EXHIBIT 4.2
-----------
EXECUTION COPY
- --------------------------------------------------------------------------------
UNIT AGREEMENT
Dated as of November 12, 1997
By and Among
VIALOG CORPORATION
The Subsidiary Guarantors named herein
and
STATE STREET BANK AND TRUST COMPANY
as Unit Agent, Trustee and Warrant Agent
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND REGISTRATION OF UNIT
CERTIFICATES
SECTION 1.01. Issuance of Units................................................... 2
SECTION 1.02. Form of Unit Certificates........................................... 2
SECTION 1.03. Execution of Unit Certificates...................................... 2
SECTION 1.04. Authentication and Delivery......................................... 3
SECTION 1.05. Temporary Unit Certificates......................................... 3
SECTION 1.06. Separation of Units and Notes....................................... 4
SECTION 1.07. Registration........................................................ 4
SECTION 1.08. Registration of Transfers and Exchanges............................. 5
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated Unit Certificates..... 12
SECTION 1.10. Offices for Exercise, etc........................................... 12
ARTICLE II
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF UNITS
SECTION 2.01. Rights of Unit Holders.............................................. 13
ARTICLE III
CONCERNING THE UNIT AGENT
SECTION 3.01. Unit Agent.......................................................... 13
SECTION 3.02. Conditions of Unit Agent's Obligations.............................. 14
SECTION 3.03. Resignation and Appointment of Successor............................ 17
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Amendment........................................................... 18
SECTION 4.02. Notices and Demands to the Company and Unit Agent................... 19
SECTION 4.03. Notices............................................................. 19
SECTION 4.04. Governing Law....................................................... 21
SECTION 4.05. Obtaining of Governmental Approvals................................. 21
SECTION 4.06. Persons Having Rights Under Agreement............................... 21
SECTION 4.07. Headings............................................................ 21
SECTION 4.08. Counterparts........................................................ 21
SECTION 4.09. Inspection of Agreement............................................. 21
SECTION 4.10. Successors and Assigns.............................................. 21
SECTION 4.11. Severability........................................................ 21
SECTION 4.12. Entire Agreement.................................................... 22
i
EXHIBIT A - Form of Unit Certificate
EXHIBIT B - Certificate To Be Delivered upon Exchange or
Registration of Transfer of Units
EXHIBIT C - Transferee Letter of Representation
ii
UNIT AGREEMENT
UNIT AGREEMENT ("Unit Agreement" or "Agreement"), dated as of November
-------------- ---------
12, 1997 (the "Effective Date") by VIALOG CORPORATION, a Massachusetts
--------------
corporation (together with any successor thereto, the "Company"), TELEPHONE
-------
BUSINESS MEETINGS, INC. d/b/a ACCESS CONFERENCE CALL SERVICE, a Delaware
corporation, CONFERENCE SOURCE INTERNATIONAL, INC., a Georgia corporation, CALL
POINTS, INC., a Delaware corporation, KENDALL SQUARE TELECONFERENCING, INC.
d/b/a THE CONFERENCE CENTER, a Massachusetts corporation, AMERICAN CONFERENCING
COMPANY, INC. d/b/a AMERICO, a Delaware corporation, and COMMUNICATION
DEVELOPMENT CORPORATION, a Connecticut corporation (collectively, the
"Subsidiary Guarantors"), and STATE STREET BANK AND TRUST COMPANY, a
---------------------
Massachusetts trust company, as trustee under the Indenture referred to herein
(with any successor Trustee, the "Trustee"), as warrant agent (with any
-------
successor Warrant Agent, the "Warrant Agent") and as unit agent hereunder (with
-------------
any successor unit agent, the "Unit Agent").
----------
WHEREAS, the Company has entered into a purchase agreement dated
November 6, 1997 with Jefferies & Company, Inc. (the "Initial Purchaser")
-----------------
pursuant to which the Company has agreed, among other things, to sell to the
Initial Purchaser 75,000 units (the "Units") consisting in the aggregate of (i)
-----
$75,000,000 aggregate principal amount of 12 3/4% Senior Notes due 2001 (as the
same may be amended or modified from time to time, the "Notes") of the Company
-----
to be issued under an indenture dated as of November 12, 1997 (as the same may
be amended or modified from time to time, the "Indenture"), among the Company,
---------
the Subsidiary Guarantors named therein and State Street Bank and Trust Company,
as trustee (the "Trustee"), and (ii) 75,000 Warrants to purchase an aggregate of
-------
756,645 shares of common stock, $.01 par value per share (the "Common Stock"),
------------
of the Company (the "Warrants," and the certificates evidencing the Warrants
--------
being hereinafter referred to as "Warrant Certificates"), in each case subject
--------------------
to adjustment in accordance with the terms hereof to be issued under the warrant
agreement, dated as of November 12, 1997 (as the same may be amended or modified
from time to time, the "Warrant Agreement"); and
-----------------
WHEREAS, the Warrants and the Notes comprising the Units shall be
separately transferable on or after May 15, 1998 or such earlier date as the
Initial Purchaser may determine in its sole discretion; and
WHEREAS, the Company desires the Unit Agent to assist the Company in
connection with the issuance, exchange, cancellation and replacement of the
Units, and in this Agreement wishes to set forth, among other things, the terms
and conditions on which the Units may be issued, exchanged, canceled and
replaced;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF UNIT CERTIFICATES
-------------------------------------
SECTION 1.01. Issuance of Units. Each certificate evidencing Units
-----------------
(a "Unit Certificate") shall evidence the number of Units specified therein.
---- -----------
SECTION 1.02. Form of Unit Certificates. Unit Certificates
-------------------------
representing Units offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent Global Units (the "Global
------
Units"). Units offered and sold in reliance on any other exemption from
- -----
registration under the Securities Act other than as described in the preceding
sentence shall be issued in the form of definitive Unit Certificates (the
"Definitive Units"). The Unit Certificates evidencing the Global Units or the
----------------
Definitive Units to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto (in the case of
---------
the Global Units, including footnote 1 thereto). Such Global Units shall
represent such of the outstanding Units as shall be specified therein and each
shall provide that it shall represent the aggregate amount of outstanding Units
from time to time endorsed thereon and that the aggregate amount of outstanding
Units represented thereby may from time to time be reduced or increased, as
appropriate. Any endorsement of a Global Unit to reflect the amount of any
increase or decrease in the amount of outstanding Units represented thereby
shall be made by the Unit Agent and Depositary (as defined below) in accordance
with instructions given by the holder thereof. The Depository Trust Company
shall act as the Depositary (the "Depositary") with respect to the Global Units
----------
until a successor shall be appointed by the Company. Upon written request, a
Unit holder may receive from the Unit Agent Definitive Units as set forth in
Section 1.08 hereof.
SECTION 1.03. Execution of Unit Certificates. The Unit Certificates
------------------------------
shall be executed on behalf of the Company by the chairman of its Board of
Directors, its president or any vice president and attested by its clerk or
assistant clerk, under its corporate seal. Such signatures may be the manual or
facsimile signatures of the present or any future such officers. The seal of
the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Unit Certificates.
Typographical and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Unit Certificate that has been duly countersigned and delivered by the Unit
Agent.
In case any officer of the Company who shall have signed any of the
Unit Certificates shall cease to be such officer before the Unit Certificate so
signed shall be countersigned and delivered by the Unit Agent or disposed of by
the Company, such Unit Certificate nevertheless may be countersigned and
delivered or disposed of as though the person who signed such Unit Certificate
had not ceased to be such officer of the Company; and any Unit Certificate may
be signed on behalf of the Company by such persons as, at the actual date of the
execution of such Unit Certificate, shall be the proper officers of the
-2-
Company, although at the date of the execution and delivery of this Agreement
any such person was not such an officer.
SECTION 1.04. Authentication and Delivery. Subject to the immediate
---------------------------
following paragraph, Unit Certificates shall be authenticated by manual
signature and dated the date of authentication by the Unit Agent and shall not
be valid for any purpose unless so authenticated and dated. For the purpose of
determining the date of issuance of any Note or Warrant comprising a Unit, an
authentication by the Unit Agent of such Unit shall be deemed to be the
authentication by the Trustee or Warrant Agent of the underlying Notes and
Warrants, as applicable. The Unit Certificates shall be numbered and shall be
registered in the Unit Register (as defined in Section 1.07 hereof).
Upon the receipt by the Unit Agent of a written order of the Company,
which order shall be signed by the chairman of its Board of Directors, its
president or any vice president and attested by its clerk or assistant clerk,
and shall specify the amount of Units to be authenticated, whether the Units are
to be Global Units or Definitive Units, the date of such Units and such other
information as the Unit Agent may reasonably request, without any further action
by the Company, the Unit Agent is authorized, upon receipt from the Company at
any time and from time to time of the Unit Certificates, duly executed as
provided in Section 1.03 hereof, to authenticate the Unit Certificates and
deliver them. Such authentication shall be by a duly authorized signatory of
the Unit Agent (although it shall not be necessary for the same signatory to
sign all Unit Certificates).
In case any authorized signatory of the Unit Agent who shall have
authenticated any of the Unit Certificates shall cease to be such authorized
signatory before the Unit Certificate shall be disposed of by the Company, such
Unit Certificate nevertheless may be delivered or disposed of as though the
person who authenticated such Unit Certificate had not ceased to be such
authorized signatory of the Unit Agent; and any Unit Certificate may be
authenticated on behalf of the Unit Agent by such persons as, at the actual time
of authentication of such Unit Certificates, shall be the duly authorized
signatories of the Unit Agent, although at the time of the execution and
delivery of this Agreement any such person is not such an authorized signatory.
The Unit Agent's authentication on all Unit Certificates shall be in
substantially the form set forth in Exhibit A hereto.
SECTION 1.05. Temporary Unit Certificates. Pending the preparation
---------------------------
of definitive Unit Certificates, the Company may execute, and, upon receipt of
an authentication order in accordance with Section 1.04 hereof, the Unit Agent
shall authenticate and deliver, temporary Unit Certificates, which are printed,
lithographed, typewritten or otherwise produced, in a form substantially similar
to the definitive Unit Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Unit Certificates may determine, as evidenced by
their execution of such Unit Certificates.
-3-
If temporary Unit Certificates are issued, the Company will cause
definitive Unit Certificates to be prepared without unreasonable delay. After
the preparation of definitive Unit Certificates, the temporary Unit Certificates
shall be exchangeable for definitive Unit Certificates upon surrender of the
temporary Unit Certificates at any office or agency maintained by the Company
for that purpose pursuant to Section 1.10 hereof. Subject to the provisions of
Section 4.01 hereof, such exchange shall be without charge to the holder. Upon
surrender for cancellation of any one or more temporary Unit Certificates, the
Company shall execute, and, upon receipt of an authentication order in
accordance with Section 1.04 hereof, the Unit Agent shall authenticate and
deliver in exchange therefor, one or more definitive Unit Certificates
representing in the aggregate a like number of Units. Until so exchanged, the
holder of a temporary Unit Certificate shall in all respects be entitled to the
same benefits under this Agreement as a holder of a definitive Unit Certificate.
SECTION 1.06. Separation of Units and Notes. The Warrants and the
-----------------------------
Notes comprising the Units will be separately transferable on or after May 15,
1998, or such earlier date as the Initial Purchaser may determine in its sole
discretion (the "Separability Date"). Upon presentation after the Separability
-----------------
Date of any Unit Certificate for exchange for Notes and Warrants or for
registration of transfer or otherwise, (i) the Unit Agent shall notify the
Trustee and the Warrant Agent of the number of Units so presented, the
registered owner thereof, such owner's registered address, the nature of any
legends or restrictive endorsements set forth on such Unit Certificate and any
other information provided by the holder thereof in connection therewith, (ii)
the Trustee, if the requirements of the Indenture for such transaction are met,
as the case may be, shall promptly register, authenticate and deliver a new Note
equal in principal amount to the Notes represented by such Unit Certificate in
accordance with the direction of such holder and (iii) the Warrant Agent, if its
requirements for such transactions are met, shall promptly countersign, register
and deliver a new Warrant certificate for the number of Warrants previously
represented by such Unit Certificate in accordance with the directions of such
holder. The Warrant Agent and the Trustee will notify the Unit Agent of any
additional requirements in connection with a particular transfer or exchange.
Following the Separability Date, no Unit Certificates shall be issued upon
transfer or exchange of Unit Certificates or otherwise. Notwithstanding
anything herein to the contrary, upon the effectiveness of the Registration
Statement on Form S-4 of the Company and the Subsidiary Guarantors filed with
the Securities and Exchange Commission (pertaining to an offer by the Company to
exchange publicly registered notes (the "Exchange Notes") having substantially
--------------
the same terms as the Notes for the Notes), the Unit Agent shall, upon
instruction (in accordance with the terms of such exchange offer and the
Indenture) of the beneficial holders of Notes comprising the Units, exchange the
Notes desired to be exchanged for the Exchange Notes.
SECTION 1.07. Registration. The Company will keep, at the office or
------------
agency maintained by the Company for such purpose, a register or registers in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of, and registration of transfer and exchange
of, Units as provided in this Article. Each person designated by the Company
from time to time as a person authorized to register the transfer and exchange
of the Units is hereinafter called, individually and collectively, the
"Registrar".
---------
-4-
The Company hereby initially appoints the Unit Agent as Registrar. Upon written
notice to the Unit Agent and any acting Registrar, the Company may appoint a
successor Registrar for such purposes.
The Company will at all times designate one person (who may be the
Company and who need not be a Registrar) to act as repository of a master list
of names and addresses of the holders of Units (the "Unit Register"). The Unit
-------------
Agent will act as such repository unless and until some other person is, by
written notice from the Company to the Unit Agent and the Registrar, designated
by the Company to act as such. The Company shall cause each Registrar to
furnish to such repository, on a current basis, such information as to all
registrations of transfer and exchanges effected by such Registrar, as may be
necessary to enable such repository to maintain the Unit Register on as current
a basis as is practicable.
SECTION 1.08. Registration of Transfers and Exchanges.
---------------------------------------
(a) Transfer and Exchange of Definitive Units. When Definitive Units
-----------------------------------------
are presented to the Unit Agent with a request:
(i) to register the transfer of the Definitive Units; or
(ii) to exchange such Definitive Units for an equal number of
Definitive Units,
the Unit Agent shall register the transfer or make the exchange as requested if
the requirements under this Unit Agreement as set forth in this Section 1.08
hereof for such transactions are met; provided, however, that the Definitive
-------- -------
Units presented or surrendered for registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Company
and the Unit Agent, duly executed by the holder thereof or
by his attorney, duly authorized in writing; and
(y) in the case of Units the offer and sale of which have not
been registered under the Securities Act and are presented
for transfer or exchange prior to (x) the date which is two
years after the later of the date of original issue and the
last date on which the Company or any affiliate of the
Company was the owner of such Unit, or any predecessor
thereto and (y) such later date, if any, as may be required
by any subsequent change in applicable law (the "Resale
------
Restriction Termination Date"), such Units shall be
----------------------------
accompanied, in the sole discretion of the Company, by the
following additional information and documents, as
applicable:
(A) if such Unit is being delivered to the Unit Agent by a
holder for registration in the name of such holder,
without
-5-
transfer, a certification from such holder to that
effect (in substantially the form of Exhibit B hereto);
---------
or
(B) if such Unit is being transferred to a qualified
institutional buyer (as defined in Rule 144A
promulgated under the Securities Act) in accordance
with Rule 144A promulgated under the Securities Act or
pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S promulgated
under the Securities Act, a certification to that
effect (in substantially the form of Exhibit B hereto);
---------
or
(C) if such Unit is being transferred to an institutional
"accredited investor" within the meaning of
subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of Rule
501 promulgated under the Securities Act, delivery of a
Transferee Letter of Representation in the form of
Exhibit C hereto and an opinion of counsel and/or other
---------
information satisfactory to the Company to the effect
that such transfer is in compliance with the Securities
Act; or
(D) if such Unit is being transferred in reliance on
another exemption from the registration requirements of
the Securities Act, a certification to that effect (in
substantially the form of Exhibit B hereto) and an
---------
opinion of counsel reasonably acceptable to the Company
to the effect that such transfer is in compliance with
the Securities Act.
(b) Restrictions on Transfer of a Definitive Unit for a Beneficial
--------------------------------------------------------------
Interest in a Global Unit. A Definitive Unit may not be transferred for a
- -------------------------
beneficial interest in a Global Unit except upon satisfaction of the
requirements set forth below. Upon receipt by the Unit Agent of a Definitive
Unit, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Unit Agent, together with:
(A) certification, substantially in the form of Exhibit B
---------
hereto, that such Definitive Unit is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A
promulgated under the Securities Act) in accordance with
Rule 144A promulgated under the Securities Act; and
(B) written instructions directing the Unit Agent to make, or to
direct the Depositary to make, an endorsement on the Global
Unit to reflect an increase in the aggregate amount of the
Units represented by the Global Unit,
-6-
then the Unit Agent shall cancel such Definitive Unit and cause, or direct the
Depositary to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Unit Agent, the number of Units
represented by the Global Unit to be increased accordingly. If no Global Unit is
then outstanding, the Company shall issue and the Unit Agent shall authenticate
a new Global Unit in the appropriate amount.
(c) Transfer and Exchange of Global Units. The transfer and exchange
-------------------------------------
of Global Units or beneficial interests therein shall be effected through the
Depositary, in accordance with this Section 1.08 and the procedures of the
Depositary therefor.
(d) Exchange of a Beneficial Interest in a Global Unit for a
--------------------------------------------------------
Definitive Unit.
- ---------------
(i) Any person having a beneficial interest in a Global Unit may
upon request exchange such beneficial interest for a
Definitive Unit. Upon receipt by the Unit Agent of written
instructions or such other form of instructions as is
customary for the Depositary from the Depositary or its
nominee on behalf of any person having a beneficial interest
in a Global Unit and upon receipt by the Unit Agent of a
written order or such other form of instructions as is
customary for the Depositary or the person designated by the
Depositary as having such a beneficial interest containing
registration instructions from such person having a
beneficial interest therein and, in the case of any such
transfer or exchange prior to the Resale Restriction
Termination Date, the following additional information and
documents:
(A) if such beneficial interest is being transferred to the
person designated by the Depositary as being the
beneficial owner, a certification from such person to
that effect (in substantially the form of Exhibit B
---------
hereto); or
(B) if such beneficial interest is being transferred to a
qualified institutional buyer (as defined in Rule 144A
promulgated under the Securities Act) in accordance
with Rule 144A promulgated under the Securities Act or
pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S promulgated
under the Securities Act, a certification to that
effect from the transferee or transferor (in
substantially the form of Exhibit B hereto); or
---------
(C) if such beneficial interest is being transferred to an
institutional "accredited investor" within the meaning
of subparagraphs (a)(1), (a)(2), (a)(3) or (a)(7) of
Rule 501 promulgated under the Securities Act, delivery
of a Transferee Letter of Representation in the form of
Exhibit
-------
-7-
C hereto and an opinion of counsel and/or other
-
information satisfactory to the Company to the effect
that such transfer is in compliance with the Securities
Act; or
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect (in substantially the form of Exhibit B
---------
hereto) and an opinion of counsel reasonably acceptable
to the Company to the effect that such transfer is in
compliance with the Securities Act,
the Unit Agent will cause, in accordance with the standing
instructions and procedures existing between the Depositary
and the Unit Agent, the aggregate amount of the Global Unit
to be reduced and, following such reduction, the Company will
execute and, upon receipt of an authentication order in the
form of an Officers' Certificate (as defined), the Unit Agent
will authenticate and deliver to the transferee a Definitive
Unit.
(ii) Definitive Units issued in exchange for a beneficial
interest in a Global Unit pursuant to this Section 1.08(d)
shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Unit Agent in writing. The Unit Agent shall
deliver such Definitive Units to the persons in whose names
such Units are so registered.
(e) Restrictions on Transfer and Exchange of Global Units.
-----------------------------------------------------
Notwithstanding any other provisions of this Unit Agreement (other than the
provisions set forth in subsection (f) of this Section 1.08), a Global Unit may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Units in Absence of Depositary. If
-----------------------------------------------------------
at any time:
(i) the Depositary for the Units notifies the Company that the
Depositary is unwilling or unable to continue as Depositary
for the Global Unit and a successor Depositary for the
Global Unit is not appointed by the Company within 90 days
after delivery of such notice; or
-8-
(ii) the Company, at its sole discretion, notifies the Unit Agent
in writing that it elects to cause the issuance of
Definitive Units under this Unit Agreement,
then the Company will execute, and the Unit Agent, upon receipt of an officers'
certificate signed by two officers of the Company (one of whom must be the
principal executive officer, principal financial officer or principal accounting
officer) (an "Officers' Certificate") requesting the authentication and delivery
---------------------
of Definitive Units, will authenticate and deliver Definitive Units, in an
aggregate number equal to the aggregate number of Units represented by the
Global Unit, in exchange for such Global Unit.
(g) Legends.
-------
(i) Except to the extent permitted by the following paragraph
(ii), each Unit Certificate evidencing the Global Units and
the Definitive Units (and all Units issued in exchange
therefor or substitution thereof) shall bear a legend
substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
--------------
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A PROMULGATED
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) PROMULGATED
UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT
-------------------
A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 PROMULGATED UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER THEREOF OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A PROMULGATED UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHED (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE UNIT AGENT A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 PROMULGATED
-9-
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS
SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE UNIT
AGENT AND THE ISSUER SUCH CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
--------------------
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY
------------- -----------
REGULATIONS UNDER THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
REGISTRATION RIGHTS AGREEMENT DATED AS OF NOVEMBER 12, 1997 AMONG
JEFFERIES & COMPANY, INC., THE COMPANY AND THE SUBSIDIARY GUARANTORS
NAMED HEREIN AND A SECURITYHOLDERS' AND REGISTRATION RIGHTS AGREEMENT
DATED AS OF NOVEMBER 12, 1997 AMONG JEFFERIES & COMPANY, INC. AND THE
COMPANY, A COPY OF EACH OF WHICH IS ON FILE WITH THE CLERK OF THE
COMPANY.
To the extent a Unit Certificate evidences a Global Unit, such Unit
Certificate shall also bear the legend with respect thereto
substantially in the form set forth on Exhibit A hereto.
(ii) Upon any sale or transfer of a Unit pursuant to Rule 144 under
the Securities Act in accordance with Section 1.08 hereof or an
effective registration statement under the Securities Act:
(A) in the case of any Unit that is a Definitive Unit, the Unit
Agent shall permit the holder thereof to exchange such Unit
for a Definitive Unit that does not bear the first paragraph
of the legend set forth above and rescind any related
restriction on the transfer of such Unit; and
-10-
(B) any such Unit represented by a Global Unit shall not be
subject to the provisions set forth in (i) above (such sales
or transfers being subject only to the provisions of Section
1.08(c) hereof) provided, however, that with respect to any
-------- -------
request for an exchange of a Unit that is represented by a
Global Unit for a Definitive Unit that does not bear the
first paragraph of the legend set forth in (i) above, which
request is made in reliance upon Rule 144 under the
Securities Act, the holder thereof shall certify in writing
to the Unit Agent that such request is being made pursuant
to Rule 144 under the Securities Act (such certification to
be substantially in the form of Exhibit B hereto).
---------
(h) Cancellation and/or Adjustment of a Global Unit. At such time as
-----------------------------------------------
all beneficial interests in a Global Unit have either been exchanged for
Definitive Units, redeemed, repurchased or canceled, such Global Unit shall be
returned to or retained and canceled by the Unit Agent. At any time prior to
such cancellation, if any beneficial interest in a Global Unit is exchanged for
Definitive Units, redeemed, repurchased or canceled, the number of Units
represented by such Global Unit shall be reduced and an endorsement shall be
made on such Global Unit, by the Unit Agent to reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of Definitive
-----------------------------------------------------------------
Units.
- -----
(i) To permit registrations of transfers and exchanges, the
Company shall execute, at the Unit Agent's request, and the
Unit Agent shall, upon receipt of an authentication order in
accordance with Section 1.04 hereof, authenticate Definitive
Units and Global Units.
(ii) All Definitive Units and Global Units issued upon any
registration of transfer or exchange of Definitive Units or
Global Units shall be the valid obligations of the Company,
entitled to the same benefits under this Unit Agreement as
the Definitive Units or Global Units surrendered upon the
registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of
any Unit, the Unit Agent and the Company may deem and treat
the person in whose name any Unit is registered as the
absolute owner of such Unit, and neither the Unit Agent nor
the Company shall be affected by notice to the contrary.
(j) Payment of Taxes. The Company will pay all documentary stamp
----------------
taxes attributable to the initial issuance of the Units or to the separation of
the Notes and Warrants comprising the Units as described in Section 1.06;
provided, however, that the Company shall not be required to pay any tax or
- -------- -------
other governmental charge which may be payable in respect
-11-
of any transfer or exchange of any Unit Certificates or any Warrants and Notes
comprising the Units in a name other than that of the registered holder of a
Unit Certificate. The Company shall not be required to issue or deliver such
Unit Certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or other
governmental charge or shall have established to the satisfaction of the Company
that such tax or other governmental charge has been paid or an exemption is
available therefrom.
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated Unit
--------------------------------------------------
Certificates. Upon receipt by the Company and the Unit Agent (or any agent of
- ------------
the Company or the Unit Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or mutilation
of any Unit Certificate and of indemnity and/or insurance reasonably
satisfactory to them and, in the case of mutilation or defacement, upon
surrender thereof to the Unit Agent for cancellation, then, in the absence of
notice to the Company or the Unit Agent that such Unit Certificate has been
acquired by a bona fide purchaser or holder in due course, the Company shall
---- ----
execute, and, upon receipt of an authentication order in accordance with Section
1.04 hereof, an authorized signatory of the Unit Agent shall manually
authenticate and deliver, in exchange for or in lieu of the lost, stolen,
destroyed, defaced or mutilated Unit Certificate, a new Unit Certificate
representing a like number of Units, bearing a number or other distinguishing
symbol not contemporaneously outstanding. Upon the issuance of any new Unit
Certificate under this Section, the Company may require the payment from the
holder of such Unit Certificate of a sum sufficient to cover any tax, stamp tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Unit Agent and the
Registrar) in connection therewith. Every substitute Unit Certificate executed
and delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Unit Certificate shall constitute an additional contractual obligation of the
Company, whether or not the lost, stolen or destroyed Unit Certificate shall be
at any time enforceable by anyone, and shall be entitled to the benefits of (but
shall be subject to all the limitations of rights set forth in) this Agreement
equally and proportionately with any and all other Unit Certificates duly
executed and delivered hereunder. The provisions of this Section 1.09 are
exclusive with respect to the replacement of lost, stolen, destroyed, defaced or
mutilated Unit Certificates and shall preclude (to the extent lawful) any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement of lost,
stolen, destroyed, defaced or mutilated Unit Certificates.
The Unit Agent is hereby authorized to authenticate, in accordance
with the provisions of this Agreement, and deliver the new Unit Certificates
required pursuant to the provisions of this Section.
SECTION 1.10. Offices for Exercise, etc. So long as any of the Units
-------------------------
remain outstanding, the Company will designate and maintain in the Borough of
Manhattan, The City of New York and/or The City of Boston: (a) an office or
agency where the Unit Certificates may be presented for exercise, and (b) an
office or agency where the Unit Certificates may be presented for registration
of transfer and for exchange (including the exchange of temporary Unit
Certificates for definitive Unit Certificates pursuant to Section 1.05 hereof).
The
-12-
Company may from time to time change or rescind such designation, as it may deem
desirable or expedient; provided, however, that an office or agency shall at all
-------- -------
times be maintained in the Borough of Manhattan, The City of New York and/or The
City of Boston, as provided in the first sentence of this Section. In addition
to such office or offices or agency or agencies, the Company may from time to
time designate and maintain one or more additional offices or agencies within or
outside The City of New York and/or The City of Boston, where Unit Certificates
may be presented for exercise or for registration of transfer or for exchange,
and the Company may from time to time change or rescind such designation, as it
may deem desirable or expedient. The Company will give to the Unit Agent written
notice of the location of any such office or agency and of any change of
location thereof. The Company hereby designates the office of the Unit Agent, in
The City of Boston (the "Unit Agent Office"), as the initial agency maintained
-----------------
for each such purpose.
ARTICLE II
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF UNITS
--------------------------
SECTION 2.01. Rights of Unit Holders. The registered owner of a Unit
----------------------
Certificate shall have all the rights and privileges of a registered owner of
the principal amount of Notes represented thereby and the number of Warrants
represented thereby and shall be treated as the registered owner thereof for all
purposes. The Company and the Subsidiary Guarantors agree that they shall be
bound by all provisions of the Indenture, the Notes, the Warrant Agreement and
the Warrants to which they are a party and that the Notes and Warrants
represented by each Unit Certificate shall be deemed legal, valid and binding
obligations of the Company and/or the Subsidiary Guarantors, as the case may be,
and that upon exercise of the Warrants, the Warrant Shares (as defined in the
Warrant Agreement) will be fully paid, nonassessable, free of preemptive rights
and free from all taxes, liens, charges and security interests with respect to
the issue thereof.
ARTICLE III
CONCERNING THE UNIT AGENT
-------------------------
SECTION 3.01. Unit Agent. The Company hereby appoints State Street
----------
Bank and Trust Company as unit agent (and in all capacities in this Agreement,
the "Unit Agent") of the Company in respect of the Units and the Unit
----------
Certificates upon the terms and subject to the conditions herein and in the Unit
Certificates set forth; and State Street Bank and Trust Company hereby accepts
such appointment. The Unit Agent shall have the powers and authority
specifically granted to and conferred upon it hereby and in the Unit
Certificates and such further powers and authority to act on behalf of the
Company as the Company may hereafter grant to or confer upon it and it shall
accept in writing. All of the terms and provisions with respect to such powers
and authority contained in the Unit Certificates are subject to and governed by
the terms and provisions hereof.
-13-
SECTION 3.02. Conditions of Unit Agent's Obligations. The Unit Agent
--------------------------------------
accepts its obligations herein set forth upon the terms and conditions hereof
and in the Unit Certificates, including the following, to all of which the
Company agrees and to all of which the rights hereunder of the holders from time
to time of the Unit Certificates shall be subject:
(a) The Unit Agent shall be entitled to compensation to be agreed upon
with the Company in writing for all services rendered by it and the Company
agrees promptly to pay such compensation and to reimburse the Unit Agent for its
reasonable out-of-pocket expenses (including reasonable fees and expenses of
counsel) incurred without gross negligence or willful misconduct on its part in
connection with the services rendered by it hereunder. The Company also agrees
to indemnify the Unit Agent, each successor Unit Agent, and their respective
directors, officers, affiliates, agents and employees for, and to hold it and
its directors, officers, affiliates, agents and employees harmless against, any
loss, liability or expense of any nature whatsoever (including, without
limitation, fees and expenses of counsel) incurred without gross negligence or
willful misconduct on the part of the Unit Agent or successor Unit Agent,
arising out of or in connection with its acting as such Unit Agent hereunder and
its exercise or failure to exercise of its rights and performance of its
obligations hereunder. The obligations of the Company under this Section 3.02
shall survive the exercise and the expiration of the Unit Certificates and the
resignation and removal of the Unit Agent.
(b) In acting under this Agreement and in connection with the Unit
Certificates, the Unit Agent is acting solely as agent of the Company and does
not assume any obligation or relationship of agency or trust for or with any of
the owners or holders of the Unit Certificates.
(c) The Unit Agent may consult with counsel and any advice or written
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion.
(d) The Unit Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or thing
suffered by it in reliance upon any Unit Certificate, notice, direction,
consent, certificate, affidavit, opinion of counsel, instruction, statement or
other paper or document reasonably believed by it, in the absence of bad faith,
to be genuine and to have been presented or signed by the proper parties.
(e) The Unit Agent, and its officers, directors, affiliates and
employees ("Related Parties"), may become the owners of, or acquire any interest
---------------
in, Unit Certificates, shares or other obligations of the Company with the same
rights that it or they would have it if were not the Unit Agent hereunder and,
to the extent permitted by applicable law, it or they may engage or be
interested in any financial or other transaction with the Company and may act
on, or as depositary, trustee or agent for, any committee or body of holders of
shares or other obligations of the Company as freely as if it were not the Unit
Agent hereunder.
-14-
Nothing in this Agreement shall be deemed to prevent the Unit Agent or such
Related Parties from acting in any other capacity for the Company.
(f) The Unit Agent shall not be under any liability for interest on,
and shall not be required to invest, any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Unit Certificates.
(g) The recitals and other statements contained herein and in the Unit
Certificates (except as to the Unit Agent's authentication thereon) shall be
taken as the statements of the Company and the Unit Agent assumes no
responsibility for the correctness of the same. The Unit Agent does not make
any representation as to the validity or sufficiency of this Agreement or the
Unit Certificates and shall not be under any responsibility in respect of the
validity or sufficiency of this Agreement (or any term or provision hereof) or
the execution and delivery hereof (except, in each case, the due execution and
delivery hereof by the Unit Agent) or in respect of the validity or sufficiency
or execution of any Unit Certificate (except, in each case, its authentication
thereof); provided, however, that the Unit Agent shall not be relieved of its
-------- -------
duty to authenticate the Unit Certificates as authorized by this Agreement.
(h) Before the Unit Agent acts or refrains from acting with respect to
any matter contemplated by this Unit Agreement, it may require:
(1) an Officers' Certificate (defined earlier) stating that, in
the opinion of the signers, all conditions precedent, if any, provided
for in this Unit Agreement relating to the proposed action have been
complied with; and
(2) if reasonably necessary in the sole judgment of the Unit
Agent, an opinion of counsel for the Company stating that, in the
opinion of such counsel, all such conditions precedent have been
complied with.
Each Officers' Certificate or, if requested, an opinion of counsel with respect
to compliance with a condition or covenant provided for in this Unit Agreement
shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
-15-
(i) The Unit Agent shall be obligated to perform such duties as are
herein and in the Unit Certificates specifically set forth and no implied duties
or obligations shall be read into this Agreement or the Unit Certificates
against the Unit Agent. The Unit Agent shall not be accountable or under any
duty or responsibility for the use by the Company of any of the Unit
Certificates authenticated by the Unit Agent and delivered by it to the Company
pursuant to this Agreement. The Unit Agent shall have no duty or responsibility
in case of any default by the Company in the performance of its covenants or
agreements contained in the Unit Certificates or in the case of the receipt of
any written demand from a holder of a Unit Certificate with respect to such
default, including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at law or
otherwise or, except as provided in Section 3.02 hereof, to make any demand upon
the Company. The Unit Agent shall not be obligated to perform any duty to the
extent prohibited by law.
(j) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the Company
made or given under any provision of this Agreement shall be sufficient if
signed by its chairman of the Board of Directors, its president, its treasurer,
its controller or any vice president or its clerk or any assistant secretary.
(k) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Unit Agent for the carrying out or performing by the Unit Agent
of the provisions of this Agreement.
(l) The Unit Agent is hereby authorized and directed to accept written
instructions with respect to the performance of its duties hereunder from any
one of the chairman of the Board of Directors, the president, the treasurer, the
controller, any vice president or the clerk of the Company or any other officer
or official of the Company reasonably believed to be authorized to give such
instructions and to apply to such officers or officials for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions with respect to any matter arising in connection with the Unit
Agent's duties and obligations arising under this Agreement. Such application
by the Unit Agent for written instructions from the Company may, at the option
of the Unit Agent, set forth in writing any action proposed to be taken or
omitted by the Unit Agent with respect to its duties or obligations under this
Agreement and the date on or after which such action shall be taken and the Unit
Agent shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified therein
(which date shall be not less than 10 Business Days after the Company receives
such application unless the Company consents to a shorter period), provided that
(i) such application includes a statement to the effect that it is being made
pursuant to this paragraph (l) and that unless objected to prior to such date
specified in the application, the Unit Agent will not be liable for any such
action or omission to the extent set forth in such application and (ii) prior to
taking or omitting any such action,
-16-
the Unit Agent has not received written instructions objecting to such proposed
action or omission.
(m) Whenever in the performance of its duties under this Agreement the
Unit Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the chairman of the Board of
Directors, the president, the treasurer, the controller, any vice president or
the clerk of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and delivered to
the Unit Agent; and such certificate shall be full authorization to the Unit
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(n) The Unit Agent shall not be required to risk or expend its own
funds in the performance of its obligations and duties hereunder.
SECTION 3.03. Resignation and Appointment of Successor.
----------------------------------------
(a) The Company agrees, for the benefit of the holders from time to
time of the Unit Certificates, that there shall at all times be a Unit Agent
hereunder.
(b) The Unit Agent may at any time resign as Unit Agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective, provided that such date
shall be at least 30 days after the date on which such notice is given unless
the Company agrees to accept less notice. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor Unit Agent,
qualified as provided in Section 3.03(d) hereof, by written instrument in
duplicate signed on behalf of the Company, one copy of which shall be delivered
to the resigning Unit Agent and one copy to the successor Unit Agent. As
provided in Section 3.03(d) hereof, such resignation shall become effective upon
the earlier of (x) the acceptance of the appointment by the successor Unit Agent
or (y) 30 days after receipt by the Company of notice of such resignation. The
Company may, at any time and for any reason, and shall, upon any event set forth
in the next succeeding sentence, remove the Unit Agent and appoint a successor
Unit Agent by written instrument in duplicate, specifying such removal and the
date on which it is intended to become effective, signed on behalf of the
Company, one copy of which shall be delivered to the Unit Agent being removed
and one copy to the successor Unit Agent. The Unit Agent shall be removed as
aforesaid if it shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Unit Agent or of its property shall
be appointed, or any public officer shall take charge or control of it or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation. Any removal of the Unit Agent and any appointment of a successor
Unit Agent shall become effective upon acceptance of appointment by the
successor Unit Agent as provided in Section 3.03(d). As soon as practicable
after appointment of the successor Unit Agent, the Company shall cause written
-17-
notice of the change in the Unit Agent to be given to each of the registered
holders of the Units in the manner provided for in Section 4.04 hereof.
(c) Upon resignation or removal of the Unit Agent, if the Company
shall fail to appoint a successor Unit Agent within a period of 30 days after
receipt of such notice of resignation or removal, then the holder of any Unit
Certificate or the Unit Agent may apply to a court of competent jurisdiction for
the appointment of a successor to the Unit Agent. Pending appointment of a
successor to the Unit Agent, either by the Company or by such a court, the
duties of the Unit Agent shall be carried out by the Company.
(d) Any successor Unit Agent, whether appointed by the Company or by a
court, shall be a bank or trust company in good standing, incorporated under the
laws of the United States of America or any State thereof and having, at the
time of its appointment, a combined capital surplus of at least $50 million.
Such successor Unit Agent shall execute and deliver to its predecessor and to
the Company an instrument accepting such appointment hereunder and all the
provisions of this Agreement, and thereupon such successor Unit Agent, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as Unit Agent hereunder, and such predecessor shall
thereupon become obligated to (i) transfer and deliver, and such successor Unit
Agent shall be entitled to receive, all securities, records or other property on
deposit with or held by such predecessor as Unit Agent hereunder and (ii) upon
payment of the amounts then due it pursuant to Section 3.02(a) hereof, pay over,
and such successor Unit Agent shall be entitled to receive, all monies deposited
with or held by any predecessor Unit Agent hereunder.
(e) Any corporation or bank into which the Unit Agent hereunder may be
merged or converted, or any corporation or bank with which the Unit Agent may be
consolidated, or any corporation or bank resulting from any merger, conversion
or consolidation to which the Unit Agent shall be a party, or any corporation or
bank to which the Unit Agent shall sell or otherwise transfer all or
substantially all of its corporate trust business, shall be the successor to the
Unit Agent under this Agreement (provided that such corporation or bank shall be
qualified as aforesaid) without the execution or filing of any document or any
further act on the part of any of the parties hereto.
(f) No Unit Agent under this Unit Agreement shall be personally liable
for any action or omission of any successor Unit Agent or of the Company.
ARTICLE IV
MISCELLANEOUS
-------------
SECTION 4.01. Amendment. This Agreement and the terms of the Units may
---------
be amended by the Company and the Unit Agent, without the consent of the holder
of any Unit Certificate, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective or inconsistent provision contained
herein or therein or in any
-18-
other manner which the Company may deem necessary or desirable and which shall
not adversely affect in any material respect the interests of the holders of the
Unit Certificates.
The Company and the Unit Agent may modify this Agreement and the terms
of the Units with the consent of holders of a majority of the outstanding Units
("Majority Holders") for the purpose of adding any provision to or changing in
----------------
any manner or eliminating any of the provisions of this Agreement or modifying
in any manner the rights of the holders of the outstanding Units; provided,
--------
however, that no modification shall be made to the Notes or Warrants underlying
- -------
the Units except in accordance with the provisions of the Indenture and the
Warrant Agreement, respectively.
Any modification or amendment made in accordance with this Agreement
will be conclusive and binding on all present and future holders of Unit
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Unit Certificates. Any instrument given by or on
behalf of any holder of a Unit Certificate in connection with any consent to any
modification or amendment will be conclusive and binding on all subsequent
holders of such Unit Certificate.
SECTION 4.02. Notices and Demands to the Company and Unit Agent. If
-------------------------------------------------
the Unit Agent shall receive any notice or demand addressed to the Company by
the holder of a Unit Certificate pursuant to the provisions hereof or of the
Unit Certificates, the Unit Agent shall promptly forward such notice or demand
to the Company.
SECTION 4.03. Notices. Any notices or other communications required or
-------
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
1. Notices to holders of Units shall be mailed to the most current
address of such holders as set forth in the Unit Register, which address
initially is, with respect to the Initial Purchaser, as follows:
Jefferies & Company, Inc.
11100 Santa Monica Blvd.
10th Floor
Los Angeles, CA 90025
Facsimile No.: (310) 575-5165
Telephone: (310) 575-5200
Attention: Corporate Finance Department
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
-19-
Facsimile No.: (212) 504-6666
Telephone: (212) 504-6000
Attention: Lawrence A. Larose
2. to the Company:
VIALOG Corporation
Ten New England Business Center, Suite 302
Andover, Massachusetts 01810
Attention: President
Facsimile: (978) 975-7208
Telephone: (978) 975-3700
with copies to:
Mirick, O'Connell, DeMallie
& Lougee, LLP
1700 Bank of Boston Tower
100 Front Street
Worcester, Massachusetts 01608
Attention: David L. Lougee
Facsimile: (508) 752-7305
Telephone: (508) 799-0541
3. to the Unit Agent:
State Street Bank and Trust Company
2 International Place
Boston, Massachusetts 02110
Attention: Roland Gustafsen
Facsimile: (617) 664-5150
Telephone: (617) 664-5665
with copies to:
Peabody & Arnold
50 Rowes Wharf
Boston, Massachusetts 02110
Attention: Robert Coughlin
Facsimile: (617) 951-2125
Telephone: (617) 951-2100
or at any other address of which either of the foregoing shall have notified the
other in writing.
-20-
SECTION 4.04. GOVERNING LAW. THIS AGREEMENT AND EACH UNIT CERTIFICATE
-------------
ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
SECTION 4.05. Obtaining of Governmental Approvals. The Company will
-----------------------------------
from time to time take all action required to be taken by it which may be
necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and securities acts filings
under United States Federal and State laws, and the rules and regulations of all
stock exchanges on which the Units are listed which may be or become requisite
in connection with the issuance, sale, transfer, and delivery of the Unit
Certificates, the exercise of the Units or the issuance, sale, transfer and
delivery of the shares issued upon exercise of the Units.
SECTION 4.06. Persons Having Rights Under Agreement. Nothing in this
-------------------------------------
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the Company, the Unit Agent and the
holders of the Unit Certificates any right, remedy or claim under or by reason
of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof, and all covenants, conditions, stipulations, promises and
agreements in this Agreement contained shall be for the sole and exclusive
benefit of the Company and the Unit Agent and their successors and of the
holders of the Unit Certificates.
SECTION 4.07. Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning or construction of any of the provisions hereof.
SECTION 4.08. Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument.
SECTION 4.09. Inspection of Agreement. A copy of this Agreement shall
-----------------------
be available at all reasonable times at the principal corporate trust office of
the Unit Agent, for inspection by the holder of any Unit Certificate. The Unit
Agent may require such holder to submit his Unit Certificate for inspection by
it.
SECTION 4.10. Successors and Assigns. This Agreement shall inure to
----------------------
the benefit of and be binding upon the successors and assigns of the Company or
the Unit Agent.
SECTION 4.11. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or
-21-
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
SECTION 4.12. Entire Agreement. This Agreement, together with the
----------------
Unit Certificates (together with the certificates evidencing the Notes and
Warrants underlying the Units and the Indenture and Warrant Agreement), is
intended by the parties as a final and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein and any and all prior oral or written agreements,
representations, or warranties, contracts, understandings, correspondence,
conversations and memoranda between the parties hereto, any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.
-22-
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
VIALOG CORPORATION
By: /s/ Glenn D. Bolduc
--------------------------------------
Name: Glenn D. Bolduc
Title: President and Chief Executive Officer
SUBSIDIARY GUARANTORS:
TELEPHONE BUSINESS MEETINGS, INC.
d/b/a ACCESS CONFERENCE CALL SERVICE
By: /s/ Glenn D. Bolduc
----------------------------------------
Name: Glenn D. Bolduc
Title: Authorized Signatory
CONFERENCE SOURCE INTERNATIONAL,
INC.
By: /s/ Glenn D. Bolduc
------------------------------------------
Name: Glenn D. Bolduc
Title: Authorized Signatory
CALL POINTS, INC.
By: /s/ Glenn D. Bolduc
-------------------------------------------
Name: Glenn D. Bolduc
Title: Authorized Signatory
KENDALL SQUARE TELECONFERENCING,
INC. d/b/a THE CONFERENCE CENTER
By: /s/ Glenn D. Bolduc
-------------------------------------------
Name: Glenn D. Bolduc
Title: Authorized Signatory
AMERICAN CONFERENCING COMPANY,
INC. d/b/a AMERICO
By: /s/ Glenn D. Bolduc
-------------------------------------------
Name: Glenn D. Bolduc
Title: Authorized Signatory
COMMUNICATION DEVELOPMENT
CORPORATION
By: /s/ Glenn D. Bolduc
-------------------------------------------
Name: Glenn D. Bolduc
Title: Authorized Signatory
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Roland S. Gustafsen
---------------------------------------------
Name: Roland S. Gustafsen
Title: Assistant Vice President
STATE STREET BANK AND TRUST
COMPANY, as Warrant Agent
By: /s/ Roland S. Gustafsen
---------------------------------------------
Name: Roland S. Gustafsen
Title: Assistant Vice President
STATE STREET BANK AND TRUST
COMPANY, as Unit Agent
By: /s/ Roland S. Gustafsen
---------------------------------------------
Name: Roland S. Gustafsen
Title: Assistant Vice President
EXHIBIT A
[FORM OF UNIT CERTIFICATE]
[FACE]
[Unless and until it is exchanged in whole or in part for Units in
certificated form, this Unit may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
---
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]/1/
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
--------------
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
PROMULGATED UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) PROMULGATED UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
-------------------
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
PROMULGATED UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER THEREOF OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A PROMULGATED UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHED (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-
DEALER) TO THE UNIT AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
PROMULGATED UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 PROMULGATED
- ---------------------------------------
/1/ This paragraph is to be included only if the Unit is in global form.
UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE UNIT AGENT AND THE ISSUER SUCH CERTIFICATIONS,
WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
-------------------- ------
STATES" AND "U.S.PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER
- ------ ----------
THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A REGISTRATION
RIGHTS AGREEMENT DATED AS OF NOVEMBER 12, 1997 AMONG JEFFERIES & COMPANY, INC.,
THE COMPANY AND THE SUBSIDIARY GUARANTORS NAMED HEREIN AND A SECURITYHOLDERS'
AND REGISTRATION RIGHTS AGREEMENT DATED AS OF NOVEMBER 12, 1997 AMONG JEFFERIES
& COMPANY, INC. AND THE COMPANY, A COPY OF EACH OF WHICH IS ON FILE WITH THE
CLERK OF THE COMPANY.
A-2
UNIT CERTIFICATE
VIALOG CORPORATION
TELEPHONE BUSINESS MEETINGS, INC.
CONFERENCE SOURCE INTERNATIONAL, INC.
CALL POINTS, INC.
KENDALL SQUARE TELECONFERENCING, INC.
AMERICAN CONFERENCING COMPANY, INC.
COMMUNICATION DEVELOPMENT CORPORATION
Units Consisting of
$1,000 Principal Amount of 12-3/4% Senior Notes due 2001
and
a Warrant to Purchase 10.0886 shares of the Common Stock
of VIALOG Corporation
CUSIP # [ ]
No. [ ] [ ] Units
This Unit Certificate certifies that [ ], or
registered assigns, is the registered holder of [ ] Units (the "Units")
as described above.
Each Unit consists of (i) $1,000 principal amount of 12-3/4% Senior
Notes due 2001 (the "Notes") of VIALOG Corporation (the "Company") and Telephone
Business Meetings, Inc., Conference Source International, Inc., Call Points,
Inc., Kendall Square Teleconferencing, Inc., American Conferencing Company,
Inc., and Communication Development Corporation (the "Subsidiary Guarantors"),
and (ii) one warrant (the "Warrant") to purchase 10.0886 shares of the Common
Stock, par value $.01 per share, of the Company. This Unit is issued pursuant
to the Unit Agreement (the "Unit Agreement"), dated as of November 12, 1997, by
and among, the Company, the Subsidiary Guarantors, the Trustee (as defined
below), the Warrant Agent (as defined below) and State Street Bank and Trust
Company, as unit agent (the "Unit Agent"), and is subject to the terms and
provisions contained therein, to all of which terms and provisions the holder of
this Unit Certificate consents by acceptance hereof. The terms of the Notes are
governed by an Indenture (the "Indenture"), dated as of November 12, 1997, among
the Company, the Subsidiary Guarantors and State Street Bank and Trust Company,
as trustee (the "Trustee"), and are subject to the terms and provisions
contained therein, to all of which terms and provisions the holder of this Unit
Certificate consents by acceptance hereof. The terms of the Warrants are
governed by a Warrant Agreement (the "Warrant Agreement"), dated as of November
12, 1997, by and between the Company and State Street Bank and Trust Company, as
warrant agent
A-3
(the "Warrant Agent"), and are subject to the terms and provisions contained
therein, to all of which terms and provisions the holder of this Unit
Certificate consents by acceptance hereof. The Company will furnish to any
holder of this Unit Certificate upon written request and without charge a copy
of the Unit Agreement, Indenture and Warrant Agreement.
The Notes and Warrants represented by this Unit Certificate shall be
separably transferable on or after May 15, 1998, or such earlier date as the
Jefferies & Company, Inc. may determine in its sole discretion (the
"Separability Date").
Reference is hereby made to the further provisions on the reverse
hereof which provisions shall for all purposes have the same effect as though
fully set forth at this place. Capitalized terms used in this Unit Certificate
but not defined herein shall have the meanings ascribed thereto in the Unit
Agreement.
This Unit Certificate shall not be valid unless authenticated by the
Unit Agent, as such term is used in the Unit Agreement.
THIS UNIT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
A-4
WITNESS the facsimile seal of the Company and facsimile signatures of
its duly authorized officers.
Dated:
VIALOG CORPORATION
By:________________________________
Name: Glenn D. Bolduc
Title: President
SUBSIDIARY GUARANTORS:
TELEPHONE BUSINESS MEETINGS, INC.
d/b/a ACCESS CONFERENCE CALL SERVICE
By:________________________________
Name: Glenn D. Bolduc
Title: Authorized Signatory
CONFERENCE SOURCE INTERNATIONAL,
INC.
By:________________________________
Name: Glenn D. Bolduc
Title: Authorized Signatory
CALL POINTS, INC.
By:________________________________
Name: Glenn D. Bolduc
Title: Authorized Signatory
KENDALL SQUARE TELECONFERENCING,
INC. d/b/a THE CONFERENCE CENTER
By:________________________________
Name: Glenn D. Bolduc
Title: Authorized Signatory
A-5
AMERICAN CONFERENCING COMPANY,
INC. d/b/a AMERICO
By:________________________________
Name: Glenn D. Bolduc
Title: Authorized Signatory
COMMUNICATION DEVELOPMENT
CORPORATION
By:________________________________
Name: Glenn D. Bolduc
Title: Authorized Signatory
Certificate of Authentication:
This is one of the Units
referred to in the within
mentioned Unit Agreement:
STATE STREET BANK AND TRUST COMPANY
as Unit Agent
By:________________________________
Name:
Title:
A-6
[FORM OF UNIT CERTIFICATE]
[REVERSE]
VIALOG CORPORATION
TELEPHONE BUSINESS MEETINGS, INC.
CONFERENCE SOURCE INTERNATIONAL, INC.
CALL POINTS, INC.
KENDALL SQUARE TELECONFERENCING, INC.
AMERICAN CONFERENCING COMPANY, INC.
COMMUNICATION DEVELOPMENT CORPORATION
Units Consisting of
$1,000 Principal Amount of 12-3/4% Senior Notes due 2001 (each, a "Security")
and
a Warrant to Purchase 10.0886 shares of the Common Stock
of VIALOG Corporation
I. PROVISIONS RELATING TO THE NOTES
1. Interest.
--------
VIALOG CORPORATION, a Massachusetts corporation (the "Company"),
-------
promises to pay interest on the principal amount of the Securities at the rate
per annum shown above. The Company will pay interest semi-annually on May 15
and November 15 of each year (the "Interest Payment Date"), commencing May 15,
1998. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from November 12, 1997.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment.
-----------------
On each Interest Payment Date, the Company shall pay interest on the
Securities (except defaulted interest) to the persons who are the registered
Holders at the close of business on the Record Date immediately preceding such
Interest Payment Date even if the Securities are canceled on registration of
transfer or registration of exchange after such Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal and interest at the location of the principal office
of the Paying Agent in money of the United States that at the time of payment is
legal tender for payment of public and private debts ("U.S. Legal Tender").
-----------------
However, the Company may pay principal and interest by wire transfer in same day
funds, or, in the case of Physical Securities, by check payable in such U.S.
Legal Tender.
A-7
3. Paying Agent and Registrar.
--------------------------
Initially, State Street Bank and Trust Company (the "Trustee") will
-------
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any of
its Subsidiaries may act as Registrar or co-Registrar.
4. Indenture and Guarantees.
------------------------
The Company issued the Securities under an Indenture, dated as of
November 12, 1997 (the "Indenture"), among the Company, the Subsidiary
---------
Guarantors and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"),
---
as in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and said Act for a statement of them. The
Securities are general unsecured obligations of the Company limited in aggregate
principal amount to $75,000,000. Payment on each Security is guaranteed on a
senior basis, jointly and severally, by the Subsidiary Guarantors pursuant to
Article Ten of the Indenture.
5. Optional Redemption.
-------------------
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after November 15, 1999 at the
following redemption prices (expressed as percentages of the principal amount)
if redeemed during the twelve-month period commencing on November 15 of the year
set forth below (but not including the date of maturity), plus, in each case,
accrued interest thereon to the date of redemption:
Year Percentage
---- ----------
1999.................................. 110%
2000.................................. 105%
Notwithstanding the foregoing, at any time on or prior to November 15,
1999, the Company may redeem up to an aggregate of 35% of the original principal
amount of Securities at a redemption price of 112.75% of the original principal
amount thereof, plus accrued and unpaid interest thereon, to the redemption date
with the net proceeds of any Public Equity Offering; provided that at least 65%
--------
in aggregate of the original principal amount of Securities remain outstanding
immediately after the occurrence of such redemption; and provided, further, that
-------- -------
such redemption occurs within 90 days of the date of the closing of such Public
Equity Offering.
A-8
In addition, prior to November 15, 1999, the Notes will be redeemable
at the Company's option, in whole or in part, at any time or from time to time,
upon not less than 30 nor more than 60 days' prior notice mailed by first-class
mail to each Holder's registered address, at a redemption price (expressed as a
percentage of principal amount) equal to the sum of the principal amount of such
Securities plus the applicable Make-Whole Premium thereon at the time of
redemption (subject to the right of Holders of record on the relevant record
date to receive interest due to the relevant interest payment date).
The following definitions are used to determine the applicable Make-
Whole Premium:
"Applicable Make-Whole Premium" means, with respect to a Security at
the redemption date, the greater of (i) 1.0% of the principal amount of such
Security and (ii) the excess of (A) the present value of such time of (1) the
redemption price of such Security at November 15, 1999 plus (2) all required
interest payments (excluding accrued but unpaid interest) due on such Security
through November 1, 1999, computed using a discount rate equal to the Treasury
Rate plus 100 basis points, over (B) the principal amount of such Security at
such time.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two business days prior to the date fixed
for repayment (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the then
Weighted Average Life to Maturity) of the Securities; provided, however, that if
the Weighted Average Life to Maturity of the Securities is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given.
6. Repurchase at Option of Holder.
------------------------------
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
-----------------------
to $1,000 or an integral multiple thereof) of each Holder's Securities at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and any unpaid interest thereon, if any, to the Change of Control
Payment Date (as hereinafter defined) (the "Change of Control Payment"). Within
-------------------------
30 days following the occurrence of a Change of Control, the Company shall mail
a notice to each Holder describing the transaction or transactions and setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, the
Indenture requires that certain proceeds be used, subject to the limitations
contained therein, to make an offer to all Holders of Securities (an "Asset
-----
Proceeds Offer") pursuant to Section
- --------------
A-9
4.17 of the Indenture to purchase certain amounts of Securities in accordance
with the procedures set forth in the Indenture.
7. Notice of Redemption.
--------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at such Holder's registered address. Securities in denominations of $1,000 may
be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on Securities or portions thereof called for
redemption.
8. Sinking- Fund.
-------------
There will be no mandatory sinking fund payments for the Securities.
9. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection not register the
transfer of or exchange any securities or portions thereof selected for
redemption, except the unredeemed portion of any security being redeemed in
part.
10. Persons Deemed Owners.
---------------------
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
11. Unclaimed Funds.
---------------
If funds for the payment of principal or interest remain unclaimed for
one year, the Trustee and the Paying Agents will repay the funds to the Company
at its request subject to terms of the Indenture. After that, all liability of
the Trustee and such Paying Agents with respect to such funds shall cease.
A-10
12. Legal Defeasance and Covenant Defeasance.
----------------------------------------
The Company may be discharged from its obligations under the Indenture
and the Securities except for certain provisions thereof ("Legal Defeasance"),
----------------
and may be discharged from its obligations to comply with certain covenants
contained in the Indenture and the Securities ("Covenant Defeasance"), in each
-------------------
case upon satisfaction of certain conditions specified in the Indenture.
13. Amendment; Supplements; Waiver.
------------------------------
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not materially adversely affect the rights of any Holder of a Security.
14. Restrictive Covenants.
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to issue preferred or other
capital stock of subsidiaries, to sell assets, to permit restrictions on
dividends and other payments by subsidiaries to the Company, to consolidate,
merge or sell all or substantially all of its assets, to engage in transactions
with affiliates or to engage in certain businesses. The limitations are subject
to a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
15. Defaults and Remedies.
---------------------
Events of Default are set forth in the Indenture. If an Event of
Default (other than an Event of Default pursuant to Sections 6.01(6) or (7) of
the Indenture with respect to the Company) occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may
A-11
withhold from Holders of Securities notice of any continuing Default or Event of
Default (except a Default in payment of principal or interest, including an
accelerated payment) if it determines that withholding notice is in their
interest.
16. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
17. No Recourse Against Others.
--------------------------
No stockholder, director, officer, employee or incorporator, as such,
of the Company shall have any liability for any obligation of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the securities.
18. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act). Capitalized terms used herein and not otherwise defined have
the meanings set forth in the Indenture.
20. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
VIALOG Corporation, Ten New England Business Center, Suite 302, Andover, MA
01810, Attn.: President.
A-12
II. PROVISIONS RELATING TO THE WARRANTS
The Warrants evidenced by this Unit Certificate are part of a duly
authorized issue of Warrants, each of which represents the right to purchase at
any time on or after November 12, 1997, until 5:00 p.m., Boston time, on
November 15, 2001, 10.0886 shares of Common Stock of the Company, subject to
adjustment as set forth in the Warrant Agreement. The Warrants are issued
pursuant to a Warrant Agreement dated as of November 12, 1997 (the "Warrant
-------
Agreement"), duly executed and delivered by the Company to State Street Bank and
- ---------
Trust Company, as Warrant Agent (the "Warrant Agent"), which Warrant Agreement
-------------
is hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Warrant Agent, the Company
and the holders (the words "holders" or "holder" meaning the registered holders
or registered holder) of the Warrants. Warrants may be exercised by (i)
surrendering at any Warrant Agent Office this Unit Certificate with the form of
Election to Exercise set forth hereon duly completed and executed and (ii)
paying in full the Warrant Exercise Price for each such Warrant exercised or
tendering a Warrant or Warrants in accordance with the cashless exercise
provisions of the Warrant Agreement and any other amounts required to be paid
pursuant to the Warrant Agreement.
If all of the items referred to in the last sentence of the preceding
paragraph are received by the Warrant Agent at or prior to 2:00 p.m., Boston
time, on a Business Day, the exercise of the Warrant to which such items relate
will be effective on such Business Day. If any items referred to in the last
sentence of the preceding paragraph are received after 2:00 p.m., Boston time,
on a Business Day, the exercise of the Warrants to which such item relates will
be deemed to be effective on the next succeeding Business Day. Notwithstanding
the foregoing, in the case of an exercise of Warrants on the Expiration Date, if
all of the items referred to in the last sentence of the preceding paragraph are
received by the Warrant Agent at or prior to 5:00 p.m., Boston time, on such
Expiration Date, the exercise of the Warrants to which such items relate will be
effective on the Expiration Date.
Subject to the terms of the Warrant Agreement, as soon as practicable
after the exercise of any Warrant or Warrants, the Company shall issue or cause
to be issued to or upon the written order of the registered holder of this Unit
Certificate, a certificate or certificates evidencing the Shares of such holder
pursuant to the Election to Exercise, as set forth on the reverse of this Unit
Certificate. In addition, such holder will receive a certificate or
certificates evidencing the Securities which were previously evidenced by the
applicable Unit. Such Shares and Securities will not be transferable until the
Separability Date. Such certificate or certificates evidencing the Shares or
Securities shall be deemed to have been issued and any persons who are
designated to be named therein shall be deemed to have become the holder of
record of such Shares or Securities as of the close of business on the date upon
which the exercise of the Warrant was deemed to be effective as provided in the
preceding paragraph.
The Company will not be required to issue fractional shares of Common
Stock upon exercise of the Warrants or distribute Share certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, there shall be paid to the
A-13
registered holder of this Unit Certificate at the time the Warrant or Warrants
comprising such Unit is exercised an amount in cash equal to the same fraction
of the Current Market Value per share as determined in accordance with the
Warrant Agreement.
Unit Certificates, when surrendered at any office or agency maintained
by the Company for that purpose by the registered holder thereof in person or by
legal representative or attorney duly authorized in writing, may be exchanged
for a new Unit Certificate or new Unit Certificates evidencing in the aggregate
a like number of Units in the manner and subject to the limitations provided in
the Unit Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
Upon due presentment for registration of transfer of a Unit
Certificate at any office or agency maintained by the Company for that purpose,
a new Unit Certificate evidencing in the aggregate a like number of Unit shall
be issued to the transferee in exchange for such Unit Certificate, subject to
the limitations provided in the Unit Agreement, without charge except for any
tax or other governmental charge imposed in connection therewith.
The Company and the Unit Agent may deem and treat the registered
holder hereof as the absolute owner of this Unit Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone) for the
purpose of any exercise hereof and for all other purposes, and neither the
Company nor the Unit Agent shall be affected by any notice to the contrary.
The term "Business Day" shall mean any day other than a Saturday,
Sunday or any other day on which (i) banking institutions in The City of New
York or Boston, Massachusetts, (ii) the principal national securities exchange
or market on which the Common Stock is listed or admitted to trading and (iii)
the principal national securities exchange or market on which the Units are
listed or admitted to trading are required or authorized by law or other
governmental action to be closed.
A-14
ASSIGNMENT FORM
I or we assign and transfer this security to
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code of assignee)
______________________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint ______________________________________________________
agent to transfer this security on the books of the Company. The agent may
substitute another to act for him.
Dated: __________________________ Signed:_____________________________
(Sign exactly as name appears on
the other side of this security)
Signature Guarantee:____________________________________________________________
Participant in a recognized Signature Guarantee Medallion Program
(or other signature guarantor program reasonably acceptable to the
Trustee)
A-15
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have the Notes underlying this security
purchased by the Company pursuant to Sections 4.16 or 4.17 of the Indenture,
check the appropriate box:
Section 4.16 [ ] Section 4.17 [ ]
If you want to elect to have only part of the Notes underlying this
security purchased by the Company pursuant to Sections 4.16 or 4.17 of the
Indenture, state the amount: $
Dated: __________________________ Signed:_____________________________
(Sign exactly as name appears on
the other side of this security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion Program
(or other signature guarantor program reasonably acceptable to
the Trustee)
A-16
[FORM OF ELECTION TO EXERCISE]
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise _____________ of
the Warrants represented by this Unit Certificate and purchase the whole number
of Shares issuable upon the exercise of such Warrants and herewith tenders
payment for such Shares in the amount of $_________ in cash or by certified or
official bank check, in accordance with the terms hereof or tender such number
of Warrants as may be provided in accordance with the cashless exercise
provisions hereof. The undersigned requests that a certificate representing
such Shares be registered in the name of ___________________________________
______________________________________________________ whose address is
______________________________________________ and that such certificate be
delivered to _____________________________________________________ whose address
is ________________________________________. Any cash payments to be paid in
lieu of a fractional Share should be made to _____________________________ whose
address is ________________________________________ and the check representing
payment thereof should be delivered to ______________________________________
whose address is ________________________________________ delivered to
_____________________ whose address is ________________________________________.
Dated __________, _______
Name of holder of
Unit Certificate:
(Please Print)
Tax Identification or
Social Security Number:
Address:
Signature:
Note: The above signature must correspond with the name as written
upon the face of this Unit Certificate in every particular,
without alteration or enlargement or any change whatever.
Dated __________, _______
A-17
SCHEDULE OF EXCHANGES OF CERTIFICATED UNITS/2/
-------------------------------------------
The following exchanges of a part of this Global Unit for certificated Units
have been made:
Number of Units of
this Global Unit
Amount of decrease Amount of increase following such Signature of
in Number of Units in Number of Units decrease (or authorized officer
Date of Exchange of this Global Unit of this Global Unit increase) of Unit Agent
- ------------------------------------------------------------------------------------------------------
- ----------------------------------
/2/ This is to be included only if the Unit is in global form.
A-18
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF UNITS
Re: Units consisting of (i) $1,000 principal amount of 12-3/4% Senior Notes due
2001 of VIALOG Corporation guaranteed by the Subsidiary Guarantors referred to
therein and (ii) Warrants to purchase 10.0886 shares of the Common Stock of
VIALOG Corporation
This Certificate relates to _________ Units held in* ______________
book-entry or* __________ certificated form by ______________________ (the
"Transferor")
- -----------
The Transferor: *
[_] has requested the Unit Agent by written order to deliver in exchange
for its beneficial interest in the Global Unit held by the Depositary a Unit or
Units in definitive, registered form and an aggregate number equal to its
beneficial interest in such Global Unit (or the portion thereof indicated
above); or
[_] has requested the Unit Agent by written order to exchange or register
the transfer of a Unit or Units.
[_] In connection with such request and in respect of each such Unit, the
Transferor does hereby certify that the Transferor is familiar with the Unit
Agreement relating to the above captioned Units and the restrictions on
transfers thereof as provided in Section 1.08 of such Unit Agreement, and that
the transfer of this Unit does not require registration under the Securities Act
of 1933, as amended (the "Securities Act") because[*]:
--------------
[_] Such Unit is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section
1.08(a)(y)(A) or Section 1.08(d)(i)(A) of the Unit
Agreement.
[_] Such Unit is being transferred to a qualified institutional
buyer (as defined in Rule 144A promulgated under the
Securities Act), in reliance on Rule 144A or in accordance
with Regulation S promulgated under the Securities Act.
[_] Such Unit is being transferred in accordance with Rule 144
promulgated under the Securities Act.
B-1
[_] Such Unit is being transferred in reliance on and in
compliance with an exemption from the registration
requirements of the Securities Act, other than Rule 144A or
Rule 144 or Regulation S promulgated under the Securities
Act. An opinion of counsel to the effect that such transfer
does not require registration under the Securities Act
accompanies this Certificate.
[INSERT NAME OF TRANSFEROR]
By:
Date:
*Check applicable box.
B-2
EXHIBIT C
Transferee Letter of Representation
VIALOG Corporation
10 New England Business Center
Suite 302
Andover, Massachusetts 01810
Ladies and Gentlemen:
In connection with our proposed purchase of Units consisting of (i)
$1,000 Principal Amount of 12-3/4% Senior Notes due 2001 of VIALOG Corporation
(the "Company") guaranteed by the Subsidiary Guarantors referred to therein and
-------
(ii) Warrants to Purchase 10.0886 shares of the Common Stock of the Company
(collectively, the "Securities") we confirm that:
----------
1. We understand that the Securities have not been registered
under the Securities Act of 1933, as amended (the "Securities Act") and, unless
--------------
so registered, may not be sold except as permitted in the following sentence.
We agree on our own behalf and on behalf of any investor account for which we
are purchasing Securities to offer, sell or otherwise transfer such Securities
prior to the date which is two years after the later of the date of original
issue and the last date on which the Company or any affiliate of the Company was
the owner of such Securities, or any predecessor thereto (the "Resale
------
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
- ----------------------------
registration statement which has been declared effective under the Securities
Act, (c) so long as the Securities are eligible for resale pursuant to Rule
144A, under the Securities Act, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its own account
---
or for the account of a QIB and to whom notice is given that the transfer is
being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur
outside the United States within the meaning of Regulation S promulgated under
the Securities Act, (e) to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities
Act that is purchasing for his own account or for the account of such an
institutional "accredited investor", or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and to compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Unit agent under
the Unit Agreement pursuant to which the Securities were issued (the "Unit
----
Agent") which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 promulgated under the Securities Act and that it is
acquiring such Securities for investment purposes and not for distribution in
violation of the Securities Act. The Unit Agent
C-1
and the Company reserve the right prior to any offer, sale or other transfer
prior to the Resale Restriction Termination Date of the Securities pursuant to
clause (e) or (f) above to require the delivery of a written opinion of counsel,
certifications, and or other information satisfactory to the Company and the
Unit Agent.
2. We are an institutional "accredited investor" (as defined
in Rule 501 (a)(1), (2), (3) or (7) of Regulation D promulgated under the
Securities Act) purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Securities for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Securities, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment for an indefinite period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
4. You, the Unit Agent and your respective counsel are
entitled to rely upon this letter and you are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
(Name of Purchaser)
By:
Date:
Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
C-2