not a Business Day, as defined in the Indenture), as the case may be, next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not punctually paid or duly provided for ("Defaulted Interest") will forthwith cease to be payable to the Holder on such Regular Record Date, and such Defaulted Interest, may be paid to the Person in whose name this Debenture (or one or more Predecessor Securities) is registered at the close of business on a special record date (the "Special Record Date") for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Debentures not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with requirements of any securities exchange on which the Debentures may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.
If the principal amount hereof or any portion of such
principal amount is not paid when due (whether upon acceleration pursuant to
Section 502 of the Indenture, upon the date set for payment of the Redemption
Price as described under "Optional Redemption," upon the date set for payment of
the Change of Control Purchase Price pursuant to "Purchase of Debentures at
Option of Holder Upon a Change of Control," upon the date set for payment of the
Purchase Price under "Purchase by the Company at the Option of the Holder" or
upon the Stated Maturity of this Debenture or otherwise) or any interest,
including contingent interest, if any, on any Debenture is not paid when due,
then in each such case the overdue amount shall, to the extent permitted by law,
bear interest at the rate of 1.75% per annum, compounded semi-annually, which
interest shall accrue from the date of such overdue amount was originally due to
the date of payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable on demand.
2. Place of Payment. The Place of Payment for the Debentures and the place or places where the Debentures may be surrendered for registration of transfer, exchange, repurchase, redemption or conversion and where notices may be given to the Company in respect of the Debentures is at the
Corporate Trust Office of the Trustee or such other office or agency of the Company as may be designated for such purpose. Payment of principal and interest and contingent interest, if any, on the Debentures will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
The Company will pay principal on (1) Global Debentures to DTC in immediately available funds and (2) any definitive Debentures in immediately available funds at the Company's office or agency in New York City, which initially will be the Corporate Trust Office of the Trustee.
The Company will pay interest, including contingent interest, if any, on (1) Global Debentures to DTC in immediately available funds, (2) any definitive Debentures having an aggregate principal amount of $5,000,000 or less by check mailed to the Holders of these Debentures, and (3) any definitive Debentures having an aggregate principal amount of more than $5,000,000 by wire transfer in immediately available funds if requested by the Holders of these Debentures. At Stated Maturity the Company will pay interest on any definitive Debentures at the Company's office or agency in New York City, which initially will be the Corporate Trust Office of the Trustee.
3. Contingent Interest. Subject to the accrual and record date provisions described below and in the Indenture, the Company shall pay contingent interest to the Holders during any six-month period (a "Contingent Interest Period") from June 1 to November 30 and from December 1 to May 31, commencing December 1, 2004, if the average Debenture Market Price of a Debenture for the Five Trading Day Period with respect to such Contingent Interest Period equals $1,200 or more.
The amount of contingent interest payable per $1,000 principal amount of Debentures in respect of any Contingent Interest Period shall equal the greater of (1) 0.25% of the average Debenture Market Price of a Debenture for the Five Trading Day Period and (2) the sum of all Regular Cash Dividends, if any, paid by the Company per share of Common Stock during that Contingent Interest Period multiplied by the Conversion Rate in effect on the date on each such payment date.
Contingent interest, if any, will accrue and be payable to Holders as of the 15th day preceding the last day of the relevant Contingent Interest Period or, if the Company pays a Regular Cash Dividend during the relevant Contingent Interest Period, to Holders as of the record date for the related Regular Cash Dividend. Such payments will be paid on the last day of the relevant Contingent Interest Period or, if the Company pays a Regular Cash Dividend during the relevant Contingent Interest Period, on the payment date of the related Regular Cash Dividend. Regular cash interest will continue to accrue at the rate of 1.75% per year on the principal amount of the Debentures whether or not contingent interest is paid.
"Five Trading Day Period" means, with respect to any Contingent Interest Period, the five trading days ending on the second trading day immediately preceding the first day of such Contingent Interest Period; provided, however, if the Company shall have declared a Regular Cash Dividend on its Common Stock that is payable during such Contingent Interest Period but for which the record date for determining stockholders entitled thereto precedes the first day of such Contingent Interest Period, then "Five Trading Day Period" shall mean, with respect to such Contingent Interest Period, the five trading days ending on the second trading day immediately preceding such record date.
"Regular Cash Dividends" means quarterly or other periodic cash dividends on the Company's Common Stock as declared by the Company's Board of Directors as part of its cash dividend payment practices and that are not designated by such Board of Directors as extraordinary or special or other nonrecurring dividends.
"Debenture Market Price" means, as of any date of determination, the average of the secondary market bid quotations per $1,000 principal amount of Debentures obtained by the Bid Solicitation Agent for $10 million principal amount of Debentures at approximately 4:00 p.m., New York City time, on such determination date from three recognized securities dealers in The City of New York (none of which shall be an Affiliate of the Company) selected by the Company; provided, however, if (a) at least three such bids are not obtained by the Bid Solicitation Agent or (b) in the Company's reasonable judgment, the bid quotations are not indicative of the secondary market value of the Debentures as of such determination date, then the Debenture Market Price for such determination date shall equal (1) the Conversion Rate in effect as of such determination date multiplied by (2) the average Sale Price for the five Trading Days ending on such determination date, appropriately adjusted to take into account the occurrence, during the period commencing on the first of such Trading Days during such five trading day period and ending on such determination date, of any event described in the Indenture.
Upon a determination by the Company that Holders will be entitled to receive contingent interest which will become payable during a Contingent Interest Period, on or prior to the first day of such Contingent Interest Period, the Company shall issue a press release and publish such information on its web site on the World Wide Web or through such other public medium as the Company may use at that time.
4. Conversion. Subject to the provisions of this paragraph 4 and the Indenture and notwithstanding the fact that any other condition to conversion has not been satisfied, Holders may convert the Debentures into Common Stock at any time during any fiscal quarter if the Sale Price of the Common Stock was more than 120% of the Conversion Price for at least 20 Trading Days in the 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter.
Subject to the provisions of this paragraph 4 and the Indenture and notwithstanding the fact that any other condition to conversion has not been satisfied, Holders may convert the Debentures into Common Stock on any Business Day after July 1, 2021 if the Sale Price of the Common Stock was more than 120% of the Conversion Price for at least one Trading Day after July 1, 2021.
Subject to the provisions of this paragraph 4 and the Indenture and notwithstanding the fact that any other condition to conversion has not been satisfied, Holders may convert the Debentures into Common Stock at any time prior to the close of business on the second Business Day preceding the Redemption Date, if such Debentures have been called for redemption pursuant to the Indenture.
Subject to the provisions of this paragraph 4 and the Indenture and notwithstanding the fact that any other condition to conversion has not been satisfied, in the event that (A) the Company distributes to all holders of its Common Stock rights or warrants entitling them (for a period expiring within 60 days of the Record Date for such distribution) to subscribe for or purchase Common Stock, at a price per share less than the Sale Price of the Common Stock on the Business Day immediately preceding the announcement of such distribution, or (B) the Company distributes to all holders of its Common Stock, cash or other assets, debt securities or rights or warrants to purchase its securities, where the Fair Market Value (as determined by the Board of Directors) of such distribution per share of Common Stock exceeds 15% of the Sale Price of the Common Stock on the Business Day immediately preceding the date of declaration of such distribution, then, in either case, the Debentures may be surrendered for conversion at any time on and after the date that the Company gives notice to the Holders of such right, which shall be not less than 20 days prior to the Ex-Dividend Time for such distribution, until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Time or the date the Company announces that such distribution will not take place; provided that no adjustment to the Conversion Price or the ability of a Holder of a Debenture to convert will be made if the Holder will otherwise participate in such distribution without conversion.
Subject to the provisions of this paragraph 4 and the Indenture and notwithstanding the fact that any other condition to conversion has not been satisfied, in the event that the Company consolidates with or merges into another corporation, or is a party to a binding share exchange pursuant to which the shares of Common Stock would be converted into cash, securities or other property as set forth in Section 1704 of the Indenture, then the Debentures may be surrendered for conversion at any time from and after the date which is 15 days prior to the date announced by the Company as the anticipated effective date of such transaction until 15 days after the actual effective date of such transaction.
"Ex-Dividend Time" means, with respect to any issuance or distribution on shares of Common Stock, the first date on which the shares of Common Stock trade regular way on the principal securities market on which the shares of Common Stock are then traded without the right to receive such issuance or distribution.
The "Conversion Rate," at any time, shall equal (A) $1,000 divided by (B) the Conversion Price at such time, rounded to four decimal places (rounded up if the fifth decimal place thereof is 5 or more and otherwise rounded down).
The initial Conversion Price is $87.50 and the initial Conversion Rate is 11.4286 shares of Common Stock per $1,000 principal amount, subject to adjustment in certain events described in the Indenture. The Company will deliver cash or a check in lieu of any fractional share of Common Stock.
A Debenture in respect of which a Holder has delivered a Purchase Notice or a Change of Control Purchase Notice exercising the option of such Holder to require the Company to purchase such Debenture may be converted only if such notice of exercise is withdrawn in accordance with the terms of the Indenture.
To convert a Debenture, a Holder must (1) complete and manually sign the conversion notice below (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion Agent, (2) surrender the Debenture to the Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Conversion Agent, the Company or the Trustee and (4) pay any transfer or similar tax, if required.
The Conversion Rate will be adjusted as set forth in the Indenture for dividends or distributions on Common Stock payable in Common Stock or other Capital Stock; subdivisions, combinations or certain reclassifications of Common Stock; distributions to all holders of Common Stock of certain rights to purchase Common Stock for a period expiring within 60 days at less than the Sale Price of the Common Stock at the Time of Determination; and distributions to such holders of assets or debt securities of the Company or certain rights to purchase securities of the Company (excluding certain cash dividends or distributions). However, no adjustment need be made if Debenture holders may participate in the transaction or in certain other cases. The Company from time to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share exchange or a transfer of all or substantially all of its assets, or upon certain distributions described in the Indenture, the right to convert a Debenture into Common Stock may be changed into a right to convert it into securities, cash or other assets of the Company or another person.
A Holder may convert a portion of a Debenture if the principal amount of such portion is $1,000 or an integral multiple of $1,000. No payment or adjustment will be made for dividends on the Common Stock except as provided in the Indenture. Except as provided below in the next succeeding paragraph, if any Debentures are surrendered for conversion on any day other than an Interest Payment
Date, the Holder of such Debentures shall not be entitled to receive any interest, including contingent interest, if any, that has accrued on such Debentures since the prior Interest Payment Date. By delivery to the Holder of the number of shares of Common Stock or other consideration issuable upon conversion in accordance with the Indenture, any accrued and unpaid interest, including contingent interest, if any, on such Debentures will be deemed to have been paid in full.
If any Debentures are surrendered for conversion subsequent to the Record Date preceding an Interest Payment Date but on or prior to such Interest Payment Date, the Holder of such Debentures at the close of business on such Record Date shall receive the interest, including contingent interest, if any, payable on such Debentures on such Interest Payment Date notwithstanding the conversion thereof. Debentures surrendered for conversion during the period from the close of business on any Record Date preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of Debentures which have been called for redemption on a Redemption Date within such period) be accompanied by payment by Holders, for the account of the Company, in New York Clearing House funds or other funds of an amount equal to the interest, including contingent interest, if any, payable on such Interest Payment Date on the Debentures being surrendered for conversion.
Each Debenture shall be convertible at the office of the Conversion Agent into fully paid and nonassessable shares (calculated to the nearest 1/100th of a share) of Common Stock. The Debenture will be converted into shares of Common Stock at the Conversion Price therefor. No payment or adjustment shall be made in respect of dividends on the Common Stock or accrued interest on a converted Debenture, except as described in the Indenture. The Company shall not issue any fraction of a share of Common Stock in connection with any conversion of Debentures, but instead shall, subject to the Indenture, make a cash payment (calculated to the nearest cent) equal to such fraction multiplied by the Sale Price of the Common Stock on the last Trading Day prior to the date of conversion.
5. Redemption at the Option of the Company. No sinking fund is provided for the Debentures. At any time on or after November 30, 2004, the Company, at its option, may redeem in principal amounts of $1,000 or integral multiples of $1,000 the Debentures for cash as a whole, or from time to time in part, accordance with the Indenture at a Redemption Price equal to 100% of the principal amount of the Debentures to be redeemed, plus accrued and unpaid interest, including contingent interest, if any, to, but not including, the Redemption Date. The Debentures are redeemable upon not less than 30 nor more than 60 days' notice by mail, e-mail or by publication.
If the Company redeems less than all of the outstanding
Debentures, the Trustee will select the Debentures to be redeemed (1) by lot;
(2) pro rata; or (3) by another method the Trustee considers fair and
appropriate. If the Trustee selects a portion of a Holder's Debentures for
partial redemption and the Holder converts a portion of the same Debentures, the
converted portion will be deemed to be from the portion selected for redemption.
6. Purchase By the Company at the Option of the Holder. Subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase, at the option of the Holder, all or any portion of the Debentures held by such Holder on November 30, 2004, 2005, 2008, 2012, and 2016 at a Purchase Price equal to 100% of the principal amount of the Debentures to be repurchased, plus accrued and unpaid interest, including contingent interest, if any, to, but not including, the Purchase Date.
To exercise such right, a Holder shall deliver to the Paying Agent a Purchase Notice containing the information set forth in the Indenture, at any time from the opening of business on the date that is 20 Business Days prior to the relevant Purchase Date until the close of business on the third
Business Day prior to such Purchase Date, and shall deliver the Debentures to the Paying Agent as set forth in the Indenture.
The Purchase Price may be paid, at the option of the Company, in cash or Applicable Stock, or in any combination thereof, subject to the terms and conditions of the Indenture.
Holders shall have the right to withdraw any Purchase Notice at any time prior to the close of business on the Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with the provisions of the Indenture.
If cash (and/or Applicable Stock if permitted under the Indenture) sufficient to pay the Purchase Price of all Debentures, or portions thereof for which a Purchase Notice has been given, is deposited with the Paying Agent, on the Business Day following the Purchase Date interest, including contingent interest, if any, will cease to accrue on such Debentures (or portions thereof) immediately after such Purchase Date, and the Holder thereof shall have no other rights as such other than the right to receive the Purchase Price upon surrender of such Debenture.
7. Purchase By the Company at Option of Holders Upon a Change of Control. Subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase, at the option of the Holder on the date that is 30 days after the date of the Company Notice with respect to a Change of Control given by the Company in accordance with Section 1303(d) of the Indenture (the "Change of Control Purchase Date"), all or any portion of the Debentures held by such Holder at a purchase price equal to 100% of the principal amount of the Debentures to be repurchased, plus accrued and unpaid interest, including contingent interest, if any, to, but not including, the Change of Control Purchase Date.
To exercise such right, a Holder shall deliver to the Paying Agent a Change of Control Purchase Notice containing the information set forth in the Indenture, at any time on or prior to the close of business on the Business Day immediately preceding the Change of Control Purchase Date, and shall deliver the Debentures to the Paying Agent as set forth in the Indenture.
The Change of Control Purchase Price may be paid, at the option of the Company, in cash or Applicable Stock, or in any combination thereof, subject to the terms and conditions of the Indenture.
Holders shall have the right to withdraw any Change of Control Purchase Notice at any time prior to the close of business on the Change of Control Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with the provisions of the Indenture.
If cash (and/or Applicable Stock if permitted under the Indenture) sufficient to pay the Change of Control Purchase Price of all Debentures, or portions thereof for which a Change of Control Purchase Notice has been given, is deposited with the Paying Agent, on the Business Day following the Change of Control Purchase Date interest, including contingent interest, if any, will cease to accrue on such Debentures (or portions thereof) immediately after such Change of Control Purchase Date, and the Holder thereof shall have no other rights as such other than the right to receive the Change of Control Purchase Price upon surrender of such Debenture.
[The following paragraph applies only if the Debenture is a Global Debenture:
8. Book-Entry. This Debenture is a Global Debenture representing $250,000,000 of the Debentures. This Debenture is a "book entry" Debenture and is being registered in the name of Cede &
Co. as nominee of The Depository Trust Company (the "Depository "), a clearing agency. Subject to the terms of the Indenture, this Debenture will be held by a clearing agency or its nominee, and beneficial interest will be held by beneficial owners through the book-entry facilities of such clearing agency or its nominee in minimum denominations of $1,000 and integral multiples thereof. As long as this Debenture is registered in the name of the Depository or its nominee, the Trustee will make payments of principal and interest on this Debenture by wire transfer of immediately available funds to the Depository or its nominee. Notwithstanding the above, the final payment on this Debenture will be made after due notice by the Trustee of the pendency of such payment and only upon presentation and surrender of this Debenture at its principal corporate trust office or such other offices or agencies appointed by the Trustee for that purpose and such other locations provided in the Indenture.]
9. Guarantees. This Debenture is entitled to the benefits of the Subsidiary Guarantees by each of the Subsidiary Guarantors of the due and punctual payment and performance of the Guarantor Obligations made in favor of the Trustee for the benefit of the Holder of this Debenture. Reference is hereby made to Article Sixteen of the Indenture for a statement of the respective rights, limitations of rights, duties and obligations under the Guarantees of each of the Subsidiary Guarantors. The Guarantees may be released in certain circumstances as described in the Indenture.
10. Events of Default. If an Event of Default with respect to the Debentures shall have occurred and be continuing, the principal of the Debentures may be declared due and payable in the manner and with the effect provided in the Indenture.
11. Modification and Waivers; Obligations of the Company Absolute. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debentures. Such amendment may be effected under the Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Debentures affected thereby. The Indenture also contains provisions permitting the Holders of not less than a majority in aggregate principal amount of the Debentures at the time Outstanding, on behalf of the Holders of all Outstanding Debentures, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the Holders of not less than a majority in aggregate principal amount of the Outstanding Debentures to waive on behalf of all of the Holders of Debentures certain past defaults under the Indenture and their consequences. Any such consent or waiver shall be conclusive and binding upon the Holders of the Debentures and upon all future Holders of the Debentures and of any Debenture issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest, including contingent interest, if any, on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed.
12. Limitation on Suits. As set forth in, and subject to, the provisions of the Indenture, no Holder of this Debenture will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to this Debenture, the Holders of not less than 25% in aggregate principal amount of the Outstanding Debentures shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceedings as trustee, and the Trustee shall not have received from the Holders of a majority in aggregate principal amount of the Outstanding Debentures a direction inconsistent with such request and shall have failed to institute such proceeding
within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of or interest, including contingent interest, if any, on this Debenture on or after the respective due dates expressed herein.
13. Authorized Denominations. The Debentures are issuable only in registered form without coupons in denominations of $1,000 or any integral multiple thereof.
14. Registration of Transfer or Exchange. As provided in the Indenture and subject to certain limitations herein and therein set forth, the transfer of this Debenture is registrable in the Security Register upon surrender of this Debenture for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Debenture are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Debentures, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations herein and therein set forth, the Debentures are exchangeable for a like aggregate principal amount of Debentures of different authorized denominations, as requested by the Holders surrendering the same.
[The following paragraph applies only if the Debenture is a Global Debenture:
15. This Debenture is a Global Debenture. If the Depository is at any time unwilling, unable or ineligible to continue as depository and a successor depository is not appointed by the Company within 90 days or an Event of Default under the Indenture has occurred and is continuing, the Company will issue Debentures in certificated form in exchange for each Global Debenture. In addition, the Company may at any time determine not to have Debentures represented by a Global Debenture and, in such event, will issue Debentures in certificated form in exchange in whole for the Global Debenture representing such Debenture. In any such instance, an owner of a beneficial interest in a Global Debenture will be entitled to physical delivery in certificated form of Debentures equal in principal amount to such beneficial interest and to have such Debentures registered in its name. Debentures so issued in certificated form will be issued in denominations of $1,000 or any amount in excess thereof which is an integral multiple of $1,000 and will be issued in registered form only, without coupons.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Holder as the owner hereof for all purposes, whether or not this Debenture be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.]
16. Defined Terms. All terms used in this Debenture, which are defined in the Indenture and are not otherwise defined herein, shall have the meanings assigned to them in the Indenture.
17. Original Issue Discount Information Reporting
Requirements. In accordance with the United States Treasury Regulation Section
1.1275-3, a Holder may obtain the projected payment schedule and the comparable
yield by submitting a written request for such information to: Quest Diagnostics
Incorporated, One Malcolm Avenue, Teterboro, New Jersey 07608, Attention:
Investor Relations.
18. Governing Law. This Debenture shall be governed by and construed in accordance with the law of the State of New York.
Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Debenture shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
QUEST DIAGNOSTICS INCORPORATED
By: _______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series designated and referred to in the within-mentioned Indenture, as such is supplemented by the within-mentioned Second Supplemental Indenture.
THE BANK OF NEW YORK
as Trustee
By: _______________________________
Authorized Signatory
Dated: November , 2001
GUARANTEE OF THE SUBSIDIARY GUARANTORS
FOR VALUE RECEIVED, each of the Subsidiary Guarantors (as such term is defined in the Indenture, as amended by the First Supplemental Indenture and the Second Supplemental Indenture), hereby, jointly and severally, unconditionally guarantees to the Holder of the Debenture upon which this Subsidiary Guarantee is endorsed (the "Debenture") and to the Trustee on behalf of the Holder, the prompt payment of the principal of (and premium, if any, on) and interest (including, contingent interest, if any, and in case of default, interest on principal and, to the extent permitted by applicable law, on overdue interest required to be paid according to the terms of the Debentures) on the Debenture, when due (whether upon acceleration pursuant to Section 502 of the Indenture, upon the date set for payment of the Redemption Price as described under "Optional Redemption," upon the date set for payment of the Change of Control Purchase Price pursuant to "Purchase of Debentures at Option of Holder Upon a Change of Control," upon the date set for payment of the Purchase Price under "Purchase by the Company at the Option of the Holder" or upon the Stated Maturity of this Debenture), according to the terms hereof and the terms of the Indenture (the "Guarantor Obligations"). This Guarantee is a guarantee of payment and not of collection and is a continuing guarantee and shall apply to all Guarantor Obligations whenever arising.
Obligations Unconditional and Absolute. The obligations of the Subsidiary Guarantors hereunder are absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of the Indenture or this Debenture, to the fullest extent permitted by applicable law, irrespective of any circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. Each of the Subsidiary Guarantors agrees that this Guarantee may be enforced by the Holder of this Debenture without the necessity at any time of proceeding against the Company or any other Person (including a co-guarantor) or to pursue any other remedy or enforce any other right. Each of the Subsidiary Guarantors further agrees that nothing contained herein shall prevent the Holder of this Debenture from suing on this Debenture or the Indenture or from exercising any other rights available under this Debenture and the Indenture, and the exercise of any of the aforesaid rights and shall not constitute a discharge of any Subsidiary Guarantor's obligations hereunder and under the Indenture; it being the purpose and the intent of each Subsidiary Guarantor that its obligations under this Debenture and under the Indenture shall be absolute, independent and unconditional under any and all circumstances. Neither any Subsidiary Guarantor's obligations under this Guarantee nor any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by an impairment, modification, change, release or limitation of the liability of the Company or by reason of the bankruptcy or insolvency of the Company. Each Subsidiary Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guarantor Obligations or acceptance of this Guarantee. The Guarantor Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee.
Notwithstanding any of the foregoing, if any Subsidiary Guarantor is unable to deliver shares of Common Stock of the Company in connection with the Company's failure to convert Debentures into shares of Common Stock of the Company upon exercise of a Holder's conversion right pursuant to Article Seventeen of the Indenture, such Subsidiary Guarantor may instead pay to such Holder the amount equal to the product of (i) the total number of shares of Common Stock into which such Debentures are convertible on the date of such exercise and (ii) the Current Market Price on the date of such exercise.
Subrogation. Each of the Subsidiary Guarantors shall be subrogated to all rights of the Holder of the Debenture against the Company in respect of any amounts paid by such Subsidiary Guarantor on account of the Debenture or the Indenture; provided, however, that such Subsidiary
Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of (or premium, if any, on) and interest including contingent interest, if any, on the Debenture shall have been indefeasibly paid in full.
Modifications. Each Subsidiary Guarantor agrees that (a) the time or place of payment of the Guarantor Obligations may be changed or extended, in whole or in part, to a time certain or otherwise, and may be renewed or accelerated, in whole or in part; (b) the Company and any other party liable for payment under the Indenture or under the Debenture may be granted indulgences generally; (c) any of the provisions of this Debenture or the Indenture may be modified, amended or waived; and (d) any party (including any Subsidiary Guarantor) liable for the payment under this Debenture or under the Indenture may be granted indulgences or be released; all without notice to or further assent by such Subsidiary Guarantor, which shall remain bound thereon, notwithstanding any such exchange, compromise, surrender, extension, renewal, acceleration, modification, indulgence or release.
Waiver of Rights. Each of the Subsidiary Guarantors hereby waives to the fullest extent permitted by law: (a) notice of acceptance of this Guarantee by the Holder of this Debenture; (b) presentment and demand for payment or performance of any of the Guarantor Obligations; (c) protest and notice of dishonor or default with respect to the Guarantor Obligations; and (d) all other notices to which such Subsidiary Guarantor might otherwise be entitled.
Reinstatement. The obligations of the Subsidiary Guarantors under this Debenture and under Article Sixteen shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Guarantor Obligations is rescinded or must otherwise be restored by any Holder of the Debenture, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.
Remedies. Each of the Subsidiary Guarantors further agrees, to the fullest extent that it may lawfully do so, that as between each such Subsidiary Guarantor, on the one hand, and the Holder and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition extant under any applicable bankruptcy law preventing such acceleration in respect of the obligations guaranteed hereby.
Rights of Contribution. The Subsidiary Guarantors, in connection with payments made hereunder, shall have contribution rights against the other Subsidiary Guarantors as permitted under applicable law. Such contribution rights shall be subordinate and subject in right of payment to the obligations of the Subsidiary Guarantors under this Debenture and no Subsidiary Guarantor shall exercise such rights of contribution until all Guarantor Obligations have been paid in full.
Limitation of Guaranty. Notwithstanding any provision to the contrary contained herein or in the Indenture, to the extent the obligations of any Subsidiary Guarantor shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of the Subsidiary Guarantors hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state or otherwise and including, without limitation, the Bankruptcy Code).
Release of Guarantors. Each of the Subsidiary Guarantors
hereby covenants that its Subsidiary Guarantee will not be discharged except by
complete performance of its obligations contained in the Debenture, this
Subsidiary Guarantee and pursuant to the Indenture; provided, however, that if
(a) a Subsidiary Guarantor does not guarantee any Indebtedness of the Company
the amount of which, excluding any Outstanding Debenture to which any Guarantee
of such Subsidiary Guarantor applies,
when added together with any other outstanding Indebtedness of the Company guaranteed by its Subsidiaries that are not Subsidiary Guarantors, would exceed $50 million in the aggregate, at the time of determination, and all outstanding Indebtedness of such Subsidiary Guarantor would have been permitted to be incurred pursuant to Section 1011 of the Indenture measured at the time of the release and discharge as described in this paragraph, or (b) all or substantially all of the assets of such Subsidiary Guarantor or all of the capital stock of such Subsidiary Guarantor is sold (including by issuance, merger, consolidation or otherwise) by the Company or any of its Subsidiaries, then in each case of (a) or (b) above, such Subsidiary Guarantor or the corporation acquiring such assets (in the event of a sale or other disposition of all or substantially all of the assets or capital stock of such Subsidiary Guarantor) shall be automatically and without any further action on the part of any party to the Indenture, and upon notice to the Trustee, be fully released and discharged from all its liabilities and obligations under or in respect of the Indenture and this Subsidiary Guarantee of the Debenture, and promptly upon the request of the Company and at the expense of the Company, the Trustee shall execute such documents and take such other action as is reasonably requested by the Company to evidence the release and discharge of such Subsidiary Guarantor from all such liabilities and obligations and shall, if applicable, certify to the Company that such Subsidiary Guarantor has no liabilities or obligations resulting from a demand on such Subsidiary Guarantor's Guarantee.
Defined Terms. All terms used in this Debenture, which are defined in the Indenture and are not otherwise defined herein, shall have the meanings assigned to them in the Indenture.
Governing Law. This Subsidiary Guarantee shall be governed by and construed in accordance with the law of the State of New York.
Subject to the next following paragraph, each Subsidiary Guarantor hereby certifies and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Subsidiary Guarantee and to constitute the same valid obligation of each Subsidiary Guarantor have been done and performed and have happened in due compliance with all applicable laws.
This Subsidiary Guarantee shall not be valid or become obligatory for any purpose until the certificate of authentication on the Debenture upon which this Subsidiary Guarantee is endorsed has been signed by the Trustee under the Indenture referred to in this Debenture.
Dated: November 26, 2001
QUEST DIAGNOSTICS INCORPORATED (CA)
QUEST DIAGNOSTICS INCORPORATED (CT)
QUEST DIAGNOSTICS INCORPORATED (MA)
QUEST DIAGNOSTICS INCORPORATED (MD)
QUEST DIAGNOSTICS INCORPORATED (MI)
QUEST DIAGNOSTICS OF PENNSYLVANIA INC.
LABORATORY HOLDINGS INCORPORATED
DIAGNOSTIC REFERENCE SERVICES INC.
DPD HOLDINGS, INC.
METWEST INC.
NICHOLS INSTITUTE DIAGNOSTICS
QUEST DIAGNOSTICS LLC
QUEST DIAGNOSTICS CLINICAL
LABORATORIES, INC.
QUEST DIAGNOSTICS HOLDINGS
INCORPORATED
By: ____________________________
Name:
Title:
PATHOLOGY BUILDING PARTNERSHIP
By: Quest Diagnostics Incorporated (MD)
as General Partner
By: ____________________________
Name:
Title:
QUEST DIAGNOSTICS INVESTMENTS
INCORPORATED
By: ______________________________
Name:
Title:
QUEST DIAGNOSTICS FINANCE
INCORPORATED
By: ______________________________
Name:
Title:
EXHIBIT B
FORM OF ADDITIONAL SUBSIDIARY GUARANTEE
FOR VALUE RECEIVED, each of the Subsidiary Guarantors executing this additional Subsidiary Guarantee (the "Additional Subsidiary Guarantors"), hereby fully and unconditionally guarantees, jointly and severally, together with the existing Subsidiary Guarantors (as such term is defined in the Indenture) of the Debenture, to the Holder of the Debenture upon which this Subsidiary Guarantee is endorsed (the "Debenture") and to the Trustee on behalf of the Holder, the prompt payment of the principal of (and premium, if any, on) and interest (including contingent interest, if any, and in case of default, interest on principal and, to the extent permitted by applicable law, on overdue interest required to be paid according to the terms of the Debentures) and contingent interest, if any, on the Debenture, when due (whether at Stated Maturity, upon redemption or repurchase at the option of the Holders of the Debentures, upon acceleration, upon tender for repayment at the option of the Company), according to the terms hereof and the terms of the Indenture (the "Guarantor Obligations"). This Guarantee is a guarantee of payment and not of collection and is a continuing guarantee and shall apply to all Guarantor Obligations whenever arising.
Obligations Unconditional and Absolute. The obligations of the Additional Subsidiary Guarantors hereunder are absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of the Indenture or this Debenture, to the fullest extent permitted by applicable law, irrespective of any circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. Each of the Additional Subsidiary Guarantors agrees that this Subsidiary Guarantee may be enforced by the Holder of this Debenture without the necessity at any time of proceeding against the Company or any other Person (including a co-guarantor) or to pursue any other remedy or enforce any other right. Each of the Additional Subsidiary Guarantors further agrees that nothing contained herein shall prevent the Holder of this Debenture from suing on this Debenture or the Indenture or from exercising any other rights available under this Debenture and the Indenture, and the exercise of any of the aforesaid rights and shall not constitute a discharge of any Additional Subsidiary Guarantor's obligations hereunder and under the Indenture; it being the purpose and the intent of each Additional Subsidiary Guarantor that its obligations under this Debenture and under the Indenture shall be absolute, independent and unconditional under any and all circumstances. Neither any Additional Subsidiary Guarantor's obligations under this Subsidiary Guarantee nor any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by an impairment, modification, change, release or limitation of the liability of the Company or by reason of the bankruptcy or insolvency of the Company. Each Additional Subsidiary Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guarantor Obligations or acceptance of this Subsidiary Guarantee. The Guarantor Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Subsidiary Guarantee.
Notwithstanding any of the foregoing, if any Additional Subsidiary Guarantor is unable to deliver shares of Common Stock of the Company in connection with the Company's failure to convert Debentures into shares of Common Stock of the Company upon exercise of a Holder's conversion right pursuant to Article Seventeen of the Indenture, such Additional Subsidiary Guarantor may instead pay to such Holder the amount equal to the product of (i) the total number of shares of Common Stock into which such Debentures are convertible on the date of such exercise and (ii) the Current Market Price on the date of such exercise.
Subrogation. Each of the Additional Subsidiary Guarantors shall be subrogated to all rights of the Holder of the Debenture against the Company in respect of any amounts paid by such Additional Subsidiary Guarantor on account of the Debenture or the Indenture; provided, however, that such Additional Subsidiary Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of (or premium, if any, on) and interest on all Debentures of this series shall have been indefeasibly paid in full.
Modifications. Each Additional Subsidiary Guarantor agrees that (a) the time or place of payment of the Guarantor Obligations may be changed or extended, in whole or in part, to a time certain or otherwise, and may be renewed or accelerated, in whole or in part; (b) the Company and any other party liable for payment under the Indenture or under the Debenture may be granted indulgences generally; (c) any of the provisions of this Debenture or the Indenture may be modified, amended or waived; and (d) any party (including any Subsidiary Guarantor) liable for the payment under this Debenture or under the Indenture may be granted indulgences or be released; all without notice to or further assent by such Additional Subsidiary Guarantor, which shall remain bound thereon, notwithstanding any such exchange, compromise, surrender, extension, renewal, acceleration, modification, indulgence or release.
Waiver of Rights. Each of the Additional Subsidiary Guarantors hereby waives to the fullest extent permitted by law: (a) notice of acceptance of this Subsidiary Guarantee by the Holder of this Debenture; (b) presentment and demand for payment or performance of any of the Guarantor Obligations; (c) protest and notice of dishonor or default with respect to the Guarantor Obligations; and (d) all other notices to which such Additional Subsidiary Guarantor might otherwise be entitled.
Reinstatement. The obligations of the Additional Subsidiary Guarantors under this Debenture and under Article Sixteen shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Guarantor Obligations is rescinded or must otherwise be restored by any Holder of the Debentures, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.
Remedies. Each of the Additional Subsidiary Guarantors further agrees, to the fullest extent that it may lawfully do so, that as between each such Additional Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five of the Indenture for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition extant under any applicable bankruptcy law preventing such acceleration in respect of the obligations guaranteed hereby.
Rights of Contribution. The Additional Subsidiary Guarantors, in connection with payments made hereunder, shall have contribution rights against the other Subsidiary Guarantors as permitted under applicable law. Such contribution rights shall be subordinate and subject in right of payment to the obligations of the Subsidiary Guarantors under this Debenture and no Additional Subsidiary Guarantor shall exercise such rights of contribution until all Guarantor Obligations have been paid in full.
Limitation of Guaranty. Notwithstanding any provision to the contrary contained herein or in the Indenture, to the extent the obligations of any Additional Subsidiary Guarantor shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of the Additional Subsidiary Guarantors hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state or otherwise and including, without limitation, the Bankruptcy Code).
Release of Guarantors. Each of the Additional Subsidiary Guarantors hereby covenants that its Subsidiary Guarantee will not be discharged except by complete performance of its obligations contained in the Debenture, this Subsidiary Guarantee and pursuant to the Indenture; provided, however, that if (a) an Additional Subsidiary Guarantor does not guarantee any Indebtedness of the Company the amount of which, when added together with any other outstanding Indebtedness of the Company guaranteed by its Subsidiaries that are not Subsidiary Guarantors, would exceed $50 million in the aggregate, excluding the Debentures, and all outstanding Indebtedness of such Subsidiary Guarantor would have been permitted to be incurred pursuant to Section 1011 of the Indenture measured at the time of the release and discharge as described in this paragraph or (b) all or substantially all of the assets of such Additional Subsidiary Guarantor or all of the capital stock of such Additional Subsidiary Guarantor is sold (including by issuance, merger, consolidation or otherwise) by the Company or any of its Subsidiaries, then in each case of (a) or (b) above, such Additional Subsidiary Guarantor or the corporation acquiring such assets (in the event of a sale or other disposition of all or substantially all of the assets or capital stock of such Subsidiary Guarantor) shall be automatically and without any further action on the part of any party to the Indenture, and upon notice to the Trustee, be fully released and discharged from all its liabilities and obligations under or in respect of the Debenture, the Indenture and this Subsidiary Guarantee, and promptly upon the request of the Company and at the expense of the Company, the Trustee shall execute such documents and take such other action as is reasonably requested by the Company to evidence the release and discharge of such Additional Subsidiary Guarantor from all such liabilities and obligations and shall, if applicable, certify to the Company that such Additional Subsidiary Guarantor has no liabilities or obligations resulting from a demand on its Subsidiary Guarantee.
Defined Terms. All terms used in this Debenture, which are defined in the Indenture and are not otherwise defined herein, shall have the meanings assigned to them in the Indenture.
Governing Law. This Subsidiary Guarantee shall be governed by and construed in accordance with the law of the State of New York.
Subject to the next following paragraph, each Additional Subsidiary Guarantor hereby certifies and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Subsidiary Guarantee and to constitute the same valid obligation of each Additional Subsidiary Guarantor have been done and performed and have happened in due compliance with all applicable laws.
(Remainder of page intentionally left blank.)
This Subsidiary Guarantee shall not be valid or become obligatory for any purpose until the certificate of authentication on the Debenture upon which this Subsidiary Guarantee is endorsed has been signed by the Trustee under the Indenture referred to in this Debenture.
[ADDITIONAL SUBSIDIARY GUARANTOR(S)]
By: ____________________________
Name:
Title: